Weekly Housing Trends

The big story

Stefania Pelfini la Waziya/Getty Images

A home for sale in Colorado has racked up over 4.3 million views on Zillow Gone Wild—not because it’s shaped like a spaceship or filled with taxidermy, but because its previous owner is still inside and refuses to budge.

Her name is Tori McMechan. She bought the property in Nunn with her husband in 2006. After he died in a car crash, the home went into foreclosure, which she fought in court but lost. She says any new owner will need to evict her, which could send the case right back to court.

Listed for $215,280, the property is being pitched as an “affordable investment opportunity” at a price so good, “if you blink it will be SOLD.” So why has it sat on the market for months? The listing agent refused to comment, but investors had their theories.

“You’re not just buying a house. You’re buying litigation where the person inside has a reason to make your possession as slow and public as possible,” says Jacob Simpson at Consistent Homebuyers. Beyond legal holdups and fees, “The cost people underestimate is carry: taxes, insurance, utilities, debt service and deferred maintenance.”

Buyers may also struggle to find a lender, and title insurance likely won’t help you oust the occupant, since standard owner’s policies carry an exception for rights of parties in possession, according to Alex Rodino, a Realtor at The ARC Platform/Keller Williams in Savannah, GA. “Would I buy this house?” he says. “Personally, no.”

How to price an occupied property

But not all investors would steer clear.

“At the right price, the headache is the opportunity,” says Daniel Amodeo at Amo Realty, who might bite for $150,000. “That’s enough of a discount where I could potentially absorb legal and carrying costs.”

“Buying it isn’t a mistake; it’s buying at a price that works only if the occupant leaves quietly,” adds Simpson. “Underwrite the worst case, and if it still works, it’s a deal. If it works only on the optimistic path, it’s a gamble.”

And forget the courtroom: The fastest way to get someone out of a house is to understand what’s keeping them there in the first place.

“The person inside usually isn’t refusing out of spite. They’re overwhelmed or can’t afford to move,” Simpson explains, adding that he has coaxed occupants to vacate by offering cash for keys, typically $2,500 to $5,000. “If what’s stopping them is a rental deposit and a moving truck, these solutions are faster than a court date.” He’s not sure, though, if this occupant would take the deal. “If her goal is the courtroom, no amount of relocation money changes it.”

Rodino agrees: “Somebody who feels steamrolled will fight to the last available motion.”

      

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What's up this week

Realty check

Source: WalletHub; Designer: Andre Blockett.

😇 This state has quietly become America’s best place to live with high wages, short workdays, and low housing costs—that is, the whole package. Find out which state it is, and where your own stands.

📈 Think mortgage rates are high now? This chart will change your mind.

🐣 Forget spas and home theaters. Meet real estate’s surprising new status symbol.

🚀 This engineer left SpaceX to solve problems closer to home: by building houses for half the usual price.

😱 NYC Mayor Zohran Mamdani’s pied-à-terre tax has a surprising winner.

☠️ For decades, these run-down properties couldn’t pay investors to show up. Now, everyone wants in for one simple reason.

🏘️ He bought 25 homes on a $52,000 salary, thanks to a financing trick bankers rarely bring up.

🤑 Think NYC is expensive? This southern city is somehow pricier.

🔪 Cut it out: Interior designers say these three things make your kitchen look cheap.

🍠 A house shaped like a potato chip has hit the market, and that’s not the weirdest thing about it.

🏗️ This $4.7M mansion is being called a “dump.” It must be the views.

You asked, we answered

Q: Who has it harder right now, homebuyers or sellers?

Source: Redfin; Designer: Andre Blockett.

Although it’s been a brutal summer across the board, buyers now have the negotiating edge over sellers in nearly 80% of US markets—that is, if they’re still out there at all. High mortgage rates and housing costs have shrunk home-shopping foot traffic to a record low, so the few people hitting open houses face less competition.

Meanwhile, the number of homes for sale has ballooned in many markets, forcing sellers to slash prices. In oversaturated Sun Belt markets, one in five homes has been listed for less than what the owners paid. Still, these dynamics vary by location. Sellers still have the upper hand in six major cities mainly in the Northeast. Meanwhile, buyers have the most power in Miami, Nashville, and a handful of Texas cities.

Buyers are expected to stay ahead into October, which is seasonally the best time to buy a home: typically, over 30% more listings than usual, 30% less competition, and $15,000 off the average house. Meanwhile, sellers will have to wait until April for their sweet spot, when they stand to gain 16.7% more shoppers and $5,300 more cash at closing.

Got a question about real estate? Ask it here, and we’ll answer it in a future issue.

Real talk

Anthony O’Neal’s first property in Columbia, TN.

At 19, Anthony O’Neal was sleeping in his car and $40,000 in debt. Today, he owns real estate on two continents and is the author of Stop Living Paycheck to Paycheck. Here’s how he went from stretching McDonald’s burgers to buying six properties, plus his end-run around high rates.

Q: What were your “paycheck to paycheck” days like before you broke out of this cycle? “At 19, I was homeless and sleeping in my car with $40,000 of debt due to poor financial decisions. Fast forward a year or two later, I was still struggling. I’d cash my $900 paycheck, pay my bills, and be close to broke again. I vividly remember driving to McDonald’s, ordering two double cheeseburgers with my last few dollars. I cut the burgers in half and called that dinner for the next two days. That’s when my mindset shifted. I thought there has to be a better way. I started educating myself with personal finance books and podcasts. By the time I turned 29, I’d bought my first home.”

Q: Tell me about your first property. “It was a house in Columbia, TN, for $205,000. I later sold that property for almost $450,000. Since then, I’ve purchased six properties and still own four of them: three in the United States and a $140,000 condo in Ghana, where I recently gained dual citizenship. My rental properties pay the mortgage and build equity. I love the equity play. Seeing that balance go down is amazing.”

Q: What advice do you have for buyers struggling with today’s high rates? “Marry the house and date the rate. I just closed on a home recently, and the rate is high. I married the home because I love the home, and I’m going to date the rate. I’m always watching the market to see if interest rates are going down. The rate on my first home was 2.25%, and we’ll never see that rate again, but if I can get a rate around 4% or 5%, I would rock with that.”

Q: Any advice for real estate investors? “The key is to find a solid tenant who will take care of your home and pay the rent on time. It can become a headache if you have the wrong tenant. So don’t overextend yourself. Make sure you’re in a financial position to pay two mortgages if rent is late.”

      

Housing market of the week

Michael Buckner/Contributor/Getty Images (Chip and Joanna Gaines); Steven Autry/Getty Images (Silos); C.I.F. Real Estate Services (homes).

Justin Ramos started his real estate career the way lots of New Yorkers do: by renting out a spare room in his Queens apartment to cover his mortgage. He then set his sights on Waco, TX, a place that’s had a very good decade thanks to two HGTV stars who put this small city on the map with a whole bunch of shiplap.

How he got started: “My best friend had moved to Waco, and each time I visited, it was clear that a tourism industry had developed to visit the properties renovated by Chip and Joanna Gaines,” Ramos recalls. “Although out-of-state investing can be difficult, my friend introduced me to a real estate agent, who introduced me to a property manager.” He has since purchased two properties for $80k and $105k, which rent for $1,075 and $1,350 per month. 

His market’s pros: “Chip and Joanna helped put Waco on the map nationally, which drives up out-of-state buyer awareness and long-term property appreciation and resale visibility,” he says. Beyond HGTV, Waco boasts big employers like Baylor University and SpaceX, located 20 miles out in McGregor.

The cons: Short-term rentals are heavily restricted in terms of where and how many can operate. But Ramos finds long-term rental demand is strong. “The salaries are high enough to support current rental prices, but not high enough for most folks to own,” he says. “So the tenant pool is deep.”

His advice: “House hacking is the best way to start because it puts a roof over your head while putting money in your pocket,” he says. From there, don’t be afraid to invest out of state, provided you’ve found a great on-the-ground team. Ramos helps agents cultivate relationships at Compai.

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