Is 700k the new 300k? (Boston, Worcester: short sales, real estate market, to rent)

[matrix5k]

Originally Posted by charolastra00

But also, you can get a lot of what I'm looking for in 80s-built townhouse condos. The newer (post 2000s) SFHs are just a whole different beast. Unfortunately, a lot was built bigger when it was more affordable to do so and now there's just less options in that sweet spot between 2 bed/1 bath ranches and McMansions. I say that as someone who grew up in a 4000 sq foot house with 4 people myself (most of the space unused) because that's just what was available in the part of the country I grew up in and, at the time, it was very affordable. Friends trying to live in the area we grew up in can't afford the same houses their parents bought brand new around the same age today.

Boomers had it good.

[Remy11]

^They really did. They could afford SFH homes, vehicles, and college tuition payments, all while usually having their partner stay home with the kids. Those days are very much in the rear view.

[Remy11]

Originally Posted by matrix5k

That's too bad. You do have to admire the hustle of these new home buyers. Many are immigrants who speak English as a second language. My buddy's house is the last 1950s home left on his street. All other houses were torn down and turned into Mcmansions. He says he lives in the most diverse neighborhood in town.

It is sad because quite a few classmates told me at our reunion that they would’ve loved to settle down in our hometown, but they simply can’t afford it now. I used to say to my parents, “I can’t wait to graduate high school and move away for good”, to which they’d reply, “someday you’ll be wanting to move back, but you won’t be able to afford it” and they were absolutely right.

I agree that you do have to admire anyone who is managing to buy now. 100 percent.

[GeoffD]

Originally Posted by Remy11

^They really did. They could afford SFH homes, vehicles, and college tuition payments, all while usually having their partner stay home with the kids. Those days are very much in the rear view.

This is revisionist history. In 1988, real estate was totally unaffordable. Real estate is cyclical. There are a bunch of people here in total denial about it.

[jayrandom]

Originally Posted by GeoffD

This is revisionist history. In 1988, real estate was totally unaffordable. Real estate is cyclical. There are a bunch of people here in total denial about it.

It's not really all that revisionist.

https://www.longtermtrends.net/home-...-income-ratio/

The home price / household income ratio peaked at just below 5 in the late 80s. It's at about 8 right now.

It looked to be pretty steady at 6 before the 1950s, so the current highs aren't completely without precedent. The statement that "boomers had it great" definitely seems to be borne out by these numbers.

[msRB311]

I can't really speak to what was happening in 1988 about real estate. Were educated people with professional, well paying jobs not able to afford homes in the Boston area? Were there bidding wars the way there are now every time a decent home in a nice town comes on the market? That's kind of the scenario now.

It's been said before but in the Boston area the issue seems to be the number of high paying jobs that have been created by biotech/pharma/finance over the past 10 or so years. Add to that inventory is low and getting into a town with a top school system is important. To be honest I think the school system thing is part of the problem. No one, even people without children or people who send their kids to private seems to be want to be in a town that doesn't have this stellar reputations due to the schools.

[r_p]

Originally Posted by Remy11

^They really did. They could afford SFH homes, vehicles, and college tuition payments, all while usually having their partner stay home with the kids. Those days are very much in the rear view.

That's because the old global economic/geopolitical order was extremely favorable to the West. People here did very well at the expense of others (Asian/LatAm countries?) where people could barely afford to eat. In a capitalist system not everyone can do well at the same time

[bricka]

Originally Posted by r_p

In a capitalist system not everyone can do well at the same time

not sure i agree with this...

[charolastra00]

Originally Posted by GeoffD

This is revisionist history. In 1988, real estate was totally unaffordable. Real estate is cyclical. There are a bunch of people here in total denial about it.

So, I can only speak about what it looked like for my family, but in 1988 my parents were living in a 3 bed/2 bath condo in Haverhill. My mom stayed at home with two kids, and my dad had a middle management role at Digital where he literally started in as a janitor out of high school and they trained him in computer programming (the story he tells is he walked into the wrong room where MBA trainees were doing orientation and they liked him so much that they kept him on, but I'm sure that's a lot of legend). I'm sure that wasn't super common, but that just doesn't happen at all now. He never got a degree. They were in their late 20s at that point, and saved 20% for retirement and still had the money to have 2 cars and go on 2-3 vacations a year.

Flash forward to today. I'm older than they were then, have a master's and am working on my MBA (no student loan debt thanks to tuition remission, so that's not a factor), and my rent on a 1 bedroom in Marlborough is more than double what they were paying for mortgage when adjusted for inflation (and is 4 times what they pay on that 4000 sq foot house on an acre of land in one of the wealthiest counties in Georgia, but apples and oranges). My current salary is almost double what my dad's was at my age adjusted for inflation and is about to go to quadruple next month with my new job... but I am not currently and will not be able to afford anywhere near the same lifestyle as my parents did. I haven't been anywhere that wasn't extending a work trip by a few days or a wedding for a weekend in years! A far cry from the 2 weeks driving through the Southwest or a week in a private beach house that was just an annual thing for my parents at the same age. My partner and I will both need to work when we have kids, though thankfully at my new salary I will actually be able to afford to have children which, frankly like many of my similarly aged peers, has seemed completely out of reach financially if we want to *also* buy a home, save for retirement, or pay off student loan debt.



That 3 bed/2 bath condo? A similar unit in the complex sold for over 400K within the last year or two and when my mom sent me the listing, she was shocked that it looked like it was still the original kitchen minus a few appliance upgrades.



I'm sure real estate was unaffordable to a lot of people, but it's hard to ignore that of my college friends, only a small handful have homes and even less have kids. Most are working middle class careers and come from middle class families, but the gulf between what our parents had at our age and what we have - despite often being more educated and achieving more career success - is hard to ignore. While it's an anecdote, the numbers bear out on the percentage of wealth held in this country by people in 25-40 compared to what it was in the 80s.

[charolastra00]

Originally Posted by msRB311

I can't really speak to what was happening in 1988 about real estate. Were educated people with professional, well paying jobs not able to afford homes in the Boston area? Were there bidding wars the way there are now every time a decent home in a nice town comes on the market? That's kind of the scenario now.

It's been said before but in the Boston area the issue seems to be the number of high paying jobs that have been created by biotech/pharma/finance over the past 10 or so years. Add to that inventory is low and getting into a town with a top school system is important. To be honest I think the school system thing is part of the problem. No one, even people without children or people who send their kids to private seems to be want to be in a town that doesn't have this stellar reputations due to the schools.

It's the bidding wars for me. Even if housing was more expensive in some ways in the 80s (especially with regard to interest rates), first time homebuyers weren't competing with folks offering 20-30% over list or all cash offers. My parents actually were able to negotiate the seller for their first home to pay closing costs and throw in new appliances!

My new job is in the pharma industry and while I knew there was a big salary difference, I really didn't *know* until we started negotiating salary and benefits. My equity alone is more than my salary was a year ago - and I made over the average household income then! How do people with average to above average jobs compete? In 3 years when my equity vests, my life will look different than I could have imagined just a few months ago but there is *so* much luck involved with getting to that point. I was talking to a colleague whose daughter works at the same company. In 3 years of working up from an entry level pharma job after graduating from college, she has more money saved for retirement than I do working in higher ed (one of Mass's biggest industries) for 12 years saving at least 15% a year. I'm thrilled for her, but again, how do most younger folks who work hard compete? It didn't always have to be that you needed 2 6 figure (or close-to 6 figure) salaries to afford a starter home within an hour and a half of Boston.