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Location: Formerly Pleasanton Ca, now in Marietta Ga
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Quote:
Originally Posted by MarisaAnna
As an outsider looking on, American real estate seems a bargain. Our current median dwelling to median income ratio in Sydney is 13:1, in the main cities overall in Australia it is 10:1.
Much gnashing of teeth here, but basically in Sydney 70% of first home buyers now get parental help. Sometimes grandparental help. It may be more possible here because long term aged care is highly subsidised. But the market is one of supply and demand. One way or another, people are still coming up with the money.
This is an example, https://www.realestate.com.au/sold/p...+bay-143392348, went for $US2,260,000. The area is a middle-class area twenty miles from the city centre. If it was in the Eastern suburbs it would have been worth triple.
Probably everywhere a result of the huge population increase in the world in the past fifty years.
From my former home in California the ratio is about 10:1, no bargain there. Here in Atlanta it’s maybe 5:1.
From my former home in California the ratio is about 10:1, no bargain there. Here in Atlanta it’s maybe 5:1.
People can make a choice where they want to live.
That's exactly right. If homeownership is so important to someone they can relocate to an area where they can afford to buy. However, people feel dug in and entitled to live where they are renting.
As an outsider looking on, American real estate seems a bargain. Our current median dwelling to median income ratio in Sydney is 13:1, in the main cities overall in Australia it is 10:1.
Much gnashing of teeth here, but basically in Sydney 70% of first home buyers now get parental help. Sometimes grandparental help. It may be more possible here because long term aged care is highly subsidised. But the market is one of supply and demand. One way or another, people are still coming up with the money.
This is an example, https://www.realestate.com.au/sold/p...+bay-143392348, went for $US2,260,000. The area is a middle-class area twenty miles from the city centre. If it was in the Eastern suburbs it would have been worth triple.
Probably everywhere a result of the huge population increase in the world in the past fifty years.
That's a mansion. That's not something for a first time home buyer. I don't understand why you gave this listing as an example. What about a house that's 100-150 sq m?
Houses were severely under priced from the beginning of time until 2020, but now they're fairly priced since covid? Why did the forces of supply and demand not work in 2018, 2019, and 2020 or any time before that?
Some people are ardent defenders of the status quo. Their argument is, that the universe is a finely-tuned machined, working perfectly... so if you don't it like it, you're an [insert favorite insult or expletive]. Others take the opposite tack, insisting that the system is hopelessly rigged and gamed, so that only a comprehensive revolution could save it.
Lost is a middle-ground observation, that the system occasionally goes out of whack, but that doesn't mean that the universe its incorrigibly broken. Historically, there has been a ratio of housing prices in aggregate, to salaries in aggregate. This ratio is now... larger than historical trend. What is "aggregate salary"? It means everything from engineering-executives at Google, to dish-washers in small-town Alabama. What is "aggregate housing prices"? It's everything from $100M Mansions in Malibu, to ramshackle mobile-homes in the aforementioned town in Alabama. Yes of course, there are many thousands of individual real estate markets, and all are different... but we can take averages, right? We can form an average (median, to be precise) housing price and an average income, comparing to what it was 5 years ago, 25 years ago, 100 years ago and so on. Then we can gauge whether the present scenario is "normal" or not.
Last edited by ohio_peasant; 11-16-2023 at 12:35 PM..
The housing market is not as efficient as fast as the stock market. If you don't like the prices have patience awaiting the correction. Or, have regrets over not having acted. No one knows the precise outcome. But, people do not possess the requisite patience because they have their life calendar they are too married to. It's about what they need and when they think they need regardless of the cycles.
I opened up a random house on zillow in this area, and this is the kind of thing I'm talking about:
2019-$351,000
2023 -$594,000
You're supposed to shell out or finance an extra $250k 3-4 years later because? I don't really know. And again, inventory is back to normal here, and rates are 2x higher than they were in 2019.
A lot of this thread is SILLINESS.
This post for example: The price of the example house 3/4 years ago is irrelevant to a potential selling price in present state.
People should stop wasting time ruminating on some perceived "good old days." They are just setting themselves up for frustration and possible bad decision making.
Look at the prices on some quality stocks you hopefully purchased in 2019. Did today's stock purchasers "miss out on the good old days"??? Hopefully they don't care as stock purchases are about the future, not the past.
That's a mansion. That's not something for a first time home buyer. I don't understand why you gave this listing as an example. What about a house that's 100-150 sq m?
I could look it up, but that's not the point. The post was about our real estate bargains in the US, and how young people in Australia need to get help to buy homes, and then the example house listed is completely unlike most homes here. I guess it was an example of how someone is still coming up with money to purchase homes at all price points, but it didn't relate to the other points - unless all homes in Australia are that large and expensive.
Such momentous transformation is unlikely. In the US, the home ownership rate has been hovering in the mid-60-percent range for many decades, including during the 2008 crisis. The rate may marginally decline, but it won't fall below 50%, even in some hypothetical utter financial collapse.
Renters are not only a much smaller group than owners (about half of the size!), but they're also less likely to vote. Apart from rent-heavy cities such as NYC or LA, it is unreasonable to expect a shift towards renter-favoring policies.
Parents will pass houses down to children. With smaller families, and less emphasis on the traditional nuclear family in coming generations, it is sustainable for multiple adult siblings to share the same house indefinitely. The result will be more of an inter-generational caste system, of homeowners and renters.
This isn't by itself starkly different from the past. But I think that in the past, it was more common to sell the family-home, splitting the proceeds among the siblings... would then use the money to invest elsewhere, or pay down debt, or buy other houses. Going forward, these siblings might be more careful to keep the house within the family, as a long-term appreciating asset.
If prices continue to rise long-term, then it makes sense for prospective sellers to sit on empty houses, covering the carrying-cost, rather than selling, at what they might regard as a discount.
You're forgetting how many people and corporations are now buying houses strictly for investment purposes and the only way they'll hold on to them for that is to rent them out. Renters were the majority of people until suburbs started being platted out after WWII. That's because they weren't farmers and couldn't afford to buy a farm if they were.
If people can't afford to buy a house, they'll rent. That's the only option open to them, unless they want to be homeless. And that's the second thing wrong with holding onto houses. You think the homeless problem is bad now? Wait till most of the middle class is out there on the sidewalks in tents. Most of them are only a health emergency away from losing their homes now.
Passing houses down in a family isn't like it seems. For the most part, there's only one house, but usually two or three kids. I think you're being over hopeful when you think there will be an inter-generational group living in these homes. The houses aren't built for it like they were at the turn of the century. Instead, I think we're going to continue to see what we're seeing: younger people getting older and older living in their parents' house because they can't afford to buy anything. And what does this do for the tax revenue generated by people owning houses?
You know, one of the reasons so many immigrants came over to the US between the 1820s to the 1880s was because their farms had been divided between their kids for so many generations, a family only had an acre or two to make a living off of. How many generations are these houses going to be passed down to until each person gets maybe $10 from the sale of it and doesn't consider it worthwhile?
Then there's the tax money problem again. Instead of say, seven people in two generation buying seven houses for themselves and paying that tax money to the county, there's still only one house and one person paying taxes on it. And you know what happens when that happens, don't you? Taxes get raised to the skies and then nobody has a house anymore because it's been foreclosed on.
Sitting on empty houses is the silliest thing I've ever heard. First, there's the upkeep. Heating, yard, gutters, etc. Who wants to spend that money on an empty house? Next, there's squatters. With more and more middle class and older Americans facing homelessness, they're not going to be picky about keeping a roof over their heads. Any roof. And then there's the theft angle. Someone's going to come along and take the windows, any wood that might be worth something, the kitchen and bathroom appliances, wiring - anything that has any value at all. I'm surprised as all get out this hasn't become a thing already.
Last edited by rodentraiser; 11-16-2023 at 08:34 PM..
This post for example: The price of the example house 3/4 years ago is irrelevant to a potential selling price in present state.
People should stop wasting time ruminating on some perceived "good old days." They are just setting themselves up for frustration and possible bad decision making.
Look at the prices on some quality stocks you hopefully purchased in 2019. Did today's stock purchasers "miss out on the good old days"??? Hopefully they don't care as stock purchases are about the future, not the past.
Further, not everyone SHOULD own a personal home.
When else have houses appreciated that QUICKLY? The shortest window of time would be to compare the end of 2020 to 2022, 2 years. How is that sustainable or normal in any way?
Who should SHOULD NOT have a personal house?
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