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The average american home price has gotten out of hand
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05-24-2020, 01:00 PM | #45 | |
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Another way to think about it is if you want a basic A to B car with air conditioning, good gas mileage, low (relative) maintenance costs, and good reliability, how much would such a car cost in 1970 versus right now? Right now I'm basically describing a used Honda Civic or Toyota Corolla. It's hard to do this comparison directly because suppose the typical Econo-box that I'm describing lasted, on average, 100,000 miles before becoming prohibitively expensive to fix (and therefore unusable). Now suppose a 2010 Honda Civic can last till 175,000 miles. It's reasonable then to compare a used 2010 Honda Civic with 75,000 miles to a brand new Econo-box of the 1970s. |
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05-24-2020, 01:02 PM | #46 | ||
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but think about the sole fact that median us income is still around 50k and average transaction price is close to 36k... that seems nuts to me considering w corona; we just saw most people dont have more than 2 mo ths of savings
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05-24-2020, 01:05 PM | #47 | |
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http://www.thepeoplehistory.com/70scars.html I bought my corolla new for like $17-$18k and honestly for a "regular" car I couldn't ask for more. Even has more advanced safety features like lane keep assist, adaptive cruise, blind spot monitoring etc. |
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05-24-2020, 01:06 PM | #48 | |
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05-24-2020, 01:43 PM | #49 |
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I'm not surprised by the TINY HOME movement. If I weren't so set on having elbow room and a small piece of property to hangout when I'm outside, I would even consider one.
It would look great next to my BMW ![]() |
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05-24-2020, 02:09 PM | #50 |
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Maybe - the reason is this?
https://usdebtclock.org/ |
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05-24-2020, 02:25 PM | #51 | |
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Tax incentives for WFH will be portrayed as corporate welfare with no one to pay for it. Low-wage workers who have no choice but to go to a service job see no financial benefit while corporations receive tax benefits. I can hear Pelosi now. Then there’s people like me who already WFH wondering why we aren’t seeing some benefit. Ultimately, if WFH goes anywhere it will be because companies have other cost savings (like rent and lower salaries by telling people they don’t need to commute) and can make it work. Tax incentives alone won’t force the issue. As far as limiting purchasers, doubtful that would happen, but if it does it would reduce new development / supply of the same quality if developers can’t sell at prices they want.
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05-24-2020, 02:38 PM | #52 | ||
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I would argue this would give Pelosi secondary swinging points related to the liberal environmental agenda which goes along with reducing emissions and lowering dependence on foreign oil due to lowered demand... my plan at least attempts to resolve numerous issues that will work for everyone... how one could argue that is beyond me.
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05-24-2020, 02:49 PM | #53 | |
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05-24-2020, 03:12 PM | #54 | |
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05-24-2020, 03:17 PM | #55 | ||
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05-24-2020, 04:08 PM | #56 |
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GenXer what is your housing situation? Are you looking? Already own? Looking to sell? Just making observations on the market?
I’d be more interested in comparing $/ft vs local median household income to that of earlier times. I find it ridiculous when comments are made that someone is financially unstable if you cannot afford housing making $55k/year. That number is significantly different from southern California or NYC vs middle of nowhere Iowa. We make more than that and I still think it’s nuts what you get for your money. Although we may not be looking to max out our pre-approval like most ![]() In my area, a nice home in a nice area comes out to about $190-$200/ft, but the median is closer to $140/ft. I’ll tell you, you do NOT want to live in this town at that price. Median household income is about $50k. |
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05-25-2020, 04:51 AM | #57 |
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05-26-2020, 06:09 AM | #58 | ||||
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I predict with a Dem govt the borders will open, new immigrants will flood in and house prices will sky rocket. There are not many free countries in the world. We are seeing that here in Canada, the ones from Asia are flush with cash making Vancouver the most expensive housing market in North America My advice, see if covid helps push pricing down, it might a little bit and then buy. If you can buy more than one house that is always smart |
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05-26-2020, 06:48 AM | #59 |
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#1 Size. In 1970 avg size was 1500 sq ft vs 2600 sqft in 2017.
#2 Rising household incomes as more wives remain in the workforce. #3 Suburban expansion allowed larger house per lot. #4 Monetary policy from The Federal Reserve artificially reduces the cost of money by lowering mortgage rates. People can spend more money on a house rather than interest. It also encourages large investors (ex REITS) to buy real estate and forces the public to invest in equities which drive up stock prices (See #5) #5 Fiscal policy: Local/State tax policy (Prop 13), Capital Gains Taxes. #6 Globalization. Buyers are competing against an international pool. This pool by being larger will have more individuals willing to pay whatever price. In addition the international pool values multi-generational households and combines* their wealth in order to outbid domestic buyers. *Ex Chinese buyers on West Coast will place large down payments on real estate. The down payments are provided via "gifts" from "relatives" living in Mainland China. It's not uncommon to see gifts totaling $100k-$300k. Of course this is how US dollars come back and are re-invested in the US economy. Not necessarily a bad thing.
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05-26-2020, 06:59 AM | #60 | |
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$205k of debt per taxpayer, or $77k for every citizen regardless of whether they pay taxes. Wow. ![]() |
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05-26-2020, 07:19 AM | #61 |
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Two factors: supply and demand
Supply: - increased supply of financing or credit. Low interest rates and relatively loose terms mean consumers can “afford” high prices - decreased slack in housing inventory. Said another way, the housing market is tight because new home construction has not kept up with population growth. Demand: - babies keep being born every year. This combined with immigration and subtracting out the death rate, means more people need places to live. These three forces create upward support on house prices. The forces described above can be supported with publicly available data, should one care do so. |
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05-26-2020, 08:42 AM | #62 | |
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05-26-2020, 08:47 AM | #63 | |
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05-26-2020, 08:54 AM | #64 | |
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It's out of control because of the stability of the employment market here. Again Fortune 1. Add to that, biotech/pharmaceuticals in MD and IT in the VA area, you have a mix of why people are flocking here. I'm one of the few that can say I'm a native in the area. Born in DC. I've seen this area go through all the changes. I have said to people that when I got my license to drive as a teenager, I could drive around I495 and never touch my brake once. Good luck going a few feet on I495 before having to touch your brake. For many reasons, I can't move out of the area. Would love to relocate to my second home in Delaware but that's not possible. Every time I go out there to get away reminds me of how stressful and crazy it is being in the DC Metro area. |
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05-26-2020, 09:42 PM | #65 |
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The US Federal Reserve just released a lot of fresh data relating to the original post. I don't see prices going down, rather I see them flat to rising in certain markets.
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05-28-2020, 10:10 AM | #66 | |
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