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How hard is inflation going to hit, or has hit?

Motorcharge said:
They really skipped right on over the largest hurdle for buying a home, the down payment. It's a hell of a lot harder to save 20% of the purchase when 20% is what a house used to cost.
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And if that's not a big enough hurdle, My 60+ year old friend just lost buying his retirement lake house to someone willing to pay cash. He has every advantage someone starting out doesn't and he still couldn't close the deal.
 
Motorcharge said:
They really skipped right on over the largest hurdle for buying a home, the down payment. It's a hell of a lot harder to save 20% of the purchase when 20% is what a house used to cost.
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FHA is still a thing, isn't it? 3% down?
 
rockota said:
FHA is still a thing, isn't it? 3% down?
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There's still options like that, but it's very difficult to use those options in a lot of markets due to people paying cash. Also have the catch 22 of how much more the mortgage is plus PMI. Average house around here is $350-400k for even an old 1000 sq ft rancher on a small lot.

Say $350k for argument sake. Current interest rate, taxes, with 20% down at $70k the mortgage is already $2300/m. You drop that down to 3% down, add in average PMI and it's $2900 a month.
 
rockota said:
FHA is still a thing, isn't it? 3% down?
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Yeah, If you want PMI. FHA is great, but it's one of the problems causing stupid home prices. It's increasing the amount of people who qualify for a house and increasing demand.

Motorcharge said:
They really skipped right on over the largest hurdle for buying a home, the down payment. It's a hell of a lot harder to save 20% of the purchase when 20% is what a house used to cost.
Click to expand...
I mean, its not like the cost of living has skyrocketed, wages have stagnated, and HR's are retiring well paid jobs and underpaying new hires. It's defiantly avocados.

Neat chart anyone can look up on fred. Disposable Personal Income VS REAL Disposable Personal Income.

Something.jpg
 
Motorcharge said:
There's still options like that, but it's very difficult to use those options in a lot of markets due to people paying cash. Also have the catch 22 of how much more the mortgage is plus PMI. Average house around here is $350-400k for even an old 1000 sq ft rancher on a small lot.

Say $350k for argument sake. Current interest rate, taxes, with 20% down at $70k the mortgage is already $2300/m. You drop that down to 3% down, add in average PMI and it's $2900 a month.
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Same in the 90's when I bought my first house via FHA. House was 2.5x more than I made, FHA ARM @ 6.5%... had to have a roommate to pay the mortgage.
 
bad zuki said:
Yeah, If you want PMI. FHA is great, but it's one of the problems causing stupid home prices. It's increasing the amount of people who qualify for a house and increasing demand.
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FHA has been around for decades.... not sure how that's increasing demand now.
 
rockota said:
Same in the 90's when I bought my first house via FHA. House was 2.5x more than I made, FHA ARM @ 6.5%... had to have a roommate to pay the mortgage.
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You aren’t allowed to rent part of the house out under FHA. Unless that’s a Vhda only requirement. I wasn’t allowed to have roommates with that option.
 
rockota said:
Same in the 90's when I bought my first house via FHA. House was 2.5x more than I made, FHA ARM @ 6.5%... had to have a roommate to pay the mortgage.
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I make basically the median household income for the area and average houses are still 5x+ what I make.

That said, I also live in what's currently (or was recently) the worst real estate market in the country.
 
bad zuki said:
You aren’t allowed to rent part of the house out under FHA. Unless that’s a Vhda only requirement. I wasn’t allowed to have roommates with that option.
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That might be VHDA, they have a lot of really obscure requirements for whatever reason.
 
Motorcharge said:
They really skipped right on over the largest hurdle for buying a home, the down payment. It's a hell of a lot harder to save 20% of the purchase when 20% is what a house used to cost.
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Nah, that's only in popular areas.

One can still by a starter home in this area for under $100k.

www.zillow.com

109 6th St NW, Austin, MN 55912 | Zillow

109 6th St NW, Austin MN, is a Single Family home that contains 1020 sq ft and was built in 1924.It contains 3 bedrooms and 1 bathroom.This home last sold for $98,000 in November 2024. The Rent Zestimate for this Single Family is $1,277/mo, which has increased by $1,277/mo in the last 30 days.
www.zillow.com www.zillow.com

DP would be $19k.

I see no difference in this home than what the boomers were buying. You're not gonna get a 4/2 on an acre in an HOA for that. Its a difference in wants and needs.
 
DRTDEVL said:
Nah, that's only in popular areas.

One can still by a starter home in this area for under $100k.

www.zillow.com

109 6th St NW, Austin, MN 55912 | Zillow

109 6th St NW, Austin MN, is a Single Family home that contains 1020 sq ft and was built in 1924.It contains 3 bedrooms and 1 bathroom.This home last sold for $98,000 in November 2024. The Rent Zestimate for this Single Family is $1,277/mo, which has increased by $1,277/mo in the last 30 days.
www.zillow.com www.zillow.com

DP would be $19k.

I see no difference in this home than what the boomers were buying. You're not gonna get a 4/2 on an acre in an HOA for that. Its a difference in wants and needs.
Click to expand...

... dayummm, they don't know what they gots ... it's only a couple of blocks from the Spam Museum
 
bad zuki said:
You aren’t allowed to rent part of the house out under FHA. Unless that’s a Vhda only requirement. I wasn’t allowed to have roommates with that option.
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never heard of that before.

And how would they know? :confused:
 
DRTDEVL said:
Nah, that's only in popular areas.

One can still by a starter home in this area for under $100k.

www.zillow.com

109 6th St NW, Austin, MN 55912 | Zillow

109 6th St NW, Austin MN, is a Single Family home that contains 1020 sq ft and was built in 1924.It contains 3 bedrooms and 1 bathroom.This home last sold for $98,000 in November 2024. The Rent Zestimate for this Single Family is $1,277/mo, which has increased by $1,277/mo in the last 30 days.
www.zillow.com www.zillow.com

DP would be $19k.

I see no difference in this home than what the boomers were buying. You're not gonna get a 4/2 on an acre in an HOA for that. Its a difference in wants and needs.
Click to expand...
Obviously house prices are cheaper in bumfuck nowhere in the midwest, but it doesn't really matter if I can't get a job in my field anywhere near there. That same house, even in shitty areas here is going to be 3x what that costs. My idea of an average starter home is the same as what you're posting, the prices here really just are that much more. It would be a 2 hour one way commute to get find something even double what that house costs.

For reference, my mom's house is like 1190 sq ft, 3 br 1.5 bath basic 1960s rancher. Bought it in 2004ish for $80k. House across the street from her is basically the same thing and sold last year for $500k cash to an out of state buyer. Same thing with the house next door and now it rents for $3k a month. Decent schools but other than that its in a fairly shitty area and definitely one of the cheapest neighborhoods in the area.
 
DRTDEVL said:
Nah, that's only in popular areas.

One can still by a starter home in this area for under $100k.

www.zillow.com

109 6th St NW, Austin, MN 55912 | Zillow

109 6th St NW, Austin MN, is a Single Family home that contains 1020 sq ft and was built in 1924.It contains 3 bedrooms and 1 bathroom.This home last sold for $98,000 in November 2024. The Rent Zestimate for this Single Family is $1,277/mo, which has increased by $1,277/mo in the last 30 days.
www.zillow.com www.zillow.com

DP would be $19k.

I see no difference in this home than what the boomers were buying. You're not gonna get a 4/2 on an acre in an HOA for that. Its a difference in wants and needs.
Click to expand...
thats nicer than my first home i bought in 1989.
 
Part of the problem here is builders don’t build 1000 to 1200 square foot homes anymore. They can’t afford to. The price of building lots forces them to build larger houses to get the best return on investment. I built our first home in 1978 for $40,000 lot included. I was making $9.00 an hour at the time. First time buyers now without a doubt face huge obstacles including competition from blackrock type companies who swoop in with cash offers that sellers aren’t going to turn down. It’s a completely fucked situation for young buyers that frustrates me to no end because my kids aren’t able to have the same opportunities as I had! :mad3:
 
Motorcharge said:
Obviously house prices are cheaper in bumfuck nowhere in the midwest, but it doesn't really matter if I can't get a job in my field anywhere near there. That same house, even in shitty areas here is going to be 3x what that costs. My idea of an average starter home is the same as what you're posting, the prices here really just are that much more. It would be a 2 hour one way commute to get find something even double what that house costs.

For reference, my mom's house is like 1190 sq ft, 3 br 1.5 bath basic 1960s rancher. Bought it in 2004ish for $80k. House across the street from her is basically the same thing and sold last year for $500k cash to an out of state buyer. Same thing with the house next door and now it rents for $3k a month. Decent schools but other than that its in a fairly shitty area and definitely one of the cheapest neighborhoods in the area.
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What is your field?
 
DRTDEVL said:
Nah, that's only in popular areas.

One can still by a starter home in this area for under $100k.

www.zillow.com

109 6th St NW, Austin, MN 55912 | Zillow

109 6th St NW, Austin MN, is a Single Family home that contains 1020 sq ft and was built in 1924.It contains 3 bedrooms and 1 bathroom.This home last sold for $98,000 in November 2024. The Rent Zestimate for this Single Family is $1,277/mo, which has increased by $1,277/mo in the last 30 days.
www.zillow.com www.zillow.com

DP would be $19k.

I see no difference in this home than what the boomers were buying. You're not gonna get a 4/2 on an acre in an HOA for that. Its a difference in wants and needs.
Click to expand...
Yeah. A starter townhouse here is $250k here and I bet it is already got a cash offer on it.
 
DRTDEVL said:
What is your field?
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Construction PM, multifamily. Hard to move to a cheaper market when the job relies on growing markets unfortunately. Regardless I'm not really talking about me here, I was speaking generally.

Before I fell into this job I was planning on moving out of state just because the entire area is so fucked when it comes to buying property. Personally, I have no doubt I could find somewhere to move that's more affordable and find a similar job, but I'd give up a great job and opportunity to do it. I stick it out where I am and I'll be making double what I am now within 5 years and I'll be running this company in 5-10 years and making enough that I can buy a house outright and retire early assuming things like WW III, hyperinflation, collapse of the dollar, etc don't happen. What the company does specifically is pretty niche and it would be very difficult to move the company and re-establish it elsewhere. It would be a hell of a risk vs what's basically guaranteed work in the markets we're in.
 
bad zuki said:
Yeah. A starter townhouse here is $250k here and I bet it is already got a cash offer on it.
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I'm 6 miles from town, on a dirt road, and not in a desirable area. A sub 2k sqft house built in the 80s has sold for $350k twice in 2 years near me. In normal times it's a 150-175k house on the best of days.
 
Posted about it in the Park but not in GCC, but I found a house a couple months ago. 1940s rancher on a small lot, little ways out but reasonable commute to work. Needed a facelift, but nothing crazy. Listed for a little under $200k. It wasn't listed 24 hours before it sold for cash. Never even saw it in person, had an appointment booked with the realtor for their first availability. Out of state buyer offered cash site unseen.

Pretty much anything sub $300k in central VA that's the case unless the land is worthless for whatever reason. Hell my bosses million dollar property he sold a couple months ago sold for cash in like 2 weeks and it's already being flipped by the people who bought it.
 
Motorcharge said:
Construction PM, multifamily. Hard to move to a cheaper market when the job relies on growing markets unfortunately. Regardless I'm not really talking about me here, I was speaking generally.

Before I fell into this job I was planning on moving out of state just because the entire area is so fucked when it comes to buying property. Personally, I have no doubt I could find somewhere to move that's more affordable and find a similar job, but I'd give up a great job and opportunity to do it. I stick it out where I am and I'll be making double what I am now within 5 years and I'll be running this company in 5-10 years and making enough that I can buy a house outright and retire early assuming things like WW III, hyperinflation, collapse of the dollar, etc don't happen. What the company does specifically is pretty niche and it would be very difficult to move the company and re-establish it elsewhere. It would be a hell of a risk vs what's basically guaranteed work in the markets we're in.
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Plenty of PM jobs available in Rochester, MN... only 35 miles away.

The winter commutes bring our values down, and I don't mind one bit.:flipoff2:
 
Found out recently these cash buyers are using their 401k to borrow from to do so, then scramble to get a mortgage after the closing to get the 401k paid back in the allotted time. Think the number was 3 months?
 
posford said:
Found out recently these cash buyers are using their 401k to borrow from to do so, then scramble to get a mortgage after the closing to get the 401k paid back in the allotted time. Think the number was 3 months?
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Kinda smart


I've worked with a handful of guys who had enough in their 401k to buy or pay off a house, but didn't or wouldn't. Sometimes still paying higher interest, and or PMI.
 
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