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I guess I fall within the category of Millennial, at least based on the age range posted here, though I’m on the old side of that age spectrum and don’t really think of myself as a Millennial. I’ve owned two houses, don’t feel ‘fed up’ with the market, and don’t plan on retiring outside of the US.
I do think, however, there’s a sense of entitlement and some just expect to be able to live/buy property wherever they want to live, even if it’s somewhere like the California coast or the trendy neighborhood in any given city, where supply and demand has driven prices to astronomical levels that require one to save and plan for such a purchase, and probably won’t be attainable on a Starbucks barista salary.
I think the TV shows showing so many people living very "high on the hog" and all the pushing of high-priced fashion and accessories and electronics gives young people the feeling that they are behind in their lifestyle if they can't afford these things. The HGTV shows make people expect a house with granite counter-tops, a white kitchen with fancy backsplash, a large primary suite, and 4 bedrooms, a bonus room, and a large yard for a couple of 30 year olds with no kids, or one kid, as their first home. Most folks of prior generations didn't have those things when we were just starting out, but we had to work our way up to that level.
Home prices are crazy high now, but I believe they will come down somewhat in the next few years. Meanwhile they can do what we did, live in a small starter home, or a fixer-upper, and learn to do some home decorating and minor renovations themselves.
I think we need to recognize there are dramatic socioeconomic class differences among millennials just as there are among gen-xers and boomers.
And there will be among gen-zers or whatever they’re called.
And some folks are born on third base and think they hit a triple. I think everyone has their own perspective on this.
If you ask me the main issue in this country is that the market struggles to bring supply (homes) and the demand (people who want to buy homes and have money to do so) together in the same place at the same time. It's a market failure.
Most of the people with high enough salaries and savings live in large metropolitan areas. A disproportionate number of them in the 5-10 top markets. Those markets can't provide the required supply in desirable homes. I'm not saying that's an easy problem to solve, but it clearly is the question to be answered and yet most of the arguments seem to completely miss that point.
Not everyone has mommies, daddies, uncles and aunties who leave seven figures each when they keel over.
Where did you get "seven figures each" - probably high 5 to low 6 figures would be plenty for a downpayment most places. Also you seemed to miss the point, so dismissive instead of focusing on the fact that it can take to later in life to get to where you want to be or aspire to.
...The HGTV shows make people expect a house with granite counter-tops, a white kitchen with fancy backsplash, a large primary suite, and 4 bedrooms, a bonus room, and a large yard for a couple of 30 year olds with no kids, or one kid, as their first home. ...
I'm not a consumer of such shows, so perhaps mine is a viewpoint rooted in ignorance. That said, my impression is almost the opposite of yours: the home-improvements show push the idea, that a crappy rundown house could be transformed with relatively little labor into something gleaming and sumptuous. So, even an rank amateur could go ahead and risk buying a dilapidated fixer. This is a falsehood, and a costly one!
The reality is that in some markets, the cost of properly fixing a house is going to be higher than to buy something brand-new, or already updated.
Quote:
Originally Posted by Veritas Vincit
Most of the people with high enough salaries and savings live in large metropolitan areas. A disproportionate number of them in the 5-10 top markets. Those markets can't provide the required supply in desirable homes. ...
This is because WFH notwithstanding, the preponderance of the good, high-paying jobs have become concentrated in the top 5-10 markets. If you want to join a tech start-up, you'll probably be in the Bay Area, maybe LA, San Diego, NYC or Boston. Maybe Austin TX. It won't be the sort of Heartland city (with the exception of Austin) where the traditional starter-home is still accessible.
As recently as 30 years ago, that wasn't the case. Good, high-paying jobs were more evenly distributed nationwide. And housing prices were considerably more uniform.
Millennials aren’t buying houses and are fed up with the housing market nonsense. They are also fed up with the moving goal post of the American dream and are looking to retire outside the country so they can live comfortably. Also opting out of having kids. I believe America is going to look a lot differently in the future. Thoughts?
I am a millennial and I am a single with no kids.I will only be able to have a house because my parents are giving me a house after they pass.I would get married and have kids if I could afford it.I cant even afford to go on a vacation but at least I do have retirement savings.But I would be up a creek with out my inheritance.I plan on leaving Texas for Arizona or New Mexico or Nevada or somewhere like TN if I cant afford the property taxes.Time will tell if I am able to afford Texas property taxes in retirement.
Last edited by NewMexicoCowboy; 11-18-2022 at 11:25 PM..
Whenever I mention that the carrying-costs of a fully paid-off house, may be higher, than those of renting an apartment... immediately I get pilloried and impugned as a liar, a maker of false comparisons, and a propagandist for Klaus Schwab.
Sure, but how much would it cost you to rent a similar house, or even a market-rate apartment for that matter?
Sure, but how much would it cost you to rent a similar house, or even a market-rate apartment for that matter?
But see, that's the crux. Why would I endeavor to rent, something comparable, to that which I'd been keen to buy? The rental is going to be smaller and more modest than the purchase.
My reasoning is twofold. First, the cost per square foot, goes up differently, for owning than for buying. A 3-bedroom apartment is a lost costlier to rent, than a single-room studio. A 3-bedroom house, is of course also costlier than a 1-room shack... but not by the same ratio. At the extreme end, it's much much more expensive to rent a 10,000 square foot mansion by the month, than to outright buy it, paying the mortgage. So as we consider larger square footage, the nod goes to buying.
Second, if I'm buying, I'm doing so, for an investment. I want to buy in a manner that positively impacts my net-worth long term. If I'm renting, I'm doing so, to minimize monthly costs. My investments would be elsewhere. Maybe even in commercial property, or a REIT. So as a buyer, my eye is drawn to a house that's long-term more profitable. It might be larger than what I need. As a renter, I'm attracted to what's absolutely cheapest, even if it's uncomfortable.
Are we going to be stuck on the assumption, that the two MUST be comparable?
Sure, but how much would it cost you to rent a similar house, or even a market-rate apartment for that matter?
Most of us don’t rent anything near what we would buy .
Plus it isn’t only a comparison of rent to buy .
It can be a case of if I rent and don’t dump a big lump sum in to buying what is my return on that money investing it
We are way a head renting in a high rise and investing else where .
Our cash flow is 15-18k a year higher renting and investing vs buying with a bit lower expenses if we bought . The higher cash flow from our investments easily eclipses any savings in costs buying ,
The deal breaker is the return on the money not in a house anymore.
So there can be far more involved in comparing then most people actually take the time to look at …
Most only compare a situation where they compare identical types of places and there is no choice of lump sum existing money into the house or invest it elsewhere to.
We have many professionals in our rental building who rather rent and buy a practice or business than a house.
so there is another side to things most discussions here don’t consider when someone makes simple apple to Apple comparisons that rarely exist in life .
especially in cities where there is a big difference in cost between a single family home and a high rise.
We pay around 25k a year in rent for a 2 bedroom 2 bath apartment with pool and tennis courts as well as guard house entry in a high rise .
We have guaranteed renewals here in nyc and all rent increases are voted on by a city board , not the whims of a small landlord wanna bee
Single family homes here start at 7 figures with 5 digit taxes …Rentals in high rises can be 25k a year
So not only can’t you compare a house to an apartment but location wise you can’t compare ….
We have an nyc income tax so property taxes are lower then Long Island and westchester but they have no local income taxes except Yonkers ..
So how do you compare , if you don’t consider all parameters
Last edited by mathjak107; 11-20-2022 at 04:03 AM..
Mathjak, what do you mean by guaranteed renewals? Is the landlord not able to terminate a lease?
Here, the normal maximum rental lease is a year and the landlord does not need to give a reason not to extend.
So rentals can be precarious.
Here 60% of first home buyers, who are predominately Millennials, get help from parents. The average amount of help is around $US60,000, not insignificant.
In 1950 there were 2.5 billion people in the world. Now there are 8 billion. I think there is a struggle for resources in most places in the world.
However on buildings with more than 5 families developers and landlords take part in very lucrative tax and financing programs .
In exchange they have to agree to guarantee renewals for tenants and to abide by the city boards increases they vote on yearly .
We owned a bunch of coops that had origonl tenants in them when the building converted to coop back in the 1980s who didnt buy their apartments.
They fell out under these agreements.
We paid them each 100k to break their lease (contract ) with us and then we sold the coop apartments for 7 figures each .
So it can be very lucrative although these programs are restrictive.
On the other hand we live in a high rise with those same guarantees….
More than half of all rentals in nyc and the boroughs here are in high rises over 5 family.
Nyc which houses millions of people has more renters then owners .
But there are loads of reasons , including nyc is the Mecca for unskilled labor since we offer so many lower end jobs ..these people can not afford to buy .
Nyc has an extensive cheap public transportation system that can get you anywhere .
We have loads of public assistance programs
Stabilized housing
Ethnic neighborhoods where one can live with their own crowd .
Tons of low end jobs
So renters range from very wealthy to very poor , many who are on section 8 subsidized housing.
So the conclusions one draws about buying vs renting living in rural Alabama ,as a one size fits all statement about renting ,may very well not apply to those renting elsewhere.
Nyc has more people than the entire state of Alabama and Mississippi added together.
So while what goes on in nyc is just one city , you can’t say it doesn’t count in these discussions because it certainly applies to millions of people and it can counter act any blanket statements made about other places
Last edited by mathjak107; 11-20-2022 at 05:27 AM..
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