Real Estate Market

[mu03eng]

Don't misrepresent, Lenny.

I went out every night of finals week for four years. Very different than "partying 7 days a week for 4 years."

And WTF happened was that I gave up booze for 18+ years, from Oct 1992 to Feb 2011. I lost the ability to be a "high-volume lush." Plus, high ABV happened. I had one that was 11% tonight. Those didn't exist at the Gym in 1981!!

You gotta train my man. No particular reason other than busy/no opportunity I went a couple of weeks without having any beer, then went out to Denver for memorial day weekend....whew that first day of brewery tours was touch and go but by the time I got through the Denver trip and a work trip, last weekend 6 or 7 beers didn't even phase me

Clearly you're doing this drinking thing wrong 

[vogue65]

It's doing great.  They are opening up a new boutique hotel there - a Kimpton

https://www.kimptonhotels.com/boutique-hotels-in-milwaukee

You cannot find a parking space anywhere in the Third Ward on the weekends.

Those are the local tourists looking for fish'n chips or Milwaukee onion rings, what about the real estate.  Are the condos selling, appreciating, is the market overbuilt, over priced or what?  When I walked the area it seemed that many of the apartments/condos were vacant.  ??

[Benny B]

When I walked the area it seemed that many of the apartments/condos were vacant.  ??

You might want to get your Coke bottles re-bottomed, Milhouse.

[MUsoxfan]

Those are the local tourists looking for fish'n chips or Milwaukee onion rings, what about the real estate.  Are the condos selling, appreciating, is the market overbuilt, over priced or what?  When I walked the area it seemed that many of the apartments/condos were vacant.  ??

Looks like things are doing pretty well to me

[ZiggysFryBoy]

Those are the local tourists looking for fish'n chips or Milwaukee onion rings, what about the real estate.  Are the condos selling, appreciating, is the market overbuilt, over priced or what?  When I walked the area it seemed that many of the apartments/condos were vacant.  ??

Vogue, dude, do ya need a new shovel?  The holes you keep digging yourself into gotta be hitting some bedrock by now, a'ina?

[4everwarriors]

Those are the local tourists looking for fish'n chips or Milwaukee onion rings, what about the real estate.  Are the condos selling, appreciating, is the market overbuilt, over priced or what?  When I walked the area it seemed that many of the apartments/condos were vacant.  ??

Dis ain't 1965 no more wit Frenchy's and Eugenes. 3rd Ward is white hot. Lots of new apts. and I know of 2 more buildin's cumin' up. Da 'hole condo scene is roarin' downtown as no new condo developments are planned. Its da tits, hey?

[Benny B]

Here's a nice tidbit... the Metro Milwaukee area is slated to complete upwards of 4,500-5,000 apartments through the end of 2017, and it seems the Twin Cities doesn't go a week without announcing a new apartment development.  Now I'm seeing more articles like this one today from the MSPBJ where tertiary markets like Rochester and Madison are getting in on apartment building en masse.

Demand has to be what's driving the need for all this apartment development... but if home prices are truly going up to bubble levels thereby forcing Millenials to rent, I would think the more dangerous bubble is in the rental sector, not in ownership.

Or maybe there is no bubble.  Maybe we're simply in short supply of housing that isn't obsolete.... lest we forget, a crap ton of homes were built in this country in the 1950's and 60's, but that stock won't be propping up the supply much longer like it has for the last half century.  Granted, much of the tear-down activity is in the older, more affluent areas, but I've seen two homes in the past month here in the northern suburbs being torn down that couldn't have been much more than 30-40 years old, if even.  Maybe they had termites... or maybe 20-25 years is just too old for a house these days (much like our basketball arenas and baseball stadiums).

It's seems like what we have here is one big conundrum... something has to give, and with an aging population looking more and more at downsizing and/or modernizing, I'm wondering if the focus here shouldn't be so much on demand/behaviors/desires of the Millenials as it is on whatever the f$@# the Boomers are going to do.

[GGGG]

I can foresee a time, maybe in about a decade or so, where I may sell my house and just rent.  I'm not going to need the size of my house.  I'm not sure about entering the condo market.  Finding a nice place to live, and then picking up and moving again in a year or two if I want, has some appeal.

[GooooMarquette]

Here's a nice tidbit... the Metro Milwaukee area is slated to complete upwards of 4,500-5,000 apartments through the end of 2017, and it seems the Twin Cities doesn't go a week without announcing a new apartment development.  Now I'm seeing more articles like this one today from the MSPBJ where tertiary markets like Rochester and Madison are getting in on apartment building en masse.

The Rochester case is kinda unique.  A combination of pent-up demand, growth of UMR (a new 4-year U of MN campus that was a long time coming and growing fast), and the Destination Medical Center initiative - a huge combination of Mayo investments, state tax money finally flowing this direction from St. Paul (the flow has been the other direction forever), and lots of private investment. http://dmc.mn

Ten years ago, places like Olive Garden were winning local "best restaurant" awards.  These days, we have a bunch of places that would be pretty competitive in MPLS or MKE.

[dgies9156]

Bought a second home on a barrier island along the Treasure Coast of Florida two years ago. Values were down at the time and Florida was in the dumps. Bought low.

Have no intention of selling but if I did, I'd have a nice intermediate term arbitrage profit. Florida is doing very well, especially in resort and retirement communities. The number of baby boomers retiring between now and 2027 almost assures the market will do well.

That and the further inland you go, the more likely it becomes that your neighbors are reptiles with very sharp teeth!

[Benny B]

That and the further inland you go, the more likely it becomes that your neighbors are reptiles with very sharp teeth!

Seems like the perfect way to fix social security. 

[Coleman]

Anyone else thinking about a refi with the post brexit rate drop?

I just bought a year ago but could already refi to a fresh 30 yr fixed at .50% lower rate...all costs lender paid. Not seeing much of a downside. Would lower my payment $120 a month.

Someone please tell me if I'm missing something

[GooooMarquette]

Anyone else thinking about a refi with the post brexit rate drop?

I just bought a year ago but could already refi to a fresh 30 yr fixed at .50% lower rate...all costs lender paid. Not seeing much of a downside. Would lower my payment $120 a month.

Someone please tell me if I'm missing something

Can't speak to your specific situation, but we refinanced about 1 1/2 years after we bought our house and saved a ton of money.

[ZiggysFryBoy]

Madison's apartment market is booming for 1 reason:  Epic Systems.

[Coleman]

Can't speak to your specific situation, but we refinanced about 1 1/2 years after we bought our house and saved a ton of money.

Yeah, that seems to be the case here too. I'm just always super careful about gotchyas. Seems too good!

[MU82]

Anyone else thinking about a refi with the post brexit rate drop?

I just bought a year ago but could already refi to a fresh 30 yr fixed at .50% lower rate...all costs lender paid. Not seeing much of a downside. Would lower my payment $120 a month.

Someone please tell me if I'm missing something

You aren't missing anything, although I don't know your exact situation.

We own our home outright but I'm thinking about taking a mortgage and then using that money to buy the vacation home we've been discussing. We'd get a better rate by getting a mortgage on our primary residence, and this would be the house we'd be most likely to sell first.

It's amazing to think we could get a 3% or lower mortgage. Who'da thunk it?

As for apartment building ... Charlotte is going absolutely crazy. A new one going up every few blocks, it seems. So far, they're filling 'em, too. Article in the Observer last week said occupancy was over 95%. Jeesh.

[MomofMUltiples]

Anyone else thinking about a refi with the post brexit rate drop?

I just bought a year ago but could already refi to a fresh 30 yr fixed at .50% lower rate...all costs lender paid. Not seeing much of a downside. Would lower my payment $120 a month.

Someone please tell me if I'm missing something

Remember that refinancing with a fresh 30 means that you are now taking 31 years to pay off your home instead of 30 - so part of your monthly payment reduction comes from stretching out the mortgage another year.  However, if the interest savings make up for that extended term, go for it!  Especially if there are no closing costs.

[dgies9156]

Remember that refinancing with a fresh 30 means that you are now taking 31 years to pay off your home instead of 30 - so part of your monthly payment reduction comes from stretching out the mortgage another year.  However, if the interest savings make up for that extended term, go for it!  Especially if there are no closing costs.

Not necessarily. How many 30 year mortgages actually are not prepaid?

Very few!

[Benny B]

Not necessarily. How many 30 year mortgages actually are not prepaid?

Very few!

Last I heard that, on average, a 30-year mortgage is prepaid (a/k/a "paid off") sometime in the 9th year.

[dgies9156]

Last I heard that, on average, a 30-year mortgage is prepaid (a/k/a "paid off") sometime in the 9th year.

Generally correct. CPR on a pool of 30 year fixed rate mortgages generally has them paid off in seven to eight years. In today's marketplace, maybe longer because the interest rate risk to the borrower is flushed out and mortgage mortality will be based on sale of a home or another life incident.

Anybody in this room who took out a 30 year mortgage in 1987 who still has it is financially illiterate.

[dgies9156]

You aren't missing anything, although I don't know your exact situation.

We own our home outright but I'm thinking about taking a mortgage and then using that money to buy the vacation home we've been discussing. We'd get a better rate by getting a mortgage on our primary residence, and this would be the house we'd be most likely to sell first.

Interesting point. We did it the other way around. We originated a mortgage on our vacation home. Logic was we wanted a 7 to 10 year balloon and we would hope that within that time we would have the vacation home paid off. We ended up with a seven year balloon two years ago at a rate of around 3.50%. Makes very little sense for us to refi it off now as we are on a fast discretionary paydown.

[GooooMarquette]

Last I heard that, on average, a 30-year mortgage is prepaid (a/k/a "paid off") sometime in the 9th year.

Which always makes me wonder why so many people do 30-year mortgages, and relatively few seem to do 15.  If most can pay off in less than 15 years, why not take the lower interest rate?

[Coleman]

Which always makes me wonder why so many people do 30-year mortgages, and relatively few seem to do 15.  If most can pay off in less than 15 years, why not take the lower interest rate?

Flexibility? lower minimum payment?

Just guesses

[MU82]

Interesting point. We did it the other way around. We originated a mortgage on our vacation home. Logic was we wanted a 7 to 10 year balloon and we would hope that within that time we would have the vacation home paid off. We ended up with a seven year balloon two years ago at a rate of around 3.50%. Makes very little sense for us to refi it off now as we are on a fast discretionary paydown.

It's hard to complain about a 3.5% mortgage! I hope you and yours enjoy the vacation home for many, many years!!!

[Benny B]

Which always makes me wonder why so many people do 30-year mortgages, and relatively few seem to do 15.  If most can pay off in less than 15 years, why not take the lower interest rate?

Because people don't actually pay it off in 9 years and continue to live in the house... They pay it off in a re-if or so they can buy a new house with a new mortgage.