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Old 03-21-2018, 08:37 PM
 
3,994 posts, read 8,724,794 times
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https://www.yahoo.com/finance/news/u...040100085.html

Quote:
Homebuyers in the U.S. have plenty to grouse about these days. Prices have climbed steeply in many metro areas, mortgage rates are rising and inventory is thin. But for people looking to purchase their first home, it’s ugly out there.

“Starter homes have become scarcer, pricier, smaller, older and more likely in need of some TLC” than they were six years ago, the real estate website Trulia reported Wednesday after analyzing housing stock across the country. Trulia began tracking prices and inventory in 2012.

It’s grim all over. American homes are at their least affordable in the report’s history. But the median listing price of available starter homes has risen 9.6 percent in the past year, easily beating out the trade-up and premium categories, while starter-home supply has fallen to a new low this quarter, Trulia reported.

Perhaps the most striking finding is that the very buyers who are typically least able to plunk down a lot of money are confronted with the least affordable homes. The share of income needed by those in the market for a premium home was 15 percent, and for a trade-up home 27 percent. For a starter it was 41 percent.

Adding insult to injury, the homes aimed at first-time buyers are less likely to be ready for human habitation than others, with fixer-uppers accounting for 11.2 percent of the category. They’re about nine years older than they were in 2012, and 2 percent smaller.

On the bright side, 2 percent isn’t a whole lot smaller. Until you learn that homes overall are more than 8 percent bigger.
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Old 03-21-2018, 08:50 PM
 
Location: Raleigh NC
7,754 posts, read 6,110,007 times
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well, it got your attention.

The Yahoo link to the Trulia blog doesn't work, so a link to the Trulia article/blog [post would be helpful.

but read this again, and tell me if it's journalism, or sensationalism:

Quote:
Adding insult to injury, the homes aimed at first-time buyers are less likely to be ready for human habitation than others, with fixer-uppers accounting for 11.2 percent of the category. They’re about nine years older than they were in 2012, and 2 percent smaller.
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Old 03-21-2018, 10:14 PM
 
10,265 posts, read 6,491,094 times
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It's true in my area. Starter homes are mostly gone, now the 1970s well maintained mobile homes on private land are selling for more than the stick built homes did 2 years ago and they are selling faster.
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Old 03-22-2018, 04:53 AM
 
Location: Floribama
13,486 posts, read 29,425,055 times
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Many people are doing what I’ve done recently, snatching up those houses cheap after foreclosure and turning them into rentals.

Most of the smaller houses like that in my area were built in the 1960’s, so it is true that the plumbing and electrical is getting to that age where it needs replacing. I just had to have work done to corroded cast iron drain pipes on one I just bought, and the plumber said he’s been working on a lot of those lately.
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Old 03-22-2018, 06:47 AM
 
Location: NC
6,081 posts, read 7,023,877 times
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2012 was near the bottom of falling housing prices following the "great recession", where bankruptcy and foreclosure led to plummeting house prices in many areas of the US. It is not surprising that thereafter, prices would be increasing, especially in the lower price points in the market. Trulia needs to supply some benchmarks for its comments.

However, there is justifiably a problem today since starter homes are not being built. Add to that the fact that most first time buyers have greater expectations than ever of what they require. In the 60's kids had twin beds and shared rooms. Today every kid "needs" a double bed and his own room, sometimes own bathroom. More square footage, please. Hard to know what to do.
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Old 03-22-2018, 07:10 AM
 
Location: Raleigh NC
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it is very true that in central locations, very few if any small homes under the median price are being built. But some people's perception of "starter home" harkens back to their first home. Mine was $140K in 1996 and was 10 years old.

However, in my market last year there were:

~4,400 homes sold priced under $300K and built since 2012. There were 14,000 sold built before 2012.

~2,600 same newer criteria but under $250K. 12,000 sold that were older.

Last year, a $250K house on an FHA mortgage required income of about $55K. Most 2 income college grad families make more than that at age 25.
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Old 03-22-2018, 07:19 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
28,386 posts, read 50,562,503 times
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Uninhabitable homes are scarce in our area, and are more likely to be demolished and a new home built there because a vacant lot will go for $400,000, and the added cost of an old decrepit house is not much more than the cost of getting utilities to a lot. The "starter" home here is about 30 years old, 1,600 SF on a 12,000 sf lot, and goes for the $500-600k range after a bidding war. The median home price is now at $962,000.

Nonetheless, the article is generalizing far too much, it's a regional/local issue. You can go 50 miles in any of three directions from here and still buy a very livable starter home for $250,000.
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Old 03-22-2018, 07:49 AM
 
Location: Tennessee
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I read a very similar article in the WSJ this week regarding the shortage of new construction and difficulty for people to get into starter homes.

The underlying problem is that quality jobs are increasingly consolidating into what seems like fewer and fewer metro areas. You have more people chasing fewer homes. That's going to cause supply constraints, and that's ignoring other unfavorable conditions for buyers.

I work in a manufacturing town. Over the years, many of the blue manufacturing jobs have been eliminated, or have been outsourced to contracting agencies, which often pay substantially less and have fewer benefits than a direct hire. Some smaller outfits have relocated HQ from small town Tennessee to larger metro areas like Atlanta. Many white collar jobs are gone too. My aunt worked for one of the major cable companies. The local office's back office functions were moved to either St. Louis, New York, or Charlotte. These aren't high end jobs - it's back office administrative stuff.

There are few decent jobs here outside of education, local government, and the medical systems. Meanwhile, metros like Nashville are just getting hotter and hotter. There was a line of thinking that telecommuting and remote work could ease some strain on the hot areas, allowing employees to work from anywhere, but that hasn't happened. If anything, it's more critical to be in a "hot" area than ever.

What's happening in my local area? Outside of Johnson City, which has a large regional state university and the HQ of the regional health system, housing starts and price increases in most of the nearby cities and counties are tepid. I remember a six month period a couple of years ago (2015 or 2016) where Sullivan County, pop. ~156,000, had zero housing starts in a six month period. It isn't uncommon to see properties languishing on the market for months at a time with no or insignificant price drops.

The local death rate is about 30% higher than the birth rate. We are in a state of natural population decline. To the extent that people are moving to northeast TN, they're largely retirees bringing wealth with them, are not dependent on the local economy, and are moving to Johnson City/Washington County. That's causing rising prices and rents in that area, but those rates of increase are still mild compared to what is seen in most mid-sized metros or larger. The wealth and "new good jobs" are basically going to Johnson City, and the rest of the area is on a slow decline.
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Old 03-22-2018, 07:54 AM
 
27,442 posts, read 44,934,740 times
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Quote:
Originally Posted by luv4horses View Post
2012 was near the bottom of falling housing prices following the "great recession", where bankruptcy and foreclosure led to plummeting house prices in many areas of the US. It is not surprising that thereafter, prices would be increasing, especially in the lower price points in the market. Trulia needs to supply some benchmarks for its comments.

However, there is justifiably a problem today since starter homes are not being built. Add to that the fact that most first time buyers have greater expectations than ever of what they require. In the 60's kids had twin beds and shared rooms. Today every kid "needs" a double bed and his own room, sometimes own bathroom. More square footage, please. Hard to know what to do.
Two points
People, especially younger workers whether married or single, have only recently been able to buy homes on their own---and I say recently meaning since WWII which was a game-changer for the housing market with the VA loan program...
Prior to that most young people, even after marriage, either lived in rental property or with families
It was too difficult to get financing and there was less new construction. So this is really just going back to the way things were before the "modern era" that people are familiar with and told they should participate in...

Second--
The wage stagnation especially for people entering the job market or doing work that is in the bottom quartile of salary just means there is not enough money available to qualify for mortgage on more expensive home (due to rising land prices and inflation of RE existing homes) so people can't afford to buy homes that are in good shape, more modern...
And wage stagnation is going to continue for large segment of the market because they have few skills that are well paid so there is more competition for low-paying jobs and people are seeing more part-time vs full time jobs w/benefits

There is nothing new in this---
People in Europe/UK have been exposed to this situatuion for long time and just consider it is the "norm"
Our daughter grew up with girl who married guy who was born in UK and dad moved to Houston for work--kept their home in London area...
She and husband went back to London area to live before they had first child--
Even though he was making decent money and she was working they couldn't afford a home--were living in rental property--and eventhough they loved living in London they knew they would never be able to afford a home of their own....so moved back to Houston...
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Old 03-22-2018, 08:00 AM
 
Location: Georgia
4,514 posts, read 3,772,562 times
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One of the things that people also don't realize is how staggering student loan debt has affected young people's ability to buy real estate. When you have a student loan of $200-$500 a month, it eats up a big chunk of what you are able to qualify for in a mortgage.

In the Atlanta market, a home in the $200K's is getting multiple offers, even if it's a shack, because investors with lots of cash (think international money) will snap it up, slap lipstick on the pig, and unwary buyers will buy it. An agent in our office had one last week for $237K that had 18 offers within 24 hours. Unless I know the builder, I am extremely wary of flips -- I've seen so many that were poorly done, and make the house a more expensive proposition in the long run. (I went to see one house where every single doorknob to exterior doors were not fitted -- i.e., you could see DAYLIGHT where the doorknob didn't meet up with the drilled hole in the door. The "deluxe, new" kitchen cabinets were installed so poorly that they SCRAPED THE CEILING of the kitchen when you opened the cabinet. Unscrupulous flippers will simply paint over mold, not fixing the cause, and buyers wonder four months later where that mold came from -- uh, from the leaking pipe behind the wall that the flipper didn't fix, duh.) It's getting pretty bad when people buy flipped homes in order to renovate them for themselves -- but that's what's happening around here.
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