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Old 08-23-2019, 11:08 AM
 
2,578 posts, read 669,842 times
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Quote:
Originally Posted by mathjak107 View Post
Good luck thinking that .it wonít happen, anymore then as a country every one should earn the national median income .
Wait. Can't everyone be above average?
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Old 08-23-2019, 11:12 AM
 
2,578 posts, read 669,842 times
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Quote:
Originally Posted by Avondalist View Post
Also most inherited wealth is locked up in primary residences.
Are you sure about that? That would surprise me.
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Old 08-23-2019, 11:22 AM
 
2,578 posts, read 669,842 times
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I'd sure like an exact definition of a real estate bubble.
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Old 08-23-2019, 11:30 AM
 
Location: The Triad (NC)
28,843 posts, read 62,924,916 times
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Quote:
Originally Posted by RationalExpectations View Post
Are you sure about that? That would surprise me.
You need to get out of that Country Club echo chamber.

Most = not the top 20% nor the bottom 20%; iow regular folks.
That middle 60% of the public is doing well enough ...
but the paid off home at retirement is still most of their 'portfolio'.

Most of this was hashed out (yet again) in just last few weeks :
Is almost everyone living on the financial edge?
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Old 08-23-2019, 11:36 AM
 
3,845 posts, read 986,457 times
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Quote:
Originally Posted by Avondalist View Post
After house prices crashed, they reverted back to the historical trendline, which is 3x local incomes.

JP's Real Estate Charts: Inflation-adjusted housing prices

People think 2000-2006 or 2010-now is how housing markets are "supposed" to work and the 2009 prices were a bargain. In reality the 2009 prices were historically normal and real estate has mostly been overpriced since 2000.

It's really sad that we've lost sight of this. Your primary residence should be seen as a cost to be minimized, so the old way was better in that respect.
It was not a normal job market for all sectors.

It's easy to say that it quickly reverted to 3x income because that's the limit to which most lenders will cut a mortgage. (Plus, even families whose income was cut in half and bought half the house that they would've been approve for would support your figure... percentage statistics are often absent any absolute values for a reason - to drive a CRAFTED point home) In the most generous arrangements (stretching payment-to-income and DTI ratios) still limit this to 29/41.

All this statistic shows is the resiliency of the human desire to push the limits to what they can be approved for. And *** THAT *** is the behavior that sets market prices!
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Old 08-23-2019, 12:11 PM
 
1,876 posts, read 632,023 times
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Quote:
Originally Posted by RationalExpectations View Post
Are you sure about that? That would surprise me.
No it's probably not true, sorry.

https://www.federalreserve.gov/econres/scfindex.htm

Link "Excel based on public data, Estimates inflation-adjusted to 2016 dollars"

Table 8, 2016 column: the primary residence is 42.6% of all non-financial assets, and non-financial assets are 57.4% of all assets.

The primary residence was 24.5% of all assets in 2016.

There are other factors, such as the outstanding debt on the primary residence upon death, as well as any drawdown of savings during retirement from any asset category, but given only a quarter of assets are the primary residence I don't see over half of inheritances coming from the primary residence.
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Old 08-23-2019, 12:42 PM
 
153 posts, read 30,929 times
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Quote:
Originally Posted by JonathanLB View Post
Yeah sorry but lol @ a house being 3x your income average. That would be like $100-150K houses in tons of markets and that ainít happening. Especially not when first time home buyers only need to put down 3% and thereís a ton of generational wealth.

Some people need to climb out of their bubble because itís killing their understanding of the local housing market. The Vegas forum has this issue, people whining that the average wage earner canít afford a house therefore itís overpriced. Maybe if it was somewhere in the Midwest, ok, but take a world class city with world class dining and entertainment and great weather, next to a state with horribly overpriced real estate, and it doesnít matter at all what the average wage is there, has nothing to do with housing prices especially at the high end. Two of my relatives have retirement money from a more expensive state, a pension from there too, another friend bought a million dollar house and works remotely / online business, I also donít care or rely on the local economy, and plenty of retirees think houses are cheap just like I do because they are cheap by any West Coast standard.

I feel sorry for the locals who find the houses expensive but thereís a bigger world out there with a lot more money than they realize and the simple reality is how cheap or expensive a house is doesnít depend on the local economy but the global economy. As long as people come from places where the market is far more expensive, than the area will be seen as cheap to enough people to lift housing prices. Itís irrelevant that $500K is a lot to an employee on the Strip. Itís entirely relevant that $500K is a bargain for anyone coming from CA right next door. Maybe it matters to young people that the local economy canít support that house, but it sure doesnít matter to middle aged and older people who are selling a much more expensive house and may be able to pay cash for a house in a cheaper area and may have enough passive income sources elsewhere to shrug off the local economy.
Agreed. Your point about generational wealth and 3% are big factors even to local capital.
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Old 08-23-2019, 12:49 PM
 
3,845 posts, read 986,457 times
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Quote:
Originally Posted by bad debt View Post
Agreed. Your point about generational wealth and 3% are big factors even to local capital.
And if you're not "doing" the generational rollover wealth model, you will be fighting an uphill battle trying to find a "wage paying job" that counterbalances the advantages of those in your generation who didn't have to lift a finger for their endowment.

You're literally saving your children a house payment and INTEREST for 30 years. How much of a lifestyle improvement does that create not having a mortgage from DAY 1?

Try to earn income (via promotion, via overtime, whatever) to match someone's lump sum will either cost you most of your 20's in work, or a lifetime of interest. You can't "work" your way to having the same advantage.
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Old 08-23-2019, 03:48 PM
 
Location: Florida and New England
1,259 posts, read 1,437,860 times
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Quote:
Originally Posted by ddm2k View Post
And if you're not "doing" the generational rollover wealth model, you will be fighting an uphill battle trying to find a "wage paying job" that counterbalances the advantages of those in your generation who didn't have to lift a finger for their endowment.

You're literally saving your children a house payment and INTEREST for 30 years. How much of a lifestyle improvement does that create not having a mortgage from DAY 1?

Try to earn income (via promotion, via overtime, whatever) to match someone's lump sum will either cost you most of your 20's in work, or a lifetime of interest. You can't "work" your way to having the same advantage.
Are you suggesting transferring housing as an asset to your heirs? The big problem occurs when there are multiple heirs.

The actual number of heirs who inherit something meaningful, in terms of a "lump sum" is pretty low. Less than 5% of Americans will inherit one million dollars over the course of a lifetime. Meaning 95% will inherit less (and I am guessing for the great majority the number is zero dollars).
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Old 08-23-2019, 03:55 PM
 
73,032 posts, read 72,816,997 times
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Quote:
Originally Posted by RationalExpectations View Post
Wait. Can't everyone be above average?
sure they can. it's called Communism . everyone is equal .
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