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Anyone who sells their house for below market rate is not selfless. He's stupid.
Perhaps SCR should charge less to deliver food because that would be selfless and allow more people, including the elderly and the infirm, to have a nice meal to delivered to them. He should give up his tips for the same reason, and stop trying to make more money by accepting tips. It's rather selfish of him trying to make the most money that he can, just like that selfish homeowner who sells his house for whatever the market decides it's worth.
Apples to oranges argument, as usual with you. A person and a house are two different things. If I were to buy my house for three times the 2010 median household income of the city in 2010 and then sell it in 2015 for four times the median household income of the city in 2015, while making minimal, if any, upgrades, then I just took a house that a typical middle-class buyer could have afforded in 2010 and made it UNaffordable to a typical middle-class buyer in 2015 while new housing is NOT coming to the marketplace to help offset that disparity. There's a finite supply of "affordable" housing in this city. The majority of vacant properties here are too far gone to save, like it or not. Just about all new construction is being built with high-end finishes and being sold for 8-10 times the median household income of the city, meaning only upper-middle-class or upper-class people can afford to buy them. This means the person earning the median household income in this city five years ago had a larger pool of available-for-sale homes to choose from than the person earning the median household in this city today because median housing sales prices have been rising more rapidly than median earnings.
Our prices at our business have held relatively constant over the years. I've been here several years, and our base delivery fee charged has remain unchanged, and food prices from restaurants have risen, more or less, equal to the cost of inflation. That means that someone on a fixed income in 2010 who was able to afford our service (with a $2 tip) could conceivably still use our service now in 2014, for roughly the same cost, also with a $2 tip, assuming their annual COLA for social security offset the rise in the actual food prices (and, if not, then that onus is on the restaurants, not our business). If people want to tip delivery personnel in 2014 what they thought was fair 5-10 years ago, then that's certainly their choice, and we don't have any sort of "minimum gratuity" requirement. I was just stiffed again this morning by another UPMC employee, but if UPMC's employees don't want to tip, then nobody is forcing them to do so.
Yes, LillyJo, you and every other homeowner in this thread who wants to sell their minimally-improved home for a handsome profit that far exceeds the rise in median household income during that same timeframe of ownership ARE "greedy". The whole "buy and flip" Ponzi scheme helped lead to the housing crisis that began the Great Recession, and you'd have to be selfish to want a repeat of that to occur. I have no idea how people earning the median household income in a place like San Francisco can afford to buy their first home without overextending themselves. I don't want to see that EVER happen in Pittsburgh, but just with the analysis I've been doing since moving here we're heading onto that same path in a few decades.
As far as what I would do in the situation of a bidding war is concerned (i.e. I list the house I bought for thrice the median household income in 2010 for thrice the median household income in 2015 and receive tons of interest) I'd either sell it at that price to the first person who made the offer OR would do something such as a raffle to pick which one would receive the house at that price. I wouldn't make them be cutthroat and increase the sales price by $10,000, $15,000, $20,000+ because then, inevitably, that house has been made "unaffordable" to the middle-class of the future as that new owner who overpaid by $20,000 will then use that as their baseline and increase their own future sales price from there. Apparently some of you don't care about future generations. Some of us do.
So you are honestly saying, if you paid 50k for a house in 2010 and in 2012 you decide to sell and one person offers 50,500k and the other offers 200k, you are going to accept the lower offer out of the kindness of your heart, and your concern for future generations? I call BS on that one.
You would be better off to take the 200k, and give the other person who made an offer 50k of it so they can have 100k to put towards a house.
SCR, you are shoehorning the house flipper argument into a conversation where it did not exist prior. Your original argument was that home owners should feel guilty about their homes appreciating. If you honestly feel that way I don't think the United States is the right country for you.
I personally use these metrics for pricing our neighborhoods:
ONE EXTREME: If the median sales price of homes in a neighborhood surpasses thrice the median household income for both the city AND that neighborhood, then the neighborhood is in danger of becoming "overpriced", as most city residents will not be able to afford a home there, AND typical neighborhood residents may no longer be able to afford to buy homes in their own neighborhood. The pool of potential buyers will shrink to the point where housing prices will need to come down a bit to attract buyers.
If the median sales price of homes in a neighborhood surpasses thrice the median household income for the city while still being around thrice the median household income of the neighborhood, then the neighborhood is "expensive" by city standards while still being stable because neighborhood residents can typically still afford to buy there, even if residents of most other city neighborhoods can't. Home prices rising in this scenario would make the neighborhood risk becoming "overpriced".
If the median sales price of homes in a neighborhood is less than thrice the median household income for that neighborhood while still being greater than thrice the median household income of the city, then the neighborhood is a "bargain" because someone earning the median household income in that neighborhood is not having to shop at the top of their approved budget to afford a home in their neighborhood while most city residents still can't afford to buy there. There is room for market correction steering this prices upwards a bit.
OTHER EXTREME: If the median sales price of homes in a neighborhood is less than thrice the median household income for both that particular neighborhood AND the city overall, then the neighborhood is "underpriced" because neither neighborhood residents nor city residents at-large have to shop at the top of their approved budgets to buy a home there. There is ample room for moderate market correction pushing pricing upwards.
Why do I care about this? I don't ever want to see the day arise when the majority of Pittsburgh's neighborhoods have median sales prices that exceed thrice the median household income of the city because then the majority of the city will officially be "unaffordable" to the middle-class. My concern is that the number of neighborhoods in the "unaffordable" category has increased just from 2010 to 2014, and there will undoubtedly be more added to this list in the coming years. One of Pittsburgh's greatest strengths has consisently been "housing affordability". Many have been moving here in recent years because unlike DC/NoVA, NYC, S.F., L.A., etc. one can enjoy the urban experience here, earn the median household income here, and comfortably afford to buy a modest home here. When we lose that edge, we will be taking a big hit psychologically. We're certainly not there yet, but if left unchecked we WILL become "unaffordable" in another generation or two given current trends of housing sales prices rising more rapidly than real wage growth.
I wouldn't mind if the median sales price for a home in "XYZ Neighborhood" went from $102,000 in 2010 to $150,000 in 2015 if the median household income in that neighborhood likewise rose from $34,000 in 2010 (1/3 of $102,000) to $50,000 in 2015 (1/3 of $150,000). By-and-large that has NOT been happening in this city, though, where many neighborhoods HAVE been seeing their median sales prices rising far more rapidly than the rise in median household incomes, pricing more and more middle-class people out of the market.
Those of you who already own homes don't care, obviously. I shouldn't really "need" to care since I'll be buying a home before this bubble hits. I do worry about future generations, though. Don't any of you? What do 20-somethings and 30-somethings in NYC or L.A. do to afford their first home these days? Even if they're making $100,000 per year working as a software engineer at Google or something the median sales price of homes in these areas FAR exceeds $300,000. Do they all mooch and sponge off their parents like trust fund hipsters? Is that the future we want for Pittsburgh? A future generation that can't make it on their own without relying on their parents' pocketbooks?
So you are honestly saying, if you paid 50k for a house in 2010 and in 2012 you decide to sell and one person offers 50,500k and the other offers 200k, you are going to accept the lower offer out of the kindness of your heart, and your concern for future generations? I call BS on that one.
You would be better off to take the 200k, and give the other person who made an offer 50k of it so they can have 100k to put towards a house.
What part of "housing isn't a commodity" don't you people understand? Housing is a basic need---a necessity. Buying a middle-class-suitable house in 2010, sitting on it, and then selling it for upper-middle-class-suitable pricing in 2015 just took one more home out of the already dwindling potential pool for typical middle-class buyers. Housing (that you don't pour money into via renovations/upgrades to improve value) shouldn't be sold and traded like a stock in IBM or PNC with the "buy low; sell high" strategy. If you buy "average" in 2010, don't put money into that asset, and then sell "high" in 2015, then all you did was help to lay the groundwork for another housing bubble as that next person wo just bought "high" in 2015 will try to sell "very high" in 2020.
NYC and San Francisco weren't always "exclusively for the elite". They became that way due to generations of people greedily flipping homes for successively greater and greater variances above the median household income in these areas at the time of sale. Now that's why someone even earning $100,000, far above the median household income in San Francisco to begin with, can't even afford to buy a home proximate to work without sponging off parents.
Until someone can show me how the region benefits from housing selling for progressively higher variances above the median household income with each successive year I'm sticking to my guns.
SCR, you are shoehorning the house flipper argument into a conversation where it did not exist prior. Your original argument was that home owners should feel guilty about their homes appreciating. If you honestly feel that way I don't think the United States is the right country for you.
People don't buy a luxury item like a Mercedes-Benz gambling as to whether or not it will increase or decrease in value. It will always depreciate.
People don't buy a luxury item like a yacht gambling as to whether or not it will increase or decrease in value. It will always depreciate.
Why should people buy a non-luxury and essential item like a house gambling as to whether or not it will increase or decrease in value? Why not just buy it to live in it instead of treating it like a piggy bank where you can cash in big and then buy a Mercedes-Benz with the sales profit? There were all sorts of dire stories on CNN Money, Forbes, etc. over the past few years indicating many Baby Boomers who are now in "underwater" housing markets are royally up the creek without a paddle because they overpaid for McMansions in the early-2000s, gambling that the housing market would continue to climb, only to instead have it depress below what they still owe on their homes as they near retirement while almost all of their "retirement savings" are sunk into the house. Why should someone like me have any sympathy for someone who took such a gamble on something that is supposed to provide basic shelter?
Having a home (or any adequate housing) is not a right that is granted to us in the United Stated Constitution. I'm sorry if you cannot accept that, but that is the country that you live in.
Among with countless other things, buying a home is an investment. Sometimes you get a return on an investment and sometimes you don't. If you don't understand a basic concept of an investment at your age then I really have no idea what to tell you.
Shelter is a basic human need. Home ownership in a desirable neighborhood at a lower-than-market price is not.
So what you're saying is that it's perfectly fine we're on the same long-term trajectory as NYC, SF, NoVA, L.A., etc. with median sales prices in an increasing number of neighborhoods outpacing the growth in median household incomes in these same neighborhoods?
Sounds to me like either:
a.) Existing people are mortgaging themselves to the hilt; or
b.) "Outsiders" with lots of cash to burn are taking over and pricing out existing residents.
If your pro-gentrification argument is that homeownership in an increasing number of neighborhoods should be reserved "only for those who can afford it" (i.e. "the rich"), then it's moot as the rental market here is much more expensive anyways due to a well-noted rental shortage. It's not you're telling someone who grew up in a neighborhood like Polish Hill or Upper Lawrenceville "don't buy a house if you can't afford the prices now". You're telling them they have to leave the neighborhood entirely now because rental prices are even higher than monthly mortgage premiums.
My argument isn't that a secretary should be able to buy a 4-BR house in Shadyside. My argument is that the number of safe neighborhoods where that secretary would be able to buy any house is depleting, and nobody seems to be alarmed by this. No upstanding hard-working person should be told to rent in Homewood, where they'll have to dodge bullets, because every other safe neighborhood is out of their price range.
You shouldn’t. But you also shouldn’t except people that bought in stable areas like Brookline a few years ago, and now are seeing their investment appreciate, feel bad for those who can’t afford the neighborhood.
I bought my house because I could afford it at the time, and I wanted a house. It happens to appreciate in value (could have went the other way, and still could) and you think instead of me cashing in on that I should act all Andrew Carnegie and give it to the people.
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