- cross-posted to:
- housing_bubble_2
- cross-posted to:
- housing_bubble_2
My salary didn’t change at all, but homes went up 82%. The money I saved for a down payment and my salary no longer are good enough for this home and many others. This ain’t even a “good” home either. It was a 200k meh average ok home before. Now it’s simply unaffordable
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You just need to stop watching Netflix and buying avocado toast.
At least that’s what old people say anyway.
Can confirme. I stopped drinking Starbucks and now I own a 50 acre plot with a 6 bedroom house on it. If only I would have listened to their Facebook comments sooner, I could have afforded that private jet too. Edit: Apparently sarcasm is lost on a few. So for explicitness - /s
With the Star bucks prices you might as well by a house. Damn they are expensive. People spend like $10 on coffee
I honestly just started going to my own local coffee joint. What used to be expensive for something like a cappuccino (like 7 bucks) is now cheaper than starbucks. Plus I help a small business.
Assuming you spend $10 on avocado toast every day, as well as $75 on eating out for every meal, $20 for Starbucks, and ALSO assuming you have $150 worth of monthly subscriptions:
It will take you 25 years to save one million dollars. That’s assuming you never get sick, never lose a job, never need to buy a car or have major repairs, or basically any kind of surprise expense or setback that could wipe out savings.
To be the richest person on earth, you would need to save that money every year for over 6 MILLION YEARS
Not to devalue your point, but if you truly were spending (10 + 3*75 + 20)*30 + 150 per month (so a total of 7800 USD) and you invest it in an index fund getting back 5%, you’ll have your million in 10 years. 8 years at 10% which is the long-term growth rate of DJIA and S&P 500.
You’ll still never be the richest person in the world, but if you truly were burning away that much money, you could make decent dough just from investing it passively. In 30 years you’d have like 15 million, more than enough to retire.
Now the only real problem is that nearly nobody is actually burning that much cash and the “stop eating avocado toast” suggestions are indeed stupid af.
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Private equity is already gobbling up the houses. Boomers are cashing in to finance extravagant retirement. Those who are not, are leaving it to their children who will then sell to private equity groups.
Eventually supply will catch up with demand which will supress rent (if we do something about the price fixing) and it will no longer be a viable investment. They’re probably losing a lot to management costs and capital expenses already.
if we do something about the price fixing
Narrator voice: they didnt
Single-family rental is also a huge thing now.
I work in municipal development, and since 2021, 100% of single-family subdivision developments that have approached the city have been for rental-only neighborhoods.
And they want to put all the homes on a single shared commercial water meter on a single piece of property instead of extending public lines, so they can’t even be converted later without massive infrastructure projects and replatting.
Eventually supply will catch up with demand
Not if NIMBYs have their way. We have a MASSIVE supply problem already, and it’s getting worse.
Where I am it’s more profitable to let it sit empty and make a Tax write of than lowering the asking rent.
Not exactly a good business strategy. You can deduct the taxes, insurance, management costs, but you have to amoratize depreciation of the building over 28 years. Not to mention that an empty house is going to start developing problems fairly quickly.
Is this one of the areas where corps are buying up a shitload of real estate?
I believe it’s on earth, yes.
My moon base is not gaining ANY land value…
If it’s on Zillow then yes. The trick is to find houses that are not on MLS/Zillow…but realistically there are none. GL! We got ours wnd in one year it went up 40%in a year.
Also in my area that house is a steal and would have offers before it hit Zillow.
At only 82% I’m going to say no.
A house in Austin
2018: $275,000
2022: $725,000Those are actual numbers from East Austin. I believe the 2024 market rate is $625,000 but it hasn’t changed hands again so I can’t say for certain.
And conservative Texans keep laughing that californians are moving to Texas because “They hate the blue politics”, never guessing that they would bring their blue politics and money with them, driving up land value. Definitely not saying that they’re bad, but that it’s ironic that they didn’t think through the consequences
The people fleeing California for Texas aren’t people who love California and its politics.
They’re mostly Republicans, and they’re making Texas more red AND increasing home prices.
but that it’s ironic that they didn’t think through the consequences
And what part of that consequence is the native Texan’s fault? If anything it simply proves their point.
I didn’t say fault anywhere. I said it was ironic. It’s ironic that they laughed at Californians moving to TX, talked about how much better TX was better than CA, never realizing that the location had nothing to do with the problems, but rather capitalism and population growth. It’s ironic that the things they said Texas didn’t have are now the things Texas is directly facing.
For it to be ironic, there would have to be some sense of Texans doing it to themselves. People coming in from another state is not a Texan’s fault. I don’t see the “irony” here.
I like the utility feed hanging off the front of the house going straight through the roof and blocking them from installing the other fake shutter. I wonder what other construction horrors lurk inside.
My lucky ass bought a house in late 2019. I’m happy I’m making money on it but this doesn’t seem healthy
You’re only making money if you downsize, move somewhere cheaper, or switch back to renting. If you move and all the other houses have gone up, then you just end up having to sink any gained equity into affording your new place. Rising prices really only help developers, realtors, and REIT’s.
Housing price increases are actively harmful to those who want to upgrade, since it increases the incremental cost of upgrading.
Housing Taxes also increase.
In California the property tax can only increase a maximum of 2% per year, so at least there’s that. (this law was put in place so that older people don’t get priced out of their house due to house values going up a lot)
Exactly.
Right but you then control the appreciation on a much larger asset. In terms of pure net worth and net present value, trading up is a huge gain even if it doesn’t generate more short term liquidity.
You can also rent out the smaller place and get both cash flow and NPV upgrade.
It is theur business to make money off it.
I am not sure how people living in house got convinced that they are now investors though
You’re right. It’s not healthy to profit so much from corporations greed.
Therefore, it’s only right that you sell me your house for $1
I, too, would like a house for $1 please
Same here. And my stupid ass father in-law spread the rumor that we wanted to sell and we instantly had several offers. But we like it here.
We got in on on our house in early 2016 and the price of real estate in our area increased by 20% while we were in escrow.
Our house has more than doubled in price since then but if we had fallen out of escrow, we would not have been able to buy anything anywhere near our jobs/preferred city (and my partner and I have a combined income north of 150k/year).
Shit is crazy these days
With you there. Didn’t realize how lucky we were, and honestly thought about waiting just one more year on multiple occasions. What’s done is done, all I can do now is not feel guilty I got in, but rather just make the most of it. Pay off as quickly as I can, and vote to help others afford houses too.
Well you are set so luckily it doesn’t affect you much in theory. If it crashes so be it as you probably aren’t in a hurry to move.
Time to eat the rich
Best hurry … Ozempic is destroying the caloric benefit
No rich person is living in a 325k ranch house.
My man let me introduce you to globalism and people living in refugee camps in South Sudan.
$325K is more money than most of the people in the world for all of history would see in a lifetime.
Wake up to your riches.
Why are you going to sudan, you can find a homeless person in any us city… Whats your point?
Tbh this is more than mildly infuriating…
That you don’t understand the realestate market? Or you didn’t know this has been projected for a decade now from millennials getting as old as the avg age of first time home buyers and being the largest % share of the US population creating more demand than available supply?
More like that they probably are too young to have bought a home earlier. All people in their 20s (and I think we make a large percentage of Lemmy users) simply have to cope and buy some overpriced home regardless.
To add to that, we also the only generation who lived thru the only housing bubble giving a hesitation to the concept that realestate has always been the safest investment. They’re buying high but are able to control most of not all extrinsic variables that could keep them from selling higher than they purchased. There aren’t many ways to invest money that you 100% either control the out come of or can insure what you cant control. The exceptions like community wide property value loss are still specific to the properties location that you decide before purchase. I know there are cases where your research before buying can fuck you but it’s still more control than investing in the market where everything about the value of your asset is out of your hands. All you can control is how it’s value is managed.
82%, feel lucky. I bought my house in 2015 for $85k. Last assessment was almost $300k
When the stock market doesn’t perform as much as a fundamental need
I keep thinking that it would be a great time to sell but then I realize there isn’t a lot of other worth while places to go.
Unless you are ready to move to dead mans land
This is everywhere. I’ve been looking for houses for 3 months in NW Ohio. 300k is the new 150k, and all the houses are beat to shit on the inside needing 50k just to make them passable inside because nobody takes care of them.
I wonder what proportion of it is also due to people fleeing 1 million + average house markets during the pandemic work from home wave. Not saying this about you, but it makes me think it’s funny how the common refrain of “Don’t like it? Just move” is often uttered by NIMBYs.
I think a big part of it is we’re on the other side of the peak of all houses going for 100k over asking regardless of condition. A number of houses have that grey vinyl flooring installed in a bunch of rooms that’s as cheap as it is ugly.
grey vinyl flooring
I hate that shit even more than I hated the fake wood paneling and shag carpet of the '70s. I bought a house last year that had the grey vinyl flooring in the living room and I’ve tried my hardest to fuck it up during the renovation so I have to replace it, but unfortunately it holds up to extreme abuse pretty well.
A former housemate did so much water damage with a portable A/C unit, that not even two months ago I had to rip up the whisper walk, and the original wooden flooring (house was built in the '30s) all the way down to the subfloor. Replacing the whisper walk would have been $3000 for just that room. We managed to find vinyl flooring that matched the rest of the flooring in the house and redid the floor for $1500.
My point is that you can get nice vinyl flooring, and it’s not terribly expensive to replace/ install.
Heh, according to the guy who sold me the house, he had to put the grey vinyl flooring in because of water damage from a portable AC unit.
Friend of mine was saving up for a house 5 years ago. Prices have gone up almost 150%
Yeah that was me too… I FINALLY got to the point where I could realistically start looking, got the pre-approval and everything just after COVID started… People had already starting WFH and moving away from where they worked and investment companies kept buying and now I’m still living in someone else’s garage because prices went through the roof pretty much as I was looking…
Of course once you mention WFH everyone gets defensive and claims this was a trend, but those charts are the same everywhere. Houses in 2018-19 were often less than half of what they cost now…
WFH is a logical thing to imagine, but there’s a simpler trend that can be seen by looking at two graphs:
https://fred.stlouisfed.org/series/M2SL
https://fred.stlouisfed.org/series/MSPUS
“Please don’t melt the economy” printing press fired up in 2020 and real estate investors seemed to get plenty of that cash. While inflation didn’t quite match the M2 injection, anything “investment” like saw that bump. The M2 injection was enough to save the stock market, but housing, which did not see the same crash as stocks, got the same boost.
This is why, more than ever, people see that individuals almost don’t get to participate and big companies are instead buying the stuff and maybe letting people rent them if they feel so inclined. The big companies got the boon of the M2 and most individuals got a modest bump by comparison.
printing press fired up in 2020 and real estate investors seemed to get plenty of that cash.
Maybe I’m just ignorant, but in a just world that should have never been allowed to happen… I’m sure our politicians had nothingggg to do with that “oversight.” :/
Thanks for the links!
Generally speaking, one would have hoped for a better solution. To be fair though, we faced an unprecedented scenario in 2020, and for many of the indicators, the closest to precedent that we ever had was the Great Depression. So they did manage to dump truck enough money into the market to patch up the catastrophic drop of the stock market, and provide enough to keep the every day economy vaguely functional. Unfortunately the ‘fix’ was still very ‘trickle down’ style and ended up with an enduring imbalance favoring those already wealthy rather than some alternative that might have left folks on a level playing field.
Only 37 more years until he has that down payment.
Being able to buy a $200,000 house in the town I live in would change my life so much.
This won’t change as long as property ownership and property renting is unified. There’s just to much of a business incentive from renting, even if it takes decades to make it back. Worst that can happen is that it can sell it back to a market that criminalizes homelessness instead of treating it or its causes.
My janky duct tape together house I bought in 2010, that was built in '58 was 98k. In 12 years I sold it at 280k, with it still technically being out of code. My house was the cheapest sold in the neighborhood, some selling for 320k. It’s insane.
Not that this is “ok” but it’s why “buy whatever you can as soon as you can” is good advice. If you’d put whatever you had into a shitty condo four years ago, and kept saving at the same rate, you’d likely be in good position to trade up soon.
I see a lot of people I know end up in the same position because they’ve been waiting for either the exact right circumstances or for prices to “crash.” All the people i know who started with anything they could afford now have a huge amount of equity in nice homes. The difference is real and primarily about timing more than income or location.
I think you misunderstand. He didn’t have the financial wherewithal to acquire a home of any sort because a down payment was expected even of the shitty condo. He didn’t have the money then he doesn’t have the money now he’s on the same shitty treadmill that the rest of us in the permanent underclass are.
I bought 5 years ago when it was still reasonable. I have a great rate on a great house that has increased by about 50% since I bought it.
I don’t want to, because this is just about the perfect size house for us in a great location, but I can’t really “trade up” as the interest rates are through the roof and everything is more expensive too.
If your circumstances change, you can make a lateral move and invest the net profit in an index fund.
