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I have no idea if I overpaid but it was comfortably in our budget and I’m happy with the house. I think the better question isn’t “did you overpay” as measured against some “natural” fair price that doesn’t exist (and which also doesn’t matter until you sell the house) but rather “did you spend more than you wanted to/you can afford”. That’s also a separate question from “are you happy where you live” which can be no despite getting a great deal. If you read the article it’s actually about people who spent more than they could afford or weren’t honest with what they wanted in a home - and yes part of that is influenced by the market, but they could also happen in any market. Personally I don’t think home prices are going anywhere but up in areas that people want to live. Todays bid up price is tomorrows great deal - and while that doesn’t help if you’re house poor, it makes the question of overpayment less meaningful. Upgrade fucked around with this message at 05:30 on Feb 9, 2022 |
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Feb 9, 2022 05:27
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BonerGhost posted:I don't know if it came up in this thread, but a lot of these homesteaders are straight up white supremacists. They're just preppers fancied up to appeal to women and ideologically no different from Nazi agrarianism. 
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Feb 9, 2022 05:50
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Motronic posted:I mean....no. Yeah, I mean I guess I’m talking about dry land wheat but it is probably the most common story where my family comes from. Everyone is slowly losing their farms or selling to out of state corporate investors.
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Feb 9, 2022 05:55
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Yeah hard to say that you overpaid when 3 months later prices are even higher
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Feb 9, 2022 05:58
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Motronic posted:I hope you get what you want, and I hope you continue to feel good about that. But as someone who is saying this right now you aren't really in a position to say how you'll feel after the fact.
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Feb 9, 2022 06:14
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It's not like rents are coming down, so either you're renting at inflated rates or you're buying at inflated rates. Take your pick of poison.
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Feb 9, 2022 06:17
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I thought I may have slightly overpaid buying in May 2021 but apparently (according to our REA’s monthly newsletter) it’s more insane than ever out there.
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Feb 9, 2022 06:36
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Lol at literally everyone thinking they overpaid. Such is life in this crazy market I guess. I also think it’s normal for most first time buyers to always think they’re buying at the top. Houses are worth what people are willing to pay for them. Nothing more, nothing less. If you could have gotten the same house for less, you probably would have, on balance.
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Feb 9, 2022 08:33
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hobbez posted:Lol at literally everyone thinking they overpaid. Such is life in this crazy market I guess. I also think it’s normal for most first time buyers to always think they’re buying at the top. I knew I was buying near market bottom in the spring of 2013, but that’s a special case given how bad things were after the financial crisis and you could just see all the distressed inventory starting to dry up.
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Feb 9, 2022 09:16
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We bought our house 2.5 years ago back when the pandemic started and at the time I felt like I overpaid. We put about 75,000 in remolding into it, and it's worth about double what we paid. Now I feel like we got a great deal. In 3 years, the market might collapse, but I'm going to have it paid off by then and won't really care one way or the other.
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Feb 9, 2022 13:34
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QuarkJets posted:Yeah hard to say that you overpaid when 3 months later prices are even higher So who knows?
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Feb 9, 2022 14:57
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I don’t think I overpaid either here in NYC. I closed in April. Since then I’ve seen maybe 1 comparable house pop up on Zillow in my neighborhood (that I was targeting). And it needed tons of work where mine didn’t. Zillow and Redfin also have my house value (I also know they suck, but I don’t have anything to compare) up nearly 5%. Rent is also going loving insane here again. Like people seeing 500+ dollar increases and availability is bad.
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Feb 9, 2022 15:15
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I was worried about overpaying in central NJ, but then we saw similar houses listing for more than we paid (which was about 8% over asking) before we even closed. It's still more than it would've cost 3+ years ago, but prices in this neighborhood are up 10+% just since we moved in 5 months ago. We got a house that we absolutely love and can afford, and I'm honestly glad that we pulled the trigger when we did. We didn't buy at the peak of the market so that's mission accomplished as far as we care. The Zillow estimate thing for our house has always been too low (I think because the lot size is listed as 5k sqft instead of 25k) and even that is already well above our purchase price. Our old apartment's rent is up 20% too (and that complex has a lengthy waiting list).
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Feb 9, 2022 15:44
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We bought our house in Denver for way under the listing price, primarily because they tried to recoup (and then some) all of the money they poured in to renovations. It ended up sitting for a while and they luckily finally took our lowball-ish offer. It appraised for 100k over what we bought it for and Zillow/Redfin seem to think it's gone up in price. If I'm honest I still think we overpaid, and I doubt the house/neighborhood have all that much room to appreciate. Hopefully we're not moving for a while.
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Feb 9, 2022 16:09
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I didn't put an offer in on a place that I thought was overpriced, and now I regret it. Prices are insane and inventory is absurdly low.. and because it's low, I can't buy a place, and cause I can't buy a place, I can't put my current place up on the market, meaning there is less inventory available! I wonder how many other people are in a similar position.
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Feb 9, 2022 16:13
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Thom Yorke raps posted:I didn't put an offer in on a place that I thought was overpriced, and now I regret it. Prices are insane and inventory is absurdly low.. and because it's low, I can't buy a place, and cause I can't buy a place, I can't put my current place up on the market, meaning there is less inventory available! I wonder how many other people are in a similar position. Rent for a bit you coward.
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Feb 9, 2022 16:19
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This might be a bit out of place/scope for this thread and if that is the case I can edit it out, but I was combing through the REBubble sub and I can't tell if these people are just delusional or actually expect a massive crash to happen (down to 2015 prices, for example). Either way the doomposting makes me rethink the entire process of home ownership. That said I do want my own place with my own garage since I had my tires get freezing rain'd to the ground last week. That was fun.
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Feb 9, 2022 18:16
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QuarkJets posted:Yeah hard to say that you overpaid when 3 months later prices are even higher I think this just means somebody else would pay more, or that's just where the market is. I can't argue with that. The whole discussion is about perception, though. I have no doubt that many people who are buying now and for the first time do not regret the purchase, and many can comfortably afford it, but context matters. If I purchased a taco today for $15+firstborn child, and I enjoyed the taco and can certainly afford the taco, I would still feel as if I overpaid for that taco given that two years ago that same taco would have cost me $9.49 and no children. Residency Evil posted:Rent for a bit you coward. I'm in exactly the same position as Thom Yorke raps in that I put in (what I thought were) generous offers on a few homes and was handily beat out so I'm not going to play with the market as-is. I never want to be house poor and I do not approach housing as an investment. The difference is that I just signed a lease to rent a home, will sell my current home in about a month, then reassess in 9-12 months what I want to do for housing. I may get burned slightly if inflation keeps on keeping on, but I am now also not paying 9% state income tax anymore so it's sort of a wash? Magicaljesus fucked around with this message at 18:55 on Feb 9, 2022 |
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Feb 9, 2022 18:38
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Magicaljesus posted:If I purchased a taco today for $15+firstborn child, and I enjoyed the taco and can certainly afford the taco, I would still feel as if I overpaid for that taco given that two years ago that same taco would have cost me $9.49 and no children. This also goes off the assumption that you were in a good financial state/life state to buy the taco two years ago as well. But basically yeah its as you said it; perception and circumstance are important.
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Feb 9, 2022 18:43
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Magicaljesus posted:I think this just means somebody else would pay more, or that's just where the market is. I can't argue with that. This is a really bad analogy for a lot of reasons, but it also misses the point. The only time the "value" of your home really matters is at two points: when you buy it and when you sell it. At every other moment what matters from a financial perspective is the costs to live there -- and those costs are very reliant on other, far more important, factors which have changed over the last two years; namely interest rates and salaries, and life choices other than owning a home. You will never know if you overpaid or underpaid because the cost you paid -- and home value -- is: a. extremely path dependent, b. constantly fluctuating, and c. you don't have anything really to compare against, because there's no ur-home value which a home is objectively "wroth" that you can measure against. So what you really need to ask yourself is "am I happy in the home I bought?" and "can I afford to live here?". If you can answer yes to both those questions you made a good purchase. Don't fall into the trap of assessing the right-ness of a purchase by home value. It will never end well.
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Feb 9, 2022 19:07
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Residency Evil posted:Rent for a bit you coward. I've considered it, but I'd rather sell and buy a home around the same time, to avoid getting overly screwed by the market moving one way or another.
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Feb 9, 2022 19:24
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Thom Yorke raps posted:I've considered it, but I'd rather sell and buy a home around the same time, to avoid getting overly screwed by the market moving one way or another. Oh no. You know he can feel this right?
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Feb 9, 2022 19:28
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Upgrade posted:You will never know if you overpaid or underpaid because the cost you paid -- and home value -- is: a. extremely path dependent, b. constantly fluctuating, and c. you don't have anything really to compare against, because there's no ur-home value which a home is objectively "wroth" that you can measure against. Your premise is wrong. One absolutely can near-objectively value a home. There is an entire industry around doing exactly that, and many homes do have exact comps because they are in a neighborhood full of exactly the same home but every other one is a mirror image of the one next to it. It is difficult or impossible to finance a home you've paid too much for, because the bank doesn't want the underlying asset securing the mortgage to be worth less than the people they hire to do a valuation tell them they can sell it for. The actual thing that hasn't happened for a lot of people is that they think their budget is going to buy them the house they've wanted since they've been saving up for the last 5+ years, and it turns out that budget no longer can do that. So you need to compromise. By increasing your budget or reducing your expectations. Or by actually overpaying and being in a position to do so. To argue that homes do not in fact have a knowable value sounds a lot like you're trying to justify your own decisions. And that's fine, but it's also not good advice in a thread like this. Your perceived happiness with a purchase has nothing to do with its value to others or how they would value that same purchase.
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Feb 9, 2022 19:43
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A lot of the debate comes from how imprecise the words price and value are. There are many different measures like replacement cost, tax value, insured value, sale value, sale net of transaction costs, appraised value, Zestimate, etc. and all those measures have their own biases and errors associated with them. So it’s not like there is one agreed upon definition of “overpaid”
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Feb 9, 2022 20:06
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Motronic posted:Your premise is wrong.
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Feb 9, 2022 20:08
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Dik Hz posted:Yeah, you can sell it in the open market and count the money you netted. Anything short of that has its own chance for error or bias. Yep -- this is what I'm getting at. Every other metric is going to vary based off a lot of different factors, in either direction. And also kind of doesn't matter! It matters a lot when you sell or you buy, but other than that your house gaining or losing $25,000 of your purchase price doesn't mean you "made" or "lost" $25,000 as if that money was debited from your bank account.
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Feb 9, 2022 20:50
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Yes homes have a value, there's the value of the land and the value of the structure, the appraisal includes several spreadsheets that breaks this down in excruciating detail and compares it to other buildings in the area and why your house is higher/lower despite the value (e.g. total number of rooms incl. den, bathrooms etc) We ended up getting our house appraised a grand total of... Six? Seven times over the last two years, buying, financing, refinancing, all of the appraisals were within 3% of each other at the time of appraisal, the system works Even if you have a view or whatever, that too is quantifiable, there's different degrees of view type, from obstructed to The only non objective stuff is like, is it grandpa's house he built with his own hands, which is really between the seller and buyer but isn't really applicable to the larger market Fake edit: oh we were looking at this one house, we've affectionately been calling "murder house" it's in a really nice neighborhood but I guess the owners son had a friend staying with him and a gang showed up and double homicided him and his friend, the price on that house keeps creeping lower and lower, but death in the house is a disclosable item and probably tracked too
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Feb 9, 2022 21:44
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Motronic posted:Your premise is wrong. You mean appraisals? "Objective" is not a word that comes to mind. Even just evaluating comps requires some subjectivity, and those sale values were also based on subjectivity (e.g. the buyer's evaluation of what the house is worth)
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Feb 9, 2022 21:52
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QuarkJets posted:You mean appraisals? "Objective" is not a word that comes to mind. Even just evaluating comps requires some subjectivity, and those sale values were also based on subjectivity (e.g. the buyer's evaluation of what the house is worth) Wow, that's almost like......"price discovery". It's almost like the value of something is based on an understanding of what a large group of people are willing to pay for a thing on average rather than just the opinion of one person. I think you might be on to something here!
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Feb 9, 2022 22:19
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There is no objective truth, only measurements of variance from other things, which are likely flawed themselves. You can get to a rough consensus of whatever you're measuring, but at some level there will be variance. We still haven't been able to agree on an actual, repeatably measurable and independently verifiable definition of a meter. Our current best definition is based on the speed of light in a vacuum, but even that will vary based on the speed of the planetary object you are standing on when you measure it. Everyone can look at Tesla's stock and say it's overvalued for what the company actually produces, but no one's gonna sell it at what it "should" be if people are willing to buy it at the current market price. I thought the price I paid for my house in 2009 was high, but I wanted a house in that area and that's what they went for. It was 1300% of what the house sold for in 1972, 70% of what the same floorplan sold for in 2008, and it's less than half of what it appraised for last year when I refinanced. All you can use is what else is out there to measure against, whether it's distance, time, weight, or value.
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Feb 9, 2022 22:27
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I think I finally understand it now. You've convinced me. Every house is simultaneously worth nothing as well as the GDP of the entire planet. There is no telling, so why try. This means that what you feel like paying is always the right number. Or is it whatever someone feels like selling it for? I'm still a little fuzzy on that. But clearly there is no way to tell so it shouldn't actually matter. I wonder how municipalities and counties figure this out for property taxes. I guess it's just a random number generator.
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Feb 9, 2022 22:41
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Upgrade posted:Don't fall into the trap of assessing the right-ness of a purchase by home value. It will never end well. I think we're talking about entirely different things. Buyers have thoughts (elation, ambivalence, remorse, etc) prior to the sale of the home they just purchased. The Times article noted that a small percentage of home buyers thought they overpaid despite the white-hot, overly competitive real estate market. This is entirely perception, even if factors impacting that perception can be objectively/subjectively measured. The current perception is very much in the rosy-lens category, and would likely reverse if the housing market tanked tomorrow. I was simply surprised by the enthusiasm in the market, not commenting on the correctness of the purchase. That's another rabbit hole discussion. In any case, I'm about to sell and not buy. I'll make a few minor repairs that would otherwise be a detriment to the sale, but otherwise not much to do. Can't wait to not have to worry about needing a new roof, a water leak, or a tree falling on the house. I'll revisit those feelings in the year of our Lord 2023.
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Feb 9, 2022 22:52
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Motronic posted:I think I finally understand it now. You've convinced me. Yes, and what informs those estimates? Is it the buying and selling of houses in aggregate? And does that mean those estimates are going to lag behind during periods of rapid change, upwards or downwards? Or is the pope somehow involved, ordained from god? Believe it or not, you don't have to argue about every little thing. As Dik Hz already said, price and value are rather abstract concepts and depend on the lens you look at them through. So maybe instead of just talking past each other we can be a little more precise with our discussion.
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Feb 9, 2022 22:54
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That the market/exchange value is whatever people will pay for it, is not a new or controversial statement in the slightest. It's econ 101. Even a professional appraisal, good or bad, is based on comparisons to actual sales, aka what people are willing to pay for things. Value of land is the simplest example (and a major driver of value in a lot of urban places). Why is land in SF worth so much more than land in North Dakota? Do you do a soil analysis and compute the value of the earth itself? No, you see what people tend to pay for land in that area.
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Feb 9, 2022 23:50
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Residency Evil posted:We bought our house in Denver for way under the listing price, primarily because they tried to recoup (and then some) all of the money they poured in to renovations. It ended up sitting for a while and they luckily finally took our lowball-ish offer. It appraised for 100k over what we bought it for and Zillow/Redfin seem to think it's gone up in price. What kind of transcendent market insight do you have where you think you overpaid when every available metric or price estimate indicates otherwise
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Feb 10, 2022 00:39
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hobbez posted:What kind of transcendent market insight do you have where you think you overpaid when every available metric or price estimate indicates otherwise I'm a half glass empty kind of guy.
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Feb 10, 2022 00:42
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Dik Hz posted:A lot of the debate comes from how imprecise the words price and value are. There are many different measures like replacement cost, tax value, insured value, sale value, sale net of transaction costs, appraised value, Zestimate, etc. and all those measures have their own biases and errors associated with them. So it’s not like there is one agreed upon definition of “overpaid” I stand by my statement price is exactly what someone is willing to pay. Value is a way more abstract concept when it comes to something like housing
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Feb 10, 2022 00:46
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Internet Explorer posted:Believe it or not, you don't have to argue about every little thing. As Dik Hz already said, price and value are rather abstract concepts and depend on the lens you look at them through. So maybe instead of just talking past each other we can be a little more precise with our discussion. Believe it or not, the Esteemed Dik Hz is no longer an IK of this very thread because of their bad takes on this topic and burning hatred of appraisers. Not sure you're citing the best source here. Yes, we all know lots of people are bad at their jobs. Many of those people are appraisers. That doesn't make the entire concept invalid. Also, everything alnilam just said. This mechanism is literally called price discovery. If you think this is something novel or the slightest bit controversial, or that one can have valid opinions about it to the contrary I invite you to take a look at one or more of the following, which go into the various aspects of how real estate prices are "discovered" by markets. You can argue the mechanisms and most appropriate inputs, as they are in these papers, but you can't in good faith argue that it's not a thing and that the outcomes aren't repeatable on the scales we're discussing in this thread: https://www.tandfonline.com/doi/abs/10.1080/08965803.2020.1840898?journalCode=rjer20 https://www.jstor.org/stable/24861431 https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.950.9572&rep=rep1&type=pdf I'm not aware of an alternative lens to look through on this well understood topic which is has been baked into global financial markets for decades.
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Feb 10, 2022 00:55
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i personally enjoyed the good engineer brain take that a meter isn't real
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Feb 10, 2022 00:58
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Motronic posted:Believe it or not, the Esteemed Dik Hz is no longer an IK of this very thread because of their bad takes on this topic and burning hatred of appraisers. Not sure you're citing the best source here. Yes, we all know lots of people are bad at their jobs. Many of those people are appraisers. That doesn't make the entire concept invalid. Motronic posted:Wow, that's almost like......"price discovery". It's almost like the value of something is based on an understanding of what a large group of people are willing to pay for a thing on average rather than just the opinion of one person. I think you might be on to something here! Dik Hz fucked around with this message at 01:40 on Feb 10, 2022 |
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Feb 10, 2022 01:37
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