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my buddy and I were talking the other day about how home prices have sky rocketed. For example my parents bought a two family and I think they payed $50k at that the time. Now fast forward that same home is worth past $1 million. Not only that people are re modeling their homes installing new bathrooms, new kitchens, expensive shades, etc...my buddy and I were scatching our heads where are these people getting the money...I dont get it....
my buddy and I were talking the other day about how home prices have sky rocketed. For example my parents bought a two family and I think they payed $50k at that the time. Now fast forward that same home is worth past $1 million. Not only that people are re modeling their homes installing new bathrooms, new kitchens, expensive shades, etc...my buddy and I were scatching our heads where are these people getting the money...I dont get it....
People who are living in expensive houses now started off in smaller houses or condos decades ago.
Flipping pays big if you buy and sell at the right time. I bought our house for peanuts in 2010. Worth over $250,000 right now, not sure how long this bubble will continue.
I live in a tough area for affordable homes. I don't know how a young family can afford a home when the average one is $400,000 and up and that was before houses for sale were plentiful. The only jobs that can potentially support that big mortgage are in the trades and medical fields. Working retail is not going to get you there and that is why we have so many young families moving away. The older retired folks that are coming from larger homes that they sold and dripping in equity.
Inheritance or a really good job is the only way young people can afford an average sized home and still have some money left over to feed the kids.
Of course there has been talk from the Biden Bunch to raise taxes across the board which will hurt these families and there has also been chatter of increasing the taxes on inheritance, estate taxes, because there are people that will never get left property so they need to take it away from the people that do. They might as well call it "estate equity".
I have a small project to do and was shocked that a 2x4x8 has gone from $3.50 to over $7 ! Thanks Biden. Building a home now comes with a 30% increase in price.
Investing in real-estate for the long-term use to be a good idea, but this younger generation is less interesting in buying expensive homes, so many of these million dollar homes won't be selling in 10 or 15 years. No one is going to buy them in the future.
Also take into account the changing demographics.
Less children being born = less future home buyers.
All of these idiots who are paying millions for fancy homes, and the wealthy buying their 2nd, 3rd, or 4th homes. Those are bad investments in the long-term despite what all of the financial "experts" might suggest today. In 15 years, expensive homes are going to be dropping in value, not increasing.
China has a strikingly similar but more serious issue. Despite having over a billion people, nearly 25% of Chinese homes are unoccupied. The middle class and wealthy Chinese are pouring all of their money into buying multiple homes that sit empty, with the expectation that home prices will constantly increase in value. In a decade or two, I think many of these Chinese investors are going to be sorely disappointed. Once again, demographic predictions show that there will be fewer future home buyers. Kinda dumb to invest in real estate for the long-term when there's going to be fewer people in the future who are willing to buy your home.
I live in a tough area for affordable homes. I don't know how a young family can afford a home when the average one is $400,000 and up and that was before houses for sale were plentiful. The only jobs that can potentially support that big mortgage are in the trades and medical fields. Working retail is not going to get you there and that is why we have so many young families moving away. The older retired folks that are coming from larger homes that they sold and dripping in equity.
Inheritance or a really good job is the only way young people can afford an average sized home and still have some money left over to feed the kids.
Of course there has been talk from the Biden Bunch to raise taxes across the board which will hurt these families and there has also been chatter of increasing the taxes on inheritance, estate taxes, because there are people that will never get left property so they need to take it away from the people that do. They might as well call it "estate equity".
I have a small project to do and was shocked that a 2x4x8 has gone from $3.50 to over $7 ! Thanks Biden. Building a home now comes with a 30% increase in price.
How do people afford it?
mortgage calculator shows a home at that price would be 1800 a month payment
If two people are working - they can afford it.
If they were single, they would probably be paying over 1K for an apartment.
Also take into account the changing demographics.
Less children being born = less future home buyers.
Perhaps one of the reasons that America embraces immigration in the way it does. Without it you have a nation getting older without much of a work force due to falling birth rates.
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