All Forum Posts by: Jake Moran

@Joaquin Camarasa you ever talk to or work with Joseph from Karbyte Contracting? That was my main guy when I lived in northern VA. I could be mis-remembering but I think he charged 50% up front whenever I worked with him, and he was most definitely NOT shady, contrary to many commenters' assumptions. (We also put in a few offers to buy a flip together, but it never worked out before I moved away.)

I'm am surprised at how many people have said 50% is not a normal deposit. I've worked with contractors in Virginia, California and Florida in the last couple years, and at least one in every state has asked me for a 50% deposit -- which I haven't thought twice about and have not had any issues with. I've never heard of the supposed law of $1,000 or 10%!

But looking forward to hearing an update about how everything works out for you @James Sloan

Very interesting! I hadn't thought about the supply being so low that it is potentially making the market look hotter than it really is. What a fascinating time we're in.

@Bernadeau C. Call Justin at (850) 510-6863. He does great work at a great price. Tell him I referred you.

@Ryan Agcaoili-Mullins Awesome, I'll try to be there!

Curious whether y'all still feel the same about appreciation recently? Realtor.com just listed the hottest markets and Topeka was #3. For those actively investing there, have things seemed different lately?

https://www.realtor.com/research/january-2022-hottest-housing-markets/

I'm assuming your subject line was just a typo and you understand that the fed is getting ready to raise interest rates, not cut them.
The expectation of higher fed rate has already been baked into mortgage rates, which is why we've seen them go from under 3% to over 3.5% in the last month or two. Unless the fed signals this week that they are going to raise rates even faster than previously expected, I don't think you'll see mortgage rates move too much more in the near term.
Now, will this affect home prices? Absolutely. A half percent increase in rates  fairly significantly reduces affordability. If someone has a max budget of $1,000 for their mortgage payment (excluding insurance and property taxes), at 3% they can afford a $237k house, but at 3.5% they can only afford $222k. That's a 6% drop in value. 
However, because there seem to be more and more people buying with cash these days, I don't think the interest hike will translate to a 6% drop in the overall market, as there are still plenty of people willing to buy at the current prices. 
All that to say, I think that the interest hike will do enough to make prices level out a bit, but barring a recession, prices almost certainly won't go down.

Some good discussion on that going on right now in this forum:

https://www.biggerpockets.com/forums/99/topics/1016476-are-we-in-a-bubble

Thanks Paul, great to hear from you and I will definitely check out that book. 

Thanks for the response -- I love hearing the perspective of someone with decades of experience, since I've only been tracking real estate for the last 5-6 years. Thanks for the confirmation that this market cycle is pretty unique.

It's funny, two of the factors you mentioned apply directly to me. We just moved from the DC area to Florida, since Covid allowed me to work remote permanently. And I brought my DC salary with me. And in the last 6 months we bought a home for ourselves as well as a vacation rental. Assuming there are millions more like me, it's no wonder you can't find a decent 3 bed /2 bath single family in America for under $200k anymore.