Wow. Sounds like you got a great deal. Around dot com, you couldn't buy a closet for that price in trendy SOMA (at the time). Good for you.

quote:

Originally posted by reloader-1:

Median house price, 1980 - $63,700

Median house price, 2025 - $410,800

https://fred.stlouisfed.org/series/MSPUS


Median wages have risen 295% since 1980

Median home prices have risen 545% since 1980


Ignoring that everything else, including education has also vastly outpaced wage growth, that’s enough to make housing unaffordable.

I’m not arguing with you. What I’d like to hear is what is your idea(s) for solving the problem past the first step of making people aware of the problem. I truly am interested in your thoughts.

quote:

Originally posted by trapper189:
Talking about means and medians is a bit meaningless in a discussion of affordability as that’s not where people are buying starter homes. They’re not saving for a down payment on a home priced at the median. Making generalizations about the entire country by focusing two specific statistical numbers and dismissing peoples’ local area knowledge as too specific is somewhat hypocritical.

Inflation is fun, but home prices are based on supply and demand more than inflation. Back in 2009, we bought a house for less than half what the previous owner’s had in it when they built it 4 year before hand. The price we paid had nothing to do with inflation. Despite the money you’ve saved for a down payment losing to inflation, you win in a down market. Besides, your down payment money should be invested in stocks and at least keep up with inflation if not beat it.

First time buyers are not buying median priced homes, but they are also not likely at the median income either. If first time buyers are at or above median income and buying below median homes, that tells you something doesn't it? That's the beauty of averages.

This is starting to remind me of a discussion on X involving female logic. Women generally want a man that makes more money than them, and who pays for dates. Women also insist on equal pay and closing the "wage gap". I pointed out that if women make the same as men, then women cannot demand a man that makes more. Simply doesn't work. But the illogic started flowing anyway, and women ignored the fact that what I said is true and argued against it. I posited "if you won't accept a man that makes less than you do, why should a man accept a woman who makes less than he does?" The response is that each woman thinks SHE is special and deserves and is entitled to a higher earning man. They ignore the fact that many women will have to accept lower earning men if all pay is equal.

All market prices are due to supply and demand. Inflation happens when there is more money than goods. Cheap money at low interest rates causes inflation, especially in housing. Coastal cities that can expand only in one direction have it worst, because commute times generally make people want to live close enough to the city. But landlocked cities like Indianapolis where I live have PLENTY of buildable land even within the city limits (Marion county limits) which still has undeveloped farm land. The surrounding 9 counties are suburban near the city, but rural with lots of farmland away from the city. Not only is there plenty of land in all directions but commute times still aren't too bad where you can build.

And we still got massive real estate increases in the past 5 years after very modest increases over the past 20 years. And my town is still building like crazy after filling up all the subs with open lots during COVID, and adding new ones. Again I suspect our particular case is due to people from high cost areas (Chicago suburbs) moving here to lower their costs, but having to dump all their house money into a new house to avoid capital gains tax. Again, too much money drives prices up.

There will be a correction. It may be worse than 2008:

I think we are reaching the point in the thread where all of the advice about lifting yourself up by the bootstraps and drinking less Starbucks is fading.

It’s sound advice, and will always be; but it has to also be grounded in reality, not an illusory world that no longer exists.

It’s like someone today telling a young man to go “seek his fortune” in the hills of California, because that worked for great grandad in 1849. It was relevant then, and some of the underlying precepts hold true, like striking out for oneself and working hard for the opportunity - but there is no gold in the hills anymore.

@ReyHRH, I’ll write a long post in what I believe could be a potential fix. Some sacred cows might be slaughtered in that. Likely just after Christmas, spending time with the family!

quote:

Originally posted by reloader-1:
I think we are reaching the point in the thread where all of the advice about lifting yourself up by the bootstraps and drinking less Starbucks is fading.

It’s sound advice, and will always be; but it has to also be grounded in reality, not an illusory world that no longer exists.

It’s like someone today telling a young man to go “seek his fortune” in the hills of California, because that worked for great grandad in 1849. It was relevant then, and some of the underlying precepts hold true, like striking out for oneself and working hard for the opportunity - but there is no gold in the hills anymore.

@ReyHRH, I’ll write a long post in what I believe could be a potential fix. Some sacred cows might be slaughtered in that. Likely just after Christmas, spending time with the family!

I think we’re reaching a point in this thread where it just needs to be said, STOP WHINING.

Life isn’t fair and it never will be. Just because a previous generation had a certain set of circumstances that were favorable, doesn’t mean this generation has to get the same.

This country is still filled with opportunities that are better than anywhere else in the world.

Yup - Hey Gen Z...You will own nothing, and you will like it!

No whining.

Just the facts. The goal is to determine if there is a problem, how to solve the problem, and move forward.

If there is no problem, then nothing more needs to be said.

Born in 1980 and this is my take on the topic:

You can't keep importing people into a country without a place for them to live and expect housing costs to get lower. Supply<Demand


If you were to overlay that chart with others in this thread, you'll notice that the points line up pretty well.

Also, people used to buy fixer uppers and put in a bit of sweat equity. This has become a thing of the past now that younger folks are less inclined to doing manual labor (and less handy in general). When banks were operated locally, they'd often write a smaller loan to make a place livable (perfect starter home), but now local and regional banks have been consolidated into corporate entities. They no longer offer many of the services or rates that a ma and pa type institution offered. Many local branches don't even exist anymore with the focus moving towards online banking.





This chart also shows how many people may have been eligible to purchase a home using a VA loan (very handy for getting a starter home). As you can see, there are quite a bit less now compared to the 70's, 80's, and 90's. Does Gen Z not wanting OR being able to join the military have an impact? Higher down payments and PMI required for standard home loans can put the kibosh on hopes and dreams, so it seems plausible to me.

quote:

Originally posted by Lefty Sig:


There will be a correction. It may be worse than 2008:

I’ve been saying this for a while now, it’s inevitable

I do feel really bad for my young brother-in-law and his wife, they just had a baby and are stuck in a rental house. They cannot afford to buy a house around here because all the starter homes that used to be like $130,000-$180,000 are now $250,000-$400,000

The problem is they don’t make enough to be able to afford the “new normal” home price numbers for a mortgage.

Something is going to give way at some point and boy oh boy watch out

Join the military, put in your time, live on base, retire, get good jobs outside in civilian life.

You'll get favorable benefits like nothing down secure loans from the VA, and in Florida for example, zero property taxes (which should be that for everyone)

That should save 1/4 of the payment vs a non military buyer alone.

The problem in 2008 was for the few years beforehand banks were loaning money like crazy to people who couldn’t afford the loans. No problem, because everybody and his sister was a real estate investor, flipping houses and paying the mortgages off. Then the music stopped and there weren’t any chairs left. It was an easy problem to identify.

I’m having a hard time seeing what the problem is now. Home values in my area are depressed at the moment. You can buy existing homes for half the price of new construction.

quote:

Originally posted by nhracecraft:
Yup - Hey Gen Z...You will own nothing, and you will like it!

And they may just vote for that. They did in NYC. And it's not going to go well.

Sigmonkey - good point about gold but I see that as reflecting overall prices of hard assets. Gold and Real Estate are both "real" and tangible and desirable by people who think equity markets are over priced and do not trust government debt. So it makes sense that they mirror each other, right?

quote:

Originally posted by trapper189:
The problem in 2008 was for the few years beforehand banks were loaning money like crazy to people who couldn’t afford the loans. No problem, because everybody and his sister was a real estate investor, flipping houses and paying the mortgages off. Then the music stopped and there weren’t any chairs left. It was an easy problem to identify.

I’m having a hard time seeing what the problem is now. Home values in my area are depressed at the moment. You can buy existing homes for half the price of new construction.

We know what the problem was in 2008 after the fact. How many of us knew much about mortgage backed securities filled with subprime loans, insured against loss by AIG? How many of us knew how big the problem was, or really noticed when Bear Stearns collapsed and was bailed out? Then Lehman Brothers wasn't bailed out and the panic started. Even industry experts didn't understand the scope of the problem or believe it was a house of cards that would come crashing down. Nor did the institutional investors buying the garbage securities.

Watch "The Big Short". Just a few people saw what was coming and took a position to profit from the collapse. No one listened to the warnings.

So now, what kind of fuckery is Wall Street and Private Equity up to? We know private equity is buying homes to rent out at a profit. Rents have been out of line with mortgages for a long time, because the barrier to entry is the down payment that many people do not have, even if they can afford monthly mortgage payment. But they may be over-leveraged. If the value of the asset start to fall they may have to dump assets which will drive prices down fast.

What else are they up to? I have no idea, but I'll bet it's something bigger and stupider then we would believe, and risking a repeat of 2008.

quote:

Originally posted by Patriot:

quote:

Originally posted by reloader-1:
I think we are reaching the point in the thread where all of the advice about lifting yourself up by the bootstraps and drinking less Starbucks is fading.

It’s sound advice, and will always be; but it has to also be grounded in reality, not an illusory world that no longer exists.

It’s like someone today telling a young man to go “seek his fortune” in the hills of California, because that worked for great grandad in 1849. It was relevant then, and some of the underlying precepts hold true, like striking out for oneself and working hard for the opportunity - but there is no gold in the hills anymore.

@ReyHRH, I’ll write a long post in what I believe could be a potential fix. Some sacred cows might be slaughtered in that. Likely just after Christmas, spending time with the family!

I think we’re reaching a point in this thread where it just needs to be said, STOP WHINING.

Life isn’t fair and it never will be. Just because a previous generation had a certain set of circumstances that were favorable, doesn’t mean this generation has to get the same.

This country is still filled with opportunities that are better than anywhere else in the world.

The man said he’s going to offer a potential fix. The open minded mature way is to wait until he offers his solution and then you can poke holes in it as much as you want. I can’t wait to do exactly that myself. Until then, your post implies there’s no solution and that position is about as ignorant as it can get.

It’s part of the chorus that says heavier than air flight is impossible, breaking the sound barrier is impossible, and landing on the moon is impossible.

quote:

Originally posted by Lefty Sig:
So now, what kind of fuckery is Wall Street and Private Equity up to? We know private equity is buying homes to rent out at a profit. Rents have been out of line with mortgages for a long time, because the barrier to entry is the down payment that many people do not have, even if they can afford monthly mortgage payment. But they may be over-leveraged. If the value of the asset start to fall they may have to dump assets which will drive prices down fast.

What else are they up to? I have no idea, but I'll bet it's something bigger and stupider then we would believe, and risking a repeat of 2008.

What kind of fuckery are they up to? You don’t know this? Wall Street has been buying up homes and just sitting on them. IE, not even renting them out, just sitting on them, for years. Using them as yet another investment to their portfolios.

Several bills have been proposed in Congress to put a stop to it. One I read (first one below) would require Wall Street to fully divest within 10 years of it going into law. But here is a list, all proposed by Democrats in Congress. Boomers aren’t your problem dude, Wall Street is.

End Hedge Fund Control of American Homes Act (S.3402 in the 118th Congress)

Stop Wall Street Landlords Act (H.R.9246 in the 117th Congress; reintroduced in later sessions)

HOMES Act (Houses Over Middle-Class Exploitation Schemes Act)

American Neighborhoods Protection Act

Blackrock is a big culprit as well.

Here's what will happen.
Eventually we will become outnumbered.
And private property will become nationalized.
Land real estate will become nationalized.
Government housing will be built on it.

You get enough people feeling they are being marginalized, they will vote for communism.

quote:

Originally posted by ScreamingCockatoo:
Here's what will happen.
Eventually we will become outnumbered.
And private property will become nationalized.
Land real estate will become nationalized.
Government housing will be built on it.

You get enough people feeling they are being marginalized, they will vote for communism.

That is ultimately the problem. When unmitigated greed causes people to abandon basic moral principles without care for the consequences their gluttony has on others, eventually people will fight back. Whether it’s through voting in communism so that government can forcefully take from others with the “consent” of the majority or through targeted acts of violence, people collectively do have a limit to what they’ll accept. A free society works for a moral people. When society abandons basic moral principles then bad things can happen to all members and segments of society.

quote:

Originally posted by Gustofer:
Blackrock is a big culprit as well.

No they are not. Blackrock is a fund manager of mostly index funds and ETF's. They hold very little real estate.

You are thinking of Blackstone. And Blackstone owns 3.8% of single family rentals nationally. 575K of 15M total rental homes.

Overall, private equity owns 3% of all homes in the U.S.