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Right now, 1 in 5 homebuyers in Utah is a cash buyer. Mostly Investors, and those that have sold a house and need a new place to live. Some homes are bidding up more than $100k over asking price. There's a lot of people in this market with cash money apparently.
 

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The overbids are crazy. I agree that's not sustainable. I know one local couple who was outbid even though they offered $20k over; sounds like an unusual portion of people are offering high bids with no contingencies, no site visits and forgoing inspections. I think that's also unsustainable and hopefully for buyers sake will return to normal. I know I would be hard pressed to ever skip the due diligence period.

But the basic price pointing and appraisal values? That's where I'm seeing expert opinion that the bubble won't burst in a traditional way. The only indicator I've read that could be spelling trouble is a noticeable increase in documentation errors but they believe that's from that sudden increase in a need for underwriting (ie novice clerical errors).

I personally would rather see home prices not exceed middle class income increases so radically but this doesn't seem to be a traditional bubble. I honestly believe places like Cedar are going to be in trouble if these prices keep up. Nothing good comes from locking out middle class and "working" class first time home buyers.
 

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My wife and I purchased our first home in 2013 for 155k. We sold it two years later for a nice profit. The current market valuation of it is $484K. 🤮🤮

3.12x increase in eight years is simply insane... I sure wish I would've held onto it for the last eight years!!
 

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I have a friend who sold his house last year and was planning on starting his new one this spring. He has bought the lot but the contractor can't even get materials as they are limited by levels of past purchases of materials. Now he's sweating the tax consequences. Pretty much sucks all around.
 

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My dad just accepted an offer on my childhood home today. They got 4 offers in three days on the market in Highland. Took the one that was $75k over list, not contingent on financing (they also had an all cash offer that was $25k over list). And we're talking a place with MASSIVE yard upkeep (multiple large water features, fruit orchard, grape arbor, lots of landscaping, etc). Blew my mind. I thought for sure it would take a bit for somebody to be willing to take on all that work, but nope.
 

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You should see the home in Highland that the guy who started "Coinbase" is building. Its rumored to be in the $40 million range... Its one big SOB. Probably going to be bigger than Josh James's (Domo) 40,000sq/ft house. Some people have stupid amounts of money.

-DallanC
 

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The banks are not the ones in the bidding war, it's the folks with the cash that can afford to push up the price and get the house using cash.

One of my friends daughters placed on offer on a home that was $70K over asking price. She had some cash to offset the asking price and going with a conventional loan for the mortgage. A "verbal agreement" of acceptance of her offer was established. Within 30 minutes she was told her offer had been denied (nothing in writing) and the house was sold. I was told that someone migrating from the West (California) to Utah had paid cash for the house at $100K above asking price. It's happening in Wyoming and Montana too. The "Coaster" are selling for an enormous amount of money and paying cash with money in pocket.
 

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Discussion Starter · #28 ·
OSB today at Lowes $48!!lol.

I wouldn't want to be building a doghouse at today's prices.
 

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My wife and I purchased our first home in 2013 for 155k. We sold it two years later for a nice profit. The current market valuation of it is $484K. 🤮🤮

3.12x increase in eight years is simply insane... I sure wish I would've held onto it for the last eight years!!
We are getting ready to build.. and while it's an insane cost, the reason we can afford the upgrade is exactly what you said. We bought our home for $155k in 2012. It's tripled in value. My mortgage on my new home will be less than that of a first time homebuyer (for half the house). Incredibly unfortunate situation for new couples/families.

Luckily, there are still some trustworthy builders that aren't trying to profit off of lumber. The spec homes are limited on lumber-per-month, and in some cities (all?) in Salt Lake County contracts-per-month are even limited. So spec builders have all the land, the most lumber, but are limited so they SPIKE their prices and limit your options. But a good custom builder can easily access the lumber for their current builds so they aren't as stingy. Lots are a problem though. Ivory, Nilson, and the likes are buying up massive developments. Making a FORTUNE.

Summary:
1. I don't think costs will go down much. A baby boom in late 80s/early 90s is driving builds. Shutdowns, demand, supply issues (not just production, but actual supply), diy's higher than ever (thanks pinterest), Utah's 19% population growth (holy crap), etc... You may see a 2x4 go back to $6 from $8, but the days of $3 for wood are gone. Our housing market, income to cost ratio anyway, will replicate California.
2. What's wild about this is also the state, city, and federal contracts that are being cancelled. They can no longer afford the original bids. I don't know a ton on this but find it interesting.
 

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Not only is lumber out of site, but concrete is bad too! I know a concrete contractor (flat work) and he wouldn't order concrete if he didn't have at least two trucks (16 yards) Now he was told he can only get one truck per day if he orders it a week in advance. And its still not guaranteed he will get that much. He's had to cancel future jobs because of this. It's hard to keep a 5 man crew busy everyday when your only doing 8 yards. His prices are going up to compensate for the lack of 'Mud".
 

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Cement contractors like Sunroc and Western Rock are on rations for cement powder.

I thought this was funny and kind of sad.
 

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Geneva Rock is down to 4 days of concrete production a week, they cant get enough supplies to run the full week.

-DallanC
 

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Feels like every aspect of our life is now being affected in a negative way due to the "close things down for 14 days to flatten the curve" ... production flat-lined, now every time you turn around there is something else coming up in short supply. I read when that stupid cargo ship got stuck in the canal, that BRP had snowmobile parts enroute and that was enough of a delay they had to either shut down production of their 2022 snowmobiles, or reorder all the parts and air freight them to Canada, which is what they chose to do.

Microchip shortage is affecting new phones, computers and now car and truck production. Vehicle prices are skyrocketing, both new and used. Now construction materials in short supply... wood, concrete, copper etc. Fuel prices are rising quickly, it makes me curious to see how much food production might be affected this summer to fall.

Everyone BUT the government calls this "inflation".

-DallanC
 

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I do not know if the shortages or supply chain issues, excuses, reasons, etc. are a result of inflation or not but I do know that as long as people continue to pay the prices, greed will be the incentive to not fix the issue.

Sent from my SM-N976U using Tapatalk
 

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Microchip shortage is affecting new phones, computers and now car and truck production. Vehicle prices are skyrocketing, both new and used. Now construction materials in short supply... wood, concrete, copper etc. Fuel prices are rising quickly, it makes me curious to see how much food production might be affected this summer to fall.

-DallanC
I have electronic equipment that I ordered a month ago, had a ship date of April 23, now it is pushed into May, One model says it will be July before it is shipped. My customers are not too happy.

The chip company in Japan burning down in March created an even bigger shortage than covid.
 

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I do love it when folks try to blame this on one simple factor. I've seen folks on opposite aisles pin it on both Obama and Trump like it's an easy issue to dissect.

A new one to me....fly fishing equipment is having supply issues. Read an article today that not only are rods and packs flying off the shelves but stateside fly tying is being affected by a hook backorder pushing as far out as this autumn. Might be time for me to look at my needs for August before it's too late.
 
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