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Old 03-23-2021, 07:41 PM
 
Location: Phoenix, AZ
5,789 posts, read 7,362,538 times
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Market is booming all of the country. A friends and family have had problems searching Milwaukee proper and rural Indiana because as soon as a house went on the market it was gone before it could be viewed. Phoenix is a destination. People want to be here. There is a reason the population grows non-stop. Horrible time to be looking but it is the way the cookie crumbles now.
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Old 03-23-2021, 07:43 PM
 
217 posts, read 87,122 times
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Quote:
Originally Posted by Code Stemi View Post
OP, weren't you thinking about possibly relocating? You may have changed your mind, but housing options would likely be more affordable if you head east of the rockies (minus Denver).
Nope. Just a few states over key area homes are expensive for the area and in short supply. It totally sucks that people who have grown up/ lived in said area their whole lives have finally saved up enough to purchase a home to get shot down so fast. A year or two ago they would have easily purchased a home but not now. Several homes selling hours within hitting the market, all cash buyers to outsiders and not giving the time of day to local people who actually want a home. It’s sick and pathetic plus you have certain people who basically want their own HGTV flip show. They buy cheap homes with nothing wrong with them only to flip them and sell them for 3x to 6x what it was bought for and that was happening years ago!

My neighbor posted their home for sale and in 30 hours got 25 offers. Every singe one of them where buyers from out of state except 5 of them. The top offers were from out of state. CA, CA, MA, NY, NJ followed by a UT. The owner took the UT offer even though it was $10,000 less then the top offer. They weren’t gonna sell out the home to Californians or other heavy liberal cesspools.

Me personally I get calls, email, mail etc asking if I want to sell my home. If I respond I say sure only if you buy it as is and four times the current home value. I never hear back from them.

I only hope something bursts and most of those who relocated regret moving and lose their home
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Old 03-23-2021, 09:54 PM
 
Location: Uptown Phoenix, AZ
5,210 posts, read 4,736,283 times
Reputation: 4783
Quote:
Originally Posted by MN-Born-n-Raised View Post
Yep! People are buying "payments". Think about it for a moment... If you borrow $700K, the interest is $21,000 a year or $1750 per month. A lot of people can afford that amount. And people who justify interest as a tax write-off calculate another 20-40% (marginal tax rate) write-off. Their 401K/stocks are also sky-high. Talk about overheated (the market). I digress.... So people they have the confidence to toss in a few hundred grand more (or under $9K a year in interest less tax deduction) to supercharge their home. But the problem is, the house values are creeping up so fast that their buying power is eroding.

And let's not forget the sense-of-urgency! It's a POWERFUL motivator to 80% of the people walking the planet. In fact, I can hear how anxious the Op is right now! To a fault, I have plenty of patience. But waiting for a bubble to burst may prove to be a huge financial mistake. i.e. you lose a decade or more "being patient". And if the Op waits and it crashes, will they have job security to buy? After all, how come we didn't all buy 5 homes at $100K back in 2011? Because it felt a little risky. We all googled (our confirmational bias) that said its houses needed to be bulldozed down. And it might be decades for it to return. So I didn't buy more than one home.

Next, there are the haves and have-nots. And the halves are gaining tremendous (widening) economic ground which isn't exactly good for society. The have-nots are losing ground with housing appreciation. Home value as a percentage of net worth has been pretty constant over the past 8 years. And the halves net worth has climbed up a lot recently and therefore, so is housing prices.


Be careful what you google as confirmation bias will have you believe it. The thing is, because we are a massively in-debt nation, we need super cheap money. So expect ultra low-interest rates to be the policy for decades to come. We are in a headlock. But IF interest rates surge, we will have a RE bubble. And it's another reason why policymakers are going to be careful in raising the rates. In fact, the Federal Reserve said that they do not foresee rate hikes in coming years, at least through 2023. And yea, they would be blind if they didn't see inflation coming.

I realize lenders price their mortgage rates long-term. And certainly, their expectations for future inflation will impact the rates. Currently, they see the economy as weak and therefore, the mortgage rates are priced low. If and when, the interest rate goes to 5%, that works out to another $14,000 a year on that $700K loan example. A 3% interest rate, raising up to 5% rate is almost a 70% increase in the cost of money. So in the end, cheap rates are driving up this fast appreciation. People who are buying "payments" and allowing others to cashout and overpay for another home. And maybe take out another $300K-$500K in cheap money. It's why the luxury market is doing so well and appreciating like mad!


"Starting soon?! No F'en way! But all cycles will come to an end. We just don't know the when and how scenario. If could be 10 years from now or even longer? If people's stock portfolio correct fast and people have big loans, I could see the luxury market having a biggER pullback if the rates go up to 5%. Or something as simple as COVIDII might be the eventual catalyst.

Both of my kids currently rent. So like the Op, I'm a little concerned with their buying power as this housing inflation continues.
I'm in my mid-20s in a stable job (government). My salary does not keep up with the cost of living and it never will because since I am government I shouldn't enjoy being able to afford living in the community that I serve (that is what everyone always tells me, government workers should be underpaid because they do not anything other than "leech tax money")... There is a good chance I am close to your kids age. What are my options?

Quote:
Originally Posted by Code Stemi View Post
OP, weren't you thinking about possibly relocating? You may have changed your mind, but housing options would likely be more affordable if you head east of the rockies (minus Denver).
I don't really know what I want. I just want a better situation. What I do know is I can't afford the rent increases in the long-term, and I can't really seem to compete in the market because I cannot buy cash, and I can't even put 20% down and never will with the rent increases. And in every other city, it seems to be just as bad or worse off. This is my home and it frustrates me. There are people out here buying multiple homes to landlord to people like me and profit off of me. And then there are flippers buying the low properties that would normally sell to people like me, to sell to the ones who want to landlord and profit off them. I can probably buy a place under 240k and there's so little of anything below this value, all I want is a condo or townhouse. The ones that are are in really bad shape, small with a laundromat, or in really bad neighborhoods. There are exceptions, but they go so quickly.

Some people just want a slice of the cake but the cake is gone before they are allowed to even get to it (I'm 26, the last time the market was "good" I was in high school) and I have been doing "all the right things" gone to school, pay off debts, save money get a good credit score... and I still can't make it. It feels rigged and I'm upset. I don't have these 401k stock options others have mentioned, I'm simply looking to enter... and I can't compete with the veterans.

Quote:
Originally Posted by nachofries View Post
Nope. Just a few states over key area homes are expensive for the area and in short supply. It totally sucks that people who have grown up/ lived in said area their whole lives have finally saved up enough to purchase a home to get shot down so fast. A year or two ago they would have easily purchased a home but not now. Several homes selling hours within hitting the market, all cash buyers to outsiders and not giving the time of day to local people who actually want a home. It’s sick and pathetic plus you have certain people who basically want their own HGTV flip show. They buy cheap homes with nothing wrong with them only to flip them and sell them for 3x to 6x what it was bought for and that was happening years ago!

My neighbor posted their home for sale and in 30 hours got 25 offers. Every singe one of them where buyers from out of state except 5 of them. The top offers were from out of state. CA, CA, MA, NY, NJ followed by a UT. The owner took the UT offer even though it was $10,000 less then the top offer. They weren’t gonna sell out the home to Californians or other heavy liberal cesspools.

Me personally I get calls, email, mail etc asking if I want to sell my home. If I respond I say sure only if you buy it as is and four times the current home value. I never hear back from them.

I only hope something bursts and most of those who relocated regret moving and lose their home
Something needs to be done to prevent housing being accumulated all by the same people and/or companies and to encourage owner-occupied residences. Not snowbirding bologna either, I'm talking about permanent residencies. Plenty of people who need and deserve to build stability in their lives and are suffering at the hands of an extremely tumultuous market. There will always be renters, but it should never be this hard to buy. If it is, we are quite literally keeping people from building retirements, from building roots, from saving that can be used to buy recreational or less needed items (a big economy booster as we have learned very hard in this pandemic).

My finances are suffering as long as the market goes on. I suspect my rent to increase in a few months. I worry at how much it is going to be. Last time I lived in an apartment here in Phoenix, my rent increased by $200/month. Luckily I was moving out of that one anyway.
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Old 03-24-2021, 02:14 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by Prickly Pear View Post
I'm in my mid-20s in a stable job (government). My salary does not keep up with the cost of living and it never will because since I am government I shouldn't enjoy being able to afford living in the community that I serve (that is what everyone always tells me, government workers should be underpaid because they do not anything other than "leech tax money")... There is a good chance I am close to your kids age. What are my options?



I don't really know what I want. I just want a better situation. What I do know is I can't afford the rent increases in the long-term, and I can't really seem to compete in the market because I cannot buy cash, and I can't even put 20% down and never will with the rent increases. And in every other city, it seems to be just as bad or worse off. This is my home and it frustrates me. There are people out here buying multiple homes to landlord to people like me and profit off of me. And then there are flippers buying the low properties that would normally sell to people like me, to sell to the ones who want to landlord and profit off them. I can probably buy a place under 240k and there's so little of anything below this value, all I want is a condo or townhouse. The ones that are are in really bad shape, small with a laundromat, or in really bad neighborhoods. There are exceptions, but they go so quickly.

Some people just want a slice of the cake but the cake is gone before they are allowed to even get to it (I'm 26, the last time the market was "good" I was in high school) and I have been doing "all the right things" gone to school, pay off debts, save money get a good credit score... and I still can't make it. It feels rigged and I'm upset. I don't have these 401k stock options others have mentioned, I'm simply looking to enter... and I can't compete with the veterans.



Something needs to be done to prevent housing being accumulated all by the same people and/or companies and to encourage owner-occupied residences. Not snowbirding bologna either, I'm talking about permanent residencies. Plenty of people who need and deserve to build stability in their lives and are suffering at the hands of an extremely tumultuous market. There will always be renters, but it should never be this hard to buy. If it is, we are quite literally keeping people from building retirements, from building roots, from saving that can be used to buy recreational or less needed items (a big economy booster as we have learned very hard in this pandemic).

My finances are suffering as long as the market goes on. I suspect my rent to increase in a few months. I worry at how much it is going to be. Last time I lived in an apartment here in Phoenix, my rent increased by $200/month. Luckily I was moving out of that one anyway.
Don't feel too bad, my fiancee and I make $120k combined, I'm 38 and she's 33, and we still rent an apartment, with no hope of actually buying anytime soon
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Old 03-24-2021, 05:58 AM
 
6,994 posts, read 8,451,011 times
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Quote:
Originally Posted by Prickly Pear View Post
I'm in my mid-20s in a stable job (government). My salary does not keep up with the cost of living and it never will because since I am government I shouldn't enjoy being able to afford living in the community that I serve (that is what everyone always tells me, government workers should be underpaid because they do not anything other than "leech tax money")... There is a good chance I am close to your kids age. What are my options?
You asked. So don't shoot the messenger.

If you were my son or daughter, I would have been prodding you throughout your life to focus on picking a career that cannot be outsourced! And to get as close to the money in your career as possible. I've had hundreds of conversations with our kids when they were in their early teens. I dreamt with them discussing the exciting times when they are kicking butt and how fun life will be. I miss that era of my life as it was a blast. While money doesn't buy happiness, it does buy fun when you have more than you need! Both kids will make $300K-$500K a year (dentist and a doctor). Even more $$, if they buy a practice. But remember, there are gross income amounts and take-home. Don't be fooled by those figures. The government will be taking their unfair share. Which is the next lesson. Own your own business and you will be shocked how many creative (and legitimate) write-offs occur.

You picked a different path, your payout should be when you retire. Until then, you will be underpaid. My recommendation is to retool and not to work for the government. Do it while you are young. Do it now. Follow the money in a career that you enjoy. Get as close as you can to the money stream. Influences make more $$'s. Also, drop "stable job" from your vocabulary! If you are good at what you do (have more horsepower than your competition), you HAVE a stable job because no one wants to lose high-performance people who influence $$. While I'm pontificating, higher-margin industries make higher wages.

Saying all of that, if you are Hell-bent on trying to make it work with an average income, you are going to dog paddle. So start dreaming. I don't know your skillset. But I've made a great living selling overpriced items to people with way too much money.

Option 2 is to get a house that needs a lot of work and steal it. Put in sweat equity and figure out how to cut corners on making it your own. That doesn't sound very fun, does it? Or go to a lower cost of living area. Economic laws are in place. Be leveraged or buy less-than-ideal locations or properties. It's why I would be focused on retooling.

Quote:
Originally Posted by Prickly Pear View Post

Something needs to be done to prevent housing being accumulated all by the same people and/or companies and to encourage owner-occupied residences.
You need to control your own destiny. Don't expect the government/policies to help you. The "something that needs to be done" is for you to take control of your destiny and retool. You are YOUNG! Focus on making more money and you get what you deserve! I sincerely wish you the very best!
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Old 03-24-2021, 06:28 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by MN-Born-n-Raised View Post
You asked. So don't shoot the messenger.

If you were my son or daughter, I would have been prodding you throughout your life to focus on picking a career that cannot be outsourced! And to get as close to the money in your career as possible. I've had hundreds of conversations with our kids when they were in their early teens. I dreamt with them discussing the exciting times when they are kicking butt and how fun life will be. I miss that era of my life as it was a blast. While money doesn't buy happiness, it does buy fun when you have more than you need! Both kids will make $300K-$500K a year (dentist and a doctor). Even more $$, if they buy a practice. But remember, there are gross income amounts and take-home. Don't be fooled by those figures. The government will be taking their unfair share. Which is the next lesson. Own your own business and you will be shocked how many creative (and legitimate) write-offs occur.

You picked a different path, your payout should be when you retire. Until then, you will be underpaid. My recommendation is to retool and not to work for the government. Do it while you are young. Do it now. Follow the money in a career that you enjoy. Get as close as you can to the money stream. Influences make more $$'s. Also, drop "stable job" from your vocabulary! If you are good at what you do (have more horsepower than your competition), you HAVE a stable job because no one wants to lose high-performance people who influence $$. While I'm pontificating, higher-margin industries make higher wages.

Saying all of that, if you are Hell-bent on trying to make it work with an average income, you are going to dog paddle. So start dreaming. I don't know your skillset. But I've made a great living selling overpriced items to people with way too much money.

Option 2 is to get a house that needs a lot of work and steal it. Put in sweat equity and figure out how to cut corners on making it your own. That doesn't sound very fun, does it? Or go to a lower cost of living area. Economic laws are in place. Be leveraged or buy less-than-ideal locations or properties. It's why I would be focused on retooling.


You need to control your own destiny. Don't expect the government/policies to help you. The "something that needs to be done" is for you to take control of your destiny and retool. You are YOUNG! Focus on making more money and you get what you deserve! I sincerely wish you the very best!
Not everyone can be a doctor or a dentist, so I guess homeownership is going to be out of reach for the majority from now on
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Old 03-24-2021, 06:44 AM
 
6,994 posts, read 8,451,011 times
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Quote:
Originally Posted by FirebirdCamaro1220 View Post
Not everyone can be a doctor or a dentist, so I guess homeownership is going to be out of reach for the majority from now on
That-a-boy. Toss some cold water on the topic. Yes. Homeownership will be out of reach for the majority. Solution: become the minority. In 2021, an electrical engineer with their master's degree makes about $110K a year. That is a BRUTAL path. I made 5x more money when I worked hard... And that was back in the year 2000 and a lower COL. All I did was sell stuff out of my house. And I made more than my bosses-bosses-bosses bosses boss at Honeywell. Hell, plumbers make $150-$200K a year. And if they start their own business, they can make a million a year. Or more than twice a neurosurgeon. We have people on our lake in Northern MN that own ______________ business. Plumbing contractors, landscapers, junkyard owners, GM's at car dealerships ($300K+), etc etc. Notice no government employees?!

There is no shortage of car salesmen making $100K+. Now if you want to focus on the "average" wage, then that includes a bunch of underperformers. If I decided to sell cars, give me a year and I'd easily make a >$100K. As I said earlier, get close to the money. Option 2: study people around you that are struggling and mimic them. You get my point. The Op is young. NOW is the time and it really isn't that tough.

Last edited by MN-Born-n-Raised; 03-24-2021 at 06:53 AM..
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Old 03-24-2021, 06:57 AM
 
Location: Live:Downtown Phoenix, AZ/Work:Greater Los Angeles, CA
25,990 posts, read 10,343,854 times
Reputation: 8629
Quote:
Originally Posted by MN-Born-n-Raised View Post
That-a-boy. Toss some cold water on the topic. Yes. Homeownership will be out of reach for the majority. Solution: become the minority. In 2021, an electrical engineer with their master's degree makes about $110K a year. That is a BRUTAL path. I made 5x more money when I worked hard... And that was back in the year 2000 and a lower COL. All I did was sell stuff out of my house. And I made more than my bosses-bosses-bosses bosses boss at Honeywell. Hell, plumbers make $150-$200K a year. And if they start their own business, they can make a million a year. Or more than twice a neurosurgeon. We have people on our lake in Northern MN that own ______________ business. Plumbing contractors, landscapers, junkyard owners, GM's at car dealerships ($300K+), etc etc. Notice no government employees?!

There is no shortage of car salesmen making $100K+. Now if you want to focus on the "average" wage, then that includes a bunch of underperformers. If I decided to sell cars, give me a year and I'd easily make a >$100K. As I said earlier, get close to the money. Option 2: study people around you that are struggling and mimic them. You get my point. The Op is young. NOW is the time and it really isn't that tough.
My point is is that only 9% of Americans earn $100,000 per year or more. Which means that 91% earn less than that. Heck, I earn $87,000 per year, and that puts me in the top 15% of wage earners, yet I still rent as does OP.

The higher the wage, the fewer job openings/opportunities there are. It's simple economics
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Old 03-24-2021, 07:02 AM
 
3,514 posts, read 7,896,887 times
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Just to add to this conversation. My wife has one of those government gigs as does her brother. They got very good at picking the next department down the hall that was offering a slight promotion. In ten years of bouncing around from detail to detail both of them have made to a six figure income with a lot of desirable benefits. Plus with WFH we live in Tucson and she hasn't seen the inside of her office in a year. Pre-Covid her telecommuting contract had her driving to the office once a month. Got Phoenix pay and Tucson home pricing.

We also just purchased a starter home for a disabled adult child amidst all of the craziness of this market. Stayed patient, had a great realtor that alerted me at 4:30 AM of a place that had hit the market overnight. Looked at the place at 9 AM, had an offer by 10 AM. Didn't go over asking price, but offered a quick clean close. It was a divorce situation and they wanted out fast. Didn't even put that much down, about $5000 and another $2000 at closing.
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Old 03-24-2021, 07:17 AM
 
6,994 posts, read 8,451,011 times
Reputation: 6395
Quote:
Originally Posted by FirebirdCamaro1220 View Post
My point is is that only 9% of Americans earn $100,000 per year or more. Which means that 91% earn less than that. Heck, I earn $87,000 per year, and that puts me in the top 15% of wage earners, yet I still rent as does OP.

The higher the wage, the fewer job openings/opportunities there are. It's simple economics
My point is it is NOT tough to be in the top 9%. To a large degree, you need to work smarter. If you are in the trades (subcontractor) and call people back, you are in the top 9% because you work smarter. I paid a handyman $95 an hour AND he is booked solid! In another example, a guy just put my wireless alarm system. We talked and he has 500 accounts at a $15 profit per month. Plus installation fees (he charges $80 an hour) or $240 for three hours. Plus equipment mark-up. Sure, he had the option to go work for someone for $30 an hour because it is "stable". He chose the latter. Now he has write-offs, cannot fire himself, and hires others for $30 an hour, etc. The choice is to be an average alarm installer or one who takes the bull by the horns and thinks outside the box.

The key here is not to be "average". I literally drove my kids around "average" neighborhoods. I let them know the result of when they settle for "average". The Op voluntarily went into an average-paying career, after laying the groundwork (college, staying debt free etc). Realize that people are where they are for a reason. Often (not always), is because they settle. Heck, our daughter wanted to be a hygenist. The good ones make close to $100K. I asked why not a dentist? Her answer was that she didn't think of it. I had her shadow 3-4 dentists in high school and the rest is history.

I come from the school of thought that it is incredibly easy to outperform most people. Most settle. Most lack drive. Most made bad decisions. Hitting the top 9% really isn't an accomplishment when you think about it deeper. It's actually pretty easy for 80% of the people if they tried (but they don't).

We should get back on topic now
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