I know everywhere is different, but it's kind of funny seeing people complain about $350k houses being crazy expensive. Those days are long gone in many areas.
I know everywhere is different, but it's kind of funny seeing people complain about $350k houses being crazy expensive. Those days are long gone in many areas.
Steve_Jones said:I know everywhere is different, but it's kind of funny seeing people complain about $350k houses being crazy expensive. Those days are long gone in many areas.
You're absolutely right. In most neighborhoods of my town, $325-$350 was the floor about 7 years ago when we bought. That was a tear down. Now they're $420-$540.
The price itself isn't the problem.
And when you add in the increase in the cost of living outside of home prices, it becomes more and more difficult to save a decent down payment too.
All sorts of ways around this, about 1,000 different things contributing to this, but it is harder now to buy a first house for the average person than it has been in my memory, or my dads memory - and his first mortgage, in the mid-late 70s was over 15%!
I have no desire to live in a rural area. Many people do, many others, like me, don't. It has nothing to do with the job market, I just don't want to live out in the boonies
In reply to bobzilla :
We're "trapped" in our house too. For us to move into something that'd be considered an upgrade (bigger yard, more garage space but not a larger house) isn't an incremental step, it's literally double the value of our house. Between that and the mortgage rate that's almost triple what we have now, it's a total no go. Even with a new, 30 year mortgage (which would be idiotic when I hope to retire in the next 4-7 years) it's unaffordable
In reply to docwyte :
I'm in a similar situation and it's the reason I plan to renovate and upgrade my house rather than to move. While I may put more money into it than it can be worth, it would be worth it to me since I would rather have it meet my needs for the next 20-30 years.
Steve_Jones said:it's kind of funny seeing people complain about $350k houses being crazy expensive.
Even funnier seeing people freak out over the crazy high interest rates like it's the end of the world, when we would have been thrilled to buy at those rates
docwyte said:I have no desire to live in a rural area. Many people do, many others, like me, don't. It has nothing to do with the job market, I just don't want to live out in the boonies
Same here. My fiance lived in a tiny town before she sold and moved here, 1600 people (although the 17 acres was nice and quiet). That's just too small. I enjoy the benefits of a larger city too much.
Steve_Jones said:I know everywhere is different, but it's kind of funny seeing people complain about $350k houses being crazy expensive. Those days are long gone in many areas.
When you're used to being able to buy something nice for less than half that price, yeah, it's a sticker shock. I live in a quiet neighborhood in NW OKC, paid $156k for an 1815sq ft house, 3/2/2 in Sept of 2017. Completely renovated, new utilities, etc. Now we see new developments with houses that are smaller, on smaller lots for more than double the price.
$380k-420k for a 1600sq ft house on a postage stamp lot is crazy to me. Oklahoma isn't exactly a rich state, which goes back to my original point about how in the hell people afford these prices.
We're in the process of listing my Mom's home. Absolute E36 M3 city, 750 sq ft, dated, on a 40 x 100 lot.
It's the one in the middle.
Agent thinks it's best in this market to go in at a very fair price. $550,000 
Well great, now I feel like I made a mistake, lol! I just bought my first home, a townhouse, to avoid paying rent and build equity so I can in the future afford to sell this one and move into a larger single home. I really don't want to be stuck in a townhouse forever...argh!
In reply to Japanspec :
If you bought now you aren't going to be handcuffed. The market has calmed down a lot.
To give you an example, My house I had in CO, I bought for $525K in 2018. Sold it in 2020 for 710K. The guy that bought it passed away and the estate just sold it for $825K. Not a single thing changed from when I sold it and really only a few small things since I bought it.
My payment was $2300ish range. For me to re-buy it in this environment is $4200ish range.
Even without the price increase, it would be $800 more a month with the current rates because I was in the 3% range. I wouldn't have sold it in today's environment and only sold because of family things.
It's all, location, location and location. Your average house in the DFW area is $400K and up depending on size and amenities. Really nice houses with swimming pools are over a million. But if you start driving East on I-20 you find they are building new houses withing communting distance in places like Forney and Terrell that are about $100,000 less. Keep driving east past the point where commuting to the DFW Metroplex is an option and housing prices drop like a rock. You can buy a place out in East Texas for $50,000 but there are few good paying jobs out there, old, dated houses with a lot of deferred maintenance and your neighbor might actually be a meth addict. Meth is big out in East Texas. Good internet service might be a problem in some areas. You might have to get your internet, and your cable TV from a dish.
But if you have a sense of adventure, know how to swing a hammer and can work remotely, you might be able to pull it off.
In reply to Ian F (Forum Supporter) :
We've been in this house for 15 years and over time have completely redone it. However the things I want, bigger yard and garage, aren't things I can add to this property. Just sort of surprised this is the situation I suppose. Didn't think the next step would be double the current home.
We feel "trapped" an an extent as well.
My recent job loss has me looking at opportunities elsewhere, and with no kids and SWMBO being full time WFH we have few hard constraints geographically - with the caveat of having to be in a state her employer already operates in, although there's a near 100% overlap with places we'd be interested in anyway. I like Carlisle well enough, it's where I grew up, my parents and her sister are both close by, it's a nice mix of being fairly rural while still having amenities close by, nice vibrant downtown, lots of car stuff nearby, reasonable cost of living, etc. Still, there are certain prevalent attitudes that I've kind of had the E36 M3s of (we'll leave it at that...) and there are a lot of other areas in this big beautiful country of ours I'd like to experience. Plus, I want to be able to cast a wide net for this next move career-wise.
Still, we both agree the overall case would have to be pretty darn compelling to get us to give up our current housing situation. It's a cool old pre-Civil War farmhouse, ~2400sf, 3 bed/2 bath, 3 car detached garage, 0.8 acre lot with woods on all sides and immediately across the street. We paid $160k in 2016 with an interest rate just over 3%. Current "Zestimate" is over $280k. Pretty much any move we'd be looking to make would entail a 2-2.5X increase in our mortgage payment, at an absolute bare minimum, for likely a less desirable house. It would be REALLY hard to give this up.
Hungary Bill (Forum Supporter) said:z31maniac said:I just don't understand who can afford these prices? Are the vast majority of Americans just OK being house poor? Even with that I still don't get it.
I deleted this post yesterday, maybe I'll keep it today. Here goes:
I was pre-qualified for a $350k loan in 2013. We bought our dream house in Tacoma, WA for $260k and I put $60k down and financed the rest. With both me and Mrs. Hungary working (I was an upper level aircraft technician with a rather large company in the area) and Mrs. Hungary working in-home assisted care, we found ourselves in debt to the tune of about $13,000 after 3-years of living stateside. Our only debt at the time was a $230 payment for Mrs. Hungary's associates degree. No other car payments, no fancy phones, no vacations (save for the occasional camping trip to a campground with no fees), no avacodo toast, nothing...Sold the house in 2016 for $350k. I thought that was the correct price for it, honestly. Plus we had done a bunch of MUCH needed refinishing to all the wood work, and repainted the insides (all sweat equity).
That house just sold for $750k and I can not FATHOM how someone in TACOMA had that much money to spend on THAT house. It's SO UGLY now. The owner after us ripped up all our beautiful landscaping, painted the place a god-awful ugly blue.... and it's tripled what I paid for it 10-years ago.
So I looked at my grandparents old place. My grandfather bought it when he worked as a machinist for the same company I work for. No education, single family income, three kids... The man paid for it, sent two kids to college, and retired with two Cadillacs and an RV. His place my Grandma sold around 2015 for about $190k. It's now $400k.
Even though I've continually advanced my career (I'm now a mid/upper level engineer in the same company) I can't afford my old house. Simply put, my salary grew by about 50%, while my house grew by 300%. Worse yet, I don't think I can even afford my Grandfathers old place even though I'm miles ahead of him in my career path (still no student loans, car payments, etc).
TLDR: I don' know man. But my spidey senses have been tingling for YEARS now and it's still continuing seemingly unchecked...
Anyhoo, here's the house. I wish I had some pictures of the way it was on this computer. It was so amazing, I sometimes wish we had never moved.
The only real way to get ahead is long term ownership. Every time you sell and move you lose at least 10% of your equity. Fees, moving costs, new drapes, rugs, furniture ????? Considering the tiny amount of equity home owners gain at first it very probable you'll be starting over again from nothing with less than 10 years ownership.
Plus the change in interest rates.
Normal real estate will inflate at The same rate as inflation compounded.
Exceptions such as limited supply of houses to demand, or highly desirable locations due to Water front, spectacular view, great schools, etc will appreciate at some higher factor than inflation. It can easily exceed 1.5 times inflation or more.
The median Family income is currently over $82,000 and if DINK's Duel Income No Kids plus no debts $328,000 is doable with 3% down.
Your home does double duty. It provides you with shelter and typically an appreciating asset. ( yes there can be exceptions, neglect of maintenance, loss of local economy, or simply bad timing can all cause you loss. Just like any investment.
However over a long enough time period the right real estate can be as profitable any good investment strategy.
Peabody said:Steve_Jones said:it's kind of funny seeing people complain about $350k houses being crazy expensive.
Even funnier seeing people freak out over the crazy high interest rates like it's the end of the world, when we would have been thrilled to buy at those rates
I got out of the Navy when the interest rates were headed up to 22%.
The GI Bill saved me I think the highest the state allowed was 5&1/2% only us veterans could get those loans and prices on really desirable real estate took a major hit because no one could afford 22%.
In reply to frenchyd :
Everything you just posted, you've posted in this thread before. Let it go.
Peabody said:We're in the process of listing my Mom's home. Absolute E36 M3 city, 750 sq ft, dated, on a 40 x 100 lot.
It's the one in the middle.
Agent thinks it's best in this market to go in at a very fair price. $550,000
Listed for a few days, we got a conditional offer at full price that fell through and held us up for a week. It went back on the market last Tuesday, we got an offer at $525 the next day and accepted it. It's insane
Peabody said:Steve_Jones said:it's kind of funny seeing people complain about $350k houses being crazy expensive.
Even funnier seeing people freak out over the crazy high interest rates like it's the end of the world, when we would have been thrilled to buy at those rates
The problem (and I didn't read far enough back to see if you've already addressed it), is prices aren't coming down, and in fact still seem to be going up. To say; when rates were low, really high prices could still be handled. With rates high and prices high - it's so much harder.
Looking at median income compared to median home prices, it's harder to buy a home today than it was in the great depression. The sky -rocket of prices and not wages (trying not to end up on the patio, but those are the main levers) means that the years required to save a 20% down payment has gone from ~2 to ~5 when compared to 1980. The monthly payments associated were relatively flat, even at the higher interest rates in 1980, when adjusting for inflation.
In reply to classicJackets (FS) :
My daughter saved for 4 years and bought her first house on a single income. It's not harder, it's just hard and takes discipline. Discipline that people don't want to do.
She makes the median income and bought a house that was well under the median house price because that's what she could afford.
Toyman! said:In reply to classicJackets (FS) :
My daughter saved for 4 years and bought her first house on a single income. It's not harder, it's just hard and takes discipline. Discipline that people don't want to do.
She makes the median income and bought a house that was well under the median house price because that's what she could afford.
Where I used to live, at my income level and the housing prices in the area, home ownership was just not achievable.
So I moved.
In reply to ProDarwin :
Where homes are cheap, wages also tend to be cheap.
In reply to ProDarwin :
That's pretty much what she did. 10 miles saved her about $150k. She did not buy a fancy new house in a fancy new neighborhood. She bought a modest house in an older neighborhood because that's what was in her price range. She's going to have a little sweat equity in it as well taking care of some minor maintenance details like paint, fence repairs, and updating the windows.
It can be done. Maybe not exactly where you want it to be, but it's possible.
Well said. I believe in sweat equity. A lot of tasks can be done in a reasonable amount of time with decent tools and watching video's, or watching other people doing the same type of job.
It's like sheet rocking. You may not be as fast but there is really serious money saving if you DIY.
A pro can do it in a fraction of the time I can. But eventually it looks OK and the labor cost savings can be serious.
Even electrical work can be done by a DIY person without risk of shocks. If it's new work and final connection done by an electrician.
Knowledge can be quickly learned many ways. In sales I'd watch tradesmen working when I made business calls. That was before U tube and before a lot of the DIY books came out.
In reply to Toyman! :
That's great for your daughter and congrats to her, I'm sure you're happy for her and proud. What is the median home price in her location and median income? Does she have kids? Any commuting requirements?
Other than location, there are so many factors on why a person can or cannot afford to save for a 20% down payment. Of course a lot of people can and will do it, but it is harder to do it today than in previous generations.
When I first moved to SATX in 2017, my house was $230k. That's a $46k down payment. 5 years later its worth $346k. If I started saving in 2017 for a 230k home to hopefully buy in 5 years....that $46k down payment would have turned into $69k. That extra $23k is a lot of money and is in fact harder for a person who makes median income. Yes, moving is an option but moving cost will put a dent in savings. Lower budget, of course, except those lower priced homes are old and charming and the investors were buying those houses at $120k and selling them for $300k between 2019 and and now. The second home I bought in SATX in 2018 was about $238k, we sold it for an absurd amount a week before xmas 2021, it sold in 3 days. We had 16 offers after being listed for a day. The person who bought it was a cash buyer, our other offers were regular people who needed a few weeks to get financing or longer for their VA loan to go through. Even I wouldn't of been able to compete to buy my own house because no way could I come up with nearly $400k cash in 3 days!
Then I moved to a place where 20% down payment = $160k or more. Even into the 6 figures in my pocket from previous home sales, it still took 1 year for us to buy a home simply because we couldn't compete with those who have access to cash purchases. I could have certainly looked in lesser priced areas with worse schools and home prices might drop $100-200k, I couldnt do that though (kids). So today, even if you somehow save for the down payment (which is harder) you'd still have to compete with other more cash rich buyers. That requires more cash lol. That's the same in a moderately priced market or and really high price market.
Discipline it certainly requires and its harder (not just hard) for people now than ever before. Lets not diminish that.
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