[CoachKandSportsguy]

Originally Posted by melpetezrinski

With all due respect, I find it difficult sometimes to follow your logic. Why is "Selling one house and buying to live in another a net neutral to net positive financial decision" when "most buyers in TV" are "buying another of lesser or equal value"? Are you suggesting, most TV homeowners downsize?

Good morning melpetezrinski: Yes

Net neutral to net positive decision means net neutral selling one house for cash and buying another house for cash of similar value. When relocating to the Villages, being a 55+ or a senior citizen, a generalization is that people are selling their working house to buy a retirement house to live in. Since Florida is a relatively lower cost housing market, most will, overlysimplified, trade one house for another, and judging on some of the IRMMA comments, easily downsized to TV, a net positive.

Once in TV, the resales are generally higher priced than new, based upon human nature of wanting a fully developed neighborhood than a more speculative to be built neighborhood. So a resale move in TV will more likely be a net positive sale with cash left over from the resale to the new. in some cases, a net neutral from upsizing by buying larger new build with the resale increase.

Originally Posted by melpetezrinski

You market timing paragraph is spot on if someone is actually crazy enough to try and time ANY market, especially one that deals with the displacement of where you lay your head at night.

I think market timing comes more into play with the TV homeowners that are possibly looking to upsize. If you are perfectly fine with the house you're living in but would consider something better, maybe waiting 6-12 months in a market that is trending down, could prove beneficial.

Agree with market timing with illiquid assets, including the relocation in the TV from preowned to new, but don't overlook the following:

All houses have a relative value, meaning that the current TV house will also decline a similar amount, maybe not an exact amount, but similar. Ultimately every buyer in TV has the choice of NEW vs RESALE. most resales are first time buyers (generalized assumption) so the resale many decline for interest rates but necessarily due to interest rates here, as most are bought from cash, but from the working house not selling or declining as well as the working house is purchased with a mortgage by a younger working person/couple.

restated: The generalized point is that TV is a bit locally different than the remainder of the country, being slightly more house affluent due to age and having owned a working house with a fully paid off mortgage, but that move to TV (TV sales slow down) isn't due to the interest rate effect here where we are looking, but at the working house where we are not looking, with some seasonality thrown in (yes, we bought our house in December on a golfing vacation trip not understanding where we were going and came back with an impulse purchased house)

You may not agree with my logic, but does my comment make more sense now?

note: if 6% on everything, including new houses in progress, that would be market related, on just houses here and there, which are slow sales, or out of favor models, then its meaningless. . and its also equal to about the sales commission on the sale of a current house. . so I am not reading much into it unless its across the board on all existing and new and up and coming houses. . .

[Wondering]

Too much inventory. Same thing happened back in 2008. Even with the discount, the houses are over priced.

[CoachKandSportsguy]

Originally Posted by Wondering

Too much inventory. Same thing happened back in 2008. Even with the discount, the houses are over priced.

So the 6% is on all new houses, every single one of them? including new ones partially built to reduce future inventory?

[dewilson58]

Originally Posted by Wondering

Too much inventory. Same thing happened back in 2008. Even with the discount, the houses are over priced.

opinion

[Vermilion Villager]

Originally Posted by Ksfirefighter

I hope the New at Richmond go to be Owner Occupied!

Pretty sure the current interest rates will ensure that!

[BrianL99]

Originally Posted by melpetezrinski

With all due respect, I find it difficult sometimes to follow your logic. Why is "Selling one house and buying to live in another a net neutral to net positive financial decision" when "most buyers in TV" are "buying another of lesser or equal value"?

Remember the old days, when we could watch NYC ticker-tape parades on TV?

All that confetti thrown in the air? Then they're left with all that junk on the ground. Remember hearing about how much it cost, to clean up after one of those parades?

Some posters and many responses you get on ToV, are exactly like those parades. Reasonable origins, but soon it's obscured with nonsense and then the wind blows and it gets worse.

[Caymus]

Originally Posted by Vermilion Villager

Pretty sure the current interest rates will ensure that!

I would be interested in reading an analysis of rental income needed vs total ownership costs. An investor can currently obtain almost 6% with zero risk.

[justjim]

Originally Posted by ThirdOfFive

Possibly. But a 6% drop in housing costs is more than offset by the increase in interest rates. Home ownership in TV is 87.1% but the vast majority of those, nearly 70%, have mortgages (datausa . io). It seems logical to assume that that ratio won't be decreasing any time soon.

Additionally, one must consider the recent RISE in prices when comparing it to the recent drop. Since Quarter 2 2020 to Quarter 2, 2023, the average purchase price of a home in TV has risen from $279,120.00 to the current average price of $406,370.00. That is a 30+% RISE in three years, and coupled with the interest rate increase over the same time period that 6% is negligible.

I seriously doubt in TV that close to 70% of homeowners have a mortgage. My educated guess would be less than 50% have a mortgage. Many sold their house up north, or in TV, and paid cash for their house. In addition, some smart investors bought when the interest rates were low (2.5 or 3.0) took out a mortgage and invested the rest. Just my opinion with no real data backup.

[melpetezrinski]

Originally Posted by CoachKandSportsguy

Good morning melpetezrinski: Yes

Net neutral to net positive decision means net neutral selling one house for cash and buying another house for cash of similar value. When relocating to the Villages, being a 55+ or a senior citizen, a generalization is that people are selling their working house to buy a retirement house to live in. Since Florida is a relatively lower cost housing market, most will, overlysimplified, trade one house for another, and judging on some of the IRMMA comments, easily downsized to TV, a net positive.

Once in TV, the resales are generally higher priced than new, based upon human nature of wanting a fully developed neighborhood than a more speculative to be built neighborhood. So a resale move in TV will more likely be a net positive sale with cash left over from the resale to the new. in some cases, a net neutral from upsizing by buying larger new build with the resale increase.



Agree with market timing with illiquid assets, including the relocation in the TV from preowned to new, but don't overlook the following:

All houses have a relative value, meaning that the current TV house will also decline a similar amount, maybe not an exact amount, but similar. Ultimately every buyer in TV has the choice of NEW vs RESALE. most resales are first time buyers (generalized assumption) so the resale many decline for interest rates but necessarily due to interest rates here, as most are bought from cash, but from the working house not selling or declining as well as the working house is purchased with a mortgage by a younger working person/couple.

restated: The generalized point is that TV is a bit locally different than the remainder of the country, being slightly more house affluent due to age and having owned a working house with a fully paid off mortgage, but that move to TV (TV sales slow down) isn't due to the interest rate effect here where we are looking, but at the working house where we are not looking, with some seasonality thrown in (yes, we bought our house in December on a golfing vacation trip not understanding where we were going and came back with an impulse purchased house)

You may not agree with my logic, but does my comment make more sense now?

note: if 6% on everything, including new houses in progress, that would be market related, on just houses here and there, which are slow sales, or out of favor models, then its meaningless. . and its also equal to about the sales commission on the sale of a current house. . so I am not reading much into it unless its across the board on all existing and new and up and coming houses. . .

You may not agree with my logic, but does my comment make more sense now?
Yes, it does but I definitely don't agree with the following 2 assumptions. 1. "resales are generally higher priced than new, based upon human nature of wanting a fully developed neighborhood" This theory might have held water 4-5 years ago before the major TV expansion (think Fenney and no infrastructure) but I think there are just as many homebuyers that would prefer a brand new home to start their next chapter. Recent sales volumes of both seem to point in that direction. Also, most resales are priced higher since they have made countless, financial updates. 2. "as most are bought from cash" There are many reports/graphs out there that have this % at 60. In fact, there were 4 months this year where cash buyers were at 50% OR LESS. So, the drastic increase in mortgage rates has and will continue to have a big effect on TV homebuyers.

[Normal]

Originally Posted by Vermilion Villager

Pretty sure the current interest rates will ensure that!

Yes, and new home inventory isn’t moving either. What would make it more certain is a sharp decline in prices by years end.

[spinner1001]

Originally Posted by Caymus

I would be interested in reading an analysis of rental income needed vs total ownership costs. An investor can currently obtain almost 6% with zero risk.

It’s complicated. You need to first define the kind of rental investment return — cash-on-cash return or something different. ‘Return’ has different meanings.

For starters how to analyze returns from real estate investments, you might start here:

Best Apartment REIT For Total Return In 2022 | Seeking Alpha

Returns from individual real estate investments will have huge variation, that offer little meaning from an analysis.

[MsPCGenius]

Originally Posted by Keefelane66

Less than a year ago people were lining up for a lottery for homes..

Not a lottery (where, in theory, anyone can win...), it was first come, first served.

[Normal]

Originally Posted by MsPCGenius

Not a lottery (where, in theory, anyone can win...), it was first come, first served.

If you were a Villages Sales Agent there was/is zero risk. Most prime real estate is bought by the inside circles.

[Babubhat]

If it’s less than a rent equivalent it’s immaterial. Not a liquid asset. People need a place to live

[Robnlaura]

The housing dump is just starting ocala is on the front end of repossessions and price drops. The villages has an enormous amount of building it cannot maintain the per square foot pricing. The resales are totally overvalued.. change is coming. Ocala is on the front end of repossession sales.. it’s coming those investors hoping on rentals are gonna be the first victims.