ProDarwin said:Oh good point on the mortgage. When I uncheck 'manufactured', the lowest listing is $325k
Honestly for San Diego that isn't bad. I imagine taxes are ridiculous though.
When I did that search, I removed Lots/Land, Apartments, Manufactured. I got 12 results. All of them were condos or...mobile homes that somehow weren't filtered with manufactured.
So ok, maybe that's not great.
Mobile Home Parks seem like such a good investment (to actually own the land, that is.)
In reply to yupididit :
STM317 said:
This graph is telling me that it is somewhat harder now, but not all that much harder than most of the 20-year span between 1987-2007.
Chart is also not regionally specific. It'd be interesting to have that chart look at places with the strongest job markets.
pheller said:Chart is also not regionally specific. It'd be interesting to have that chart look at places with the strongest job markets.
People will always come up with a reason of why they can, or can't do something. Either way, they'll be correct.
Enlightening, thanks.
...in this world nothing can be said to be certain, except death and taxes.
Having the will definitely matters. I worked with a guy in his late 20's who is determined to develop a rental real estate portfolio. He owns a few properties in various ways. He's willing to take the risks in hopes of big rewards. Sometimes I wish I were not so risk-averse.
Duke said:In reply to yupididit :
STM317 said:
This graph is telling me that it is somewhat harder now, but not all that much harder than most of the 20-year span between 1987-2007.
To SWAG some numbers, I'd guess that the historical average value for the early part of the chart was somewhere between 80-85.
For simplicity, here's median 30 year mortgage rates and median sales price for the given timeline on the same chart:
If we pick a year in the middle of that "typical" era, say Q1 1998, we see that rates were 7.05 and median sales price was $152,200. With a 20% down payment of $30,400 that works out to $814 principal and interest in 1998 dollars. When adjusting for inflation, the sales price would be $287,300, the downpayment would be $57,400 and the monthly P&I works out to $1536 in 2023 USD.
Q1 22 looks pretty close to the same affordability on the chart, so let's see where it lands. Q1 22 had average mortgage rate of 3.82 and median sales price of $433,100. The same 20% down payment would now be $87k, or 35% more than the $57k inflation adjusted value for 1998. The monthly principal and interest payment would be around $1618. So the math backs up the chart, and Q1 1998 and Q1 22 had affordability that's not too far apart (a difference of $82/mo), but it required 35% larger inflation adjusted down payment to get there.
If we look at the same scenario with current median prices ($416,100) and rates (6.51%) a buyer would pay $2085 each month in P&I. It would require an $83k downpayment to hit 20%, which is a hair over 30% larger than the inflation adjusted value for the 20% down figure from 1998.
So the chart makes it look like it's not too bad now by comparison, but it's currently almost $500/mo more expensive for the exact same house than it was 18 months ago, and $550/mo more than 1998. It's a 27% increase in monthly housing spend, after a 30% larger down payment. And that's not accounting for any potential change in home owner's insurance or property tax rates since 1998.
**This is not me saying that it's impossible to buy a home now, or that some places aren't better or worse for housing affordability than this data reflects. Just running averages with national level data to provide some basis for discussion.
STM317 said:
Affordability (price and interest rate)...
Without definitions, this is a bit misleading because your definition of 'affordability' is not at all the same as shown in your chart. The 'Housing Affordability Index' is defined as:
Value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. This index is calculated for fixed mortgages.
Mortgage qualification has little to do with actual affordability...
Using max mortgage qualification amount has never been what I would consider 'affordable'.
Using median "family" income makes it look more affordable, due to family demographics shifting ever more dual-income based. Note that the median 'family' income is higher than median 'houshold' income due to including 'family' necessitating more than one occupant' while 'household' includes single occupant.
Using 20% down for first time home buyers makes it look more affordable, due to reducing the loan amount, elminating PMI, and increasing general mortgage eligibility.
The DTI limit for mortgage qualification has repeatedly increased over time, making it look more affordable.
The lone counteracting variable is that most new construction seems to be not-starter homes, which has made median house increase faster than 'starter' house prices, but is balanced somewhat by also bringing surrounding starter home prices up with them since starter home demand has outpaced supply.
IMHO a better measure of 'equivalent' affordability for first time homebuyers over time would be looking at the front-end DTI (housing costs vs income) for median individual income vs median house price with FHA (or at least minimum fixed conventional) minimum down payment.
The question is not whether or not it subjectively 'can' be done today, it's (all else being equal) whether or not it has remained as easy to do today as in years past? The objective data I've seen all points to a resounding 'no'.
Like others have mentioned, affordability is highly dependent on location. And as I've said before, it can be misleading comparing the same location with it's past history, because while the physical location might be the same, the market is likely different.
It seems to me like an established area with demand would have trouble supplying more entry level homes. While more homes would help with demand, the new homes themselves would command a premium on existing entry level homes. Say an existing entry level home in town was built in the '60's and is 1200 sq. ft.. So you build more 1200 sq. ft. homes. They are still going to cost more. If a buyer has to choose between a 60's home and a brand new home, they are going for the new home. It's new, has 60 years of advancements, and is likely in a newer, nicer neighborhood. Around me, new homes usually cost more than existing, driving up the prices of existing, even with the added supply. To try to offset this, new homes are on smaller and smaller lots, to the point where it's tough to distinguish between an individual house and a townhome. It's like a dog chasing it's tail. It appears that if you are in a desirable location, rising house prices just comes with the territory. If you want more affordable, you need to go to those places with less demand.
In reply to Boost_Crazy :
And there is generally a reason for that lower demand. I have a cousin that bought her first home in Detroit for ~$25k (not a typo) less than 10 years ago.
While desirability is different for everybody, it's also a balancing act. Living some place cheap that makes you miserable is not inherently better or worse than living some place expensive that makes you happy. There are certainly some advantages to being someone who desires the 'undesirable', but it's not reasonable to judge all by that one mold.
In my cousin's case, it was a great place to do her trauma surgeon residency, yet I doubt many here would make the same choice for themselves or their families even at that price.
In reply to Driven5 :
About 10 years ago the city of Detroit was offering blocks of 100 houses for $10,000. Yep. $100 per house. I should have bought a few blocks...
Detroit is probably not a good example of anything.
In reply to SV reX :
Most major cities have areas that aren't affluent. Usually in there are some homes that are vacant trouble makers. Way behind in taxes and a constant source of trouble.
Very often the cities make extremely good deals for owner /occupants on those properties. Sell it for $1 Or some nominal way below market price.
That or turn them over to habitats for humanity. Who will refurbish it , bringing it up to code and making it a pleasant place for someone to live.
In reply to frenchyd :
That wasn't the case in Detroit. Detroit was an absolutey extreme example.
There were developed sections of Detroit that were being offered as urban gardens because they had no other use for a while.
Its not like any other city.
In reply to SV reX :
I'm aware of Detroit. Actually some of the southern Parts of Chicago are almost as bad.
But even Palatine up North of Chicago would put up a few houses periodically. ( and that's a very decent suburb.)
Like I said typically the city first offered them to police/ firemen/ nurses/ EMT's /teachers etc. ( because their starting wages typically weren't high enough to live in those communities).
This thread is hitting especially hard currently.
Job just offered me a significant pay bump if I'll relocate to Seattle. Both housing and rent options would eat up the pay bump (and then some). Seriously considering a tiny house for a year or two if I can find land to put it on
calteg said:This thread is hitting especially hard currently.
Job just offered me a significant pay bump if I'll relocate to Seattle. Both housing and rent options would eat up the pay bump (and then some). Seriously considering a tiny house for a year or two if I can find land to put it on
The idea of Seattle is cool, but the idea of moving to have less overall purchasing power is not.
Is this a scenario where, if you say no you might as well look for a different job because the company will never offer anything again?
calteg said:This thread is hitting especially hard currently.
Job just offered me a significant pay bump if I'll relocate to Seattle. Both housing and rent options would eat up the pay bump (and then some). Seriously considering a tiny house for a year or two if I can find land to put it on
Funny, most companies are evacuating Seattle like crazy. It's become a pretty big dump.
Boost_Crazy said:Like others have mentioned, affordability is highly dependent on location. And as I've said before, it can be misleading comparing the same location with it's past history, because while the physical location might be the same, the market is likely different.
It seems to me like an established area with demand would have trouble supplying more entry level homes. While more homes would help with demand, the new homes themselves would command a premium on existing entry level homes. Say an existing entry level home in town was built in the '60's and is 1200 sq. ft.. So you build more 1200 sq. ft. homes. They are still going to cost more. If a buyer has to choose between a 60's home and a brand new home, they are going for the new home. It's new, has 60 years of advancements, and is likely in a newer, nicer neighborhood.
Not always. I own a house in Dallas that is 1,000 square feet that was built in 1954. You can get to Downtown Dallas from there in 20 minutes. Or you can buy a bigger brand new house with all the goodies far out in the suburbs and spend two hours a day driving to your office through some really nasty traffic.
The prices for these 1.000 square foot homes are now pushing $300,000 if you can find one for sale, but most of the time you can't. I get three calls a week from realtors.
iansane said:calteg said:This thread is hitting especially hard currently.
Job just offered me a significant pay bump if I'll relocate to Seattle. Both housing and rent options would eat up the pay bump (and then some). Seriously considering a tiny house for a year or two if I can find land to put it on
Funny, most companies are evacuating Seattle like crazy. It's become a pretty big dump.
Are they actually moving, or just moving HQ?
For example, Oracle moved HQ to Austin at the end of 2020 for tax purposes. But the Redwood campus is still massive and houses nearly 10k employees.
In reply to iansane :
From what I hear, the real estate is still absurd in Seattle while the town falls apart around it. If you are planning on moving there, be very careful where you move. Expensive real estate does not guarantee a good neighborhood, especially in regards to anything near downtown. Also of note also is that Washing now has the most expensive gasoline in the nation (yes, more than CA or HI).
In reply to calteg :
Where, more specifically, in Seattle or the Seattle area is the facility located? Housing is most expensive in the central Seattle-Bellevue belt line, and decreases as you move North or South from there. But if that's where your job is physically located, your commute also gets progressively worse as you do so.
aircooled said:In reply to iansane :
From what I hear, the real estate is still absurd in Seattle while the town falls apart around it. If you are planning on moving there, be very careful where you move. Expensive real estate does not guarantee a good neighborhood, especially in regards to anything near downtown. Also of note also is that Washing now has the most expensive gasoline in the nation (yes, more than CA or HI).
Why do you think that is? I'm asking because I don't know.
Has the state recently increased the gas tax?
Have local refineries been shut down?
Is there more demand than supply?
While the temptation is to blame the politicians, heck they are easy targets. But unless the states has tax has increased it's not them.
Refineries shut down? Who controls them? Oil companies?
Or is it so few gas stations they can charge whatever they want?
In reply to frenchyd :
Oh, it's definitely the politicians. They recently implemented some sort of carbon offset fee. Remember though, IT'S NOT A TAX! (it's a game they play in CA also).
I cannot find an article specifically on the outcome, but this one before it was implemented is rather funny. I guess it was just super hard to figure out what the result would be (uhh yeah...)
We can VERIFY, no, there is not a new gas tax in Washington state. However, companies that emit greenhouse gases may need to pay a new carbon emissions fee.
Some argue that the new fee will hurt consumers, as they say, the companies who have to pay the carbon fees will pass the extra cost onto consumers at the gas pump.
The Washington State Department of Ecology says since the law has not yet taken effect, it is unclear what the impact will be. Also, how much it will cost drivers is going to depend on many factors and is yet to be seen.
In reply to aircooled :
So the state has tax is higher now than before?
How much higher?
46 cents.
But it's not a tax it's a fee. The reason they make them fees in CA is because tax increases have to be voted on by the public, I am guessing they have a similar law in WA?
The fee apparently is on the oil companies. For some reason they could not predict they would just past the cost on to the consumers. Well, at least now they can blame the oil companies and not the legislators who imposed the fee!
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