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Houses cost too much!

bumpybumpy Posts: 4,435
I did some poking around in Ye Olde Census, and in 2000 the median home price here was $118,000, and the median income was around $43,000. Real estate has gone up some since then, mostly from retirees and Yankees coming in and bidding up everything.
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Comments

  • steverstever Viva Las CrucesPosts: 41,258
    Where's here?

    Back in '75 or so I got my first house in TN for ~$19k. Zillow puts the tax appraisal at $102k today.

    With the rise in the standard deduction, it's barely worth the tax break to carry a mortgage these days.

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  • bumpybumpy Posts: 4,435
    Rural eastern Virginia.
  • patpat Posts: 10,421
    Yeah? Like Isle of Wight? Or maybe the eastern shore? Or where? I'm in Norfolk. :)
  • fintailfintail Posts: 33,950
    It's much worse on the west coast...Seattle area and BC Lower Mainland are insane. A house that was 20K 45 years ago can be 600K+ today.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,255
    You can't even find a house where I live for 600K, and the houses are not very big or elaborate. It's where they are sitting that makes them so expensive. A 1500 square foot, 2 bedroom frame cottage built in the 40s, basically a one-story ranch, can be worth 1.2 million, no problem. It's much smarter to rent.

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  • fintailfintail Posts: 33,950
    It's not that bad here - yet. The house across the street from me, a 1050 sq ft 1950-ish cottage with decades of neglect, Zillows at about 650K. No view, no huge lot, nothing. I think the average in my zipcode is approaching 1M. Renting is the only option for most, that's why a block of houses will be torn down for condos or apartments. I still prefer this to a long commute.

    It's funny too, if you drive 2 hours, you can get a decent little house for 100K. But, there's a reason for that.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,255
    I'm happy with the renting situation as it allows me to live in a house I couldn't possibly otherwise live in. When rent is about 1/5th the mortgage, it's got to be the bargain of the century. The landlord doesn't care, since he didn't put any value into the house since he bought it so many years ago. All that has "gone up" is the price. If a house becomes more valuable without any improvements whatsoever, this isn't an "investment", this is a speculation, like hog bellies or gold futures.

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  • jipsterjipster Posts: 5,345
    The Louisville housing market is one of the lowest in the country I believe. The median selling price is around $140,000... nicely loaded.
  • fintailfintail Posts: 33,950
    If my apartment building went condo, the mortgage would be about double my rent as well. This would still be cheap for the area, and not the worst deal - I would be tempted, even though it might strain my finances. I am a little leery of the local condo market though, with many new conversions and new construction, I think a saturation point might be met. It happened for condos where I used to live, they aren't appreciating nearly as fast as houses, as they once did.

    Here, many people are betting their retirement on their house, it's more of a risk than anyone will admit.
  • fintailfintail Posts: 33,950
    I can't even imagine. 140K wouldn't get a garden shed behind a crackhouse here.

    My ca. 600 sq ft apartment would bring about 250K as a condo, with the most modest upgrades.
  • okko1okko1 Posts: 327
    in the area i live 150 is average 200 is movin up if you can commute 4 years ago i was offered a spot that had a modular home 80x32 with 40 acres and a 4.5 acre pond the house setting 1/4 mile from the road for 159 the neigbor spent 350 on his house with the comfort of knowing he will have some privacy for at least the next 20 years
  • fintailfintail Posts: 33,950
    Insane. They say we have higher incomes out here, but it does not make up for the housing cost. I can't imagine anything decent here for 150K...a dumpy 30 year old condo a 45 minute drive from work might hit 150 at the low end.

    One good thing, the house my grandparents paid ca. 20K for around 1960 is worth something like 600K now. Sadly, no other family members live in this area, so no other big appreciation on my side.
  • okko1okko1 Posts: 327
    i live in a small town in kansas where lets say building codes are not so restrictive. about 30 days ago the house behind me was demolished. today they started the grade work it is supposed to be a 3 bedroom bath and a half with two car garage. i will guess about 145-160 for the turn key.
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,255
    That's interesting. The price variations are so radical in this country.

    Interestingly I've read somewhere that historically real estate values have NOT gone up a lot in the past--these last 30 years are quite a glitch in the normal trend of real estate in the USA.

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  • fezofezo Posts: 9,384
    I wonder about that with the prices. My grandparents built a very nice house in 1928 for $6K. In 1952 my parents bought a considerably lesser house for $8K.

    Nowadays either house will get at least $400K and they are both still in the family.
  • fintailfintail Posts: 33,950
    It was the same here, too. My great-grandparents bought a house in Seattle in 1950 for something like 8K. It was built in 1925, and cost something like 5K then. Not a special house, just a typical colonial-revival cottage. When my great-grandmother moved to a care home in 1999, the house sold for 250K, and it needed everything, they had never updated anything. Today, with renovations, it it is worth like 750K.
  • okko1okko1 Posts: 327
    it was about 15 years ago when johnson county got the rush from new jersey. people were selling very modest homes back there and buying houses with 3500sqft. of living space and telling me of how they made enough on the house they sold to go about even on the new one back then the house would start at about 250 and depending on finishing options up to 350. lots for these homes were about 40. :shades:
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,255
    Well much of the rise in prices is due of course not to the VALUE of the house going up, but rather to just the PRICE going up....it's the same basic $8K house and certainly it didn't have $392K in value-added improvements.

    Which means that real estate is not an "investment" (value-added entity like a growing corporation's stock) but rather a speculation. This would explain the sudden glitch in real estate prices over the past few decades, and it's quite conceivable therefore, that like any speculation, it could just go POP at any time.

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  • okko1okko1 Posts: 327
    plumbing is snubbed and gas line in place grade read for footings. not sure yet of layout but i wish i had a picture of the place they tore down i guess it is poor boy urban renewal.
  • michaellnomichaellno Posts: 4,300
    I live between Denver and Co. Springs, and my house (7 years old, 3bd/2.5ba, 1600sf on a 5000sf lot) is worth around $210K.

    My folks, on the other hand, live northwest of LA. They bought their house new in 1968 for $23K. It's now worth around $550K. It's 1450sf on a 7200sf lot - 3bd/2ba.

    At the top of the scale is my sister and BIL - they live outside of San Diego. Bought their house (3000sf, 4/5bd, 3ba) 2 or 3 years ago for just under $500K, last time they had it appraised, it was valued at just over $900K.
  • steverstever Viva Las CrucesPosts: 41,258
    Folks over in the The Future Of The Manual Transmission got sidetracked talking about old houses and how they are better built than new cookie cutter ones. I'm not sure I agree with that.

    My first house was a Tennessee summer cabin converted into a year round house that I moved into back in 1975. It was an early 40's house, and had lots of problems. The tub always stopping up was memorable, as was the orange shag carpet in the den. Great neighbors that I still keep up with after living there 3 years.

    Next was a small brick ranch from the 50's that was solid, if nondescript. Not having to paint was a plus. Then it was a 1954 ranch in Anchorage that apparently used old concrete forms from the nearby army/air force bases for lots of the studs. The roof was stick built from 2x4's and I had to shovel it whenever the snow got a foot deep - didn't trust that it could handle the snow load. Great little house for 15 years, and more wonderful neighbors, but iffy construction.

    Then we got a 1929 era full basement job here in Boise 7 years ago, complete with a couple of runs of knob & tube wiring. Well built and within walking distance to downtown, but chopped up and uncomfortable. The upstairs bath was so small you couldn't fully open the door! But I didn't have to do any work on it at all.

    We moved in a year to a 1974 ranch that's bright and open, with cathedral ceilings under a (new) hot roof. It's an owner built kit and we got a deal on it "as is" - I keep waiting for the attached garage to pull away and fall down the hill (more great neighbors here too, including one guy who owns a crane that could come up and pick my garage up for me, lol).

    The next buyer will probably scrape it and it won't be too much longer until the 1.5 acres it sits on will appraise for more than the house. I like everything about it (except the stairs), but the maintenance of the house and pasture are wearing me down fast. ;)

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  • qbrozenqbrozen Posts: 17,520
    hmmm... i'm not a financial wiz, so bare with me. Is this value/price argument applicable to everything other than, let's say, a corporation that absorbs other entities? I mean, I guess that's true, right? Anything like gold, oil, etc, are all based on prices, not value. What is real value, anyway? Heck, land is more valuable to me than gold, yet I'd have more buyers for my gold and, pound for pound, its far more expensive.

    Anyhooo... as long as employment doesn't drop in the toilet, I don't see property values necessarily "popping." Cooling off? Sure. We've already seen that happening. I mean, it couldn't keep climbing forever.

    I think we made our housing moves at real good times (I hope). Bought the first one in Summer of 2000 for $155k. It was a little Cape Cod in a nice little town within 90 minutes of Manhattan. Sold it in Summer of 2004 for $280k. So that's a little more than 15% per year. Its worth about $325k now, so that's only been around 5% per year since we sold it. Sounds like the right move.

    We sold it to buy a house for $400k. Very rural area about 15 minutes south of that town with our Cape Cod. 4-bedroom 8-year-old colonial on an acre. Just before the market cooled, it was appraised at $525k. A little under 10% per year, but still pretty good. Will it drop? Maybe. I'm not terribly worried about it because I don't plan on moving. Its exactly what I want. Of course, the real fear is if the housing market DOES plummet and then, god forbid, I become unemployed. But I guess that's what happens to some people sometimes, right? Financial ruin is always 1 step away. I suppose, if we really wanted to be comfortable, we could have stayed in that Cape. Probably paid it off in 10 years. And retirement would have been all that much closer. *shrug* oh well. At least I've got the space to store up my car projects for when I eventually get around to retiring in 30 years.

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  • jipsterjipster Posts: 5,345
    talking about old houses and how they are better built than new cookie cutter ones.

    My first house was a nice cape cod with basement, I think it was built in early 50's. Even though it was not a brick exterior, it was rock solid and tight as a drum. Noise almost disappeared when I closed a window.

    When the airport authority took the neighborhood under some bogus claim (later we, neighborhood association, sued and won a large judgement), we were allowed to take anything out of the house we wanted. I had moved out and it was a day or two before scheduled demolition. A friend asked if he could have something off interior a/c unit. I had turned in the keys, told him to go get it if he wants it. He tried to kick, then crowbar the door open... he could not get in. The doors and doorframe were unbleievable solid and strong. Now, my current 1974 tri-lvel... not nearly as solid and tight.

    As a general rule I think the overall quality of material was better years ago than today. Seems many builders want to make the shortcuts when it comes to quality. Build that nice looking home for the least amount possible. Cheap carpet, low end furnace and a/c units, low end shingle... less attention to detail which make older homes unique and more attractive.
  • bumpybumpy Posts: 4,435
    these last 30 years are quite a glitch in the normal trend of real estate in the USA.

    More people with more money to bid things up, thanks to easy credit and creative financing.
  • steverstever Viva Las CrucesPosts: 41,258
    my current 1974 tri-level...

    We should do a house swap sometime - I bet your floor plan isn't much different from my tri-level.

    Did I mention that I hate stairs and none of my first houses I had in my youth had them? Now that I'm way past AARP eligibility, I have to stumble up and down them all day. :P

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  • bumpybumpy Posts: 4,435
    old houses and how they are better built than new cookie cutter ones.

    The old houses that are still around now were better built. The old houses built like today's cookie cutters fell down or were torn down 50 years ago, so we don't think about them. I can drive around and point out all sorts of old houses that have been abandoned in place for whatever reason, passed over by potential buyers for new, modern construction. Some of them were well built, and some of them weren't.
  • qbrozenqbrozen Posts: 17,520
    Exactly.

    Its just not a blanket statement that can be made. My parent's turn-of-the-century farmhouse has these crazy hand shaped 2x6s in the exterior walls and solid wood interior doors, BUT the plaster & lathe interior walls and single pane wood-framed windows leave ALOT to be desired.

    There is something to be said for sheetrock, insulation, and vinyl argon-filled windows. If I could combine their houses skeleton with modern day insulating techniques ...

    '13 Stang GT; '15 Fit; '98 Volvo S70; '14 Town&Country

  • jipsterjipster Posts: 5,345
    I grew up in a quad-level, so at the moment the tri-level is looking pretty good. I do remember my mom complaining quite frequently about "all the steps" in the quad. All the bedrooms and master bath were upstairs, the washing machine and dryer... all the way down in the basement.

    We do plan on moving in the near future. Would like a nice ranch with a walk-out basement. Designate the basement as the kids zone.... enter at your own risk. :)
  • Mr_ShiftrightMr_Shiftright CaliforniaPosts: 45,255
    I'm only real point there was to point out that buying a house to flip in a few years is pure speculation, it's not investing in the traditional sense of the word. All you are doing is betting that someone will pay more than you did without you doing anything. Some stocks also buy and sell like this, and that is speculating as well. So is betting on number 12 in Vegas. But some stocks belong to companies that are actually building wealth, so that's more like sound investing. Stocks have almost a 100 year history of steady growth (if you held all your stocks at the time of the Great Stock Market Crash of 1929, you'd have been made whole in about 9 years). But real estate does not show a steady growth for 100 years....barely 25 or so.

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  • okko1okko1 Posts: 327
    plllllll :P
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