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Here's something that I "get" intellectually, but not really instinctively.
Let's say your mom has about $1,600 of net monthly income. We'll go up to $2,000/net from all sources assuming she has any savings at all. Let's also assume no debt.
Sure, lots of areas have high property taxes that can eat up a lot of income even with a paid for house. I've personally never lived in a very high tax state. Indiana, South Carolina, and Iowa are also low property price/middle of the road tax states.
My property taxes are under $1,000 annually, and that includes city trash/recycling, limb pickup, better road plowing than the county provides, etc. Even with that said, a $2,000 net monthly income is well above median income at my area. If I had a low monthly income in retirement, there's no way I'd stay somewhere like New Jersey or Long Island and be eaten alive in property taxes.
Someone posted a house yesterday on Long Island that was $450,000 with nearly $10,000 in annual property taxes. It was basically a tear down and it might fetch $50,000 here. Unless you were born there and have deep personal ties to the area, I don't understand why people put up with it. Of course jobs are a concern, but there are plenty of flyover metros with good job markets, and a fraction of the property prices/taxes.
This is what $117,000 buys you in Indianapolis. Looks like a good neighborhood in a suburban area on the west side of the city next to a great municipal park.
My mother was a widow who doesn't know a soul in Indiana. Who in Indiana was going to go shopping for her when she stopped driving, take her to doctor appointments, get in the car and drive down when she forgot to get her meds refilled? She had cousins on Philly, she had kids and grandchildren and now greats in South Jersey, what would she really have gained moving?
Financially she was doing okay at least able to pay bills, have her Medicare supplement, buy clothes..she was just afraid to spend/didn't have much to spend on major things. Thus the roof went unrepaired even as she had to move out of her bedroom because pieces of the ceiling were flaking down all over. The bigger problems came as she started to decline in health, needed transportation and needed someone to help her in the house. Then she landed in that gray area where the city said she made too much for subsidized home health aides, yet she didn't make enough to hire them herself.
But moving to Iowa or some other place far from everyone she knows would have been foolish IMO. I cannot imagine how lonely and afraid she'd have been. I would never at that age move away from my family and lifelong friends knowing I'm entering a phase of life where I'm going to need help.
And again, we got $50,000 for her house when we sold it. Even in Indiana, what's she going to buy for that? She sure wasn't getting approved for a mortgage.
Someone posted a house yesterday on Long Island that was $450,000 with nearly $10,000 in annual property taxes. It was basically a tear down and it might fetch $50,000 here. Unless you were born there and have deep personal ties to the area, I don't understand why people put up with it. Of course jobs are a concern, but there are plenty of flyover metros with good job markets, and a fraction of the property prices/taxes.
It's kind of hard to explain because other than the obvious (NYC being the nation's highest-paying and greatest-opportunity job market in certain fields; the same can be said for Long Island when it comes to teachers; or local family ties that for some people trump anything and everything), it can be a very visceral emotional attachment to this area. And you're right, those are usually people - like myself - who were born and raised here. We know, pragmatically, that there are many places where we could live more cost-effectively (especially as retirees) and get "much more for your buck" but when it comes right down to brass tacks, we simply do not want to leave. For example, I'd rather live in a tiny house on a postage stamp sized lot on Long Island than in a 5000 sq ft house on two acres anywhere else, and it has nothing to do with family being here. There are other reasons, some practical (like what ocnjgirl cited) and others cultural but it all comes down to knowing, deep down in my emotional 'gut', that this is the only place I ever want to be, period. When I was in my fifties and at an especially dire financial point I did investigate other locales but all that did was to show me how strongly I really felt about not wanting to ever live anywhere else.
On the other hand there are plenty of people who will happily bash and insult Long Island all day long while living here and declaring to all and sundry that they plan to flee as soon as they "get the chance." You can find plenty of those on the Long Island forum; so much so that when anyone says that they enjoy living here, the resident LI-haters dogpile on them like you wouldn't believe, LOL.
Last edited by BBCjunkie; 02-22-2019 at 10:44 AM..
Many seniors value their privacy and have little interest in condos or apartments, including assisted living, unless absolutely necessary.
That's me in a nutshell. I had to live in an apartment (garage in a private house, converted to a studio apt) for three months in the late 1990s while awaiting the closing on a house I was buying, and thought I would go stark raving mad. Only the certain knowledge that it was for a very short time got me through it. I absolutely cannot stand the thought, let alone the reality, of other people on the other side of my living space's walls, floors, or ceiling.
If it ever came down to it, I'd practically sell my soul for in-house assistance rather than to go into any kind of attached housing. That's how repugnant that prospect is to me.
See that's just a thing about who you know. Almost everyone I know who's retired IS on a pension. But that's because I worked for a muni, and my DH worked for the state, and most of my family and friends have worked for companies that had retirement benefits, government agencies, school districts in classified jobs, or as teachers. Yes, defined benefit plans are almost extinct for private employers, except in industries with a strong union presence, but almost all government agencies, including municipal utilities, and school districts, and universities still have them. That's about 32% of retirees getting a pension of some type, even a small one, right now.
I agree with what you are saying about the young folks not willing to save for a down payment, but like you said there are young people buying homes. We sold our rental that was a perfect starter home and had 16 offers. Several were young couples and their realtors had them write glowing letters to us why we should accept their offer, like we were parents giving up our child for adoption to the best family.
Thats a good point and reality. Seniors and younger people are all over the place in income and housing affordablity. I have two sons one purchased a 800k house five years ago and the other just settled on a 500K house. Neither was a first home and they were young in the game buying their first homes. Again the homes are in relatively to very expensive housing areas. As retirees we would be able to compete with them but on the other hand I know many both younger and older who couldn't.
Pensions and SS for married retirees can create game changers in the current market. The danger that is real and happening is the upgrading of current housing to make it more high end in order to attract more affluent seniors/retirees with money ( often pensions and SS) along with insurance and investment payouts.
This has a negative impact on those with moderate to lower income regardless of age group and is part of the housing crisis in some areas. It was one of the fears of the Amazon backlash movement that housing would be created and upgraded in Queens to attract high income workers and high resource seniors.
lol. I've never heard of this before. People over a certain age (what would be the cut-off age, I wonder? 50? 60? 80? ) should abandon their homes, so younger people can buy them? That makes no sense. Most younger people couldn't afford a big family home, if they even wanted an older home. I think someone needed to fill a weekly real-estate column in the paper, and had run out of ideas, so they came up with this kooky thing.
It's not original. There are other pieces in the same vein, more or less.
One idea is that since home builders are putting up only about half as many new builds as in previous years, there's a shortage of available housing.
Another is that some of the people advocating for seniors leaving their homes are their own families. Some because they want their parents to go into assisted living or such, and some because they are tired of waiting for an inheritance and are eyeing the home equity.
We live in a small Montana town of about 2,000 people and growing slowly, 50 miles from a real 1000,000 population city. Cheapest home is single wide mobile for sale in town, $165,000 in old area where they allowed a few single wide mobile homes on separate lots years ago. Cheapest new lot in town is $70,000. Builder has bought every older home that needed rehab starting 10 years ago, excellent rehabs to keep crew working slow times, and kept as rentals. Not 1 old home needing a rehab in town.
No $100,000 homes in town. However new homes going up every year. Homes did not take a big price drop when they did in much of the country, as the market did not over inflate before it happened.
Even McDonald's pays new adult employees $14 hour to start, when they can find one, and hires on the spot. c
Schools above state average. Safe to live with no gangs or big crime problem. No sales tax. Very low property taxes, especially for seniors. Family median income above national median and state median. Very low unemployment rate. Very low poverty rate. Cost of living below national average.
I am giving this information as I want those that feel small towns are in trouble, to show only some are. In the west, most are doing fine.
Quote:
Originally Posted by Serious Conversation
Part of the problem is that basically no new "value" homes are being built.
Even in my neck of the woods, it's difficult to find a SFH home zoned to city schools (county schools are bad) that's in decent shape for $100k. While that's a low price point, this area has mostly low end jobs, but a $100k house for a couple, even in low wage jobs, should be achievable if they have little debt.
This is about the best example I saw of a "starter" SFH in my local area, flipping thoorough listings this morning. It has an odd Frank Lloyd Wright vibe that I personally like, but may turn a lot of people off. There are some local flipping companies that take old houses, rehab them, and turn them around, and a lot end up under $150k.
I would think a housing shortage would make seniors WANT to sell their homes as they could profit more from them than in a "normal" housing market.
Why would they want to do that, and lower their standard/quality of living. On our deaths our kids will move into our homes, or they can sell them and beat the big capital gains taxes we would pay if we sell, which can be huge tax bills. No taxes if the kids sell.
The housing shortage is not going away anytime soon, and this is now the normal housing market. In high priced areas the housing shortage is going to get worse in the future.
What we have in San Francisco is a shortage not of housing, but of affordable housing. As posters upthread have said, developers don't want to build houses for middle and low income buyers because there's more profit in high-end real estate. Another factor is that wealthy Asians like to buy up property here so that their sons and daughters have a place to live while going to school in the U.S. Some other wealthy people buy expensive high rise condos as pied-Ã -terres or as investments but leave them empty most of the year.
Our city government requires that a certain number of units in new buildings be sold below market rate to qualified buyers (low income, no previous home ownership), but for every one of these units, there are hundreds of applicants. The need far outstrips the supply.
What we have in San Francisco is a shortage not of housing, but of affordable housing.
Not to bead the same dead horse yet again, but...
the imbalance is about having TOO MANY PEOPLE. Everywhere.
This is the common theme with just about every issue.
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