Houses cost too much!

gagrice

Too funny. Sent it to my buddy in Anchorage. He knows the real estate market up there. Should get a kick out of the blog.

fintail

I bet the money in AK can build some wacky stuff - extreme cabin style houses etc. Might be cooler than the tacky mcmansions of the lower 48.

gagrice

My buddy was sure the picture of the Polar bears was one he took out in Kaktovik. With the internet pictures go around the world in minutes.

fintail

No doubt a cool place for the scenery, but it would be massive culture shock to live there, for me anyway. I like snow, but I think that would push my limits.

Here's an interesting listing - typical local ostentatious stuff, but props for consistent window design, and an attempt a symmetry - too bad about the appendage. Noteworthy for the lack of view or similar features, the "8"s in the price, and the google earth view of what was there before. I'd rather have the old house.

Here's what you'll pay for a nice waterfront villa - and a house that IMO looks older than it is. Also lots of "8"s in the price, because of course.

gagrice

Think of it this way. You are a low level exec at Microsoft knocking down a million a year. That nice waterfront place will lower your taxable income to half million. You live like a king as long as you have that job and hope the home increases in value when you have to sell. Of course you may end up like Robin Williams with more real estate expenses than income and find suicide is your best way out. I will not allow my wife and I to get our expenses higher than either one of us can afford with the other gone. An even better cushion is getting out of CA before they go under and nail those that are left behind. A place like this I could pay cash for and build a nice big shop and garage in back. A big greenhouse. Has its own well as most of the 1 acre lots in Pahrump have. Only utility is electric and internet. The electric co-op also provides fiber optic internet for $50 per month. Mobil diesel is $2.35, that is 50 cents cheaper than here currently.

http://www.zillow.com/homedetails/880-Benson-Cir-Pahrump-NV-89060/70486927_zpid/

fintail

I don't know if there are enough execs around here to buy houses like that. I work for a large telecom firm (multi BN quarterly revenues and EBITDA) and know some senior leadership - most of them actually live in reasonable houses. Of course, a million here doesn't buy a castle, but only a couple I know of live in places of such price. The houses I linked are primarily marketed to foreign buyers, who make up more than half of transactions in some areas here. I'd like to hope the source of this money might come under better vetting in this new regime, but I have sincere doubts.

If I lived in NV, I might want a desert lawn - less work and water wasted. that specific house might be kind of big and maybe not the best finishes, but the price is right, and I bet you could get it for less. But there's always a catch - like when my friend had an amazingly cheap house in GA, he would tease me with it, and I would reply "yeah, you have a house in Georgia"

gagrice

You always run the risk of being disappointed when you think the grass is greener elsewhere. My CPA is back from property shopping in TX. May put in an offer on 25 acres right on a nice lake near Dallas. 1700 ft house. Low taxes by virtue of it being zoned Agricultural. He was not thrilled with the weather when it dropped to 17 degrees and froze up the water in his Motor Home. Still plans to leave.

http://www.zillow.com/homedetails/1950-County-Road-231-Valley-View-TX-76272/2098680870_zpid/

fintail

Nice looking land and buildings, but I don't know if I'd want to live in the middle of tornado country some distance from civilization. I see they show the storm shelter, which would be a necessity (but I'd want it closer to the house). Maybe nice for retirement. I wonder why it was listed so high, then cut in half.

gagrice

Good question on the price drop. They may have realized the land does not hold as much value as they thought. Some states would not let you split it up so unless you just want a big cushion from your neighbors. Costco is 41 miles away and a WM SuperCenter 16 miles. Pretty all green, The Winter shot on Bing maps is mighty bleak looking for someone used to green year round.

fintail

I think TX can look pretty bleak a lot of the time, but it beats looking at the endless strip mall/tract house orchard sprawl of TX cities , I guess. I don't mind arid landscapes, but I don't think that's the one I want. I can do just as well in eastern WA and not be so far from where I know.

gagrice

If you like the weather and surroundings in WA, it is one of the better tax states to live and retire in. I thought long and hard about Eastern WA, close to the ID border. Love the Okanagan Valley, just inside the WA border with BC. Of course I could be happy on Vancouver Island. Around Sidney, the bookstore capitol of Canada.

fintail

WA taxes depend on the person. It can be pretty regressive in some areas. Eastern WA is good if one doesn't mind a colder winter. I have a bit of family there, and my dad ended up retiring there, in the Palouse. Not the cheapest property in the region, but generally pleasant. The Okanagan is also nice, especially if you like a little snow. Vancouver Island might tax more than you like

fintail

This place recently made the internet chatter rounds - as the cheapest detached house in the city where I live. Not my speculative nutcase zipcode, but the city of ~130K people. What a bargain! And it's pending. Not a bad sized lot, but kind of a meh area (although very close to where I work, which would be cool), and the house looks like a project. I wonder if the insanity it can keep going.

gagrice

This is about the bottom here also. It is very junky around it. Probably why no pictures from the street. Google it.

http://www.zillow.com/homedetails/1722-S-Grade-Rd-Alpine-CA-91901/17059757_zpid/

There are several homes right around this one built in the 1940s. No one seems to be buying and tearing down as there are lots available. And the cost of permits are way over $50,000 now.

fintail

Listed for 166 days, must be optimistic. Cheapos here are pending 10 minutes after they are listed. Must be a large lot too for the nonconforming rental income, although I agree the area doesn't look posh. It looks OK for rural areas around here anyway, not too methy. I am sure it is like this everywhere, but here it can go from nice to demilitarized zone in a few blocks.

I don't have much of an issue with taxing the flipping industry anyway, especially for speculators and offshore buyers. I'd also have no problem with a monster tax on properties that are allowed to remain vacant.

gagrice

Notice how low the property taxes are on that place. They have probably owned it since the 1970s when Prop 13 went into effect. They will have a real wake-up call if they buy another home in CA. You can carry your prop 13 by down sizing your home. Fat chance they will find a single family home for less than $575k. We tried and did not get enough for the house we moved out of. A flipper bought this 90 year old place last August and put a few bucks in and hopes to make a killing. Not sure any banks will finance with a hand dug well.

http://www.zillow.com/homedetails/404-Alpine-Heights-Rd-Alpine-CA-91901/16905593_zpid/

fintail

We don't have anything like Prop 13 here, but we do have special reduced senior tax rates - I know my grandmother pays quite little for her house. After a little over 50 years, it might be worth 20x original purchase price - it would be a bit more if she wasn't in an outlying area. House is worth 20x more, wages might be 8-10x more, and I don't want to think about inflation of prices for education, food, fuel, medical, and so on.

That flip is shameless, definitely deserves a special tax.

gagrice

No slowdown in sales. You are in second place. They are selling like hotcakes around here also.

Denver was the fastest market last month, Redfin found, with purchase contracts signed just 23 days after listing for a typical home, far below the 43 days that was typical a year earlier. Seattle was the second fastest, with 26 days on the market, followed by Oakland, at 27 days.

http://hosted.ap.org/dynamic/stories/U/US_HOME_SALES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2017-02-22-10-01-25

fintail

I'd be interested to know which markets have the most offshore influence.

gagrice

Just got back from a few days in Pahrump NV. We both really like the little town. Has everything you would need. And the COL is about half what it is in San Diego. Everything is less expensive. From a 4 egg omelette to a new home on the golf course. Think you could find a place like this in WA on half an acre? There are literally dozens of deals like this one. For the retiree or asthma sufferer it is paradise. Clean, clear air and only 3 stop lights in a town of 40k people. We have six lights with only 15k people. Lots worse traffic here. Went out at 7 AM for breakfast and no one on the roads. Including the main highway through town. Did I mention only 55 miles to Las Vegas Airport.

https://www.zillow.com/homedetails/5851-Grain-Mill-Rd-Pahrump-NV-89061/62708759_zpid/

fintail

You could find a place like that for the money here in areas away from employment centers, but traffic between those places is so bad, they might as well be in NV. My mom lives in a place like that, where a few bordering small towns combine for maybe 35K people. You can get something nice for 200K, but you'll need to be able to work remotely or have a local public sector job. Doesn't look bad, I am a sucker for tile roofs, and I could afford that. Just think of the parts cars I could accumulate

I'd worry about the summer heat though, but maybe people tolerate it more as they age. My paternal grandparents were snowbirds, had a winter place in AZ, primary/old house in eastern WA (where it was almost as hot, and they didn't have AC).

gagrice

The difference during the Summer is the humidity. 100 degrees with 20% humidity is easier to take than 90 degrees with 90% humidity, like they have in the Midwest and South.We plan to stop by Pahrump in July when we go up to Oregon via Lake Tahoe to see my Sister. One of the things my wife and I talked about is getting places from Pahrump is so much easier. Flying out of Vegas is far less expensive than San Diego. Driving is great as we don't have to go through Los Angeles.

If you like tile roofs you would like most of the homes in Pahrump. Plus 99% are single level which when you get older you will appreciate. Every place we looked at had at least a double car and most had three car garages. If we were buying there today, my wife liked this best of all the homes we went through.

https://www.zillow.com/homedetails/521-China-St-Pahrump-NV-89048/62707086_zpid/

fintail

I suspect it isn't much different from eastern WA in the summer, maybe a longer hot period, but the humidity makes it livable if you have AC. I would worry about electricity costs and water shortages.

I like the no maintenance lawn of that house, and with so much land, more room for garages and maybe even a little bike track or something.

gagrice

I talked to several home owners. A big electric bill in the summer is $250. Very little propane used there. All electric homes. The electric company is a cooperative consumer owned. They encourage the use of solar. Though I did not see hardly any homes with solar. Nothing like San Diego. Where electricity is 3-4 times as much.

According to the well guy I talked to the aquifer under Pahrump valley is very large. It could handle at least a million homes. Only 40k people live there. It is hard water so most people have water softeners. .

fintail

That might be the drawback - that's a big power bill compared to most areas here. Solar might not be a bad idea, especially if it is subsidized. Like most west coast areas, NV isn't a "taker" in terms of federal aid, so it might be justified there.

Sounds like a good place to retire for CA people. I know around here, many retirees leave the area when the time comes - the rat race is even less fun when one is older, and many of these people are very lucky in terms of real estate, and make out like lottery winners when it comes time to sell. Sell the Seattle house bought for 85K in 1980 for 800K today, go to a sunnier clime, buy a nice house for 200K and have nice investment income from the remainder.

gagrice

Almost every person I talked to in Pahrump moved there from CA, with no desire to move back. Two of the homes we looked at had huge motor homes parked outside. They both plan to spend September to May in a Pahrump RV park and travel around during the heat of the Summer.

fintail

RV travel, something I have no desire for. I could buy a nice car and stay in an awful lot of hotels for the price of a behemoth motorhome. One would still want a house or some kind of home base on top of it.

A friend of mine's parents (both public sector retirees, 3 pensions!) live in a senior community in Arizona during the winter, and summer in a gigantic motorhome. I think I would hate driving it.

gagrice

I really did not like driving our small RV on the MB Sprinter. We ended up staying in motels every night. We rarely pay over $100 a night staying at a Hampton Inn. The middle of the road RV would provide a thousand nights in motels. If you are going to stay longer the price goes down renting a condo for a few months. Add on the fact that parking your RV will cost from $25 to $75 per day. The one couple said it was just too much work for her to maintain a 3000 sq ft home. I want a home base somewhere. People are leaving CA faster than they are coming in. The upper middle class retirees are leaving with the fat retirements. People coming in are in the bottom tier of the labor pool. Net loss in revenue for the state.

fintail

I don't think I would even want a Sprinter. I am just not into it, I have never liked camping in general. And as you say, the vehicle is just the beginning, there are storage and lot/parking fees too. One can use Priceline or Hotwire and do even better on hotels. I don't have a desire to be on the road all the time if I am lucky enough to make it that age.

Is CA population shrinking? I don't know about that. There are plenty of people with money coming in as well, but they only arrive in a few specific locations. Same as here. The cities are loaded with the wealthy, but outlying areas, not so much. IMO it is time to place a significant tax on offshore real estate purchases, especially residential, to help cover infrastructure issues.

gagrice

I don't think they really know for sure. With the border like a sieve both legal and illegal entries is hard to keep track of. If they get a legitimate job then the state has a record of them. The IRS tracks those moving to other states. Very wealthy will move there for the weather and connections either in Hollywood or Silicon Valley. If you are working or retired on less than $100k a year, you are not living large. Those with homes they have lived in for 20+ years are doing fine on Property taxes. Groceries may be the only bargain. Everything else costs a lot more than the US average. The Homeless especially downtown San Diego are depressing. Our cops rout them out every few days so tent cities don't last long. Of course traffic is always horrible. Not many reasons to stay if you are retired. Too many other places that are far less expensive and less crime.

http://www.sacbee.com/site-services/databases/article69054977.html

fintail

That makes more sense - the rate of growth is slowing. Population is increasing, probably more than in much of the non-coastal US, as employment is still there, and employers in many industries still hire those outside of legal status no matter what, as there's no real recourse.

It's not much different here. The lucky ones who bought in a generation ago are doing fine, oldsters are often house rich at least, utilities are cheap, but this is not a place to retire, not even for the fortunately pensioned. The homeless issue in Seattle in particular is probably similar to some CA cities - it's widely known that some come north for the relatively tolerant attitude here (and legal pot). I have no plans to live in the Seattle metro area once I am not working a normal job.

gagrice

Thought you might get a kick out of this article. Seems the young are not really interested in the herd mentality when it comes to settling down.

Even at 24 years old, preschool teacher Bre Hataishi has her eyes set on a house.

For now, she rents a one-bedroom apartment in South Park with her boyfriend, but only because their income is nowhere near what they need to purchase.

When the time comes, the couple has little interest in the hundreds of condos being built in downtown San Diego, or anywhere else for that matter.

“We definitely want a house because we want to have dogs,” she said. “And kids someday.”

http://www.sandiegouniontribune.com/business/real-estate/sd-fi-millennial-study-20170302-story.html

fintail

I have to wonder if ownership in job centers will eventually approach a European 40/60 mix instead of the traditional American 60/40 mix. In my area anyway, I know very few owners in my peer group (a few years older than the oldest millennials) who own a house without significant family aid, and that's often received even when buying a slowly if any appreciating condo. It's just not doable in many area without two decent incomes.

gagrice

That has been the American dream since the 1960s. A house in the burbs with two cars in the garage. With two people working to accomplish their goal. Of course they wanted it to be just slightly nicer than the people next door. I think homes are expensive here. Then watch some of the home buying programs on the East coast. Small two story homes on a postage stamp lot that cost more than my 3000 sq ft ranch on an acre+. I don't think I would ever want less than an acre as a cushion between my neighbors. I just find it so much better when we don't infringe on each others choice in music.

fintail

I think the two income thing came into a majority maybe 25+ years later than the 60s - I am speaking as someone who grew up in the 80s, and I can confidently say the majority of my friends with both parents at home didn't have both parents working. My mom only worked occasionally, part time, until I was in high school. It now takes two incomes to buy what one could provide in the past. Housing, healthcare, education, all massively more expensive than when some older people set out. I can look at my grandpa's income ~55 years ago, and the house he bought at the time, compared to mine and the cost of a similar house today, and see why two incomes (or parental aid) are necessary for most living in popular employment centers. The American dream isn't what it once was, and will probably slowly decline as populations increase, and real incomes do not.

Houses are expensive in most places where salaries are healthy and the environment is nice. Most people who work where the jobs are can't imagine an acre within a reasonable distance (miles or minutes) of work. A co-worker of mine has an acre lot. She bought a little while ago, and admits she couldn't afford it at the prices of today. Her 15 mile commute took over 2 hours last Thursday. No thanks!

gagrice

I think CA was way ahead of the curve on women working. It started during the war and never ended. My mother and grandmother both worked in sewing factories while my father was away at war. My aunt took care of me and my little sister. We all lived on the same little property in Los Angeles. When my mother remarried in 1953 my stepfather worked two jobs and went to college so my mom could stay home with us kids. It was always a struggle for him. I went to work right out of HS for the phone company and helped my girlfriend get through college. When we married in 1964 she was working full time. I don't remember any of my friends during the 1960s that both did not work. It was the same in Alaska when I moved up there and remarried. My wife was a school teacher. I was always buying and selling real estate so two incomes came in handy. Now I don't have to worry if my pension or SS goes away. Investing for my future was always priority number one. We did not go out to eat or go to movies or concerts except on very rare occasions. I call it being fiscally conservative.

fintail

With CA being the den of progressiveness, that makes sense, and even for AK with no doubt a recurring general shortage of labor - one would work because work needs to be done, rather than just gaining income. But I suspect for most of the lower 48, especially more traditional areas, it wasn't as common. The only working two parent households I recall didn't have young kids (below junior high or so) at home. Daycare cost a bit even 30 years ago (immensely more now), and sometimes the second job is hard to pencil out. Most people can't rely on family for such help.

Still, a house that cost 2-3 years of a decent salary in the past can be 10 years or more of a similar salary today, at least in my area. Some people who got started earlier had lucky timing. Other cost of living issues just make it worse. When it's not too hard to find 30-somethings who still have vehicles provided by parents, or who receive massive gifts either in money or underpriced property when buying a place, it might be hard to compare everything as apples to apples. Fiscal conservatism is a good thing in most cases, and can be easier when stars align

gagrice

CA I am sure was keeping up with the latest and the Joneses. AK was unique. Almost everyone I ever knew came up to make their fortune and leave in a couple years. Of course that rarely happened except for those that built the Pipeline from 1971-77.

The early 1970s were pivotal in CA. Housing was in such high demand you put up a thousand dollars and your name went into the hat to get a home in LA & Orange County Suburbs. Thousands were waiting for every home built. Two things killed that boom. First the 1973 Oil Embargo, and then high interest rates. By 1980 we were in a full fledged recession. 1969 my wife and I looked at a brand new two story home in a subdivision right next to San Diego State. The Price was $25k which seemed like a lot of money. As houses had not gone up much the previous decade. The next year I followed my dream to Alaska. A home that would have cost $20k in San Diego was over $40k in Anchorage. So I rented and never caught the wave there. Two places have done well for me and real estate. Alaska and Hawaii. In 1980 when I left the farm to go back to my old job in Alaska things were heating up. My buddy and I bought two houses and remodeled them in 1981 and did quite well. Bought at $100k sold for $200k. By 1985 oil prices dropped and home prices followed. In 1991 I bought a home for $125k that had a $200k mortgage. Most of the money I made in Alaska went to buying land in AZ and HI. Both did quite well especially Hawaii. Oh that house by San Diego State. Nothing in that subdivision is less than $650k today. You win some and lose some in Real Estate. This is what you get there today, down in the Interstate 8 valley.

https://www.zillow.com/homedetails/5781-Adobe-Falls-Rd-San-Diego-CA-92120/2096723068_zpid/

fintail

Or win some/win some if you are in some areas, or lose some/lose some if in others. I have a co-worker who lived in FL for several years, and was there during the Dubya-era bubble. Their old house, bought for 250K in 2005, just sold again for 129K. Oops! For a wider timeframe, houses in my grandma's neighborhood - a non-trendy area some distance from the city proper (with a sometimes nightmarish commute these days), probably brought about 20K or so, 50 years ago. They routinely bring more than 400K now. Even in WA, not always so good. In the smallish town where my mom lives, houses that were 50K 25 years ago won't bring 100K now. Yet where I live, a house at 200K 25 years ago can easily be 1.5MM or more today. The rate of increase will have to stop soon, but I don't know if there will be a real crash here, with so much offshore money now on the scene.

That 1965 tract house would probably be similar where I am now - maybe 700-800K on a lot that size on the normal side of town, perhaps just over 1MM on the trendy side.

gagrice

Thought you might like to know. King County is in the top ten gainers in population last year. With a cool 15,500 international immigrants. I am sure they got the bucks to buy.

http://www.cnsnews.com/news/article/terence-p-jeffrey/chicago-detroit-baltimore-lead-nation-population-loss-maricopa-county

fintail

Yep, I believe it. Offshore buyers are a huge factor in the specific area where I live, ask no questions about the sources of funds. Not all new arrivals are that way, but money buys residency. I suspect with the new regime, it will only become more intense.

gagrice

I look at real estate all over the US and a few foreign countries. Places like this boggle my mind. I don't think you can find these kind of buys any West of the Rocky Mts. My realtor just sent me ten new listings. 3 BR 3 bath with 3 car garage for under $150k. It is small and a small lot, but a couple making MW could afford to live in this place. Payments are half of a two BR apt around me. Two mile level bike ride to all 3 Super markets and Walmart. I may get me a golf cart if we move out there.

https://www.zillow.com/homedetails/1831-Upland-Ave-Pahrump-NV-89048/62706513_zpid/



http://www.autoblog.com/2013/07/23/mercedes-designs-golf-cart-of-future-pics/

fintail

That house looks a little dreary, but some TLC would cheer it up no doubt. I don't know who'd grant a 150K mortgage with a $20/hr combined income, but a house like that would likely be cheaper than renting. Not sure what the job market is like there, without a long commute - doesn't look like a metropolis.

You can find places not too much different from that in rural areas of the PNW. Maybe easier without the heat, but the clouds might irritate some people.

Do they have street legal golf carts there?

MB has been behind this idea before:



I kind of like these silly 80s era fantasy ones:



Here's an elaborate one:

gagrice

I would say good jobs are limited. Though my sister has had $100k years dealing blackjack in the casinos. Pahrump has 3 good sized casinos. Several medical complexes with a brand new hospital. Those should provide good jobs caring for 40,000 senior citizens. The one thing that stood out was lack of apartment buildings. One small apartment complex in town. Not a single Condo or townhouse. My kind of place. There are several homes for rent in the $700 range. Not sure how nice they are. I have only rented an apartment one time in my entire life. I hated the noisy neighbors.

Most of the city roads are posted 35 MPH and people drive that speed. I have a feeling they enforce the laws there. I did not try to test them. A couple of the long stretches are 45 MPH. Golf carts are considered green so I would imagine they are allowed. This is what I would probably buy, to go running around the surrounding hills.

gagrice

Just found this bit of common sense for Pahrump.

Drivers of off-road vehicles will be able to use county paved highways to access trails, after passage of an amendment to Nye County Code by county commissioners Tuesday.

Nevada Revised Statutes allows county commissioners to designate any portion of a county highway permissible for operating off-highway vehicles to reach a private or public area open for use by those vehicles. That vehicle category can include all-terrain vehicles or motorcycles, dune buggies, a snowmobile or any motor vehicle used on public lands for recreation.

Pahrump Public Lands Advisory Committee Chairman Bob Adams spoke in favor of the bill but didn’t have to, commissioners quickly made the motion to approve. Adams said one benefit is it will reduce dust pollution from drivers using the side of the road.

http://pvtimes.com/news/road-vehicles-approved-limited-paved-use.html

fintail

When I mentioned the cheapish housing there to a friend who is familiar with the area, he replied "retirement area". I guess that looks right. Doesn't sound like a diverse enough economy to attract more younger workers, and that might be just fine according to most who live there now. Can a golf cart get up to 45? I don't know if I'd risk getting smashed by a distracted dolt in a truck. As population grows, and population consolidates just like wealth has in the past 35 or so years, apartments and condos will only be more common.

Those 4 wheel adventure ATV things are pretty cool, but I have seen some so expensive, you could buy a nice used car for the money.

gagrice

Most golf carts top out at 25 MPH. Those ATVs are a lot faster. Maybe too fast. They start about $10k and go up and over $20k. I would likely find a used one with only a few miles on it. I think I want to be on the North end of town. The racing school and Shooting facility are both on the South edge. I got a feeling the town fills up on the weekends.

http://www.springmountainmotorsports.com/

https://www.frontsight.com/index.asp?

fintail

If I lived in a little town and wanted something for local use, a vintage/antique car, like a Model T/A or similar, might be fun. They will do 40, are pretty reliable, and shouldn't depreciate too much - they have depreciated in the past decade or so and are pretty cheap now. 15K will buy a nice T or A or many other common 20s-30s cars. They probably are no less safe than one of those fancy ATVs, and you'll get tons of positive attention.

With land so cheap there, one could build their own little track if they were so inclined. I am sure zoning is easy there.

gagrice

I have always leaned toward VW based off road vehicles. Easy engines to work on. fun to drive and easy to license. And parts everywhere. You can still buy Meyers Manx bodies and frames etc.

http://meyersmanx.com/manxbuggykits.html

fintail

One of those would go over well, too, especially with that vintage look, and still probably cheaper than a fancy modern ATV. Ingress and egress might not be easy for people who aren't too limber, though.