Anyone else seeing this?

Question

A couple months ago Wifey and I decided to move back to Souther Utah. We had sold our home in FL quicker than anticipated and wanted to buy another home in new spot. I was surprised.
    We found almost nothing that could actually be bought and moved into RIGHT NOW! I had to play the short sale or foreclosure game and put out numerous offers. Even the new home subdivisions had almost NOTHING to buy NOW and move in now. Had to select a home, determine plans obtain loan/s etc. It started me thinking.
     I'm not the only person relocating to a new area. Many are like me, sold a home and want a new one now. I finally bought one in a nice subdivision that would close in 2-3 weeks. Subdivision had 2 homes under const and both were sold before completion. Now, the builder JUST stated 2 new ones that'll be ready in a few months.
     This is a very desireable area due to the sunshine and area. I decided there is a niche that no one is covering. Have a home READY to move into. These are the anti-investor type properties. I actually purchased 2 nice lots for almost the same price I bought a couple years ago and built on! These lots reached as high as $120,000 and I bought each for 28.5K
    I also found a lot on a golf course to buy, and I have a home designed . There is also a huge Parade of Homes in FEB and I'll joint venture a LARGE home for that lot. I also bought the lot across the street to benefit from all the traffic in Feb.It will be the least expensive home in the subdivision.
   Here are my thoughts and questions.
1.Anyone else finding the difficulty to actually find a home to buy and move into?
2. Is your area seeing a rebound and if so, are the spec builders joining in?
3.Median price in your area?
4. Is this only something that will work in 100K population areas?

I really think this is a good process and will work well in many areas. I've seen the inventory in my area go from 2600 homes in inventory to 1700 in last 5 months. This is another good guage to determine strngth of an  area, imo. Check your area before you do investing. People have to want to be in your area, or no future (detroit for example).
    Interested in additional thoughts on this and experiences you may be having. Rich.

Account Closed · Answer

Hi Rich.  In St. George it seems like the $200-$300k price range is starting to see more activity.  I've been watching some cheaper houses ($100k-$150k) and they are sitting on the market for 6+ months.  But, so far this year my neighborhood (couple blocks south of Harmons) had four houses go on the market for the mid-$200k range and they all sold within a month or two at most.  This is a big turn-around compared to last year when one of those same houses sat on the market for over 6 months before getting an offer.  Right now there is one on the market for $349k.  I think they'll be waiting a while for a buyer at that price.

I'm also surprised to see a glimmer of spec building in this area again.  As Riverside Dr. curves around into 3050E, there is a subdivision that originally started back around 2006.  They built a few houses, then stalled out for the past few years.  This year someone built three spec houses there, which they are just finishing right now (been watching the progress since I take that road to Home Depot and Costco).  I'll be curious to see how long it takes for them to sell.

You reminded me about my old way to check inventory.  I used to go to Realtor.com and see how many houses with 2+ bed/2+ bath were for sale in St George and compare it to Las Vegas (just as a gauge against the nearest big city).  It used to be about 26,000 for Vegas and 2,600 for St George.  I just looked again and it shows 18,000 in Vegas and under 900 for St George.  I haven't checked that inventory in over a year.  I'm surprised it is so low.  Perhaps this area is recovering faster than I thought it would...

Rich Weese · Answer

I've started a new thread today as an update to this thread with a heading more in line with the subject matter. Rich

Rich Weese · Answer

Jeff- They're in line to be built on. I don't like to leave myself open to a serious downturn. I have 2 specs left in TX and will build 2 in UT. As soon as any of them sell, I'll start another. I feel comfortable with 2 in each location. These will ALL be homes I can keep and rent if neccessary for amount of payment I would go get. 
 Jason- Thanks. There are still SO many ways to be involved in this RE game. I normally try to get off a particular train when everone else is getting on or already riding it. This has always worked well for me. Rich

Jason S. · Answer

Got it.

I normally deliver everything new top to bottom including re-texturing the walls - when you walk in it is looks like a brand new tract home.  No leftover dirt or anything else from prior ownership.  This way we get top of market for minimal extra cost.

It simply is not that much money to make everything new.

I carried this theory over from my vast experience with Manufactured Homes.  I always wondered, during the housing boom, why people would buy the MH on an infill lot over the older site built homes - well first I made them with perfect curb appeal, but what I found was they wanted everything new and fresh inside. They were willing to buy the MH simply because it was totally new.

So there is confirmation of your observation with a MH twist.

Jeff N. · Answer

Rich, how long do you plan on holding the lots you are buying. Are you buying with the intent to resell the lots or are buying to build?

I'm curious because lots are a fraction of 2008 prices in my area and have thought about picking one up myself.

Rich Weese · Answer

Sure. I was referring to item # 5 from Anson above where he said the house was "near new inside". I don't know age of home, but I was comparing with my process of delivering a brand new home inside and out. Sorry for any confusion on that. Many rehabbed homes are very old and beat up and some are only cosmeticcally changed. That isn't what I was commenting on. Rich

Jason S. · Answer

Rich.

I am a little confused in your analysis.  Aren't all Fix/Flippers supplying ready to move in properties?

Please help me understand where I am missing what you are seeing/asking for confirmation on.

Rich Weese · Answer

Steve-  That kinda substantiates what I'm saying. If re-location companies can serve as the go between,and make money for same priced properties, there must be good demand for those properties. Maybe that is the new business all the flippers should try!

Travis-Same thing I'm finding and price range I'm going after. I think there is a real demand for those.Are you in Bloomington Hills? I just bought a great lot on golf course on Erin Dawn for 37K! Had been as high as 100K in overprriced times. Expect to list at 319-329K. I also bought an owner finance on golf course at end of Sundance-3400 sq. ft. for 280K.
     Your method of comparing SG with Vegas is also substantiating what is going on. I don't think most sellers or investors are aware of the rapid changes. With snowbirds coming in a couple months, I want to be ready. Same thing in TX. The snowbirds come to rio grande valley, TX. Lets' get together for lunch.

Anson- You are also giving me more evidence. Your re-habs look new compared to all the other types of properties and games you need to play. I think you are onto something.

I'm surprised that no one is doing what I'm doing, even though all the replies so far seem to paint a rosy picture for this method. Other input or thoughts? Thanks to respondents. Rich

Anson Young · Answer

Inventory in PHX and CO are both dropping, not as much as PHX overall.  Affordable properties that are move in ready are being snatched up immediately on the west side, both by landlords and normal buyers.

Its a very solid strategy, I always cite the 5 types or properties on the market, and why my flips sell well.

1. REO - usually a POS that needs a ton of work, likely priced 10-20% below mkt
2. short sale - have to wait around forever for acceptance, condition can be spotty or great
3. traditional seller - mom&dad havnt updated their house since 1980, and it shows
4. traditional seller - mom & dad did update cosmetics (to their tastes usually, not universal appeal), and now want over market price
5. my home that is near brand new inside, updated to universal HGTV tastes, usually most of the following is new (roof/furnace/h2o heater/windows), priced a little below market
MOVE IN READY

Steve Babiak · Answer

Rich,

In the town where I live, many of the recent sales that are "move-in ready" involve companies that provide relocation services, taking properties from those who are moving away to the latest corporate location.  Those relocation services then re-sell the properties (seems that the deeds I've seen recorded for both transactions are at the same dollar amount) and collecting a fee outside of the closing somehow.

Anyone else seeing this?

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