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Bill, I'm not sure we're getting anywhere on this. You have your position about affordability, I have a totally different opinion about affordability. I'll leave it as I respectfully disagree, ok?
When my dh and I recieved yet another notice that our former agri-town needed to build yet another elementary school the hand writing was on the wall. We whipped our 30 year old house in shaped staged it 24/7, available to show within the hour. When the stinky mortgage companies are selling loans to people who cannot read the contract, when homes are being snapped up to flip in the neighborhood, well load up the wagon ma! We were able to statisfy our debt and buy outright a very modest home in a different state. Homes are there but ya gotta do without all the things the tv says you need!
I think you hit it on the head! The HGTV syndrome.... Must have granite,must have granite,must have... you get the idea.
I think you hit it on the head! The HGTV syndrome.... Must have granite,must have granite,must have... you get the idea.
And to add to that:
MUST have same size house as mommy & daddy. Even though mommy & daddy are in their 50's or 60's worked hard and saved and the BIG house they live in now cost a lot less when they bought. We are in our late 20's or early 30's but we MUST have that BIG HOUSE with EVERY amenity.
I see this a lot. They are not willing to settle for a "starter home". Then you get the syndrome we have here in the Dallas Metroplex. People moving here after cashing out of their 1950's dump w/ a huge payoof, or never could afford to buy a house. Come here and find a BRAND NEW HOME!!! WOW!!! Something they never thought they would be able to do. They won't even consider an existing home even though the older home here is in a more established neighborhood, closer to work, has the same amenities if not more than that new one out in the far burbs. They have that "MUST have brand new" syndrome.
The Gottahave's family are the ones not doing well. For those willing to stay within their means and willing to START in a "starter home" they can find plenty of affordable homes. Instead they would rather sit in a cramped up apartment paying rent instead of just saying: You know we are going to be here for awhile. Our 3 kids are tired of sharing a bedroom. We have no yard at all. I commute 1 1/2 hours to work everyday. Waiting to buy a house hoping the prices will keep going further down. Right now the interest rates are good. We have money in the bank to put down a NICE chunk for the down payment. We could have a nice sized house w/ a yard. I could live closer to work. We buy the house now that is at a good price. So what if it goes down in 6 months. We are not planning on selling then anyway. We want a HOME to raise our family in for the longterm. By then it won't matter if the market crashed 6 months or a year after we bought as it will still have gone up in value since then. Afterall it will have been 10-15 years. The kids could grow up in a HOUSE and not an apartment.
Yep, that poor Gottahave family. Don't you feel sorry for them.
And to add to that:
MUST have same size house as mommy & daddy. Even though mommy & daddy are in their 50's or 60's worked hard and saved and the BIG house they live in now cost a lot less when they bought. We are in our late 20's or early 30's but we MUST have that BIG HOUSE with EVERY amenity.
I see this a lot. They are not willing to settle for a "starter home". Then you get the syndrome we have here in the Dallas Metroplex. People moving here after cashing out of their 1950's dump w/ a huge payoof, or never could afford to buy a house. Come here and find a BRAND NEW HOME!!! WOW!!! Something they never thought they would be able to do. They won't even consider an existing home even though the older home here is in a more established neighborhood, closer to work, has the same amenities if not more than that new one out in the far burbs. They have that "MUST have brand new" syndrome.
The Gottahave's family are the ones not doing well. For those willing to stay within their means and willing to START in a "starter home" they can find plenty of affordable homes. Instead they would rather sit in a cramped up apartment paying rent instead of just saying: You know we are going to be here for awhile. Our 3 kids are tired of sharing a bedroom. We have no yard at all. I commute 1 1/2 hours to work everyday. Waiting to buy a house hoping the prices will keep going further down. Right now the interest rates are good. We have money in the bank to put down a NICE chunk for the down payment. We could have a nice sized house w/ a yard. I could live closer to work. We buy the house now that is at a good price. So what if it goes down in 6 months. We are not planning on selling then anyway. We want a HOME to raise our family in for the longterm. By then it won't matter if the market crashed 6 months or a year after we bought as it will still have gone up in value since then. Afterall it will have been 10-15 years. The kids could grow up in a HOUSE and not an apartment.
Yep, that poor Gottahave family. Don't you feel sorry for them.
dfw- The problem is that you're looking from your perspective in Dallas where home values are much, much, lower than in bubble areas.
Do you want to see what an average 250K home w/7K in yearly property taxes will get you in NJ? Or in Long Island, NY? You really don't want to see those homes, trust me. I'm all for starting out modestly, but its rediculous how inflated prices have gotten in bubble areas. The only decent homes that cost this much are either in the ghetto, or 1 - 1/2 hours away in the sticks. These are so far from any decent jobs that you'll need to buy a car every 3 years or so.
Problem is, in NJ, the homes that were in the low 200's in say '00 are now around 400K. Did income levels jump that much in 8 years, HELL NO! That's what me and KC and everyone else is trying to explain here.
People are left w/limited options. Sure they can try to save money, but the property taxes alone will choke you.
dfw- The problem is that you're looking from your perspective in Dallas where home values are much, much, lower than in bubble areas.
Do you want to see what an average 250K home w/7K in yearly property taxes will get you in NJ? Or in Long Island, NY? You really don't want to see those homes, trust me. I'm all for starting out modestly, but its rediculous how inflated prices have gotten in bubble areas. The only decent homes that cost this much are either in the ghetto, or 1 - 1/2 hours away in the sticks. These are so far from any decent jobs that you'll need to buy a car every 3 years or so.
Problem is, in NJ, the homes that were in the low 200's in say '00 are now around 400K. Did income levels jump that much in 8 years, HELL NO! That's what me and KC and everyone else is trying to explain here.
People are left w/limited options. Sure they can try to save money, but the property taxes alone will choke you.
Trust me, I lived through it and I got out.
You've previously been talking generalties about affordable real estate. Now you're talking about pockets, and Long Island as a pocket does not represent the typical real estate market. You know as well as we all do that all real estate is local. Yet the press takes an isolated area, just as you did to show how expensive properties are. That is a distortion of the overall market. Not every area doubled in price, and many areas have already made substantial corrections, where other areas continue to increase in value.
In 1999, in Manhattan, $1500 per month would rent you one room in a non air conditioned building on the 5th floor with no elevator, and a window looking at the next apartment building about 8 feet away. I rented a commuter appartment for 8 years in Queens near the airport and only paid $900/mo for two bedrooms, living room and kitchen, including the utilities in a second story two unit home. The location of the markets make a huge difference.
In Gilbert one can buy a home in the best communities for less than $250k, and new homes further out for under $200k. In 1978 I had to pay $88k for a 2400 sf tract home in CA that is no larger than some of these new homes that today are selling for no more than $200k. If that isn't affordable, then I don't know what is. And wages have risen considerably since 1974.
Also, in 1974 there were much fewer two income families.
Now if you're defining affordable as being able to buy a home earning minimum wage, then no one has ever been able to do that, and never will.
I think momof2dfw hit the nail square on the head, in that people may be shooting for that pie in the sky and don't want to start in the affordable starter home. Bring the million dollar home down to $100k so it's affordable to me, and I won't have to work hard to earn the money to be able to afford it. I don't want to live in a crappy $200 home. That's some of the mentality she is talking about. I don't blame people for dreaming, but that's what it is, a dream.
Let's take a real life example in a desirable community:
Gilbert, AZ
Val Vista Lakes master planned community Val Vista Lakes - Your Community
Only $85/mo dues for all the amenities of that community $259,900 2009 square foot house.
7,500 sf lot
4 bed room
3 bath
2 car garage
New Pergo floors in 06
All new carpet in 07
In excellent condition
Built 1994
mls 2803401 for verification purposes. There are other homes I could have chosen, with lower and higher prices. I chose this one because it's in good condition, and is not a short sale.
Is that an "affordable" home in your definition?
If not, you can get you a new build for $150,000 in Queen Creek or Surprise. Is that affordable?
Perhaps what you're wanting to see is for this next home to get down to $200k to be affordable?
Again in Val Vista Lakes
On the lake, Water front home
Custom home on cul-de-sac in gated sub-community $1,095,000 4225 sf
15,000 sf lot
4 br
3 bath
4+ car garage
RV garage with connections.
mother inlaw suite
Private spa, 10-person pebble tec, no private pool
Windows in the kitchen/great room are about 20 feet tall so there is a view from the loft area.
mls 2855263 for verification and other house amenities.
There are other problems that come with bringing the values down too far. This dreaming buyer is waiting for the home that was $500K last year but purchased 10 years ago for $350K to come down to BELOW $200K or so. They may be stretching it financially to make it to get that home at $250K or $300K. So they pick it up for $275K. That bigger home costs MORE for utilities which the buyer may not realize as they SHOULD have been in a much smaller home in that area. Then in a few years if they have not learned to save better and went out and furnished that home to the hilt (hear people complain all the time about people buying "BIG HOUSES" but don't have furniture - so what, I'm taking MY TIME to find what I REALLY WANT and to pay CASH for it . Oh, and I buy QUALITY items too) on credit. You know the house MUST be fully furnished for the Gottahave family. And next thing you know - WHAM-O!!!! They did want their property to appreciate but they forget to think ahead about the future property taxes at what SHOULD have been the price in the beginning and when it does make it up to that THEY CAN'T AFFORD IT ANYMORE. DUH!!! The other thing I've seen is people that do buy into a neighborhood of homes that are at a MUCH higher price than the "bargain" they got, they can not keep up w/ the work. These typically are the worst kept homes and yards .
As for the market I first described where the people moving into the area from other states, they don't realize they are hurting themselves with their "must have new" mentality. These are typically the most transient homeowners and get transferred often. In a few years when it is their time to sell the new wave will bypass the existing homes in order to build the "new house". This is the ONLY area in the Dallas Metroplex that has been hit w/ a real estate bubble. They have a high number of foreclosures and rentals. There are perfectly nice homes on the market in existing neighborhoods in their price ranges that are not in some ghetto. Not only are they hurting themselves and their neighbors in the real estate arena they are hurting the environment. They deplete natural resources like water. They contribuite heavily to traffic congestion and pollution as they keep moving further and further out to areas that are having a hard time keeping up w/ the roads just to have that "brand new house". Their appreciation rates stink and in some cases are nonexistent. Come on into the inner loop or closer in to the downtown area and you have VERY NICE and well kept homes and neighborhoods. Less traffic, larger yards w/ mature trees. Then that majic word shows up: APPRECIATION! WOW! It really DOES happen even here in Texas. Just avoid the far north tundra out there w/ the new developments and you can find it.
You've previously been talking generalties about affordable real estate. Now you're talking about pockets, and Long Island as a pocket does not represent the typical real estate market. You know as well as we all do that all real estate is local. Yet the press takes an isolated area, just as you did to show how expensive properties are. That is a distortion of the overall market. Not every area doubled in price, and many areas have already made substantial corrections, where other areas continue to increase in value.
In 1999, in Manhattan, $1500 per month would rent you one room in a non air conditioned building on the 5th floor with no elevator, and a window looking at the next apartment building about 8 feet away. I rented a commuter appartment for 8 years in Queens near the airport and only paid $900/mo for two bedrooms, living room and kitchen, including the utilities in a second story two unit home. The location of the markets make a huge difference.
In Gilbert one can buy a home in the best communities for less than $250k, and new homes further out for under $200k. In 1978 I had to pay $88k for a 2400 sf tract home in CA that is no larger than some of these new homes that today are selling for no more than $200k. If that isn't affordable, then I don't know what is. And wages have risen considerably since 1974.
Also, in 1974 there were much fewer two income families.
Now if you're defining affordable as being able to buy a home earning minimum wage, then no one has ever been able to do that, and never will.
I think momof2dfw hit the nail square on the head, in that people may be shooting for that pie in the sky and don't want to start in the affordable starter home. Bring the million dollar home down to $100k so it's affordable to me, and I won't have to work hard to earn the money to be able to afford it. I don't want to live in a crappy $200 home. That's some of the mentality she is talking about. I don't blame people for dreaming, but that's what it is, a dream.
Let's take a real life example in a desirable community:
Gilbert, AZ
Val Vista Lakes master planned community Val Vista Lakes - Your Community
Only $85/mo dues for all the amenities of that community $259,900 2009 square foot house.
7,500 sf lot
4 bed room
3 bath
2 car garage
New Pergo floors in 06
All new carpet in 07
In excellent condition
Built 1994
mls 2803401 for verification purposes. There are other homes I could have chosen, with lower and higher prices. I chose this one because it's in good condition, and is not a short sale.
Is that an "affordable" home in your definition?
If not, you can get you a new build for $150,000 in Queen Creek or Surprise. Is that affordable?
Perhaps what you're wanting to see is for this next home to get down to $200k to be affordable?
Again in Val Vista Lakes
On the lake, Water front home
Custom home on cul-de-sac in gated sub-community $1,095,000 4225 sf
15,000 sf lot
4 br
3 bath
4+ car garage
RV garage with connections.
mother inlaw suite
Private spa, 10-person pebble tec, no private pool
Windows in the kitchen/great room are about 20 feet tall so there is a view from the loft area.
mls 2855263 for verification and other house amenities.
Bill, I don't see any other realtors backing up your position because they all know your position is incorrect on affordability and they can't back you up on it. I would have no complaints if the markets that over appreciated corrected back to inflation type gains. Also, I think its great that its alot tougher to get a mortgage now. I don't want an overheated market. Maybe you do, or maybe you don't think your market is in one, I don't get your logic and I don't think most here do either.
All these examples you talk about here is just window dressing and not once have you answered a direct question about affordability. Again, you have not responded to the fact that even the NAR admits that there is an affordability problem.....
There are other problems that come with bringing the values down too far. .
Do you pay attention to what's written or just make this up as you go along? All I've said consistently is that prices come back (and I mean come back) to historical levels appreciating per the inflation rate like they've done in the past. You are assuming I want a market to go down to 150-200K if historical levels say they should be around 350K. Wrong.
Quote:
Originally Posted by momof2dfw
This dreaming buyer is waiting for the home that was $500K last year but purchased 10 years ago for $350K to come down to BELOW $200K or so. .
Wrong again. Gross exaggeration. Never had that position. Pay attention to what I write.
Last edited by CouponJack; 02-04-2008 at 07:35 PM..
Bill, I don't see any other realtors backing up your position because they all know your position is incorrect on affordability and they can't back you up on it. I would have no complaints if the markets that over appreciated corrected back to inflation type gains. Also, I think its great that its alot tougher to get a mortgage now. I don't want an overheated market. Maybe you do, or maybe you don't think your market is in one, I don't get your logic and I don't think most here do either.
All these examples you talk about here is just window dressing and not once have you answered a direct question about affordability. Again, you have not responded to the fact that even the NAR admits that there is an affordability problem.....
OK - I will play too.
Affordability is an after the fact concept. It is used to explain what has happened - not what will happen. In fact the US supports afforability ranges of below 2 to above 6. The methodology as to which number applies in which market is left to the student.
It is an observation of outcome not a predictor of the future.
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. Oh, and I buy QUALITY items too) on credit. You know the house MUST be fully furnished for the Gottahave family. And next thing you know - WHAM-O!!!! They did want their property to appreciate but they forget to think ahead about the future property taxes at what SHOULD have been the price in the beginning and when it does make it up to that THEY CAN'T AFFORD IT ANYMORE. DUH!!! The other thing I've seen is people that do buy into a neighborhood of homes that are at a MUCH higher price than the "bargain" they got, they can not keep up w/ the work. These typically are the worst kept homes and yards 
. 
