But seriously. Those housing prices! How do you do it?

[Toni]

I live in a college town that is also a working class town for everything that isn’t related to colleges. The vast overwhelming majority of the rental market is geared for students, with many many previously single family homes converted to student housing. The net effect is that young families and newcomers to town are generally forced into apartments rather than their preferred choice of single family dwellings. When we moved here 34 years ago, I think we looked at a total of 4 homes in our price range that were plausibly appropriately large enough for our family and settled on the largest one nearest my husband’s job. We were very very fortunate. It stretched our budget a lot but we only needed one car. I read the community Facebook page and I feel so much sympathy for people without much who are desperate to get out of a crowded apartment or escape a bad relationship who cannot find somewhere else to go. Or new faculty with children or any professional with a family.

At the same time, the student population is declining. I really wish I had the money to purchase some of these ‘student houses’ and rehab them back to single family homes or perhaps duplexes. It would never be profitable but it would be the right thing to do for people and for the town.

 

[Tharmas]

MS Tharmas and I were lucky. We bought our house 28 years ago for a price that today seems unbelievably low. We didn’t buy as an investment but because we loved the house. We had promised each other we would get married as soon as we found a proper house, and this was it. We were married in the house six months after we moved in. We don’t intend to sell it. We hope to die in it and leave it to the kids to sell.

I don’t know what younger folks do today. The house next door to us went on sale a couple of years ago, and it sold before the realtor could get her sign up. It was a young couple who bought it. They thoroughly renovated and enlarged it and then moved out (family reasons – they weren’t intentionally flipping it). I think they were asking close to a million, and another young couple bought it. Where’s all this money coming from?

 

[Tigers!]

. Where’s all this money coming from?

Based upon my daughter's experience in Aust. - 2 good jobs and pray that neither get too ill or lose said jobs.

 

[Toni]

. Where’s all this money coming from?

Based upon my daughter's experience in Aust. - 2 good jobs and pray that neither get too ill or lose said jobs.

Heh, based on my son and his significant other: two good jobs plus a crap ton of student debt (law school = his; hers is 2 masters degrees plus I think undergrad? No idea) = being able to afford or 'afford' about $300K for a house. That is less than half the size of my house and less updated but in a 'cool' location.

 

[TSwizzle]

I live in a college town that is also a working class town for everything that isn’t related to colleges. The vast overwhelming majority of the rental market is geared for students, with many many previously single family homes converted to student housing. The net effect is that young families and newcomers to town are generally forced into apartments rather than their preferred choice of single family dwellings. {snip}

Surely you must realize that this is intentional. Our overlords do not like the suburbs, they don't like us owning cars and driving them, they don't like us taking flights. They want us jammed in to apartments, working within walking/cycling distance, not eating meat and so on.

 

[Hermit]

I live in a college town that is also a working class town for everything that isn’t related to colleges. The vast overwhelming majority of the rental market is geared for students, with many many previously single family homes converted to student housing. The net effect is that young families and newcomers to town are generally forced into apartments rather than their preferred choice of single family dwellings. {snip}

Surely you must realize that this is intentional. Our overlords do not like the suburbs, they don't like us owning cars and driving them, they don't like us taking flights. They want us jammed in to apartments, working within walking/cycling distance, not eating meat and so on.

Yeah, those shapeshifting reptilian aliens are pure evil.

 

[Tigers!]

I have turned off the ringer on my phone because I get calls from 8am to 8pm from investors/flippers/assholes wanting to make a "cash offer" on my house.

That reminds me, I need to get our 'leave us the hell alone' sign back up on our mailbox. Damn windy days..

We get a few of these offers per week.

Funny, the offers we get are:
Can I hunt on your land?

Who are they hunting on your land? There are a few pollies here in Australia we could give you.

 

[TV and credit cards]

People keep talking about greed. I think it's just how capitalism works.

It’s capitalism when it’s my capital gain.
I recommend everyone dip their toe in the rental market if the opportunity presents itself. It will let one know if they are the altruistic individual they think they are.

 

[Hermit]

People keep talking about greed. I think it's just how capitalism works.

It’s capitalism when it’s my capital gain.
I recommend everyone dip their toe in the rental market if the opportunity presents itself. It will let one know if they are the altruistic individual they think they are.

When I bought my first home I did not have capital gain in mind, but when I sold it I did get 3.24 dollars back for every dollar I bought it for 12 years earlier. That is due to the so-called iron law of capitalism - prices being determined by supply and demand.

But yes, capitalist systems accommodate greed the more the greater they are modelled on the laissez-faire principle. What we need is a mixed economy - capitalism, the excesses of which are leavened by socialist regulations.

 

[gmbteach]

My daughter and her fiance have brought (Nov. 2022) a house/land package in Lara (Melbourne, Australia) for ~$600k. Small block, the house will be nothing flash. When I was growing up (60s-70s) nobody wanted to live in Lara. A similar block now costs > $700k. Stupid.
At that price both will need to work for decades to pay it off. If one loses their job or is injured etc. then after about 6 months they will be in strife. My daughter is an ambo so the pay is quite reasonable provided she gets the overtime. But if she gets the overtime then she will not spend much time with fiance/hubby or any kids they might have.
I paid $14k for my land in 1991. Installed a kit home for $80k in 1993.
Housing prices in Aust. have lost any links to reality.

Quoting Tigers for context. Our market differs from the US.

Bought my first house (3BR, weatherboard, tiled, land 50' x 124', in Melbourne ) in 1983 for $48k. The mortgage was $33k. I was single, living with my boyfriend, (who did not contribute, another story) and had no trouble meeting the mortgage and getting the house restumped, rewired, replastered where necessary, on a mid level salary. Sold that for $142k in 1991 to a young couple starting out. An amount that reflected inflation and the increased value of the place but placed no undue burden on them.

By comparison, in 1999 I bought a tiny 3BR weather board, tin roof, land irregular but 10% smaller, in a rural, coastal area for $57K.

Sold that around 2002/3 for $165k with very minor renovations (new water tank, floors sanded and polished, slate surround to heater). Just heard that same house is again for sale. It has had a very substantial renovation and small extension, but even 20 years of inflation cannot justify the $895k they are asking for it. They will get it, however.

In 1999, small empty blocks were going for $11k in the area. In 2002 that skyrocketed suddenly to $80-100k. Covid, and the exodus out of cities, has seen the remaining land fetch in the region of $250k.

I just Googled the median house price for Melbourne. $1,101,612

I don't know how young people are ever going to do it.

Things are nuts here in SEQ too.
We paid mid $300k for our 4 bed 2 bath house on 725m 9 years ago. Next door neighbour just sold his three bed, 1 bath house on a similar sized block for $550k. He does have a pool, but it’s on a main road corner. he gutted and redid his place. I know he would have paid $270k for his house as he bought his just after I bought my old place across the road.
Bilby and I like our home, and while it needs work, we are happy to stay here. I do sometimes want to move to a more rural area, like my brother just has, but we need considerably more cash for that.

 

[atrib]

I was talking to a friend in California who recently "upgraded" his home. He bought his last house 10 years ago for about $500K and he still owes $330K on it. He is renting that out now to cover the mortgage. His new home costs $2.6M, he put 5% down, and it comes with monthly mortgage payments over $10K (not counting taxes and insurance). Total family income is $280K per year. His annual mortgage payment on the two properties is over $150K. And he doesn't have any significant cash savings (less than $20K). Right now he can just about cover the payments and put food on the table, but if something happens, he is fucked. And he is not saving for retirement despite being 49 years old. That is the kind of stupid behavior that keeps people broke all their lives.

Oh, and he just took a HELOC loan from the equity on his first property for $90K to improve the kitchen and bathroom!!!!

 

[gmbteach]

I was talking to a friend in California who recently "upgraded" his home. He bought his last house 10 years ago for about $500K and he still owes $330K on it. He is renting that out now to cover the mortgage. His new home costs $2.6M, he put 5% down, and it comes with monthly mortgage payments over $10K (not counting taxes and insurance). Total family income is $280K per year. His annual mortgage payment on the two properties is over $150K. And he doesn't have any significant cash savings (less than $20K). Right now he can just about cover the payments and put food on the table, but if something happens, he is fucked. And he is not saving for retirement despite being 49 years old. That is the kind of stupid behavior that keeps people broke all their lives.

Oh, and he just took a HELOC loan from the equity on his first property for $90K to improve the kitchen and bathroom!!!!

My brother and his wife used property to fund their retirement. They have bought and flipped a few properties and have one that Provides an income way that covers the mort on that property and on another one they just finished. The first property has a total of 5 bedrooms, rented out individually, with a couple of bathrooms, and a common living and cooking area. There is also a studio flat that used to be a garage. The second property is a similar, but each bedroom has its own bathroom, has a live in person, and is for women only. Rent on both properties include electricity, water, internet, cleaning supplies, toilet paper and other communal essentials…he says it to avoid arguments and seems to work. He was mowing both properties as well. Not a bad set up.

They recently sold their Salisbury property, three bedrooms, two bathrooms, with a 1 bedroom ground floor flat and a 2 bedroom cottage, for about $1 million, and this has funded their ‘forever’ home on nearly an acre further out of town, pretty much mortgage free.

 

[Jimmy Higgins]

I was talking to a friend in California who recently "upgraded" his home. He bought his last house 10 years ago for about $500K and he still owes $330K on it. He is renting that out now to cover the mortgage. His new home costs $2.6M, he put 5% down, and it comes with monthly mortgage payments over $10K (not counting taxes and insurance). Total family income is $280K per year. His annual mortgage payment on the two properties is over $150K. And he doesn't have any significant cash savings (less than $20K). Right now he can just about cover the payments and put food on the table, but if something happens, he is fucked. And he is not saving for retirement despite being 49 years old. That is the kind of stupid behavior that keeps people broke all their lives.

Well, in his defense, if he hasn't started by the age of 49...

Oh, and he just took a HELOC loan from the equity on his first property for $90K to improve the kitchen and bathroom!!!!

When I need to get my mom to an eye doctors appt (a lot of them recently), home improvement shows are on...

Designer: And how much are you willing to spend?
Homeowner: Oh, about $150k.
Me:

 

[crazyfingers]

Prices here in the suburbs of Boston are pretty crazy. Glad I'm not in the market and will be selling at least one home in a few years.

My parents bought the house I grew up in in 1964 for $26K. 3 bedroom. 2.5 baths, 2 acres of land next to conservation land. Good schools. Next to no crime. The town has been a magnet for the executive types. Once the trust paperwork clears it will be mine. Would sell for close to $1million today.

My house we got in 1997 for $270K. We started with a 30 year mortgage with 40% down. Refinanced several times and changed to a 15 year mortgage. Paid off faster than we had to. I think an extra $1000/month. Otherwise almost the same story. 4 bedrooms, 2.5 baths, 2 acres of land surrounded by conservation land. Nicer insides than my parents. Larger. AC. Good schools on paper at least. Next to no crime. Some cows escaped from a local dairy several years ago and 5 police cruisers showed up as if cows obey cops. The cops have nothing else to do I'm sure. It would also sell for around $1Million.

Right now we are keeping both. It's nice to have a spare house in case of Covid. They are 35-40 minutes away.

I like the property better at my parent's house. Flat. I like my house better but the land is more hilly. I wish I could transplant my house onto the other land. In the long run we may bulldoze the house on my parent's land and build a one story retirement house. Sell this one. But whatever. Right now we can afford to keep both houses.

I don't know what the kids will do unless we help them, which we probably will.

My daughter is our first to move out. She's been living with her boyfriend and his parents. They pay rent. But my daughter found a great deal. She's like manager of a high end horse stable. Pay is great. The owners have an apartment on the property and they want an employee to rent it. Only $500/month split between her and her boyfriend. I think it's sort of like being on-call 24 hours a day but not a lot happens. And she loves horses so at the moment it's good.

 

[Toni]

Prices here in the suburbs of Boston are pretty crazy. Glad I'm not in the market and will be selling at least one home in a few years.

My parents bought the house I grew up in in 1964 for $26K. 3 bedroom. 2.5 baths, 2 acres of land next to conservation land. Good schools. Next to no crime. The town has been a magnet for the executive types. Once the trust paperwork clears it will be mine. Would sell for close to $1million today.

My house we got in 1997 for $270K. We started with a 30 year mortgage with 40% down. Refinanced several times and changed to a 15 year mortgage. Paid off faster than we had to. I think an extra $1000/month. Otherwise almost the same story. 4 bedrooms, 2.5 baths, 2 acres of land surrounded by conservation land. Nicer insides than my parents. Larger. AC. Good schools on paper at least. Next to no crime. Some cows escaped from a local dairy several years ago and 5 police cruisers showed up as if cows obey cops. The cops have nothing else to do I'm sure. It would also sell for around $1Million.

Right now we are keeping both. It's nice to have a spare house in case of Covid. They are 35-40 minutes away.

I like the property better at my parent's house. Flat. I like my house better but the land is more hilly. I wish I could transplant my house onto the other land. In the long run we may bulldoze the house on my parent's land and build a one story retirement house. Sell this one. But whatever. Right now we can afford to keep both houses.

I don't know what the kids will do unless we help them, which we probably will.

My daughter is our first to move out. She's been living with her boyfriend and his parents. They pay rent. But my daughter found a great deal. She's like manager of a high end horse stable. Pay is great. The owners have an apartment on the property and they want an employee to rent it. Only $500/month split between her and her boyfriend. I think it's sort of like being on-call 24 hours a day but not a lot happens. And she loves horses so at the moment it's good.

The deal for your daughter: employment she likes with good pay and a bonus of what must be far below market rate accommodations is wonderful. Really happy for her. Hope she follows your example and socks away as much of the cash as she can, in case her circumstances change. And that the money is protected from the boyfriend, who may be a nice guy but does not sound as though he has good examples to draw from with regards to his family.

I've always wanted to live in a more rural setting; hubby is a city boy. We compromise by renting a place on a lake for a week or two every summer. I had always imagined once I retired, I'd manage to rent a lake place for the entire summer. I knew hubby wouldn't want to be up there all summer but I sure did. I told myself we'd never be able to afford our own place but secretly, I thought we might be able to do it. Hubby has always been far less keen than I am and so it seemed unlikely that we'd ever make that jump. With COVID, a LOT of people seem to have latched onto my idea, or rather, have grabbed up as much of any lake property as possible and are renting it out by the week, driving up weekly rental prices quite considerably and resulting in zero property for sale where there used to be 40-80 at any one time alone a hundred mile stretch of lakeshore. So: dream dashed AND hubby is now talking about how great it would be if we had our own place and oldest kid is talking about how we really NEED our own lake place and that's where everybody will be moving in the coming apocalypse.

Also, we are almost certainly stuck in this town until we die because it's quite affordable compared with living in the metro area near most of the kids. I'm finally getting the house the way I want it but it's 2 stories plus basement plus attic and I just think in 20 years, it will be highly impractical.

I wish I had been more ruthless 5 years ago.

Oh, and I do know:#Firstworldproblems

 

[crazyfingers]

The deal for your daughter: employment she likes with good pay and a bonus of what must be far below market rate accommodations is wonderful. Really happy for her. Hope she follows your example and socks away as much of the cash as she can, in case her circumstances change. And that the money is protected from the boyfriend, who may be a nice guy but does not sound as though he has good examples to draw from with regards to his family.

Ya there is too much going on at his parent's house. The siblings are toxic. I sure hope she keeps this job for a while and saves money. It's a great opportunity to save. The two of them spend a lot on stuff that they don't really have a need for yet. Or no need at all.

I've always wanted to live in a more rural setting; hubby is a city boy.

We like where we are. The outer suburbs of Boston. The shopping center is about a 5 minute drive but I can walk though my back woods and connect to about 3 hours worth of hiking trails. There is far more woods and conservation land in this town than development.

But back to the topic, ya the house prices have been going way up around here. They will probably go down but for now there are still a lot of people looking for a place where there is some isolation due to Covid. I'd go even more nuts if I lived in an apartment building in the city during Covid.

 

[bilby]

Most modern political parties agree that excessive inflation is a bad thing, and that it's a central role of a government to keep it under control (though they frequently disagree on how to achieve this).

Most modern political parties like to tell voters that they will prevent excessive inflation, and that they will work hard to ensure that specific commodities and services remain 'affordable'; Politicians love to tell us how hard they work to keep gas, food, and cost of living expenses down.

Yet as soon as the conversation turns to real estate, they flip the entire narrative on its head, and gush about how they will keep the housing market bouyant (ie., subject to as much inflation as they can sustain).

It's a total mystery to me how the same people for whom high gasoline prices are a disastrous vote losing scenario, also have high real estate prices as a wonderful vote winning scenario.

Do the voters like high prices for stuff, or not??

 

[Harry Bosch]

Most modern political parties agree that excessive inflation is a bad thing, and that it's a central role of a government to keep it under control (though they frequently disagree on how to achieve this).

Most modern political parties like to tell voters that they will prevent excessive inflation, and that they will work hard to ensure that specific commodities and services remain 'affordable'; Politicians love to tell us how hard they work to keep gas, food, and cost of living expenses down.

Yet as soon as the conversation turns to real estate, they flip the entire narrative on its head, and gush about how they will keep the housing market bouyant (ie., subject to as much inflation as they can sustain).

It's a total mystery to me how the same people for whom high gasoline prices are a disastrous vote losing scenario, also have high real estate prices as a wonderful vote winning scenario.

Do the voters like high prices for stuff, or not??

It's not that I disagree with you. But owning real estate is the one asset that can hedge the cost of inflation. I don't trust gold. You want to own as much real estate as you can during inflationary periods.

 

[bilby]

Most modern political parties agree that excessive inflation is a bad thing, and that it's a central role of a government to keep it under control (though they frequently disagree on how to achieve this).

Most modern political parties like to tell voters that they will prevent excessive inflation, and that they will work hard to ensure that specific commodities and services remain 'affordable'; Politicians love to tell us how hard they work to keep gas, food, and cost of living expenses down.

Yet as soon as the conversation turns to real estate, they flip the entire narrative on its head, and gush about how they will keep the housing market bouyant (ie., subject to as much inflation as they can sustain).

It's a total mystery to me how the same people for whom high gasoline prices are a disastrous vote losing scenario, also have high real estate prices as a wonderful vote winning scenario.

Do the voters like high prices for stuff, or not??

It's not that I disagree with you. But owning real estate is the one asset that can hedge the cost of inflation. I don't trust gold. You want to own as much real estate as you can during inflationary periods.

You want to own as much of everything as you can during inflationary periods.

Except cash, obviously.

 

[Harry Bosch]

Most modern political parties agree that excessive inflation is a bad thing, and that it's a central role of a government to keep it under control (though they frequently disagree on how to achieve this).

Most modern political parties like to tell voters that they will prevent excessive inflation, and that they will work hard to ensure that specific commodities and services remain 'affordable'; Politicians love to tell us how hard they work to keep gas, food, and cost of living expenses down.

Yet as soon as the conversation turns to real estate, they flip the entire narrative on its head, and gush about how they will keep the housing market bouyant (ie., subject to as much inflation as they can sustain).

It's a total mystery to me how the same people for whom high gasoline prices are a disastrous vote losing scenario, also have high real estate prices as a wonderful vote winning scenario.

Do the voters like high prices for stuff, or not??

It's not that I disagree with you. But owning real estate is the one asset that can hedge the cost of inflation. I don't trust gold. You want to own as much real estate as you can during inflationary periods.

You want to own as much of everything as you can during inflationary periods.

Except cash, obviously.

Well, real estate goes up in value during inflationary period. Stocks generally go down. You don't want to sell in a down market though if you have diversified funds. But for many families, their number one monthly expense is their mortgage. If you own your house, the payments won't be affected by inflation.