Home foreclosures see a 'notable' increase amid ongoing cost-of-living crisis

As @spiritgide said, he was not defending, he was explaining. And I was not attacking. No need to get your hackles raised on someone else's behalf when it was not asked for, nor warranted. As I said, I dislike house flipping. I have zero problems with it, as it is someone finding an opportunity and using their skills to create a value out of it. But Spiritgide, what you did is exactly the definition of house flipping: buying a property with no intention to live in it or hold on to it through rentals, renovating it, and selling it at a profit. No shame in it.
I have just worked enough with buyers of flipped houses to see their perspective: Property was bought at 1x, 1x worth of work was put it, and I am now being charged 3X for a house that "cost" 2x (these are in fact your numbers as quoted earlier). On top of that new owner has to do work on the newly purchased house to make it the way they actually want it to be (most house flippers make everything pretty neutral to not scare anyone off)
Once again, not attacking (I am in a very similar business to spiritgide).

Again, foreclosure rates have been at a 20 year historic low under Biden. Recording 3 of the 4 lowest foreclosure rates in the last 20 years. Is this a good or a bad thing?

 

to the buyers who don't like flipped homes, then do the renos yourself. It's pretty simple

Foreclosures are on the rise, that is a fact. You can be pro-Biden and pro-Democrat all that you want. it does nothing to change the facts. You can simply continue to fool yourself

 

Have to say- no. I'm not in that business at all. And while I do expect to make a profit on this house, I have put a great deal of time, work and money into it. Regardless, my goal is to keep my neighborhood a good place to live. I would sell the house at a break-even price to the ideal person, before I would sell it at a big profit to a buyer who would be a detriment to my neighborhood. House-flippers would never do that.

One of my businesses in the past was design-building custom homes, a field I got into doing basic sub-contracting, much for rental owners, some for those flipping houses. I don't seek that now; this is only the second house I've renovated in 20 years- and the other was so my grandson would have a good home for his family, which he couldn't afford without help. I showed him how to see problems, how to buy right. I found the house, we investigated and appraised it together. I actually bought it for cash as a repo. When the repairs were done, which he helped with hands-on every day, I sold him the house at cost. Timing was perfect; he now has an equity of $140K in a house he's owned for 4 years, with the down payment coming from a trust fund his grandparents created for him. I hold the mortgage- because at the time, he lacked the credit to qualify. He's never made a late payment, but now he has good credit, he's learning to invest in stocks, and learning financial skills. 5 years ago he was floundering, struggling. Now, he's flying on his own and doing well. That's my payoff, not money. It's much better than money.

IF I bought houses to renovate and profit, which I did a few times 40 years ago, things would be different. I don't need to profit today. But I've always had different goals. You do have to make money; a living- but there are actually two paychecks I need. One is the money, of course. The other is what I call an emotional paycheck, the ability to look at what you have done- and be proud of what you have accomplished and the way you did it. That's a payoff I work for in everything I do.

Many of the people in the business of "flipping houses" today will, as the post says- stay neutral to give it wider appeal. However, most will also fail to repair marginal things, sticking with what will work for the sale, despite it obviously posing a major expense in the near future. I've never done that in flipping houses. In houses I built, I only did custom homes for people who wanted the home built to high standards. Those standards can't be used when building spec homes, because most people won't pay for them. If something will still be saleable by the time they plan to leave, that's good enough. The average length of ownership on a new home is about 7 years.

To me- the shame is building something you wouldn't buy yourself knowing the downsides, and representing it to a buyer as quality. When I sell this house, the buyer will know of everything I consider a downside that will need future improvements. No surprises. You won't find many people- flippers, realtors. sellers, builders- that will do that.

And, I don't feel attacked at all. What I'm saying is that the better you understand what you are buying, the better chance you will be happy you bought- and a lot of that depends on the people you are dealing with. They all have different motives, different standards.... different levels of honesty. The conditions today are making home ownership difficult, and has created opportunities for those who would take advantage of the buyer desperate to find a home they can afford, and becoming less prudent buyers because of that. That alone, particularly buying a home with problems you fail to see or are hidden from you, will contribute to foreclosures. Losing a home can be devastating to a person's spirit. I do not feel sorry for those who go into foreclosure because they were never qualified and knew it, but I feel for those who are forced into that by things beyond their control, by deception, by inflation that should never has been allowed to get out of control, by medical costs that are insane. We need stability in the cost of living to have stability in the process of affording your own home. Unlike most things we buy, a home is a kind of foundation, a link to something reliable in life It has a lot to do with people's ability to feel they have roots, and security.

 

It is neither a "good or a bad thing". It is a matter of simple economics. If a person cannot afford to live where he is located then the smart thing to do is move to a place where he can afford to live. In the United States it is not the responsibility or the right of the government or society to tell anyone where to live.

 

Interesting. So a tax deduction limitation is resulting in higher property costs. It has nothing to do with this:

 

Yeah. No worries from my side of things, I think someone was getting outraged on your behalf when there was no need.
I disagree with you on 95 percent of the things you post here, some really quite vehemently. This is not one of them. One can disagree and remain more than civil. I wish you luck in finding your ideal buyer.
I guess it would have been out of your control, but from your talking about yourself it seems to me that you would have preferred a buyer who would have done the work himself and put sweat equity into his house rather than someone who just wrote a cheque for three times the initial cost of the house.
I am sure that you did a great job and way over what a typical house flipper would have done, but be very careful: those who buy flipped houses (and I understand that you are not a typical house flipper) tend to be resentful of the price increase (even if it is completely justified) and more importantly hold on to a very mistaken belief that anything that goes wrong in the next decade is due to the guy who did the work on the house....who now lives right across the street.
Be very careful.....

 

That's insightful!
One thing always true, we have a wide variety of people, with a wide variety of skills. Some people are almost naturals at DYI, others haven't a clue. Most people are good at something, but none of us are good at everything. If you aren't handy with tools, you hire someone that is.

This house has an area that will not be changed at all. The widow was once a hairdresser, and her husband converted a garage into a beauty shop. She quit that sometime in the 80's, and it's just been storge since. The hairdressers sink is still there, although the plumbing is disconnected. I decided to leave this as is, because the space offered a wide range of possibilities, from a master bedroom/bath suite, to a home office with a private entrance. Or- it could just be storage until the time is right for the buyer to do something else. Leaving it provides more options, meaning it can fit more buyers. There will be draft floorplans, showing the possibilities, so they don't have to be visionary. The options- do it yourself, hire someone later, or incorporate the improvement you want with the contract to buy. In that case I wouldn't do the work, but I know many good contractors, so I can arrange it. Some house designs do not lend themselves to additions either. This one does, it would be easy to add to without the demolition of existing space and the lot is so large there is plenty of room. Many good reasons to buy this house, and it's fits the bracket with the most buyers and lowest supply in our area right now as well.

So you see, I am in an excellent position. I don't need the money; I can wait on the right buyer. I know the business from the ground up, even though I got out of the construction business over 20 years ago, and I have many contacts with good people in the business now. A fully informed buyer with good character will find few surprises, and not be expecting that I owe them ongoing perfection. That is something you get by being able to read people, and turning down the ones who don't measure up- and I can do that too.

I would say to any who might be thinking that flipping is easy- that any old house and many newer ones can hold surprises, some that won't be found by the most careful inspections, and some can be very expensive. You need all the savvy you can get when you buy, and if you don't have it you need to know someone who does.

 

Please reread, it is the combination.

 

So, you agree that inflation is driving up housing prices due to the cost of materials supressing demand based new-starts.

Agreed.

So what's causing the inflation?

 

No I did not. Stop pushing those falsehoods. !!!

 

You probably know that is a question with multiple correct answers. If we simplify it, we might say- Chaos. That is instability in the components of the system and the perceptions of people. Bad decisions, not working together, not on the same page, everyone struggling to make things happen and having to throw more money at things to get anything done. A great deal of that is leadership, it does start with government. Covid threw the wrench in the gearbox, and it was handled poorly. Hasn't been fixed, so it's continuing to be haphazard.

The path we are on and the decisions we make on the way should remain focused on the long-term objective, and they are not.
I think it was Churchill that said "You will never reach your destination if you stop and throw stones at every dog that barks".

 

Come on mdrobster, buck up and face the music of your illogical agenda.

Answer the question.

What caused the inflation?

 

Oh yeah, you're logical.

 

So, you won't answer this question?

What is causing inflation?

You won't answer because you don't know, or because you don't care in an effort to hold the partisan line?

 

Partisan line...?