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Yep a young person in their early 20's doesn't have any reason to go buy a nice family sized house. That's later. There's no shame in renting, or even buying a fixer for under $200k and building equity in it. You're young, full of energy... you can make some repairs!
In SoCal the "solution" for young people wanting to buy their first home is to look at condos, look further out from major employment centers and put up with a typically miserable commute, or buy something older. The mass subdivisions that are close to where the jobs are turn out to be among the highest priced real estate - think Irvine, Tustin, and Laguna Nigel for example.
In 1978 when I bought my first home in SoCal I paid about 3.3X my annual salary at the time. The area had been seeing about 10% annual appreciation for several years, so like most of my peers there was a feeling that if we don't buy now we'll get priced out of the market. We bought it on an FHA loan that had low down payment requirement (5% IIRC), and reduced payments leading to negative amortization during the first 5 years of the loan. I was early in my career, and had good prospects for continued income growth, so I was pretty much exactly the sort of person that loan was designed for. It all worked out OK for me, but I could have been derailed if I lost my job for some reason, or needed to sell the home at a bad time for the market. In fairness, I did not have student loan debt, or a big car payment, or any other debt besides the mortgage, which I realize may not be typical.
I tell this story because some years later I remember thinking pretty much what Sandpointian is thinking - how can young people buy their first home given what had happened to real estate prices. Yet somehow, many people who want to own continue to find ways to get into the market, even in the often overheated and very expensive SoCal market.
I thought it was interesting to call a new home a starter home. Personally, I'm not sure that any new home should be considered a starter home. That's not the way my parents started, and it's not the way we started either. My first home was built in 1955, was 23 years old when I bought it, and it definitely was not a picture of perfection. Our second home was even older at the time we bought it in 1994. 33 years old, and it still had the original kitchen and all the original baths. Floor coverings in some rooms were original to the house. Even our retirement home here in Sagle was 14 years old when we bought it. Of the three it was the only home that we didn't think needed major renovations at the time we bought it. We are in the middle of a kitchen remodel though.
Sometimes I feel like some young folks have unrealistic expectations about their first home, the cars they drive, and the lifestyle they lead. Maybe instead of looking at the $200k new home they should consider an older home. If they are handy they might think about a home that needs some upgrades. Outside of kitchens and baths there is a lot a reasonably handy person can do to improve a home using their own labor.
All that said, I do think the NID real estate market is problematic, and maybe not just for young people. I don't have data to back this up, but my feeling is the local values are heavily influenced by immigrants from other states who, in many cases, are bringing years of accumulated equity. As a result, values of a good portion of the market are beyond the price range that can be supported by many of those working in the local economy.
One thing to consider of is whether current values can continue to be supported if the stream of immigrants from other states dries up for some reason. If it becomes less popular to up and move to Idaho we may see values decline, particularly in the higher priced segment. Personally, I don't take it as a given that the stream of immigrants will continue forever.
My concern is about young people, as I have three of my own. In 5-15 years, they will be the young people looking for their starter home. I am watching the millennial generation and the next one in the pipeline (Generation XYZ?) with a kind of morbid fascination and great sympathy. I just do not know how they will ever get into a house of their own given the high prices, high rents, lower wages, more competitive job markets, the other large expenses like schooling, and the proliferation of over schooled/undereducated and underskilled HS and College grads.
On living where one grew up. I recall a friend of mine joking when you she castigated her Mom as to why she had to be spoiled by being raised in such a beautiful area. But nowhere in the conversation was a game plan that to just to stay in the area, one had to start had and early. Prices soared and most have left. One of the most challenging things is to convince your children that (a) your area is special, (b) that to stay requires harder and smarter work., and (c) if you are complacent, you have no chance.
S.
Not to mention that, in all of this, few want to point out how negatively the low wages of the region fare for young people in Idaho. The conservative state legislature has voted down the ability of local cities to be able to require a living wage.
The standard response is that people can "...drive over the state line to Spokane" Well, maybe...
Not everyone can be guaranteed a better-paying job across the state line in Spokane! And, Spokane isn't obligated to provide jobs to people in Idaho. If you're able to get a Spokane job and commute from Idaho, consider it a blessing!
A $7.25-ph (Idaho wages) an hour job is not going to pay for a $200,000+ house (not including the required maintenance in that climate). Even two $7.25-ph jobs with both people working won't, if we're honest.
Jobs in health care are good, but they aren't nearly as plentiful in the Spokane-Cd'A region as they are in other places on the West Coast.
So, who can actually afford to live in Idaho? Only those who bring their money with them! Usually these are people who earned generous pensions in states and cities that had liberal laws regarding benefits. They're the ones who move to Idaho and then vote down the very same laws that benefited them in the states they came from.
Then there's this very NIMBY attitude re: the building of low-income housing and apartments anywhere around Post Falls or Coeur d'Alene.
If your a young person with an education, Idaho really isn't the state for you. It just isn't. I don't know how the kids working at Walmart, Super 1 Foods or Taco Time on a $7.25-ph wage, are going to be able to survive in North Idaho?
The region has really set itself up to be a retirement destination for the well-heeled (who can brave the winters), and a servant-class consisting of young kids with very limited or no education.
Educated kids leave Idaho and don't return. Read D.F. Oliveria's comments about his own children in the Spokesman-Review. He has mentioned this more than once.
Something's gotta give, somewhere.
Last edited by kttam186290; 07-14-2017 at 03:09 AM..
........ The conservative state legislature has voted down the ability of local cities to be able to require a living wage. ............
That is such an entitlement "progressive" political view. Just from a political standpoint, you are much better off remaining in California... where, incidentally, lots of cities set a high minimum wage and have rent control and minimum wage earners still can not afford to buy an "entry level" house, let alone afford to rent a decent small apartment.
There are not very many places where a minimum wage person can afford to buy a house. As in almost nowhere in the USA. Minimum wage people who desire to buy a house have to figure out how to up their income or else be willing to buy a wreck and do all the repairs themselves.
There are several states that are ruled by progressives for you to choose from. Pick one of those instead of being all upset that a conservative state does not have enough "progressive" entitlement programs to suit you. People move to Idaho to escape from the "progressive" control.
There are students who grew up in Idaho, did good in school, got accepted to the University of Idaho, or Boise State, and had to leave the state of Idaho to find work and earn a decent wage at the same time. Many wanted to stay in Idaho and earn a living there, but couldn't. Are they "entitled"?
If someone grew up in Idaho, worked hard and made decent choices but just couldn't financially keep up with the jump in the price of housing...are they "entitled" ?
I have heard many Idaho natives say that the people moving from other states and living off of their generous pensions while forcing the cost of living up are actually the "entitled" ones.
I think the word "entitled" is thrown around a little more than it should be in many circumstances.
That is such an entitlement "progressive" political view. Just from a political standpoint, you are much better off remaining in California... where, incidentally, lots of cities set a high minimum wage and have rent control and minimum wage earners still can not afford to buy an "entry level" house, let alone afford to rent a decent small apartment.
There are not very many places where a minimum wage person can afford to buy a house. As in almost nowhere in the USA. Minimum wage people who desire to buy a house have to figure out how to up their income or else be willing to buy a wreck and do all the repairs themselves.
There are several states that are ruled by progressives for you to choose from. Pick one of those instead of being all upset that a conservative state does not have enough "progressive" entitlement programs to suit you. People move to Idaho to escape from the "progressive" control.
People move to Idaho for all sorts of reasons. Would you like life long or longtime Idaho residents to leave because you are newly arrived and don't approve of their political viewpoints?
A $7.25-ph (Idaho wages) an hour job is not going to pay for a $200,000+ house (not including the required
maintenance in that climate). Even two $7.25-ph jobs with both people working won't, if we're honest.
This tired old strawman?
If we're honest, the only people working for minimum wage
are low-skilled teenagers, and lazy lowlifes who won't put in
the effort to make more, neither of which has any business
living in a $200,000+ house unless it's their parents' or a rental.
(no offense intended to teenagers)
I've been in Idaho six years now and have never worked for
$7.25 per/hour, so as far as I can tell, that's not "Idaho wages".
It doesn't matter where you grew up. The government is not gong to pass laws that entitle every single minimum wage worker to purchase a 3 bedroom, 2 bath, 2 car garage in a nice neighborhood. If you are a minimum wage earner and you want to buy a house, you are going to have to formulate a different plan other than waiting for the government to pass laws that will qualify you to buy a house.
People who really want to own a house figure out how they can do it and they work towards that goal.
It doesn't matter where you grew up. The government is not gong to pass laws that entitle every single minimum wage worker to purchase a 3 bedroom, 2 bath, 2 car garage in a nice neighborhood. If you are a minimum wage earner and you want to buy a house, you are going to have to formulate a different plan other than waiting for the government to pass laws that will qualify you to buy a house.
People who really want to own a house figure out how they can do it and they work towards that goal.
It's not "realistic" when there are no manufacturing jobs for the lower skill set, only service sector employment and small business. You benefit from the privilege of having brought money with you to Idaho, which is something many natives don't have.
Right now there is a shortage of skilled contractors Bonner county. We're finishing up a kitchen project and had a plumber out to the house yesterday to hook up the sink plumbing. He works for one of the larger plumbing companies in the area, and he told me they can't find enough licensed plumbers. Their typical lead time for service calls is 1-2 weeks. Ok perhaps for remodels or new construction, not so good when you need a leak fixed.
I've been having a similar experience trying to find a painter. Several have told me they aren't taking any new jobs at this time.
I think this is typical of many of the skilled trades here in NID. I realize some of these jobs will ebb and flow with the economy, but it seems these are the sorts of jobs where someone can make more that the minimum wage. These are also careers that lead to small business ownership relatively easily if one is so inclined.
Not going to rewrite the NID economy on that basis, but I think there are opportunities here for more than minimum wage jobs.
As for raising the minimum wage, it is counter productive economically. If you make something more expensive, companies will generally find ways to buy less of it. Make it more costly to buy entry level unskilled labor, and companies will invest in automation or other ways to increase productivity of existing employees. Make it more expensive to hire unskilled labor in NID and fewer manufacturing companies will choose to locate their factories here. Increase labor costs for businesses that are already here and they will increase their prices. To the extent they are selling into the local economy that makes it more expensive to live here, which hurts those at the low end of the income scale. It's generally a feel good measure that hurts those It's intended to help.
Dave
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