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** NOTE TO RENTERS - DO THIS: PAY AS LITTLE IN RENT AS YOU HAVE TO AND SAVE, SAVE, SAVE IN THE MEANTIME **
Well, ok, who could argue with this assessment? The problem is with rents as high as they are now, renters are not saving (not to mention that people still have not learned how to stop wasting money, rather like Asians, for example). However, the data show that these renters do want to be become homeowners (they just don't want to skip dinners and vacations for years to do it).
Well, ok, who could argue with this assessment? The problem is with rents as high as they are now, renters are not saving (not to mention that people still have not learned how to stop wasting money, rather like Asians, for example). However, the data show that these renters do want to be become homeowners (they just don't want to skip dinners and vacations for years to do it).
There's a difference between paying lip service to a notion like that and actually executing it. What people "must have" in a home today has increased significantly. The average household size has, from 1973 until now, dropped from 3.0 to around 2.55 while the median house size has gone from 1,500 ft2 to 2,500 ft2. Combined, the space per person has doubled in the last 40 years.
There's a difference between paying lip service to a notion like that and actually executing it. What people "must have" in a home today has increased significantly. The average household size has, from 1973 until now, dropped from 3.0 to around 2.55 while the median house size has gone from 1,500 ft2 to 2,500 ft2. Combined, the space per person has doubled in the last 40 years.
But you act like that is even a demand from young buyers. I can do without mcmansions and gargantuan suburban homes. They are a waste of energy and a pain to maintain. Maybe it is a generational difference but all of my peers fee the same. However, those are the only homes on the market! Suburbs do not have dense housing.
If I want to buy in my current area with good schools, my choices are limited to enormous, ugly homes built in 1970 or mcmansions - both priced around $700+ for 2300+ sq ft lotd and pools. I would be fine in a condo but there aren't many here and the twin townhomes on the market are a MESS (still priced over $500k though).
The newer areas like Del Sur have perfectly sized townhomes but I cannot stomach paying around $500 in monthly fees.
I am really really sick of older posters who assume that real estate woes boil down to lazy, greedy millennials who demand more than they "deserve." Buying up, slowly over the years is a great philosophy but there are huge, goddamn differences between someone graduating college in 1992 and getting their career started in a very different San Diego housing market than someone graduating in 2002 or 2012 with a truckload of debt, poor wages that have not kept up with inflation, a housing market that has been dominated by investors and old people.
No comment on the special racist jab at Asians in the previous comment, other than to say, seriously wtf?
But you act like that is even a demand from young buyers. I can do without mcmansions and gargantuan suburban homes. They are a waste of energy and a pain to maintain. Maybe it is a generational difference but all of my peers fee the same. However, those are the only homes on the market! Suburbs do not have dense housing.
If I want to buy in my current area with good schools, my choices are limited to enormous, ugly homes built in 1970 or mcmansions - both priced around $700+ for 2300+ sq ft lotd and pools. I would be fine in a condo but there aren't many here and the twin townhomes on the market are a MESS (still priced over $500k though).
The newer areas like Del Sur have perfectly sized townhomes but I cannot stomach paying around $500 in monthly fees.
I am really really sick of older posters who assume that real estate woes boil down to lazy, greedy millennials who demand more than they "deserve." Buying up, slowly over the years is a great philosophy but there are huge, goddamn differences between someone graduating college in 1992 and getting their career started in a very different San Diego housing market than someone graduating in 2002 or 2012 with a truckload of debt, poor wages that have not kept up with inflation, a housing market that has been dominated by investors and old people.
No comment on the special racist jab at Asians in the previous comment, other than to say, seriously wtf?
I made no reference to age. I did mention a sense of entitlement and a lack of patience, which I think is really part of the entitlement. Entitlement comes in many forms. I referenced as one example the trend toward much larger homes because it is widespread and fairly easy to cite data. Another form of entitlement, IMO, is expecting to be able to buy a home fairly tailored to one's desires (whatever those may be -- big place, pool, good schools, "hip" walkable area) in a highly desirable city. Expecting to be able to do that soon after borrowing lots of money to go to college adds in a lack of patience. So does expecting to buy in the middle of run-up in a volatile real estate market.
As I've said before, I think San Diego is surely in the top 5% of places to live in the world. Certainly within the United States. I don't think it's crazy to expect that it would be difficult to buy a desirable place there. The pace of real estate there is significantly above average. Therefore, to jump and stay in one needs something above average: income, wealth, discipline, or patience, or some combination thereof.
I'm not far off Millennial status and the pace of real estate in coastal CA has been high since before I was born. This is not a new trend. Granted, San Diego is particularly challenging because it doesn't have $ engines like other high COLA areas (e.g., Bay Area, Boston, D.C.).
But you act like that is even a demand from young buyers. I can do without mcmansions and gargantuan suburban homes. They are a waste of energy and a pain to maintain. Maybe it is a generational difference but all of my peers fee the same. However, those are the only homes on the market! Suburbs do not have dense housing.
If I want to buy in my current area with good schools, my choices are limited to enormous, ugly homes built in 1970 or mcmansions - both priced around $700+ for 2300+ sq ft lotd and pools. I would be fine in a condo but there aren't many here and the twin townhomes on the market are a MESS (still priced over $500k though).
The newer areas like Del Sur have perfectly sized townhomes but I cannot stomach paying around $500 in monthly fees.
I am really really sick of older posters who assume that real estate woes boil down to lazy, greedy millennials who demand more than they "deserve." Buying up, slowly over the years is a great philosophy but there are huge, goddamn differences between someone graduating college in 1992 and getting their career started in a very different San Diego housing market than someone graduating in 2002 or 2012 with a truckload of debt, poor wages that have not kept up with inflation, a housing market that has been dominated by investors and old people.
No comment on the special racist jab at Asians in the previous comment, other than to say, seriously wtf?
A truckload of debt is on YOU. Geez, we had students loans too back in the 80s. Most just weren't dumb enough to rack up debt though I know a couple that did.
But you act like that is even a demand from young buyers. I can do without mcmansions and gargantuan suburban homes. They are a waste of energy and a pain to maintain. Maybe it is a generational difference but all of my peers fee the same. However, those are the only homes on the market! Suburbs do not have dense housing.
If I want to buy in my current area with good schools, my choices are limited to enormous, ugly homes built in 1970 or mcmansions - both priced around $700+ for 2300+ sq ft lotd and pools. I would be fine in a condo but there aren't many here and the twin townhomes on the market are a MESS (still priced over $500k though).
The newer areas like Del Sur have perfectly sized townhomes but I cannot stomach paying around $500 in monthly fees.
I am really really sick of older posters who assume that real estate woes boil down to lazy, greedy millennials who demand more than they "deserve." Buying up, slowly over the years is a great philosophy but there are huge, goddamn differences between someone graduating college in 1992 and getting their career started in a very different San Diego housing market than someone graduating in 2002 or 2012 with a truckload of debt, poor wages that have not kept up with inflation, a housing market that has been dominated by investors and old people.
No comment on the special racist jab at Asians in the previous comment, other than to say, seriously wtf?
Young people think it was great before. Guess what? Many who graduated in 1992 struggled tremendously to find work. We were well into the era of mcjobs. I think you're lumping Gen X together with the boomers.
...I am really really sick of older posters who assume that real estate woes boil down to lazy, greedy millennials who demand more than they "deserve." Buying up, slowly over the years is a great philosophy but there are huge, goddamn differences between someone graduating college in 1992 and getting their career started in a very different San Diego housing market than someone graduating in 2002 or 2012 with a truckload of debt, poor wages that have not kept up with inflation, a housing market that has been dominated by investors and old people.
Using that, yes, housing has gone up more than inflation (comparing 1991 to 2015), but would be about the same when compared to 2012. The lesson from that is - DON'T buy at a high. I certainly regret doing that in 1991 - It still feels like eight wasted years. The trick, of course, is figuring out when housing is at a high. One sure way to not buy at a high is to wait for a crash, then swoop in and buy - that's actually how I was finally able to obtain a SFH in Carmel Valley (and keep all the other properties to boot). Another thing to consider is that interest rates are about half of what they were when I was starting out - allowing today's borrowers to get mare bang for the buck, so to speak (lower interest rate = qualify for larger loan = can borrow more, with payments staying the same as a smaller loan amount with a higher interest rate).
As far as income - at least for starting out engineers, salaries have definitely more than kept up with inflation - up until about two years ago, I was involved in hiring new grads for my workplace (a government laboratory - not known for being very competitive with salaries available in private industry) - their starting salaries were a tad more than double of what I made when I was starting out - better than the 1.75x that it should have been had salaries only kept pace with inflation. Folks I know in private industry are doing even better by significant amounts (10s of thousands annually).
School costs have definitely gone up as well, but at least student loan debt is tax-deductible now (unlike when I was starting out), not to mention that I was paying 10% interest, unlike today's 4.29% rate.
Altogether - I'd say that as long as someone is in an in-demand field (like engineering), their situation today isn't drastically different than what I faced. Interest rates are definitely half to less than half of what they were, and salaries have actually gone up. If I were starting out, right now, I'd keep renting for awhile (and spend as little as possible while doing so) and wait for the next crash to happen, then swoop in and buy; post-crash, it becomes a buyer's market, particularly if you have a chunk of money ready to go for downpayment. I certainly regret buying as soon as I could - just waiting six months would have made a huge difference in the rest of my life. But I'm ecstatic that I was able to take advantage of the 2006 crash.
Quote:
Originally Posted by icecoldlemonade
No comment on the special racist jab at Asians in the previous comment, other than to say, seriously wtf?
Actually, yeah - I was wondering what that comment was about. I think the wording was off, and it was meant to convey that Asians are superb savers, but I'll let the OP of the comment enlighten us as to what the intent was.
But you act like that is even a demand from young buyers. I can do without mcmansions and gargantuan suburban homes. They are a waste of energy and a pain to maintain. Maybe it is a generational difference but all of my peers fee the same. However, those are the only homes on the market! Suburbs do not have dense housing.
If I want to buy in my current area with good schools, my choices are limited to enormous, ugly homes built in 1970 or mcmansions - both priced around $700+ for 2300+ sq ft lotd and pools. I would be fine in a condo but there aren't many here and the twin townhomes on the market are a MESS (still priced over $500k though).
The newer areas like Del Sur have perfectly sized townhomes but I cannot stomach paying around $500 in monthly fees.
I am really really sick of older posters who assume that real estate woes boil down to lazy, greedy millennials who demand more than they "deserve." Buying up, slowly over the years is a great philosophy but there are huge, goddamn differences between someone graduating college in 1992 and getting their career started in a very different San Diego housing market than someone graduating in 2002 or 2012 with a truckload of debt, poor wages that have not kept up with inflation, a housing market that has been dominated by investors and old people.
No comment on the special racist jab at Asians in the previous comment, other than to say, seriously wtf?
Please get over yourself. There is not a huge difference between people graduating in 1992 compared to 2002 or 2012. That $300k house in 1992 may be worth $800k now, but certainly was not worth $800k in 2002 or 2012. Maybe only $500k in 2002 and $650k in 2012 close to the bottom of the market. Even so, interest rates were 9% back in the early 90s and much much higher in the 80s. Now, today you can get a 30 year fixed with no points for 3.75% or lower. My wages were $40k annual 3 years out of college, started at $19k in 1989. Now, we pay brand new college graduates almost $60k. So do the math if you are even able to. The payment on a house today is not much more, if any in inflation adjusted terms. The only thing is the down payment required is much larger than back then.
Using that, yes, housing has gone up more than inflation (comparing 1991 to 2015), but would be about the same when compared to 2012. The lesson from that is - DON'T buy at a high. I certainly regret doing that in 1991 - It still feels like eight wasted years. The trick, of course, is figuring out when housing is at a high. One sure way to not buy at a high is to wait for a crash, then swoop in and buy - that's actually how I was finally able to obtain a SFH in Carmel Valley (and keep all the other properties to boot). Another thing to consider is that interest rates are about half of what they were when I was starting out - allowing today's borrowers to get mare bang for the buck, so to speak (lower interest rate = qualify for larger loan = can borrow more, with payments staying the same as a smaller loan amount with a higher interest rate).
As far as income - at least for starting out engineers, salaries have definitely more than kept up with inflation - up until about two years ago, I was involved in hiring new grads for my workplace (a government laboratory - not known for being very competitive with salaries available in private industry) - their starting salaries were a tad more than double of what I made when I was starting out - better than the 1.75x that it should have been had salaries only kept pace with inflation. Folks I know in private industry are doing even better by significant amounts (10s of thousands annually).
School costs have definitely gone up as well, but at least student loan debt is tax-deductible now (unlike when I was starting out), not to mention that I was paying 10% interest, unlike today's 4.29% rate.
Altogether - I'd say that as long as someone is in an in-demand field (like engineering), their situation today isn't drastically different than what I faced. Interest rates are definitely half to less than half of what they were, and salaries have actually gone up. If I were starting out, right now, I'd keep renting for awhile (and spend as little as possible while doing so) and wait for the next crash to happen, then swoop in and buy; post-crash, it becomes a buyer's market, particularly if you have a chunk of money ready to go for downpayment. I certainly regret buying as soon as I could - just waiting six months would have made a huge difference in the rest of my life. But I'm ecstatic that I was able to take advantage of the 2006 crash.
Actually, yeah - I was wondering what that comment was about. I think the wording was off, and it was meant to convey that Asians are superb savers, but I'll let the OP of the comment enlighten us as to what the intent was.
Great post. You said it much more eloquently and politely than me. Wish I would have read your's first.
Fellow Americans, regardless of which generation you were born in, entitlement has been up front and center for both the Boomers (social security, pensions, the expectation of endless real estate appreciation) and the Millenials (have-it-all, insta-satisfaction, reality of a globalized world on many levels and the hedonism/empathy to follow). My view is, do what you can in this life to avoid debt AT ALL COSTS, and seriously think about why you work to buy the things you seek. So many people work their asses off to buy *useless* s**t when they could be putting their limited precious hours to better use in this life.
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