High housing payments: the new American nightmare

[expatCA]

Originally Posted by 5thgenSF

that $29,000 house is now about $900,000 to a million. an eichler around the corner sold for over a million two years ago. and those houses were new when we lived there in the 50's/60's.

Hi,

Yes in some places that is true. The house my Father bought in 1952 for $9500.00 is now worth about $280,000.00 and that is also way above inflation. Yet the house I sold in 2009 basically sold for what I paid for it in 2000, plus normal inflation and is right about that value today. A home I sold before that was bought in 1995 and sold in 2000 and was for normal inflation based pricing. Looking back 50 or more years guarantees distortion as it does in almost any stretch that long. However looking back 10 to 20 and maybe even 30 years gives a better assessment, except in "special" areas. In most cases prices are far less than you have experienced.

[AllenSJC]

Originally Posted by Think4Yourself

Sky high housing costs are indeed a major economic problem especially as the median income for Americans has stagnated for the last 30 years.

Yep. That's a big reason for the growing debt of many American households.

[SOON2BNSURPRISE]

Back in the 60's my dad had a friend that told him he could purchase a 1 acre lot with a 3 bedroom 1 bath home on it for around $30,000. The place was too far away from anything at the time and no one wanted to live there. By the early 70's he told us that these crazy people were buying these little places in the same area on practically zero lot lines for around $18,000. Many of the people that bought those were trying to get away from the heat of Los Angeles and wanted a place that was cooler in the summer. My dads friend is still in that little house. Him and his wife raised 3 kids there. One of his sons works with me now at the hospital. His daughter works for the city of Malibu where these homes are all located. Have you heard of Malibu? It is a place that few wanted to live in back in the 60's. On a side note that little home on the 1 acre lot has had plenty of people making offers on it although the owner has no intentions of selling it. The land alone is said to be worth around $6,000,000 in todays market. Location is everything, but when interest in a location change that helps the lucky few to really get a great return. I would say though that the problem with that is we never know if an area will change to the point that it goes from no one wanting it to everyone wishing they could own a part of it.

[Ultrarunner]

Originally Posted by SOON2BNSURPRISE

Back in the 60's my dad had a friend that told him he could purchase a 1 acre lot with a 3 bedroom 1 bath home on it for around $30,000. The place was too far away from anything at the time and no one wanted to live there. By the early 70's he told us that these crazy people were buying these little places in the same area on practically zero lot lines for around $18,000. Many of the people that bought those were trying to get away from the heat of Los Angeles and wanted a place that was cooler in the summer. My dads friend is still in that little house. Him and his wife raised 3 kids there. One of his sons works with me now at the hospital. His daughter works for the city of Malibu where these homes are all located. Have you heard of Malibu? It is a place that few wanted to live in back in the 60's. On a side note that little home on the 1 acre lot has had plenty of people making offers on it although the owner has no intentions of selling it. The land alone is said to be worth around $6,000,000 in todays market. Location is everything, but when interest in a location change that helps the lucky few to really get a great return. I would say though that the problem with that is we never know if an area will change to the point that it goes from no one wanting it to everyone wishing they could own a part of it.

The old adage of rather being lucky than smart

So far no one I know has a crystal ball... the best we can do is make an educated guess.

There are many similar stories about folks buying in outlying areas because it was less expensive/congested and 30 40 or 50 years later the demand is unimaginable...

Without a doubt... years from now, there will be people sharing similar stories and calling today the missed opportunity.

Some of my parent's friends had kids older than I was... I clearly remember back around late 70's early 80's the situation was similar... everyone said the kids will never be able to buy a home... impossible with 15% mortgage rates or even higher...

Now, the discussions are full about those that lucked out buying 30-35 years ago...

[tickyul]

Originally Posted by 5thgenSF

do you have a house you bought at the peak of the market?

Nope, not quite that insane or dimwitted.

[IH8CA]

Originally Posted by 1AngryTaxPayer

I know a whole batch of people just like this.

Thats why most of humanity must be wiped out. Too many people make too many bad decisions.. its inevitable and its why I am a bigot of the entire human race.

[.highnlite]

The idea of a mortgage to buy a home is a relatively new idea. Pretty much post WW2 (notice my qualifiers, just in case you want to quibble) Homes prior to that were generally paid for out of pocket, which is one reason pre WW2 homes are comparatively small. You used to be able to buy home kits from Sears Roebuck.

Paying for your home out of pocket is still the best way to do it. Sure keeps you from getting in over your head! But of course, for many that would prevent them from getting anything over their head (cute play on words)

[mysticaltyger]

Originally Posted by SOON2BNSURPRISE

Let me add that with anyone that bought or is buying a home, how is it that many can not make the payments on a purchase that they made, read the contract to, signed there name to, and planned on buying? What happened? The price goes down and they decide that they are not going to pay? We went in with a plan to not only buy but to pay our home off in as short of time as possible. Didn't anyone else have the same idea? Were these people that paid double what the home is worth now think that prices were going to go up forever? I just don't get it.

The hard truth is that many Average Joes and Janes are just as greedy as the Wall Street folks they bellyache about. The dollar amounts involved are different, but the mindset is the same.

[mysticaltyger]

Originally Posted by 5thgenSF

i didn't say i lost my job. but a whole lot of us are unemployed and underemployed. so i guess this crash was good since you got the home you wanted at a better price. does all this finger pointing make you feel smarter? and everybody else is just stupid or lazy? you can yowl til the cows come home and it won't change anything. this is just a classic attitude ... you've got what you want so everybody else is a loser.

Actually, what you're interpreting as people feeling superior is really more people who are financially conservative with money feeling frustrated and powerless that we're outnumbered by the majority of people who are not. Maybe not all the time, but much of the time. It's very frustrating to see so many people who so eagerly take a piece of rope and hang themselves. Unfortunately, when enough people engage in this type of behavior, those who aren't committing financial suicide can be taken down as well.

And it isn't just right wing nut jobs who are saying this. A pretty large number of centrist and people from the left are saying the same thing:

http://money.msn.com/investing/did-t...my-kill-saving

[mysticaltyger]

Originally Posted by .highnlite

The idea of a mortgage to buy a home is a relatively new idea. Pretty much post WW2 (notice my qualifiers, just in case you want to quibble) Homes prior to that were generally paid for out of pocket, which is one reason pre WW2 homes are comparatively small. You used to be able to buy home kits from Sears Roebuck.

Paying for your home out of pocket is still the best way to do it. Sure keeps you from getting in over your head! But of course, for many that would prevent them from getting anything over their head (cute play on words)

Yep. All lending did was allow for the prices to inflate, and for big banks to make lots of money which they have used to corrupt political systems throughout the world. Nowadays a lot of people can't even wrap their heads around the idea that they can/probably should pay cash for cars, let alone houses. Sad.