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- cross-posted to:
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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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Being able to buy a $200,000 house in the town I live in would change my life so much.
You want to know why? Start at the bottom and look at the price of land only blocks in the region. More than likely: its the cause. The answer then becomes very simple.
$325k for a 3bdrm 2bath detached SFH in good condition?
Awww, that’s adorable. Even after taking the exchange rate into account, that would be like going back to 1998 in my corner of Canada. Right now, a house like that on a 0.21 Ac plot of land would be running you $1,300,000 CAD. In places like Vancouver? $4,800,000 CAD on average.
Awww, that’s adorable.
People still talk like this? Wow. Anyway, it’s not a contest. Both scenarios can be very unfortunate and disappointing
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.
That’s cheap as hell compared to California. And I work remote from anywhere I want. Thanks for the tip!
Also here in Europe this is the type of construction we use for a garden shed, not a house.
Even when we do modern timber frame, it’s generally still brick or block at the bottom. How long do these houses last in the US? I imagine a lot of the continent is pretty humid
My parents’ timber house is from the 1780s and is still solid. So, 240 years at least, give or take. I’m aware of plenty of timber houses from the 1600s that are still standing and functional as well.
Is a timber frame house from back then the same as one built post 1950 though? Some Q’s:
- Have materials/practices decreased in quality?
- Has there been a shift from a sense of pride in craft and duty to build well towards cutting corners and saving $?
- Has the density and properties of wood changed as we use smaller trees grown more quickly in monocultures compared to old-growth harvested lumber of pre 1900s?
In California at least, houses made with a wooden frame are usually on top of concrete (either a concrete slab under the whole house, or a concrete perimeter under the exterior walls), and the frame is bolted into the concrete along the entire perimeter.
Older homes often aren’t bolted into the concrete, but it’s common to retrofit this to improve earthquake resistance. Without the bolting, the house can move around during an earthquake. The government here has a program (Earthquake Brace and Bolt) where they cover part of the cost of doing this work.
Masonry (houses made of bricks, stone, etc) are much less common here, since they perform much worse in earthquakes.
When wood is properly sealed up in walls, it lasts a very long time. We don’t really have buildings on an old world timescale, but we do still have colonial wood frame buildings.
Timber frames are sheathed in treated plywood and then wrapped in siding. Rain doesn’t reach the wood of a barely-maintained house, exterior humidity won’t do damage in any hurry, and wood is rarely making ground contact. These houses last at least a hundred years given that this style is approaching 100 years. It’s usually storm damage through the roof that causes the rotted wood you’re imagining, not normal wear and tear.
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
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.
My lucky ass bought a house in late 2019. I’m happy I’m making money on it but this doesn’t seem healthy
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.
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.
Exactly.
Housing price increases are actively harmful to those who want to upgrade, since it increases the incremental cost of upgrading.
Housing Taxes also increase.
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.
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
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.
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
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.
Time to eat the rich
Best hurry … Ozempic is destroying the calorie 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.
mine is now worth 130% of its original value
If the house hasn’t changed, then the value is basically the same.
The price change is more about how rapidly the USD is devaluing.
Between 2020 and 2024 there was about 22% inflation. 1.22x$195,400=$238,388. So there’s still over $110,000 of price inflation to account for past devaluation of the dollar.
there was about 22% inflation
I’m not disagreeing with you, but I just wanted to note that inflation numbers (more specifically, the CPI) is an average across multiple industries - supermarkets, rent/mortgage, furniture, cars, flights, health care, and several more. It’s possible for inflation to affect some industries much more than others and I wouldn’t expect everything to all go up at the same rate.
So occasionally I look out of curiosity and the reason is pretty plain.
I look for houses for sale in a suburban area as public listings, and there’s like 1 within a few square miles of the area.
I switch over to renting, and there’s like 12 houses just like the one for sale available, all owned by companies. I also know a coule that aren’t listed that have no tenants, but are still owned by one of those companies. You can tell because those yards are now waist deep grasses (in an area where HOA throws a hissy fit if your yard looks just a smidge unkempt).
Don’t know why the companies find it more profitable to buy houses people aren’t looking to actually move into, at least at the rent they are willing to accept. If I fully understood why, it might just piss me off more. Like maybe the houses work better as a loan basis than other assets, so even empty and unused they are valuable as some sort of financial trick.
Don’t know why the companies find it more profitable to buy houses people aren’t looking to actually move into, at least at the rent they are willing to accept. If I fully understood why, it might just piss me off more. Like maybe the houses work better as a loan basis than other assets, so even empty and unused they are valuable as some sort of financial trick.
That’s one thing, but housing has been a low-risk investment for a long, long time. If they bought the house OP posted in 2020 and sold it in 2024 they would have almost doubled their money even without renting it out.
If it makes you feel any better, that house would sell for at least double that price where I live.
At least triple the price in my area. 4x if the schools are good.
