Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Txbullsfan, My first post in this thread explains why prices are out of line with fundamentals. It's because the Fed's ten years of artificial support and interest rate suppression has demolished true price discovery for markets of not only homes, but stocks as well. The policies that have benefitted corporations, stocks, and housing are the same ones that have obliterated renters, savers, and those who think they will be getting their pension.
Interesting thread. Anecdotal here, but I've known some people who have moved to SA after cashing out in more unaffordable national markets. They are buying their homes here for cash, driving up prices. This may explain the article's stated disconnect between fundamentals and prices. Some of these folks buy a house with a third of the million they cashed out with, and are living on the remaining 600 grand without real career prospects. It's when reality hits and they get a job that they realize they will have to work their butts off for $40,000/yr., and they bail because they can't support their now overpriced house with a three income household. A lot of people I know end up leaving because it took more than a cheaper house to keep them here, and SA didn't have it for them (i.e., they were getting what they paid for in CA and more cosmo places). Of course this does not apply to everyone. Just some of what I've seen.
Oh, and keep in mind that, overall, the same monthly payment you would have paid in 2008 now buys you twice as much house (in terms of price). Me thinks this may have something to do with the near doubling of home prices. Of, course, you're free to think that being able to buy twice as much house with the same money would not make prices double, but I'm banking on that logic. When the Fed loses control of rates despite its artificial interest rate suppression, look out below!!
Quote:
Originally Posted by Proffer
Txbullsfan, My first post in this thread explains why prices are out of line with fundamentals. It's because the Fed's ten years of artificial support and interest rate suppression has demolished true price discovery for markets of not only homes, but stocks as well. The policies that have benefitted corporations, stocks, and housing are the same ones that have obliterated renters, savers, and those who think they will be getting their pension.
I agree with you in part, that a big driver for the disconnect between fundamentals and home purchase/rent prices is there is a large degree of non local people/money coming to San Antonio and it is driving up prices. A surge of people moving here means a shortage of homes. A shortage of homes (supply) drives up the demand. An increased demand drives up the price; much more competition (higher bidding prices) for used homes that are available, new home builders get excited and because of demand, can build more and charge more. It explodes new home and used home prices and it affects first time home buyers the worst. It is a terrible upward cycle for non affluent and first time home buyers. Great for the affluent and current home owners.
On top of a surge of the the middle class moving here, more affluent people and corporations (both local and non local) are also moving/investing here, but even more then that, more affluent people are seeing dollar signs in their eyes and they are building expensive apartments and are buying up multiple properties and renting out to people here. These home "rentals" help go towards creating a housing shortage (lower supply) for first time home buyers as they take properties someone can own and they keep them at profit for the person renting them out, increasing demand, which increases rent prices. This helps drives up the "income disparity" between the wealthy/affluent and the non affluent. The wealthy will continue to make money off the rentals and new builds and the non affluent will have to scrap and compete for what is left. What choice do they have? "Shelter" is a necessity of life, its not just a "want".
Some here would be shocked to learn what these newly built apartments and re-habed home are renting/selling for. To more affluent areas of the country, home and land values in Texas (in specific San Antonio) is a steal. A great place to build and "rent out" to make even more money on top of the money they are making now. Their (local and non local) affluence, is negatively affecting the locals here who are not as affluent.
Fortunately, San Antonio and the surrounding areas have long been able to "stay under the radar" and avoid this type of thing for some reason or another. Unfortunately for locals, we have been found. The same holds true with all of Texas really. Especially Austin and other cities. As others have stated, San Antonio is not the only city experiencing this. People are flocking to Texas to avoid their previous markets either to live, or to make a ton of cash off of new builds and rentals. Texas is the #1 state in all of the country for people moving into. Its just that San Antonio is one of the hardest hit because for so long San Antonio is home to many low income residents and the non tech/non governmental wages have stayed stagnant for so long. It kept rents (housing and apartment) and home purchases fairly stable. Those days are fleeting and largely gone.
Yes, better entry level paths to first time ownership would be a great thing. Ownership of a home goes a long way towards decreasing homelessnes, improving socio-economic standings of a community and decreasing crime. Not just for here in San Antonio but for anywhere in the US and the world.
Here are some ideas, although, I don't expect them to go over well with some.
1. Give federal rebates for first time home buyers. The rebates would be similar to rebates offered on "green" items for sale now. The amount of the rebate would be based on an individuals income and the goal of getting the mortgage payment as close to 35% - 50% of a persons income as possible. This rebate would only apply to first time homebuyers. This rebate would come with restrictions, such as the owner must own the home for 30 years and if the seller sells before this 30 years, any profit is not given back to the seller but instead added to a pool of money to help fund the rebate program.
And/or
2. The second idea is to federally limit the bank rate of first time home buyers. This percentage rate would not exceed a certain percentage say, 1%. Second (or more) time home buyers wouldn't qualify for these benefits and would be charged the normal bank rate (right now I think the "normal" is around 3%) as they have equity in their home. If they can sell higher, they can buy higher and vice versa. They have equity and are not as negatively effected by steeping home sales prices. In fact, they very likely are benefited by rising home costs depending on where they choose their next home.
Drastically rising home prices doesn't hurt current home owners, it hurts first time home owners and renters (home and apartment). A large number of people trying to provide a basic need (shelter) for them and their families.
For anyone who might be interested, Texas has a little-known program for veterans, teachers, and public safety workers. The program gives them down payment assistance. Public safety workers include firefighters, EMTs, police officers, government correctional officers (as opposed to private prisons), government security officers, and I believe parole and probation officers.
Yes, better entry level paths to first time ownership would be a great thing. Ownership of a home goes a long way towards decreasing homelessnes, improving socio-economic standings of a community and decreasing crime. Not just for here in San Antonio but for anywhere in the US and the world.
Here are some ideas, although, I don't expect them to go over well with some.
1. Give federal rebates for first time home buyers. The rebates would be similar to rebates offered on "green" items for sale now. The amount of the rebate would be based on an individuals income and the goal of getting the mortgage payment as close to 35% - 50% of a persons income as possible. This rebate would only apply to first time homebuyers. This rebate would come with restrictions, such as the owner must own the home for 30 years and if the seller sells before this 30 years, any profit is not given back to the seller but instead added to a pool of money to help fund the rebate program.
And/or
2. The second idea is to federally limit the bank rate of first time home buyers. This percentage rate would not exceed a certain percentage say, 1%. Second (or more) time home buyers wouldn't qualify for these benefits and would be charged the normal bank rate (right now I think the "normal" is around 3%) as they have equity in their home. If they can sell higher, they can buy higher and vice versa. They have equity and are not as negatively effected by steeping home sales prices. In fact, they very likely are benefited by rising home costs depending on where they choose their next home.
Drastically rising home prices doesn't hurt current home owners, it hurts first time home owners and renters (home and apartment). A large number of people trying to provide a basic need (shelter) for them and their families.
So because my wife and I saved as much as we could while,living in apartments for years we would now be penalized since we bought our first house 3 years ago? How about people get their finances in order and figure out if they need that $800 iPhone or want to save $500 for a down payment on a house. Government (and me as a taxpayer) should not have to help someone get a house.
So because my wife and I saved as much as we could while,living in apartments for years we would now be penalized since we bought our first house 3 years ago? How about people get their finances in order and figure out if they need that $800 iPhone or want to save $500 for a down payment on a house. Government (and me as a taxpayer) should not have to help someone get a house.
I don't any low-income people who were able to come up with $800 for an iPhone. They might be out there, but not in significant numbers.
This article puts a lot of emphasis on rise in housing costs relative to rise in income. If San Antonio ever gets as bad as Austin, many people will not be able to save for four years and afford a house in the city. First of all, the high rent makes it difficult to save. Second of all, you'll likely not qualify for a loan because your income will be too low relative to the cost of the house. If you do get lucky and get into a house, the property taxes will be unaffordable (property taxes are also high in SA). So, middle class locals are moving to the suburbs in droves. Austin's black population has moved to places like Pflugerville and other suburbs by the thousands because their neighborhoods have been gentrified, which is the reason why Austin has gone from being 10% black to 8% black. A lot of deputies, who happen to make decent salaries in Travis County, buy houses in neighboring counties.
With the tax breaks that were passed today it appears that real estate owners who rent out multiple homes will get a tax break.
More of a tax break means they can buy and rent out more homes further increasing their wealth.
More homes owned and rented out by each individual owner means less homes here in San Antonio that are available for purchase.
Less homes available for purchase drives up demand as less properties are available for ownership.
Increased demand then drives up the rentals and purchase price of remaining homes.
The increased rent charged will further give wealth to those who already are in possession of wealth who can then buy more properties to rent out to add to their wealth.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,722 posts, read 58,054,000 times
Reputation: 46185
1) Any place desirable (climate, schools, jobs, economy...) is expensive.
2) SA is not very expensive (as expensive goes).
3) There is no shortage of housing or buildable space (tight restrictions / codes / infrastructure costs).
4) There are many areas within SA region that are quite inexpensive (for housing)
5) If... there is a bubble, it is only temporary as per above criteria
6) If... you want to buy a home, wait, or pay the price of admission (either is fine, as I don't see a bubble)
(I'm not sure why some think of primary residence as an 'investment'... mine is and always has been a HUGE liability (i.e. a very expensive place to tie up capital, time, maint, repairs, cash flows OUT...)
I bought my first home at age 19 (for my parents to have a place to live when they lost their ranch to increased taxes).
I was chased from Colorado in the 1970s largely by Texans (and CA) paying WAY too much for properties. High priced houses are of no value to me, a place to lay my head. Currently I 're-buy' my home every 5 yrs due to HUGE property taxes ($43/ day on a home that I built for <$100k) (50% + taxes to schools I never used (I homeschooled mine while volunteering as a family at the crummy public schools))
Life is not fair, play the game as best you can.
Leave a legacy for others.
You get one shot at each day... make it count, it's not coming back.
You get one shot at each day... make it count, it's not coming back. Well Said.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
... mine is and always has been a HUGE liability (i.e. a very expensive place to tie up capital, time, maint, repairs, cash flows OUT...)
