State of housing costs in the US. Where does it end?

[BigBurt]

I am 43 and a selfish irresponsible 43 at that. I’ve made 6 figures for a long time. I don’t own a home currently because I have poor taste in women and have a couple divorces under my belt. I have owned two homes before, I’m just in between homes at the moment living in a rental. I race race cars so I have a revolving money pit that eats up all my income. I have put into savings 25K to 30K a year when I’m not blowing all that money doing fun stuff but currently I have a contractual obligation to fulfill so there’s basically a hole poked in the bottom of my bank account. 6 weeks ago I had a crash and with the biggest race I’ve ever attempted coming up I had to spend what for most would be a sickening amount of money on repairs to get back on my wheels.

I’ll get it back. I’m just going to have to do it differently now. I was on track to have my second house paid off by the time I was 40 when my first divorce set me back. Then my second marriage set me up to lose the house entirely. One might wonder if I regret wasting my money on racing and the answer is no, not at all. The only bad decisions I’ve ever made are trusting women. I don’t intend to make that mistake anymore.

Salute, so much sounds familiar there lol

 

[east_beast]

When I sold my previous house this spring, they wrote an extra 10k into offer to be rolled in as the down payment. I didn't care, the extra commissions were negligible, but I realized that it would need to appraise 10k higher, and I started to sweat that, and wound up polishing some things I didn't intend to just to make appraisal.

Buyer was a young guy, good income, no down payment money

How does that work? I've had to show proof of the cash in the bank for the down payment on every house I've ever bought.

 

[Sandy Johnson]

they wrote an extra 10k into offer to be rolled in as the down payment.

How does that work? I've had to show proof of the cash in the bank for the down payment on every house I've ever bought.

I'm also trying to figure this out. Was it they would pay $10k more, but you would pay the down payment for them??

 

[Clemson13]

Some of that came down to zoning changes with Femar. I'm waiting to see how much they can bribe them for an exemption.



Hey now! I played video games in those classes. English killed me.


Another question to add:
Since wages haven't increased, when will the boomers realize that there aren't as many kids out there to afford the lifestyle houses that they owned and they will take a bath with current interest rates?
Nobody I know is buying these $600k+ houses on the golf course. They have been sitting for 3ish months with a few price cuts.

Contrasting position, I know many Millennials buying those lifestyle houses from 550k-1.5MM.

Not everyone's wages stagnated the last few years. In some fields the pay went WAY up since before the scamdemic even counting for inflation.

 

[Projectjunkie]

How does that work? I've had to show proof of the cash in the bank for the down payment on every house I've ever bought.

I'm also trying to figure this out. Was it they would pay $10k more, but you would pay the down payment for them??

It was in the offer, something along the lines of "seller to pay 10k in closing cost credits"

I was also told it's pretty common right now

The initial offer was at asking price with 10k credited, and I told them to get her fucked. Or maybe 5k off ask, then they responded that the 10k down was really important, so they bumped the offer up and still got their 10k down




Fha by the way

 

[bad zuki]

Contrasting position, I know many Millennials buying those lifestyle houses from 550k-1.5MM.

Oh I totally agree. But I think that the shear volume of large houses vs the low number of wealthy millennials is a huge gap.
Also, It depends on if the houses are near a metropolitan area. Currently you can buy a 100 acre mansion for 1M down the road from my shop. Or a condo in DC for the same price.

 

[east_beast]

It was in the offer, something along the lines of "seller to pay 10k in closing cost credits"

I was also told it's pretty common right now

The initial offer was at asking price with 10k credited, and I told them to get her fucked. Or maybe 5k off ask, then they responded that the 10k down was really important, so they bumped the offer up and still got their 10k down




Fha by the way

Oh, closing costs are different. Seems weird though. Generally closing costs can be rolled into the mortgage which is basically what they'd be doing just with extra steps involved.

 

[dntsdad]

Bullshit... it is part of the solution as is cutting most 'luxury' shit people do. If person don't cut either, a person doesn't have the will to get into a house so fuck them.

JFC, calm down Mr. Bootstrap

Remember when gas was crazy expensive back in 09 or whatever and Obama told everyone to inflate their tires more as part of the solution? You sound like that.

Nobody, including me, said that cutting costs, and especially frivolous costs, isn't "part" of a solution. What I actually said is that cutting frivolous costs, Starbucks in this instance, isn't THE solution any more than inflating tires is a solution to a lack of energy supply. In addition, not everyone even goes to Starbucks and in my kids case, I would bet he has never been there or at least he doesn't frequent it but the point is valid. Although I don't look over his spending habits, I am sure there are things that he could cut to bare bones.

There are fundamental flaws in the housing system in my opinion. I was hoping to have intelligent discussion and hear people's view as to what, if any, they are. Not a bunch of anecdotal instances where someone did this or that but the system as a whole. Whether those issues are foreign or domestic investment, corporate investment and conversion to rentals, housing regulation requirements, zoning, taxes, etc, I am not 100% sure if all or any can be "fixed" and if there is a government solution, a private business solution, etc.

If you, or anyone else, doesn't think that there are any issues and that the housing costs are just what they are and nothing can be done, then fine, state that. Saying the solution is to not get a latte is fucking dumb though and doesn't drive a 400% cost in 8 years, a market that average people have a hard time competing in against corporate investment bodies, etc.

 

[Roc Doc]

My old job was in Folsom and my drive was 60 mins door to door.. most if not all on 'surface' streets. People looked at me like I was nuts until I commented that I had a friend in SF Bay Area that spent 90 mins on a good day to drive 35 miles on 101

I think there are still some deals up here but it takes a different mindset to be up here. I've heard more than a few cases of people saying 'oh Georgetown seems cute/cool'... then they drove up and said too much driving I'll ignore the guys who bought houses at 3000'+ and then sold the next year when they found it snowed a few feet

My buddy lives in El Dorado behind the old Sams, and has been there since the early 90's. He said the drive time is easily doubled to get to downtown. He mostly flys his Mooney, but sometimes has to drive and he said it heinous. He says he's moving out of California...just like he did every one of the 25 years before this one.

 

[east_beast]

JFC, calm down Mr. Bootstrap

Remember when gas was crazy expensive back in 09 or whatever and Obama told everyone to inflate their tires more as part of the solution? You sound like that.

Nobody, including me, said that cutting costs, and especially frivolous costs, isn't "part" of a solution. What I actually said is that cutting frivolous costs, Starbucks in this instance, isn't THE solution any more than inflating tires is a solution to a lack of energy supply. In addition, not everyone even goes to Starbucks and in my kids case, I would bet he has never been there or at least he doesn't frequent it but the point is valid. Although I don't look over his spending habits, I am sure there are things that he could cut to bare bones.

There are fundamental flaws in the housing system in my opinion. I was hoping to have intelligent discussion and hear people's view as to what, if any, they are. Not a bunch of anecdotal instances where someone did this or that but the system as a whole. Whether those issues are foreign or domestic investment, corporate investment and conversion to rentals, housing regulation requirements, zoning, taxes, etc, I am not 100% sure if all or any can be "fixed" and if there is a government solution, a private business solution, etc.

If you, or anyone else, doesn't think that there are any issues and that the housing costs are just what they are and nothing can be done, then fine, state that. Saying the solution is to not get a latte is fucking dumb though and doesn't drive a 400% cost in 8 years, a market that average people have a hard time competing in against corporate investment bodies, etc.

This. Housing costs have doubled while inflation has cut the value of money in half. You need to be making 4x more. Wages haven't come anywhere close to that. It's not about individuals, it's about markets and populations.

 

[dntsdad]

This. Housing costs have doubled while inflation has cut the value of money in half. You need to be making 4x more. Wages haven't come anywhere close to that. It's not about individuals, it's about markets and populations.

This is for sure true.

I am just not convinced that it's JUST an inflation issue.

Investing, supply whether that is from regulation, material costs, zoning, etc., taxes, or any other plethera of issues have to be including IMO.

Again, just wondering if there is a gov solution (although I am mostly never in favor of government getting involved in anything) or what. Everything I just listed in my last statement would in fact require government action whether fed, state, or local.

 

[east_beast]

This is for sure true.

I am just not convinced that it's JUST an inflation issue.

Investing, supply whether that is from regulation, material costs, zoning, etc., taxes, or any other plethera of issues have to be including IMO.

Again, just wondering if there is a gov solution (although I am mostly never in favor of government getting involved in anything) or what. Everything I just listed in my last statement would in fact require government action whether fed, state, or local.

Very few complex issues have single issues causes or solutions. And that's where government fucks up. They always grossly oversimplify things then roll out their "fix" that usually just makes everything worse.

It's like when they try to pretend that homelessness is just a housing issue and ignore the rampant addiction and mental health issues that are huge contributing factors. Those addicts and crazy people are still gonna be addicts and crazy people if you house them. Thata not a solution. They did the same thing causing the subprime mortgage crisis. Simply giving mortgages to people with demonstrated poor financial histories or people who can't afford the payment once the five year arm expires isn't a solution

 

[Sandy Johnson]

Investing, supply whether that is from regulation, material costs, zoning, etc., taxes, or any other plethera of issues have to be including IMO.

Home construction hasn't kept pace with population growth.

Population keeps going up, while during the last big housing market crash, construction dropped off. I don't think we ever recovered from that.

I don't see a government solution to that.

 

[Grnjp92]

This is for sure true.

I am just not convinced that it's JUST an inflation issue.

Investing, supply whether that is from regulation, material costs, zoning, etc., taxes, or any other plethera of issues have to be including IMO.

Again, just wondering if there is a gov solution (although I am mostly never in favor of government getting involved in anything) or what. Everything I just listed in my last statement would in fact require government action whether fed, state, or local.

One thing the gov could do is get rid of alot of the paperwork that adds real money to a job.

 

[zlathim]

They are doing SFH but even more townhomes up and down overland

I see your point. I took Chinden from Franklin to Eagle today. I haven't been on that stretch of road in quite a while, maybe even a couple of years. I saw several large apartment buildings being constructed along that stretch.

 

[rockota]

This. Housing costs have doubled while inflation has cut the value of money in half.

No… these are the same. Prices have not doubled, the value of the dollar has been 1/2’d….

This is also why we have $100k trucks, $1200 phones, $15k beds, etc


Edit: yes, demand is up. And they are only making so much land

 

[east_beast]

No… these are the same. Prices have not doubled, the value of the dollar has been 1/2’d….

This is also why we have $100k trucks, $1200 phones, $15k beds, etc


Edit: yes, demand is up. And they are only making so much land

 

[bad zuki]

No… these are the same. Prices have not doubled, the value of the dollar has been 1/2’d….

This is also why we have $100k trucks, $1200 phones, $15k beds, etc

Also, the amount of technology that has gone into a trucks, phones, and beds has doubled, so it's not a good comparison to housing.
Hell, even I remember when a cutting edge flip phone was $1000. and you got to play snake or make calls on it.

We should have stayed on the gold standard.

 

[east_beast]

Also, the amount of technology that has gone into a trucks, phones, and beds has doubled, so it's not a good comparison to housing.
Hell, even I remember when a cutting edge flip phone was $1000. and you got to play snake or make calls on it.

We should have stayed on the gold standard.

I love when economists scoff at crypto saying the value is based on nothing. I just wanna say, now do fiat currency. They're both basically the same. Both have value because people agree that they have value. At least crypto doesn't have the supply just arbitrarily determined by a government.

 

[Gatorgrizz27]

This is a catch 22 for me too. Government regulation makes me nervous and I know they'd end up fucking it up because ultimately they always work in the interest of their donors and feeding an endless bureaucracy. But these corporations buying up housing as fast as they can are absolutely trying to turn us into a renter society. There will be a significant downturn (possibly a crash) in housing at some point. It feels inevitable. Hell, the corporate outfits snatching stuff up is probably floating the market at the moment. But when the downturn comes they're REALLY gonna be snatching shit up.

Florida has passed a law preventing China and certain other countries from purchasing land here. Their check is a notarized form, I’m not sure what would happen if someone that was a citizen here purchased it in their name with cash from their uncle back home, and funneled him all the rental income.

The really scary thing about BlackRock, etc gobbling up these single family homes is when the next depression actually hits they can come out and say “We love America, and right not Americans are hurting. To give back in support of our communities we are dropping rental rates by 50% for the next 12 months.”

What happens to grandma Susie who owns three rental properties (kept her old house each time they moved), and has only raised the rent 10% over the past 7 years? Her houses sit vacant and eventually she sells them to BlackRock also, as the taxes and insurance eat her alive.

“You will own nothing and be happy.” There is an ulterior motive, as actual real estate investors and developers all want to own multi-family units. BlackRock could just go build their own, but instead they are buying single family homes in neighborhoods…

 

[dntsdad]

Florida has passed a law preventing China and certain other countries from purchasing land here. Their check is a notarized form, I’m not sure what would happen if someone that was a citizen here purchased it in their name with cash from their uncle back home, and funneled him all the rental income.

The really scary thing about BlackRock, etc gobbling up these single family homes is when the next depression actually hits they can come out and say “We love America, and right not Americans are hurting. To give back in support of our communities we are dropping rental rates by 50% for the next 12 months.”

What happens to grandma Susie who owns three rental properties (kept her old house each time they moved), and has only raised the rent 10% over the past 7 years? Her houses sit vacant and eventually she sells them to BlackRock also, as the taxes and insurance eat her alive.

“You will own nothing and be happy.” There is an ulterior motive, as actual real estate investors and developers all want to own multi-family units. BlackRock could just go build their own, but instead they are buying single family homes in neighborhoods…

This is one of the huge drivers of cost increases in both house sales and rent prices IMO.

Not sure what can be done but if the .gov can ban Tik Tok, they could take on this. However, they would probably fuck it up even more. lol

 

[[486]]

Plus, everyone aspires to a different long term plan. Some people worry more about the year over year percent in property value increase and just happily pay the increase in tax burden every year.

My grandparents house has been paid off for like 20+ years. Their tax burden breaks down into more a month than their mortgage was when they were still paying on the house. This shit is unacceptable

I don’t want a nice house in a nice neighborhood with kids walking down the sidewalk to school every day. I don’t care about turning 200k into a fake 400k because I don’t want a mortgage payment that breaks down into thirds of taxes insurance and mortgage. I can get a loan for 300k right now but the taxes and insurance make the monthly payment and utilities be over 50% of my income. Fawk that. What I aspire to is [486] or Projectjunkie homes.

I bought my shitty house and a few years later, the property value doubled, then the next year it doubled again
apparently they've only gotta take the purchase price into account for three years
Really regretting my... basement shenanigans (as opposed to a really nice 5th wheel trailer)


it's an interesting game, the only winning move is not to play
how about a game of chess?

 

[Clemson13]

it's an interesting game, the only winning move is not to play
how about a game of chess?

There are at least 2 winning moves to the game.

Way 1: Dont play the game
Way 2: Be the one who is hated for renting out properties, buying assets, and investing. Raising those rents to levels your tenants can barely afford to maximize profit. Sure your primary residency is a PITA and not a winner, but who cares when all the other income streams are healthy.

 

[[486]]

Way 2: Be the one who is hated for renting out properties, buying assets, and investing. Raising those rents to levels your tenants can barely afford to maximize profit. Sure your primary residency is a PITA and not a winner, but who cares when all the other income streams are healthy.

that doesn't help when you look at your tax bill
if anything it makes it worse when you look at your tax bill

 

[DannyK]

Home construction hasn't kept pace with population growth.

Population keeps going up, while during the last big housing market crash, construction dropped off. I don't think we ever recovered from that.

I don't see a government solution to that.

FACT!

Housing construction has not kept pace with population growth in the USA since the great recession.

I'm an engineer, not a business person, so i have no idea what the government could do to help. They may just cause another problem if they tried to intervene.

 

[JR4X]

FACT!

Housing construction has not kept pace with population growth in the USA since the great recession.

I'm an engineer, not a business person, so i have no idea what the government could do to help. They may just cause another problem if they tried to intervene.

There is nothing the government gets involved in that they don’t make the problem worse. Half of it is Karen’s who want the government to put a stop to one thing or another and those Karen’s empower the government to be pieces of shit. Some of those Karen’s are on this board.

 

[Projectjunkie]

I guess the churched up term is "sellers assist"

Everybody loves it because it brings up comps commissions and taxes, and it gets spread out over 360 easy payments

 

[arse_sidewards]

Some of those Karen’s are on this board.

All those people chest thumping about how their neighborhood is great because the zoning doesn't allow X or Y...

 

[Mr.Ratbastard]

It may have been mentioned already but the .gov response to covid also fucked everything up. When the cost to build almost tripled we were fucked. There is zero chance builders would ever let the price per sq ft drop anywhere near previous levels after seeing what people were willing to pay. Of course the banks had to play along too.

 

[JR4X]

It may have been mentioned already but the .gov response to covid also fucked everything up. When the cost to build almost tripled we were fucked. There is zero chance builders would ever let the price per sq ft drop anywhere near previous levels after seeing what people were willing to pay. Of course the banks had to play along too.

That will correct in time. It’s just gonna be a painful dip for a while. Nobody is in a hurry to pay the inflated interest, insurance and taxes on post Covid home prices. The banks are struggling to find people to take loans. I’m getting loan offers hurled at me because I got myself pre approved to go buy something. Interest rate isn’t what put me off. I didn’t buy anything because I’m not over paying for the stuff that was currently for sale. Now the mortgage companies I was working with are sending me home listings as if they were realtors trying to get me to buy something, anything. I am seeing housing prices dropping so I’m going to wait. I’ve got nothing but time at this point.