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 > Vacation Home Buying Fizzling. RV's too?

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valhalla360

No paticular place.

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Posted: 05/09/22 01:55pm Link  |  Quote  |  Print  |  Notify Moderator

way2roll wrote:

I worked as an analyst in the REO division of a large bank for years right around the big bubble. Maybe your geography is different but houses are not money pits. Statistically speaking, houses almost always are an appreciating asset. And in my neck of the woods, I've seen exponentially less used RV's for sale than the past 2 years.


Reality falls somewhere in the middle.

It's fun to talk about the little old couple who bought a $30k house in 1950 and the kids are selling it for $1million but that's really an unusual case and when you back calculate the annual return, it's not that great and it ignores all the costs that go into supporting a house for 70yrs.

If you are more typical (average duration of ownership is around 7yrs), the transaction costs of buying/selling typically eats up most if not all of the appreciation.

RVs are obviously worse as depreciating assets but houses are not the investments that the real estate industry promotes.

In terms of the market bubbles and the impact of rising interest rates, expect both to take a big hit as the Fed tries to get inflation under control after stoking the fires.


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way2roll

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Posted: 05/09/22 02:21pm Link  |  Quote  |  Print  |  Notify Moderator

valhalla360 wrote:

way2roll wrote:

I worked as an analyst in the REO division of a large bank for years right around the big bubble. Maybe your geography is different but houses are not money pits. Statistically speaking, houses almost always are an appreciating asset. And in my neck of the woods, I've seen exponentially less used RV's for sale than the past 2 years.


Reality falls somewhere in the middle.

It's fun to talk about the little old couple who bought a $30k house in 1950 and the kids are selling it for $1million but that's really an unusual case and when you back calculate the annual return, it's not that great and it ignores all the costs that go into supporting a house for 70yrs.

If you are more typical (average duration of ownership is around 7yrs), the transaction costs of buying/selling typically eats up most if not all of the appreciation.

RVs are obviously worse as depreciating assets but houses are not the investments that the real estate industry promotes.

In terms of the market bubbles and the impact of rising interest rates, expect both to take a big hit as the Fed tries to get inflation under control after stoking the fires.


Don't confuse cost of ownership with the value of the asset. If a house one year sells for $100k and 2 years later sells for $150k, that's an increase in the absolute value of the home by $50k. Pretty much everything you buy has a cost of ownership. But an asset's value is it's value. And homes almost always increase in value. How you manage a sale becomes a factor of net proceeds but does not impact the value. And transaction costs of buying and selling are usually around 5-7%. Hardly eating the net profit. Cumulated annual property taxes are the biggest bite to a net income on most homes but again they don't change the value.

Rv's on the other hand, as you stated, are a depreciating asset. Most things are depreciating assets. Hardly anything outside of collectibles increase in value. But homes and land do.


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ferndaleflyer

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Posted: 05/09/22 05:40pm Link  |  Quote  |  Print  |  Notify Moderator

Maybe. I have one place I bought for $43,000 and was offered 1/2 a million 1 week ago. Bought another for $67,000 took $100,000 of timber off of it and sold for $450,000. No outside closing costs or other fees to bleed my profit. I pay cash and sell for the same. You seen the stock market the last few days? And a loss by supporting a house, be real you got to live some where.

wapiticountry

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Posted: 05/09/22 07:15pm Link  |  Quote  |  Print  |  Notify Moderator

valhalla360 wrote:

way2roll wrote:

I worked as an analyst in the REO division of a large bank for years right around the big bubble. Maybe your geography is different but houses are not money pits. Statistically speaking, houses almost always are an appreciating asset. And in my neck of the woods, I've seen exponentially less used RV's for sale than the past 2 years.


Reality falls somewhere in the middle.

It's fun to talk about the little old couple who bought a $30k house in 1950 and the kids are selling it for $1million but that's really an unusual case and when you back calculate the annual return, it's not that great and it ignores all the costs that go into supporting a house for 70yrs.

If you are more typical (average duration of ownership is around 7yrs), the transaction costs of buying/selling typically eats up most if not all of the appreciation.

RVs are obviously worse as depreciating assets but houses are not the investments that the real estate industry promotes.

In terms of the market bubbles and the impact of rising interest rates, expect both to take a big hit as the Fed tries to get inflation under control after stoking the fires.
Factor in the utility value of shelter and home ownership becomes extremely profitable. Like you said, you have to live somewhere. Unless it’s under a bridge or in your parent’s basement that shelter costs a lot of money.

Wade44

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Posted: 05/10/22 12:38am Link  |  Quote  |  Print  |  Notify Moderator

way2roll wrote:

Housing prices are up because there is a shortage of homes in desirable areas. Lots of demand, no supply. We see supply and demand issues affecting literally everything right now, mostly a fallout of Covid. This is a completely different and normal part of economics and the sky is not falling. The Fed is increasing rates to help curb inflation caused by this unpredicted supply and demand issue. Not to mention they haven't raised rates in a very long time. It's not doom and gloom.


I wonder what $11.00 2X6X93-5/8" studs and $37.00 sheets of 7/16" OSB have to do with it LOL. I never knew how much I enjoyed the Lowe's Saturday special every once in awhile with the $4.97 7/16" OSB.

I look at it all using other barometers however, such as my fertilizer costs, some of which are up over 400% which is unprecedented, it's new territory and its gotten / going to get ugly. I won't get started on diesel / fuel prices. The sky fell over a year ago and you're walking on it, it is soon going to crack. You can not eat your house.


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way2roll

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Posted: 05/10/22 05:40am Link  |  Quote  |  Print  |  Notify Moderator

Wade44 wrote:

way2roll wrote:

Housing prices are up because there is a shortage of homes in desirable areas. Lots of demand, no supply. We see supply and demand issues affecting literally everything right now, mostly a fallout of Covid. This is a completely different and normal part of economics and the sky is not falling. The Fed is increasing rates to help curb inflation caused by this unpredicted supply and demand issue. Not to mention they haven't raised rates in a very long time. It's not doom and gloom.


I wonder what $11.00 2X6X93-5/8" studs and $37.00 sheets of 7/16" OSB have to do with it LOL. I never knew how much I enjoyed the Lowe's Saturday special every once in awhile with the $4.97 7/16" OSB.

I look at it all using other barometers however, such as my fertilizer costs, some of which are up over 400% which is unprecedented, it's new territory and its gotten / going to get ugly. I won't get started on diesel / fuel prices. The sky fell over a year ago and you're walking on it, it is soon going to crack. You can not eat your house.


I hear you on fuel costs. it's definitely a head scratcher. If supply and demand are supposed to be the factors in determining rising costs, that does NOT explain the continual rising cost of diesel. Plenty of supply, yet here we are. Coincidental there is a big push for EV's? And yes, building costs are up. That wouldn't explain the rising costs of resales though. It's pretty common knowledge inventory on pre existing homes is very low. That dictates the risings costs. This thread is about vacation homes fizzling. And my point through these posts is that it isn't. Not sure where the author got their facts but that's not the case in my area. For every home about to go on the market there are 30 offers waiting. Many sight un-seen and all over ask with heavy cash incentives. All of them under contract in a day. I could sell my house tomorrow for easily double what I paid a few years ago. Of course I'd have to have somewhere to go. Thought of hitting the road full time in my FW with my cash and wait til the market settles... We are actively looking for a piece of land to do just that.

cptqueeg

Idaho

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Posted: 05/10/22 10:39am Link  |  Quote  |  Print  |  Notify Moderator

In our vacation area the WFH crowd and Air BandB investors and converters gobbled up all the inventory leaving the locals with no place to live. Any slight weakening of the market or increase in inventory will be met by demand from those locals(and in some cases their employers) that have been forced out of their rentals in the past 2 years.

* This post was edited 05/10/22 11:28am by cptqueeg *

Grit dog

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Posted: 05/10/22 12:04pm Link  |  Quote  |  Print  |  Notify Moderator

One thing is for certain, we have yet to fully realize the downstream effects of the mess created by the pandemic.
I don’t claim to be a smart man or have the answers and those that do claim to understand it are likely posturing, as we all should be in our own way.
Not a zombie apocalypse prepper. But also not an ostrich.
Been bit by recession and also capitalized on it, and yes something still smells a little different about the current situation. (Maybe it’s my sense of smell after having the Rona, but everyone would be well served to stay a bit aloof and protect their own interests the best way they see fit.) Remember, you can only control what YOU do.


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cbshoestring

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Posted: 05/10/22 03:16pm Link  |  Quote  |  Print  |  Notify Moderator

My brother looked at a toy hauler listed at $40,000. Everyone told him dealers would not negotiate, because sales are sizzling.

He offered $30,000.

They came back at $35,000

He told them he really needed to be at 30, because he was going to need a WDH plus numerous accessories.

They settled on 31,500. Dealer provided/installed WDH. Plus gave him $250 in store credit for some goodies.

They are atleast back to recognizing the 30% markup that they don't really need.

markandkim

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Posted: 05/11/22 05:14am Link  |  Quote  |  Print  |  Notify Moderator

We're about to see the biggest recession we have ever seen in our lifetime. You need to enjoy this summer as much as you can. I believe the RV industry is only fooling themselves. It is going to crash hard soon. They make it sound like it's going to improve later this year. No way. I would not buy anything now if you don't want to regret it later. The RV sales lot that were near empty are now overflowing. Save your money if you don't need one now.

We are ready to pay cash for our fulltime truck and rig right now, but no freaking way. We will stay in our current set-up for now.

Protect everything you have.

Just try to find a truck right now and you'll know what I'm talking about.

Try getting warranty work, accident work or other major work done on what you have.

Even rental cars are through the roof, if your lucky to get one in some places.

Can anyone else see the writing on the wall?

Diesel near $7.00 in New England and still rising!!!


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