And yet, there is still demand and customers. Regionally, it isn't about the wages. It's about wealth through other means. For example, if you work at particular companies, your wages may be market level but your company stock may have made you a multi-millionaire over the past 3-10 years. In some areas, they get a lot of the si valley assholes that come w/ their wealth and fuck up the red region - nice and clean vs where they came from.

I am sure you are and am sure you do. But honestly. We can have a discussion which we are with some really good points of view and personal experience. Not withstanding your industry expertise I think most here understand what is going on. Much of it specific to ones location.


Almost all of this came about because of the covid bs.

Now, these inflated values are going to stick because property taxes are based on current values. And states are looking for less tax revenue.

It sucks for not only new home buyers But for every home owner. It is a shitty deal all the way around.

I’m with you ORC, Covid has done a number on the economy and the market that is an absolutely shitty deal.

My only point is, there’s a huge percentage of people who are absolute idiots and waste money on frivolous things.

But the kid who works hard, stays out of trouble, saves as much as they can, and wants to buy a shitty house at 30, in almost every major/mid-major metropolitan area in the US… can’t.

THAT is the problem. I could care less about those who waste money, but home prices are so far into the stratosphere that it doesn’t make sense.

We are in agreement reloader

Housing for young people is not unobtainable. If there is one trait that rubbed off on my middle son, it's being frugal. 30 years old, small one bedroom apartment, rent has only been raised 50 dollars in 8 years. Never has had a car payment,(just learned today his 05 accord is toast).
He has had a steady job since 16yo. I think he has about 200k in cash and I don't ask about his 401k. His girlfriend of 3 years who I know he will marry is 28 and still lives with parents. She probably has more cash than him.
50 year mortgage? Are you kidding? I preached to my sons, get a 15 year mortgage, pay it off in 8-10 years then buy your nice house.
But... Nobody listens to me!!

Visiting inlaws in Cleveland saw the post-WWII houses for the new families that emerged once the military returned. Small houses on small lots with a garage. The houses 60+ years old were painted and yards mowed. They looked like a great way to get into a house today but that is not what I see being built. In our neighborhood houses built with wood in early 1950s probably 2.500 sq ft sell over $800,000. No young couple can buy into this market.

quote:

Originally posted by konata88:
If this number is median and not mean, then it may not be clear that's the case.

If you have 1000 homes and 999 are $425K and 1 is $1M, the median (and mean) will be $425K.

If you have 1000 homes and 400 are $200K, 400 are $1M and 200 are $425K, the median is still $425K (mean is about $565K).

Basically, I think it's indeterminate how many homes are higher or lower than the median. Average as well since the upper bound is unknown.

1. I’m not being pedantic but being precise. In your first scenario, the mean is $425,575 while the median is exactly $425,000. This is important because it shows the difference between mean and median.

2. You’re incorrect In thinking it’s indeterminate how many houses are higher or lower than the median because the mathematical definition of median is the value at which the number of values below the median value is exactly equal to the number of values above the median value.

When I was looking to buy a house, I was able to track each month (red fin, etc) the median price, price per square foot, Year over year change, specifics for 3 bedroom houses, how many houses are available, how many were sold, how many sold at, below, and above asking price, average number of days on market before being sold, how many houses have been on market under 30 days, 90 days, and over 90 days.

In real estate, the outliers of expensive houses make the average value higher which makes the median value more preferred as a comparative measurement. For any neighborhood, the values do tend to clump around the median/mean. And the comp analysis normalizes the data for square footage, number of bathrooms, etc.

I understand the general topic is housing but I’m not sure what the issue is or what the various positions are.

If we’re talking about why people aren’t buying houses, it could be generational priorities. Gen Xers popularized the Financial Independence Retire Early movement in the 2000s / early 2010s.

On how to make housing affordable, the real solution is for wages to grow faster than inflation. You can cut spending and save but if inflation is eroding the value of the money you’ve saved, you’re in a losing battle. Inflation makes you look foolish in saving money for a down payment as the real value of your money in your savings account keeps decreasing while the price of houses keep going up.

quote:

On how to make housing affordable, the real solution is for wages to grow faster than inflation. You can cut spending and save but if inflation is eroding the value of the money you’ve saved, you’re in a losing battle. Inflation makes you look foolish in saving money for a down payment as the real value of your money in your savings account keeps decreasing while the price of houses keep going up.

Ahh... yes, now you are putting your finger to it: wages relative to inflation.

There are several reasons for this, but don't overlook one of the biggest culprits: the so-called Affordable Care Act. Many companies are facing such large health insurance costs that the choices are: reduce or eliminate coverage or reduce wages. Health "insurance" has become a bigger and bigger portion of your total compensation. It's completely out of control.

It doesn't matter whether you are part of the 11% of the population buying insurance on an ACA "exchange" plan or not. That terrible 2009 act has destroyed the entire market for and even the very meaning of the word insurance.

Fascinating discussion. One of the things I seldom see mentioned is people today (I was going to say "kids", but it's more than that) don't know how much money they have. They want something? They just pull out the plastic or tap their phone.

Back in the day, I had a checking account I had to reconcile monthly. I had cash. I wasn't able to tap to pay. So I always knew how much money I had. I don't know how most people do it today with a tap tap here and a tap tap there.

If I were a cynical person, I'd think that big business and government planned it this way....

quote:

Originally posted by HRK:
Hotel Life

I don't think this is new. When I was young and working with equally poor people, many of them were living in long-term hotel/motel because they did not have the money for first month/last month + security deposit. This was early 80s.

quote:

Originally posted by IntrepidTraveler:


Back in the day, I had a checking account I had to reconcile monthly. I had cash. I wasn't able to tap to pay. So I always knew how much money I had. I don't know how most people do it today with a tap tap here and a tap tap there.

If I were a cynical person, I'd think that big business and government planned it this way....

That brings back memories. Having just gotten out of the navy in my 20s, I remember trying to withdraw from my savings account. I needed two IDs. I only had my drivers license. The teller, about my age, said the other ID is a credit card; I didn't have any credit card. He scoffed at me.

Two of my kids are out of school and working. Both are fairly thrifty, but much of their excess income goes into Roth style retirement accounts for the significant tax advantages. Unfortunately, these funds are locked away and largely unavailable for a down payment.

If they were to buy houses they could redirect future income surpluses from retirement accounts to mortgage payments, but there is still the matter of that pesky down payment.

The retirement accounts of my youth had much lower caps and thus more of my savings were directed to liquid assets that were available for purchasing a home.

However, if young people can't buy homes then prices will inevitably fall. The market will clear.

If we are serious about lowering the prices of homes the best bet is to increase supply by relaxing restrictive regulations on new building and reducing demand competition from companies like Black Rock that are home hording, and foreign buyers.

Eliminating all capital gains on home appreciation and making old (low interest) mortgages transferable to a new home would also make downsizing more attractive to empty nesters thus opening more larger homes for young families.

quote:

Originally posted by pedropcola:
Somebody sold this idea to the younger generations that it was handed to us old folk and there is no way they can recreate that. Load of self defeatist bullshit. I tell my kids all the time when they look at my stuff that when I was their age I didn’t own shit but a mortgage and a car. A shitty car.

Yup, and I’m still not buying the bullshit either. I’m so past hearing the college crap, buying a house, car, whatever. Adapt or die. Quit buying all the new devices and going out to eat, and your fancy vacays because you vomit it all the time “I’m living my best life.” Yeah and they whine incessantly.

quote:

Originally posted by pedropcola:
What does that book that nobody reads anymore say (millionaire next door)? You can look and act wealthy or you can be wealthy. It’s tough to do both.

100%. Just like you said, when I bought my house 19 years ago, man it was a bitch the first years. No nice car, no nice nothing. Had to grind and just deal with it. No vacations at all for many years.

Tired of this snowflake bs. Grow a pair. Rub some sand in it.

That’s exactly the mentality that doesn’t allow for any rational discussion on if there is a problem or not.

Are there entitled snowflakes? Hundreds of thousands of them! I have zero doubt.

I’m not talking about those. Is there a real problem today with housing costs? What are the possible solutions?

“Grow a pair” is wonderful advice and highly relevant to all situations; but is there an actual issue?

If gas is $30 a gallon due to some idiotic government caused issue, is your answer “grow a pair, I drove everywhere and saved money?”.

quote:

Are there entitled snowflakes? Hundreds of thousands of them! I have zero doubt.

I’m not talking about those. Is there a real problem today with housing costs? What are the possible solutions?

Yes, there is a problem. But it's mostly a regional problem... at least partially caused by bad policy decisions on a local level.

My youngest daughter bought a house only a year out of college. But that was in Ponca City, OK where houses are relatively cheap.

She then took a job on the east coast, living in Fairfax, VA. It makes no sense to buy there at current prices. She's now living with her cousin and renting, but has plenty in the bank if/when prices come down.

It’s mostly a problem in major/mid-major cities, which is exactly where almost every company generally has employment opportunities.

If you are in a trade, then there’s still quite a bit of opportunity across the US. But that doesn’t solve the issue of Atlanta, Kansas City, Boston, Indianapolis, Denver and a few dozen other cities having problems.

What does a "starter" house for a young couple (age 26 to 32) look like? How many bedrooms, garage? How fancy is it? How big of a lot? After taking this into consideration, what should a starter house cost? Would a builder be willing to build houses like this? Can a young couple afford it? I am not trying to start anything here, just seriously want to know.

Around here, even 100 year old “fixer-upper” homes with no foundation, which normally would go for < $50k are listed at $200k+. It’s insane. To get into something relatively nice is $400+. And that’s in one of the poorest counties in the state. I can’t imagine trying to buy right now. Problem is, they’re selling (to mostly out of state buyers who can afford it) so prices won’t be going down any time soon.