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Old Yesterday, 06:57 PM
 
Location: On the sunny side of a mountain
3,207 posts, read 7,179,245 times
Reputation: 6662

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I live in an expensive resort area, I have a friend who has been here for more than 15 years and does nothing but complain about the price of buying real estate. She is currently renting a lock-off without a full kitchen or washer & dryer for $1500+ utilities. She has plenty of savings and a very good job but just refuses to make the jump to owning because she can always find an excuse why it's the wrong time. Even now at a high point in our market she swears the rent money she throws away monthly is less than a mortgage, she's wrong but she can't adjust her mind set to buy something that will be the start to buying something better.

The house we bought 4 years ago is the smallest and most outdated we have ever owned, every year we do a few improvements, it's in a very sought after area and it's a building block for buying bigger and better. It's a marathon not a sprint.
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Old Yesterday, 09:42 PM
 
Location: Western Washington
9,442 posts, read 8,684,915 times
Reputation: 16261
Quote:
Originally Posted by whatsgoingon4 View Post
For me it has. I try not to think about it too much, but it's depressing. 5 years ago I could have bought a pretty nice place for half what they go for now.
Well, inflation applies to housing too. In 5 years I would expect a 15-20% increase in housing costs, but as we know housing has been hot lately. 30% over 5 years is probably typical. Not double as you claim, but I am skeptical that your memory is that accurate, as few people would have precise memories of a complex market over 5 years.


Quote:
Also, our inventory seems pretty short in the sub $170k category. I'm seeing mostly 70s and 80s ranches on small lots, with ugly, outdated builder kitchens and bathrooms, often tight layouts and small rooms, 8 foot ceilings everywhere (and sometimes less), outdated bare aluminum framed windows and flat doors, old flooring, etc.

Some of these homes are listed at $160-170k now and are described as "starter homes." I'm sorry but $160k is not a starter home, IMO, especially when they need this much work. Not when the median income here is $36k a year. People think houses are cheap here, but they're coming from areas with incomes double to triple ours.
Actually, a small home that needs repairs is exactly the definition of starter home. If median income is $36k, which is on the low end for the US as a whole, that means that half of all people earn more than $36k. That means the upper half of your income market does view $160 as affordable.

Quote:
$160k here used to buy you a nice 3/2/2 newer home in a nice neighborhood with vaulted ceilings, tile floors and some upgrades all day long. Now it buys you a 1970-something 2/2/1 of about 1200 square feet that maybe has a new roof and A/C if you're lucky.

I get that the interest rates are good now, and that's nice. But I'm not interested in buying a house like that at these prices. I could see maybe $100k for a house like that, but not more, especially considering the extra $60k probably means you'll never get to do a new kitchen and baths or anything else.
What prices were is not applicable to what prices are. Time moves on.


Quote:
The only thing I can see is to save for 5 more years (I was planning to be in a house long ago) to try to make up the difference, and hope prices don't increase much more. I don't really see how they can bear to increase much, or people aren't going to be able to buy anything.

We're already at or worse than pre-2008 prices here, JMO.
Prices almost certainly will increase over 5 years, so if your savings plan does not incorporate an additional 20%+ increase in housing costs you are dooming yourself to failure. 2008 was a long time ago, so it is not surprising that housing prices are comparable now.
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Old Yesterday, 10:05 PM
 
Location: Rochester, WA
6,278 posts, read 3,514,064 times
Reputation: 17081
Quote:
Originally Posted by Kiru View Post
To me, just because a home is outdated doesn’t mean it needs work. A house needs work when things aren’t functioning or are unsafe. If a new/updated house is now $250-$350k+, then an outdated house for $160k sounds like a starter home to me. You can always upgrade over time. House values usually increase over time, so buying the old $160k house and updating it, then waiting 10 years, you’ll most likely make a tidy profit. Which you use to springboard yourself into an even nicer house, if you want.
Hear hear... You may make a good profit even if you DON'T update it with today's fad. ")

Houses don't have to be updated because the kitchen has the wrong color cabinets. I don't agree that kitchens should be replaced every decade or two in a house over fads. It's wasteful. Wasteful of money, wasteful of our resources, wasteful to our landfills.

I would focus on whether the home has a good roof, good siding, good location. Those are the things that matter, the things that will preserve its value over time. The rest... the windows, the flooring, the colors, can all be changed slowly, goals can be set over the long term to update. Update those things that are actual value upgrades, not just fads, first.
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Old Today, 06:25 AM
 
Location: Tennessee
24,503 posts, read 18,234,441 times
Reputation: 28764
No, my local area has slowly appreciating prices.
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Old Today, 06:34 AM
 
Location: San Diego
36,206 posts, read 32,802,240 times
Reputation: 20495
200 grand? That won't even get you an outhouse anywhere near the coast.
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Old Today, 08:01 AM
 
11,396 posts, read 8,079,766 times
Reputation: 12330
Quote:
Originally Posted by smc733 View Post
One of the most well-respected economists, who called the 2008 bust and developed the gold-standard Case-Shiller index, Robert Shiller, recently said he expects home prices may fall:
https://www.bloomberg.com/news/artic...-start-falling
May fall means may not fall and may increase. May means nothing in housing. A supernova may explode and end out galaxy tomorrow. Or some other unknown event can end the Universe at any split second. or it may not. May means or may not or could or could not or basically nothing.
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Old Today, 07:31 PM
 
Location: New Orleans, LA
1,735 posts, read 3,183,151 times
Reputation: 2969
Default Have rising prices kept you from buying?

No. I moved into my present home four years ago, and it is just perfect for me. I love this little house and hope to live here for the duration. I watch the soaring housing prices with amazement but they do not personally affect me.
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Old Today, 08:28 PM
 
Location: Florida -
8,902 posts, read 11,071,883 times
Reputation: 17240
Many younger people fail to realize that the 2007/8 'bubble burst' and dramatic decline in national housing prices was an anomaly ... not something that happens every few years. Except for a 'flattening of the market' in the 1987 time-frame, U.S. prices have pretty much maintained an upward trend for the last 50-60-years and homeowners have been able to depend on home appreciation. (People used to save for years to afford a starter home, rather than expecting to own a home like their parents within a couple years of getting out of school).

Today's RE market is still a bargain due to sustained, sub-5-percent interest rates. Double-digit mortgage interest rates were standard in the late 70's through the 90's and rarely dropped below 7-9-percent until about 2000. Although housing prices are increasing, so are salaries. Meanwhile, low interest rates are still keeping houses relatively affordable. For example, a $100K, 30-year mortgage of 4% creates a (simple) monthly payment of $475, but, leaps to about $735 at 8% and $1029 at 12%.
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