Was it harder then...or now on LI? (Melville: insurance, how much)

[ClarkStreetKid]

But when we really get down to the high cost of housing on LI (or anywhere else), the main driver for it is us. Everybody from the mid eighties on has taken advantage of the various housing shortages that have plagued LI.

[GypsySoul22]

Your mother in law lives in the over 60 year old fantasy world...like my father.
His answer to EVERYTHING is 'work harder' or 'suck up to people' to make good money and hook a great job.

My parents had three kids, owned a house and we lived okay (modestly but we went to private school!). We only have the one child and have no hope in heck of digging out unless we move.

[4StanleyCups]

Originally Posted by clamboy

I think this is the net/net of this dialogue

Everythings up threefold but salaries.

My question to the boomers is....If you were under 30 could have the same today given the current reality?

Could a single income Hardhat have what he had 30 years ago?

Good questions. I can use a friend's son as a comparison/example.

He graduated with a Bachelors last year and went to work in NYC at a starting salary of 40K. He just got a raise and is now making 43K. He and his girlfriend rent a 2-br apt here on LI (not in a private house, it's one of the new ones that are like townhouses) that costs them about $2200/mo total ($1950 rent plus utilities and cable etc). He's not at the point of wanting to commit to a house at this point in the relationship but might in a year or so. His girlfriend probably makes about 18K/yr if that. So be generous and say their total household gross income is 60K.

The cheapest decent houses in the area where they want to live (same community/area as where I've lived since the early 1970s) start at 400K and the taxes start at $8K.

So comparing my 1970s status (37K gross household income, 72K house, $2800 property taxes) with his 2007 status (60K gross household income, 400K house, $8000 property taxes):

Gross household income is now double.

Property taxes are now triple.

The house price is what messes this up. If you compare my 72K seventies house with today's 400K price, then you've got a house price that has gone up 550%. More than quadrupled.

But my 72K house was waterfront and at the time was high-end. The non waterfront houses in the same development were selling for the high 50s to 60K. We got a good deal because the owner had to sell fast because he had a sudden job offer upstate and wanted to move his family up there before Labor Day. A starter house in the same neighborhood as my friend's son and girlfriend want, would've sold for probably 40K at the same time I spent 72K for mine.

So what's the most accurate comparison? The 1970s 40K starter home located between Rte 27 and Rte 27A, costs at least 400K today. That's a tenfold increase.

My 72K waterfront home would sell for between 720K and 750K today. For ease of math let's say 720K. Again a tenfold price increase.

Starting gross household income doubled.
Property taxes tripled.
House prices went up tenfold.

Nope, couldn't do it on that basis today.

Point well taken.

[clamboy]

Originally Posted by GypsySoul22

Your mother in law lives in the over 60 year old fantasy world...like my father.
His answer to EVERYTHING is 'work harder' or 'suck up to people' to make good money and hook a great job.

My parents had three kids, owned a house and we lived okay (modestly but we went to private school!). We only have the one child and have no hope in heck of digging out unless we move.

You mean uphill to school (both ways)through 3 feet of snow barefoot.

When did the Woodstock generation become the Depression generation?

Im picking my self up by my bootstraps and gettin outta dodge.

This party sucks.

C

[jfkIII]

Originally Posted by 4StanleyCups

The cheapest decent houses in the area where they want to live (same community/area as where I've lived since the early 1970s) start at 400K and the taxes start at $8K.

So comparing my 1970s status (37K gross household income, 72K house, $2800 property taxes) with his 2007 status (60K gross household income, 400K house, $8000 property taxes):

Gross household income is now double.

Property taxes are now triple.

The house price is what messes this up. If you compare my 72K seventies house with today's 400K price, then you've got a house price that has gone up 550%. More than quadrupled.

No different than the stock market...this is why "corrections" are needed. Just remember...the ones that make out the best are the ones buy low and sell high! What you're now seeing in major areas such Long Island, Las Vegas, etc. is simply a correction in the housing market. If it did not occur...our children, grandchildren and great-grandchildren would have no hopes of ever owning a house.

[4StanleyCups]

Originally Posted by jfkIII

No different than the stock market...this is why "corrections" are needed. Just remember...the ones that make out the best are the ones buy low and sell high! What you're now seeing in major areas such Long Island, Las Vegas, etc. is simply a correction in the housing market.

I completely agree, and that's why IMO the best way to invest in the stock market is to think "hold long term". Not a year or two years or even five years. Ten years minimum, fifteen or twenty even better. I shake my head at people who go into conniption panic fits because their ABC Company stock is "down" from yesterday or last week or last month or the last six months. Sure, I check mine briefly - once a month when I get my brokerage statement. When a stock splits, like Questar did last month I smile because I know that a year or two or three from now the share price will be the same or more as it was before the split and now I've got twice as much as I did before.

It's all good, and should be expected.

Sure there are the occasional total busts (think the telecom crash of the late 1990s) but who's to say that restructuring won't eventually help even those recover. (Housing as well as stocks) I lost a bundle on Nortel (Northern Telecom) but so did lots of other people and hey, it also gave me a nice capital loss to offset all of my capital gains that year and for the next couple of years as well.

[Glad2BHere]

Originally Posted by jfkIII

No different than the stock market...this is why "corrections" are needed. Just remember...the ones that make out the best are the ones buy low and sell high! What you're now seeing in major areas such Long Island, Las Vegas, etc. is simply a correction in the housing market. If it did not occur...our children, grandchildren and great-grandchildren would have no hopes of ever owning a house.

And what is that? How is the housing market correcting itself?

[HockeyMom72]

What I told my daughter who is just stating out (new teacher). Don't attempt to buy a $400,000 HOUSE at first. Buy a small (800/900 sq. ft.) condo or co-op. I looked myself a couple of years ago. It can be done in the $200,000 range. Get a 2 bedroom if you can (more saleable). Keep the condo for some years and get equity into it. It is better than wasting money on rent. When you have equity in that, sell it and use that to put towards a house. Hopefully, by then the price of single families might have gone down a bit. If you get a 2 bedroom, you will be able to stay in it longer if you decide to start a family. I would also say try to get a co-op. That way your taxes are included in the monthly maintenance and less of a burden.

As I said, I thought about doing this myself a few years ago. The units that I looked at were all being sold by young familes with one or two kids who were "moving up" to single family houses.

It is worth a consideration. I also told my daughter to try for something just over the Queens border. They may be older, but I found they were cheaper and the taxes in the City are definitely less.

[GypsySoul22]

Clamboy--you said you are moving to Connecticut. Where abouts? It's not very 'cheap' there, either. I'm curious where in CT you decided on.

Hockeymom, your advice makes sense. I really don't understand how people are grabbing up these homes for $500,000 then renovating them for $$ on top of the mortgage.

Seriously, is everyone IN DEBT? What do they do, just go bankrupt so the rest of us honest folks have to bail them out? Living within or below your means is the only thing that make sense. However, it's hard to do.

[clamboy]

Originally Posted by jfkIII

No different than the stock market...this is why "corrections" are needed. Just remember...the ones that make out the best are the ones buy low and sell high! What you're now seeing in major areas such Long Island, Las Vegas, etc. is simply a correction in the housing market. If it did not occur...our children, grandchildren and great-grandchildren would have no hopes of ever owning a house.

That aint gonna help the taxes though.

That would suck to be assesed on an asset now if the bottom fell out.