In reply to yupididit :
Of course we can discuss anything we want. That doesn't make it a solution, it makes it a conversation.
I can ask your opinion on a local ballot referendum, but if I don't cast a vote, I haven't made any legitimate move. I've just asked opinions from someone.
pheller said:Steve_Jones said:pheller said:I'm saying that the community comes together to form some sort of non-profit that buys up valuable land or historically significant properties.
I don't think zoning should be used as the method for which we protect neighborhood character.
Sounds good as everything is for sale at some price. Go ahead and start the non-profit.
or did you mean "someone else" should do it?
Not my fight.
My comments were directed at Frenchy.
Seems like you've a bone to pick with me? Quit being a dick.
I've replied to you 2 times in a thread, and now I have a bone to pick with you, and I'm being a Dick? Wow.
In reply to STM317 :
In reply to Boost_Crazy :
Interesting point!
In semi related news, today's GDP report had something included that I hadn't seen or heard about before. Apparently, the government tracks the money spent on privately owned investment properties each quarter.
I'm not sure it tells us anything specific without knowing how many properties were purchased, but I figured it might be of interest here:
That graph is very interesting. Like you said, the number of properties sold would be helpful. But it makes sense that the total dollar amount would be higher when houses cost more, and lower when they are cheaper. But I'd expect it to be much flatter if it were long term investment. If one were to invest their own money for the long term, you buy low during the slump and sell when the market gets hot. That graph appears to to back up short term investors flipping homes vs. buy and hold before the peaks. It's also interesting that the amount invested appears to drop significantly before the market drop. It's a very small sample size to really show a corelation, but it's something to consider.
I'm curious what's going to happen in the housing market. I'm hoping the fed pumps the interest rates up even more and doesn't u turn anytime soon. There's been a lot of cheap cash on the market and investors have been using it to buy up real estate and other assets. The fed finally stopped buying MBS last month. It's gonna be interesting to see the results of that. I mean 63% of Americans live paycheck to paycheck, we care about payments and people were stretching themselves to buy homes at 3% rates. Now that they are at 7% values need to drop my like 30-40% to make it even. I'm thinking now that US T notes will be paying a decent amount, investment firms will be selling their properties for a quick buck vs trying to cash flow them. Why make 5% being a land lord when they can just do nothing and make 5% holding a T note that's safer than having money in the bank? This and the fact that alot of the boom cities like Dallas Texas has had a ton of construction in the pipeline. There should be some downward pressure on prices. We'll see. Good news is 60% of homes aren't on mortgages so the only people that will be upside down will be people that bought in the last couple years or refinanced and pulled out equity to leverage themselves to the tits for other things. Another cool thing about this whole situation is people who are upside down and might want to cash flow on their properties could try to rent them out. This should add more rentals to the market. Also there's a record number of multifamilies being built which should help increase the rental inventory.
Steve_Jones said:pheller said:if the community deems a property as valuable it should purchase that property, make up a deed restriction, then resell with said restriction. Not just zone the property so it never get developed and nobody ever wants to develop it. Eventually, interesting, historic, or beautiful properties just rot away, and when they are finally deemed as unsalvageable, a developer will come in and install their glass box.
It would be better to somehow make it economiclly viable for that property to maintain its value to the community and the modern owner.
Who makes that decision, and with what money? If these blighted buildings bother you so much, you buy them and fix them up.
Blighted property tears down the property values in the whole area. Plus there is the broken window theory( one broken window starts vandalism to break more windows and innocent fun turns into lawlessness and crime). Look at Detroit for an example..
So it's in the best interest of the community to deal with blight. The community I live in has an annual budget of 11 million dollars with more than 3 million for police. ( population about 5500 ).
So spending money to either buy and fix up or buy and tear down is easily done by society. For the benefit of society.
e30saam said:I'm curious what's going to happen in the housing market. I'm hoping the fed pumps the interest rates up even more and doesn't u turn anytime soon. There's been a lot of cheap cash on the market and investors have been using it to buy up real estate and other assets. The fed finally stopped buying MBS last month. It's gonna be interesting to see the results of that. I mean 63% of Americans live paycheck to paycheck, we care about payments and people were stretching themselves to buy homes at 3% rates. Now that they are at 7% values need to drop my like 30-40% to make it even. I'm thinking now that US T notes will be paying a decent amount, investment firms will be selling their properties for a quick buck vs trying to cash flow them. Why make 5% being a land lord when they can just do nothing and make 5% holding a T note that's safer than having money in the bank? This and the fact that alot of the boom cities like Dallas Texas has had a ton of construction in the pipeline. There should be some downward pressure on prices. We'll see. Good news is 60% of homes aren't on mortgages so the only people that will be upside down will be people that bought in the last couple years or refinanced and pulled out equity to leverage themselves to the tits for other things. Another cool thing about this whole situation is people who are upside down and might want to cash flow on their properties could try to rent them out. This should add more rentals to the market. Also there's a record number of multifamilies being built which should help increase the rental inventory.
Raising interest rates slams on the brakes of the economy. While property values may temporarily soften.
So will jobs and thus the market for housing will screech to a halt.
Of course some houses will be forced to sell due to the death of the owners or other things. But they won't be given away. It's most families only real asset.
Investments will crash along with the rest of the economy. Nothing good ever comes of recessions or worse depressions.
Inflation on the other hand is the rising tide that floats all boats. Well except for people who's head is in the sand and keep the cash under the mattress or in a Jar buried in the back yard. ( or Bank account)
A nice steady 3-4-5% inflation rate makes Mortgages easier to pay for and appreciates the prime wealth of every working person. ( their home)
Business like it because it's predictable and allows them to raise prices in a steady fashion.
In reply to frenchyd :
That's the point of raising interest rates. Everything has inflated way too high. It's broken from fundamentals. Unemployment is at all time lows so we can afford to lift it all up a little bit.
not sure where you are at but inflation has affected alot of people badly. Especially the lower class. It's stretching peoples pocket books. Who cares if your home goes up in value. You live in it. If you sell it for a profit you gotta pay up for the next house.
Sure no one is giving homes away for free. But if no one can afford the payments, and cash buyers that are truly cash buyers that are not leveraged don't want to catch a falling knife. They'll wait until it makes sense to buy. No point in holding a bag when they can make money holding other things like T notes. 5% inflation every year is not healthy. Especially when asset prices sky rocket making it harder for people to get into homes and other markets for the first time. Homes historically were never an investment. They usually appreciated with the rate of inflation which was 2%. Also the last recession helped de leverage people and let people get into homes for pennies on the dollar. they aren't all that bad.
In reply to e30saam :
You and I have different approaches to life. Apparently you like to time your purchases. While I like to buy when the time is right for me.
Let me assure you, there is no really right approach. I bought my first home ( not on wheels) when I could. I paid $27,800 for it and 9 years later sold it for more than3 times what I paid for it. From that I bought my current house and I'll own that until they dig my grave.
My heirs will divide up around 3 million assuming traditional levels of appreciation.
I don't treat life like a balance sheet that I'm winning or losing. I carefully make my priorities and enjoy life around them. If my selections put me ahead in the balance sheet game? I look at the actuarial tables to remind myself that I have a finite amount of time and understand that at those last days I'll gladly trade any wealth for more time.
In reply to frenchyd :
I think you read a bit more into his post than was there, but you bring up some interesting points. Timing your big purchases is very important- especially when you are young. You back that up with your example. Your first house tripled in 9 years. Even though it was not planned, you had good timing. Your life may have had a completely different arc if you had bad timing and bought at the peak. You would not have been able to upgrade houses later, as you may have been upside down. These decisions are extra important when you are young, as they compound over your life. But I agree with you as you get older. Waiting for that better deal can mean a trade off of not enjoying whatever it is for a greater portion of your life. I'd say that the best approach is probably a combination. Make smart, well timed decisions when you are young. This will put you on the path where you will have more "screw it" money when you are older, and the priority can shift from accumulating wealth to enjoying it.
In reply to Boost_Crazy :
You are probably correct. Because I just wanted to live on Lake Minnetonka practically all my young life. ( including 2 Vietnam tours).
Luckily for me buying early allowed me to ride the elevator up and made other purchases less critical.
frenchyd said:Inflation on the other hand is the rising tide that floats all boats. Well except for people who's head is in the sand and keep the cash under the mattress or in a Jar buried in the back yard. ( or Bank account)
A nice steady 3-4-5% inflation rate makes Mortgages easier to pay for and appreciates the prime wealth of every working person. ( their home)
Business like it because it's predictable and allows them to raise prices in a steady fashion.
Inflation lifting all boats was only true up until the mid-80s when this also applied to wages. Since then wages have been flat and we've tried to substitute debt for income. Which only works until it doesn't. If your house/groceries/fuel/etc. are all up 30%, and your income is up 0%, life is getting harder. If your income is up 30% too, you're at least keeping pace.
0% rates allow any idiot to borrow infinite money and pretend they're wealthy. 4-5% rates mean there has to be some underlying value to your business/asset/whatever you're trying to finance. I hope housing and assets fall back to give the under 40 crowd a chance to actually start their adult lives on a decent footing. The last 3 years of asset appreciation has been based on a house of cards.
In reply to Flynlow (FS) :
If you haven't received a pay increase in the last 3 years it's time for you to move on.
As a lowly bus driver my pay has gone up 10% a year. Each year. Right now I can switch companies and earn another 10%/ hr increase and a $5000 signing bonus.
My wife's pay is up 40% over that same time. Companies income have at least grown that much and Guess what? There is a labor shortage. Look around. There are millions of unfilled jobs.
Even Walmart is raising wages! There are something like 21 states where the biggest employer is Walmart.
Inflation doesn't reward those who fail to understand their real value. For everyone to gain like that unions would need to be more dominant.
Believe it or not, I wasn't trying to make a thread about me or my personal situation. I was speaking to national averages:
But you literally just contradicted your post i was responding to, first it was "a rising tide (inflation) lifts all boats", then it was "you'd need a union for everyone to get that sort of benefit, you have to advocate for yourself".
i reiterate, wages are not keeping up with inflation/cost of living. It's built on a mountain of debt and false equity. So really, you need to add food, or rent, or median house price to the graph above:
I misspoke. I should have said for those who don't hustle for themselves you'd need a Union to help you get your value.
It takes courage to demand a paycheck in line with your value. Unions help the average guy get them. ( but yes, some undeserving also get the pay) Nothing is perfect.
Back to your point.
Homes are getting higher. In part blame population growth. population is significantly higher while much of the industry from the rust belt has left.
While jobs are going unfilled they aren't assembly line jobs anymore. They require skills and knowledge. I digress.
As a school bus driver ( if that were my only income). It wouldn't have been enough to afford a 1 bedroom apartment in a modest neighborhood when I started today I'm almost making enough to buy a fixer upper in a modest neighborhood. Add a wife's income and I'm there.
My point is not about me. But about the income required to get on the elevator and ride the inflation tide up.
In reply to frenchyd :
I got RSU's and a raise last summer. I got another raise this summer, but no RSU's.
Both don't even come close to keeping up with inflation the last 18 months. Which is what his point was. Very few people have likely been able to increase their pay 10%+ over the last 18 months (without changing jobs) and all that would have done is keep up with inflation, not get them ahead of it.
In reply to z31maniac :
I'm sorry I don't know what an RSU is could you please explain.
You don't get ahead of the effects of inflation until inflation slows down or reverses.
Further most wages since the 1970's haven't kept up with inflation. But that's largely because so many manufacturing jobs were lost to overseas. While our population continues to grow.
Since we are at 332 million today compared to back then
More to the point. In 1975 when I bought my first house it took almost 50% of my net pay to make the monthly payments. When I sold it 9 years later the payment was barely10% of my income. 10 years after that my tax deduction for the house payment was dwarfed by the deduction for child care.
My points are that tax deductions for interest on mortgage payments, make home ownership affordable for young childless couples. And pay increases if only for inflation reasons also make home ownership affordable and worth while. Remember the payments remain pretty well fixed while rents will steadily increase with inflation.
In reply to frenchyd :
RSU = Restricted Stock Unit so shares in his company.
In reply to RX Reven' :
Thank you. That's sorta like matching the IRA or 401k payments like caterpillar , John Deere, Ingersol Rand did or the bank my wife works for.
On top of that we got Bonuses for exceeding expectations. While meeting higher standards.
frenchyd said:More to the point. In 1975 when I bought my first house it took almost 50% of my net pay to make the monthly payments. When I sold it 9 years later the payment was barely10% of my income. 10 years after that my tax deduction for the house payment was dwarfed by the deduction for child care.
My points are that tax deductions for interest on mortgage payments, make home ownership affordable for young childless couples. And pay increases if only for inflation reasons also make home ownership affordable and worth while. Remember the payments remain pretty well fixed while rents will steadily increase with inflation.
Mortgage insurance deductions only come into play with large prices and/or high rates. The standard deduction for a married couple is now $25,900. Even with current rates over 7%, a median home buyer in MN is likely better off taking the standard deduction than they are itemizing to take advantage of the mortgage interest deduction.
Houses were also cheaper relative to median incomes in 1975 than they are now.
Median income in 1975 was $13,719 and in 2021 it was $88,590
Median selling price in Q4 1975 was $41,200 and for Q4 2021 it was 423,600:
So the median home price in 1975 was 3.00 times the median family income, and the median house in 2021 cost 4.78 times the median family income. The only way any of this works out to be "affordable" for normal people is if the ratio between prices and incomes shrinks.
frenchyd said:In reply to RX Reven' :
Thank you. That's sorta like matching the IRA or 401k payments like caterpillar , John Deere, Ingersol Rand did or the bank my wife works for.
On top of that we got Bonuses for exceeding expectations. While meeting higher standards.
RSU's follow a vesting schedule with typical durations of about four years.
So, let's say z31maniac received 100 RSU's in 2018...1/4 (25 shares) would have vested in 2019 and another 1/4 (25%) would have vested in 2020, etc. Once he's been receiving RSU's for four years, he'll get 100 RSU's vesting each year (the 0% become 25% - the 25% become 50%, etc.) making it a powerful retention mechanism for his employeer.
RX Reven' said:frenchyd said:In reply to RX Reven' :
Thank you. That's sorta like matching the IRA or 401k payments like caterpillar , John Deere, Ingersol Rand did or the bank my wife works for.
On top of that we got Bonuses for exceeding expectations. While meeting higher standards.RSU's follow a vesting schedule with typical durations of about four years.
So, let's say z31maniac received 100 RSU's in 2018...1/4 (25 shares) would have vested in 2019 and another 1/4 (25%) would have vested in 2020, etc. Once he's been receiving RSU's for four years, he'll get 100 RSU's vesting each year (the 0% become 25% - the 25% become 50%, etc.) making it a powerful retention mechanism for his employeer.
Especially when they start stacking. I think the last year my of sign-on bonus RSU's also included two raises with RSU's. So I had vests in February, June, and August.
In reply to STM317 :
So by your numbers I couldn't have bought my place in 1975?
Were you around in 1975? I was, I didn't buy a median priced house because I couldn't afford it. So I bought what my income allowed and as a result of that I'm sitting here with a house worth a couple of million. I never earned much more than a middle class wage.
The point is if you stand on the sidelines and wait for the exact right house to come by that you can afford you will always lose to inflation.
Your numbers tell you that.
You see those squiggly lines sometimes going up? Sometimes going down? When they get close step up and buy.
Want to know why? Because life is never a straight line. You may get a raise or lose your job. Your wife can win the lottery or get cancer.
Stuff happens. sometimes good, sometimes bad, but one thing is for sure. Sitting on the sidelines waiting for number charts to align isn't going to help.
STM317 said:frenchyd said:More to the point. In 1975 when I bought my first house it took almost 50% of my net pay to make the monthly payments. When I sold it 9 years later the payment was barely10% of my income. 10 years after that my tax deduction for the house payment was dwarfed by the deduction for child care.
My points are that tax deductions for interest on mortgage payments, make home ownership affordable for young childless couples. And pay increases if only for inflation reasons also make home ownership affordable and worth while. Remember the payments remain pretty well fixed while rents will steadily increase with inflation.Mortgage insurance deductions only come into play with large prices and/or high rates. The standard deduction for a married couple is now $25,900. Even with current rates over 7%, a median home buyer in MN is likely better off taking the standard deduction than they are itemizing to take advantage of the mortgage interest deduction.
Houses were also cheaper relative to median incomes in 1975 than they are now.
So the median home price in 1975 was 3.00 times the median family income, and the median house in 2021 cost 4.78 times the median family income. The only way any of this works out to be "affordable" for normal people is if the ratio between prices and incomes shrinks.
It seems like I'm interested in trying to figure out the supply side reason why houses are more expensive today than years ago.
A few factors it seems have contributed to this:
- Trades make higher wages now relative to the rest of the population. That means that the median income for home buyers is likely lower than the median income for homebuilders.
- More people are moving to housing markets with either A) less vacant land or B) less previously established housing. It's hard to buy into a housing market as a new resident when all of the housing is relatively new.
- Good deals are quickly snatched up by flippers, STR investors, LTR investors, or institutional investors. It looks like this has been a growing trend since about the 80's, although the data is a bit hard to determine if it really is any worse today than what it was 30 years ago.
- Wages have not kept up with HOUSING inflation. We might live better lives in terms of our cars, phones, healthcare, etc, but in terms of our housing, we're getting less square footage for our dollar. Is that a result of better and more expensive insulation that reduces our O&M more so than decades ago?
Agree/Disagree?
frenchyd said:In reply to STM317 :
So by your numbers I couldn't have bought my place in 1975?
No. I'm saying that the playbook you used in 1975 isn't likely to have the same results now because the situation has changed and the variables are different.
pheller said:STM317 said:frenchyd said:More to the point. In 1975 when I bought my first house it took almost 50% of my net pay to make the monthly payments. When I sold it 9 years later the payment was barely10% of my income. 10 years after that my tax deduction for the house payment was dwarfed by the deduction for child care.
My points are that tax deductions for interest on mortgage payments, make home ownership affordable for young childless couples. And pay increases if only for inflation reasons also make home ownership affordable and worth while. Remember the payments remain pretty well fixed while rents will steadily increase with inflation.Mortgage insurance deductions only come into play with large prices and/or high rates. The standard deduction for a married couple is now $25,900. Even with current rates over 7%, a median home buyer in MN is likely better off taking the standard deduction than they are itemizing to take advantage of the mortgage interest deduction.
Houses were also cheaper relative to median incomes in 1975 than they are now.
So the median home price in 1975 was 3.00 times the median family income, and the median house in 2021 cost 4.78 times the median family income. The only way any of this works out to be "affordable" for normal people is if the ratio between prices and incomes shrinks.
It seems like I'm interested in trying to figure out the supply side reason why houses are more expensive today than years ago.
A few factors it seems have contributed to this:
- Trades make higher wages now relative to the rest of the population. That means that the median income for home buyers is likely lower than the median income for homebuilders.
- More people are moving to housing markets with either A) less vacant land or B) less previously established housing. It's hard to buy into a housing market as a new resident when all of the housing is relatively new.
- Good deals are quickly snatched up by flippers, STR investors, LTR investors, or institutional investors. It looks like this has been a growing trend since about the 80's, although the data is a bit hard to determine if it really is any worse today than what it was 30 years ago.
- Wages have not kept up with HOUSING inflation. We might live better lives in terms of our cars, phones, healthcare, etc, but in terms of our housing, we're getting less square footage for our dollar. Is that a result of better and more expensive insulation that reduces our O&M more so than decades ago?
Agree/Disagree?
You're missing one HUGE difference.
Look at the avg sq ft of new construction in the 50s-60s. Look at the avg sq ft of new construction now.
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