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This is detrimental to people like me who want to be more financially conscious. Now, if I want to live in a nice, safe neighborhood where my kids can have friends, I have to join the Jones's and over spend.... keeping the snowball rolling..
You will just need to pay HIGHER RENT to live in a nice, safe neighborhood.
rates are right in their normal historical range .
we just got used to lower rates but they were not the norm
COnsidering that my first Mortgage was at 16% (refinanced three years later at 12% VA) I don't have much sympathy when people complain that ' today's rates have gotten too high '.
Day to day average Joes can't afford them but investors and corporate property management companies can afford them...
In the US in 2023, something like 65% of all residents live in a property owned by themselves or their parents. "Average Joes" are mostly already homeowners. Those locked out of the market, are persons who formerly owned, but now rent; or those who have been renting thus far.
Quote:
Originally Posted by bfmx1
I have a friend who just bought a $1.2M house.. He knows good and well it was $700k two years ago and is likely going to land in the $800k area in a few years, but he did it anyway - at 7%!!! ...
How certain are we, that that $1.2M house will decline to $800K "in a few years"? Perhaps its price will never fall? Perhaps "in a few years", it will be worth $1.8M? How would that change our judgment?
Quote:
Originally Posted by Silverfall
... Millenials have paid off their school loans and have entered the market as well.
That's a huge, and rarely acknowledged factor. Persons who even 5 years ago, were in no position to buy, suddenly... are. They're competing with each other, and with downsizing Boomers.
Quote:
Originally Posted by Silverfall
We will get more inventory on the market once the boomers start to die, but we have a ways to go before that happens.
And people almost universally extol higher longevity, as some great boon. Well, there's a downside! Social Security and Medicare. And now, housing. Imagine an alternate universe, where it is uncommon for 60-year-olds to eventually see 70; for 70-year-olds, to eventually see 75; or for anyone, to ever see 80. Bit of a different economic calculation, no? But... we as a society, seem to prioritize... other things. Now we reap the consequences.
Last edited by ohio_peasant; 11-14-2023 at 07:38 PM..
Exactly. I moved to the Bay Area married. We eventually bought a townhouse for $180k (goes for $900k now). So, we got divorced. I worked full time and finished a BS in Biz Admin w/Acctg. Got a local job with a good company, then another and then transferred out to suburbs NW of Portland. It was not my first choice because my first choice was to have at least $10M and stay where I was living -- LOL...
Of course, now the area I live is more desirable than it was... ...and it feels like home.
Prices here have slipped 10% (so far). The problem is that a lot of young couples are making a lot of money. Due to the labor shortage and retirements where I work young people are moving up rapidly. A lot of young people stayed in school when the economy was bad and now that there is a lot of employment opportunities it is really paying off for them. Not being part of a couple is disastrously expensive (ask me how I know).
Maybe this is from my decidedly non-coastal perspective, but I do not see the "young people making a lot of money" thing.
I'm 37. I made $56k at 28 in 2014. I made like $21k in 2013. I went up to $100k briefly, but took a lower paying job with a local government with better benefits and now make $85k.
I'm far from hand to mouth, but I'm not "making a lot of money." I don't know many people under 40 making $100k or better regionally. The ones I know are mostly medical professionals with professional degrees (MDs, PharmDs mostly). My next door neighbor is an internal medicine resident at the local hospital - he'll get there if he isn't already - he's 30. SMB owners. Maybe a few director and above leaders at local companies.
I worked for the regional hospital system for years. It has the largest IT department in the area outside of possibly the mammoth regional grocery chain. Pay for individual contributors has been stagnant, maybe 1%-2% annual raises, for the better part of a decade.
There aren't many. If I was back in a bigger city, I'd probably have a different take.
Here you go. Very affordable, but can't be uglier ... Don't know who approved this eyesore - 350 sqft for $130K. You don't even get a tree with that home. Who needs two bathrooms with one bedroom and where are the windows?
The ugliest neighborhood I ever saw...
Not to mention that Lennar homes are of a very poor quality. They probably start to fall apart before last payment.
Honestly, those aren't that bad (aside from the quality). Sure they all look alike now, but I remember suburbs being built that were the same way. Street after street of houses that all look the same. Remember Levittown? Until the owners get in and start planting things and making their houses look individual, it's not going to be the beautiful area everyone wants.
I know a place where I can get a 600sqft one bed one bath manufactured home for only $60,000. I still can't afford that.
I've looked at mud huts, dome houses, yurts, metal shed roofs (where you buy the end caps), straw bale, log cabin kits, sheds I thought I could turn into a house, tiny homes (WAY too expensive), park models, older trailer homes, octogon houses, you name it, I've priced it. These houses are also way too expensive for me, even though I'd give my right arm for one. So know what I'm looking for next?
Right now I'm looking for a trailer I can live in for the rest of my life. A nice used 40ft trailer with slide outs for about $35,000 will give me almost 400sqft and decent place to live. At my age, the thing only has to last about 30 years.
Quote:
Originally Posted by MidValleyDad
COnsidering that my first Mortgage was at 16% (refinanced three years later at 12% VA) I don't have much sympathy when people complain that ' today's rates have gotten too high '.
When was your first mortgage? Because let's remember that 16% of say $80,000 is lots less than 5% of 975,000 and in addition to that, you have to remember that the average working person's salary has stagnated since the early 70s with regard to wages today.
"A startling fact is that average real wages have grown by only 0.7 percent over the half century beginning in February 1973. In February 2022 dollars, wages have grown over this period by $0.18. There is no question that an $0.18 increase over a half century is correctly interpreted as stagnant."
In other words, wages are not going up and housing prices have gone through the roof. It was far easier to buy a house 50 years ago with the wages being paid then than it is to buy a house today with what amounts to practically the same wages from half a century ago.
Q: "Why are housing prices so high? No one can afford them."
A: Every home that sells is afforded by the buyer who purchases it. Perhaps you can't afford a house you are looking at, but the people with whom you compete with can.
Quote:
Originally Posted by aslowdodge
Short and sweet answer that makes it quite clear.
Low rates drove prices up to where they are now very quickly during the reaction to covid, now houses remain priced as if rates are 2.8%, except now they're 7%+.
People would say this is because inventory is low, but now inventory is back to what it was before covid. How are these prices sustainable in this environment?
I'm looking at the San Antonio area for this as inventory has not rebounded everywhere. Prices here are insane relative to local wages, and their monthly payments even more so due to the return to more normal rates, which are very high relative to 2 years ago. I see price cuts, but they're a joke relative to how much prices have ballooned since the beginning of 2021.
Thank you! I didn't refresh my browser since yesterday, and I'm just now realizing this thread is 3 pages long. I'll have to go through and read everyone's posts.
Day to day average Joes can't afford them but investors and corporate property management companies can afford them, and then rent them out to people.
That's a common misconception.
In reality, investors - either individual or corporate - are usually quite disciplined with professional financial management. They will not purchase a home unless its fair market rental plus justifies the investment. They will absolutely pass on deals they consider overpriced.
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