Crazy Housing Market

[LineSkiCat14]

In conjunction with @Ron Mehico 's points on home ownership in 2021, there's a huge rise in multi-generational homes. Where maybe a grandparent moves into a room or inlaw suite, or a young adult returns home for a few years instead of paying someone else rent.

A few friends have already done it, and we're strongly considering it. My mom lives alone and can't handle her home's up keep. She'd sell it, and we'd do some deal with her, buy a bigger house that can fit everyone. We handle the upkeep of the house and watch after her as she gets into her golden years, and we get her house sale money to put into this bigger home, plus utilize her for day care.

The wage growth just isn't there for people born in the 80's and after. My parents were both making 6 figures in the mid-90's (dont think either of their jobs pay substantially more today).. looking at homes that cost half of what they are now. Weren't rich by any means, but imagine that.. making $200,000 and looking at homes less than this number. Can anyone even under 40 do that these days? That your home costs LESS than what you make?

 

[bkingUK]

Have had 4 houses on block go for sale in past month. There were 2 in 2 years prior. Seems like bubble about to pop.

But if you’re going to sell house and buy, it’s not even worth it unless your switching markets or going to cheap area.

 

[American Dragon]

In conjunction with @Ron Mehico 's points on home ownership in 2021, there's a huge rise in multi-generational homes. Where maybe a grandparent moves into a room or inlaw suite, or a young adult returns home for a few years instead of paying someone else rent.

A few friends have already done it, and we're strongly considering it. My mom lives alone and can't handle her home's up keep. She'd sell it, and we'd do some deal with her, buy a bigger house that can fit everyone. We handle the upkeep of the house and watch after her as she gets into her golden years, and we get her house sale money to put into this bigger home, plus utilize her for day care.

The wage growth just isn't there for people born in the 80's and after. My parents were both making 6 figures in the mid-90's (dont think either of their jobs pay substantially more today).. looking at homes that cost half of what they are now. Weren't rich by any means, but imagine that.. making $200,000 and looking at homes less than this number. Can anyone even under 40 do that these days? That your home costs LESS than what you make?

Multigenerational homes is pretty common in many cultures/countries. Kind of tough for a lot of lower income people to do that though because of lack of space. My parents house it could be doable with them, my brother, and I since my brother and I are single. It would be a nightmare to put the two of us in there with each having a spouse with the tiny bedrooms and only having 1.5 baths. A queen or king size bed would take up quite a significant amount of space in the bedroom I grew up in.

 

[Anon1640710541]

The wage growth just isn't there for people born in the 80's and after. My parents were both making 6 figures in the mid-90's (dont think either of their jobs pay substantially more today).. looking at homes that cost half of what they are now. Weren't rich by any means, but imagine that.. making $200,000 and looking at homes less than this number. Can anyone even under 40 do that these days? That your home costs LESS than what you make?

You sound completely absolutely 110% out of touch with reality.


If your parents were both making > $100k/year 25 years ago, that means they had a *huge* income. The median household income today is only $70,000. So yeah, your parents were huge ballers.

As far as wage growth today -- there are TONS of ways to make a big income in today's economy. But (and you're not gonna believe this!!) the opportunities are likely different than what were available to your parents generation, the one before that, etc.

 

[LineSkiCat14]

You sound completely absolutely 110% out of touch with reality.


If your parents were both making > $100k/year 25 years ago, that means they had a *huge* income. The median household income today is only $70,000. So yeah, your parents were huge ballers.

As far as wage growth today -- there are TONS of ways to make a big income in today's economy. But (and you're not gonna believe this!!) the opportunities are likely different than what were available to your parents generation, the one before that, etc.

Both their jobs, Sales manager and Attorney, don't appear to have the same wage growth that matched with inflation. Are we going to pretend that wages haven't stalled in the last 15 years? And I don't mean burger flipper wages. I mean the middle income folks. System Engineers like myself seem to have plateaued.. and that's certainly the type of 21st century career your referencing.

The median income in 1990 was 55k. Only 15k more after 25 years. Seems to me house prices have far exceeded that.

 

[LineSkiCat14]

I mean, there's article after article that talk about how 20-30 year olds just cant achieve the dream of home-ownership. That buying a home is so costly, not just today, but even before COVID. Why is that? I'm not making this **** up lol.

 

[Anon1640710541]

** BREAKING NEWS **


Sales managers and attorneys often make a boatload of money.

 

[LineSkiCat14]

** BREAKING NEWS **


Sales managers and attorneys often make a boatload of money.

Substantially more than they did 20 years ago? I don't think so. Neither job as far as I know is keeping up with the rising cost of housing..

 

[Anon1640710541]

On a 30 year note, a $200,000 loan would run you about $13-1400/month with escrow.

In a city like Lexington, that makes home ownership very affordable to most people that have a good job.

 

[LineSkiCat14]

Multigenerational homes is pretty common in many cultures/countries. Kind of tough for a lot of lower income people to do that though because of lack of space. My parents house it could be doable with them, my brother, and I since my brother and I are single. It would be a nightmare to put the two of us in there with each having a spouse with the tiny bedrooms and only having 1.5 baths. A queen or king size bed would take up quite a significant amount of space in the bedroom I grew up in.

With my mom being an attorney... I don't know if I could ever live with her again lol. I'm pretty sure I'm 0 for 782 on arguments won.

She'd need her own entire unit for it to work hahaha.

 

[LineSkiCat14]

On a 30 year note, a $200,000 loan would run you about $13-1400/month with escrow.

In a city like Lexington, that makes home ownership very affordable to most people that have a good job.

Well I don't live in Lexington, but even 200k for a house there seems small. Weren't people here talking about 300+?

Albany New York is essentially 300k for something that's ready for a family and doesn't need that much work. You COULD find 200-250k.. but there's also a lot priced at 350-500k.

Granted, the market is hot. But do you really think wages have kept up? The median salary in 2019 (before COVID mind you) was 67k.. In 1989 it was 58k. That's really not a lot of growth.

 

[Anon1640710541]

There are TONS of houses available in Albany NY for $200k. Nice ones. Check out Zillow. You’re not gonna believe it, dude.

 

[cricket3]

Can we see the list of *nice* houses in Lexington for 200k?

 

[bradyjames_rivals]

Congrats on being poor.

I paid my house off at 38.

Congrats on the $200,000 pad in the armpit of America.

 

[Anon1640710541]

297 E 6th St
107 Westgate Dr
141 Manitoba Ln
3561 Rocky Hill Terr
1324 Hartland Woods Way
3308 Fields Ct



Try Zillow.


Those are nice homes for a 20-something/first time homebuyer, and all of them are nicer than my first home.

(9508 Saint Thomas Ave 37923 if you’re interested)

 

[cricket3]

A bunch of houses under 1000 sq ft and one next to Oxford Circle. Got it.

 

[Lord Z]

A bunch of houses under 1000 sq ft and one next to Oxford Circle. Got it.

Right in the heart of where they kill pizza deliverymen for their pie.

 

[Anon1640710541]

[laughing][laughing]

Oh, I’m sorry. I’ll go back and search for 2,500 square foot 5-bedroom homes with marble countertops, custom cabinets, an inground heated saltwater pool, 3 car garage and a golf course view.

Ya know, what every 26 year old first time buyer deserves.

 

[Ron Mehico]

To PTI’s point, the average new home size in 1981 was 1,700 sq feet whereas it’s 2,800 sq feet today (and I’m sure with much nicer finishes). So even though homes have increased disproportionately in cost, our demands and expectations for housing have too.

 

[cricket3]

Nice ones.

You’re the one that brought *nice* in to the conversation.

What about just a 3 bedroom 2 bath house around 1500 sq ft with a garage and no risk of stepping on a needle when you go for a walk. What most would consider an average house in Lexington.

 

[LineSkiCat14]

There are TONS of houses available in Albany NY for $200k. Nice ones. Check out Zillow. You’re not gonna believe it, dude.

Not ones you want. Either extremely small or in a bad area. Also, I should clarify, when I say Albany, I mean the Capital District. Albany, more or less, is **** these days. Nisky, Guilderland, Latham, Clifton Park are the towns you want (yes, some of those are in Albany COUNTY)

I look every day. As a fun exercise, I'd love for you to send me some, and I can yay or nay them. Not even to combat your point, just to tell you why they are priced at 200k. I'd be amaxed if you can find me a "nice" and safe home in Albany for $200k that can fit a growing family.

 

[American Dragon]

With my mom being an attorney... I don't know if I could ever live with her again lol. I'm pretty sure I'm 0 for 782 on arguments won.

She'd need her own entire unit for it to work hahaha.

I could easily live with my dad. My mom on the other hand, man it has to be desperate times to permanently live with her. I love her, but she is one hard woman to live with. Don't know how my dad has done it for 44 years.

 

[Anon1640710541]

Well the median home price in Lexington is around $250,000. So if you want “average” then you’re gonna pay for it.

My first home was well below average. Same with my parents. And their parents. We all survived. And the cool thing is you’re not required to live there forever. Turns out you’re allowed to sell later and buy something different.

 

[Anon1640710541]

Not ones you want. Either extremely small or in a bad area. Also, I should clarify, when I say Albany, I mean the Capital District. Albany, more or less, is **** these days. Nisky, Guilderland, Latham, Clifton Park are the towns you want (yes, some of those are in Albany COUNTY)

I look every day. As a fun exercise, I'd love for you to send me some, and I can yay or nay them. Not even to combat your point, just to tell you why they are priced at 200k. I'd be amaxed if you can find me a "nice" and safe home in Albany for $200k that can fit a growing family.

Dude.

I’ve seen House Hunters way too many times. People like you are awful.

 

[LineSkiCat14]

Well the median home price in Lexington is around $250,000. So if you want “average” then you’re gonna pay for it.

My first home was well below average. Same with my parents. And their parents. We all survived. And the cool thing is you’re not required to live there forever. Turns out you’re allowed to sell later and buy something different.

Is that in reference to my post? I imagine Lexington is a bit higher in price than Albany.. but the Capital District is weird.

FWIW, I'm in my "first home" which is a duplex that needed work and was still $150k (now $230k according to Zillow). So I've gone a bit different of a route. And yes, first homes should be cheap.. but so were our parent's first homes. My parents ACTUAL home (after their 1st home), when they were in their late 30's, was still just $150k. That was 4 bedrooms, 2.5 baths, a barn, chickencoop that I smoked a lot of pot in, and 30 acres of land. The house today appears to be double that. But wages haven't doubled.. just for the entry-jobs.

 

[LineSkiCat14]

Dude.

I’ve seen House Hunters way too many times. People like you are awful.

I guess you're the poor one it seems lol.

 

[KingOfBBN]

Blackrock (mainly) and other investors are purchasing every bit of real estate they can get their hands on. They're paying cash. That's why they're just skipping the inspection because it isn't required with a cash deal. It's also why there won't be foreclosures either, because it's a cash deal.

This is an incredibly dangerous artificial alteration to natural market forces. It isn't natural to continually bid well above asking price for anything and everything on the market. Combined with inflation and rise in building costs, it will be literally impossible to buy a home unless you're a top earner.

Congress and/or the ags office needs to investigate this immediately. They can't just allow a giant investment company to buy up much of America. At bare minimum, they need to see exactly what the motive is and who are the investors in this fund that's holding the properties. Of course they can't be bothered to do something actually important so they continue to be on talk shows and have grandstanding hearings about nothing

Well they’re super close to China as well as our politicians so good luck.

 

[cricket3]

Who TF is talking about first homes? This whole argument started about a couple making 200k, four times the median household income in Lexington.

 

[kritikalcat]

297 E 6th St
107 Westgate Dr
141 Manitoba Ln
3561 Rocky Hill Terr
1324 Hartland Woods Way
3308 Fields Ct



Try Zillow.


Those are nice homes for a 20-something/first time homebuyer, and all of them are nicer than my first home.

(9508 Saint Thomas Ave 37923 if you’re interested)

I live a block over from Westgate. Love my street, and Westgate is pretty nice (not as nice) too. Definitely affordable, relatively speaking. My house would be worth $600K+ in 40502 but I might be able to sell it for $300K in ‘04 (we plan to retire in it.)

 

[kritikalcat]

A bunch of houses under 1000 sq ft and one next to Oxford Circle. Got it.

Westgate being next to Oxford Circle is misleading. It’s an island. Dead end street, fenced off with no outlet. Nothing that happens on Oxford is intruding into Westgate. It’s like saying that Fayette Park is sketchy

 

[kritikalcat]

Should I be paying off 2.75% mortgage money to have my house free and clear when my wife retires in 8 years, or investing what I’m paying in extra principle in the market instead? We’re already maxing our 401Ks

Should I keep my rental home ($1400 rental income, $600 mortgage) or sell it and take around $100K tax free, hold and let the market cool a little, then use as a down payment on a multi family property? If I hold on as rental property I have to figure out a strategy to avoid getting killed on taxes when I sell because the basis is so low. Transfer now to an LLC or Trust and reset the clock? 1031?

 

[LineSkiCat14]

Should I be paying off 2.75% mortgage money to have my house free and clear when my wife retires in 8 years, or investing what I’m paying in extra principle in the market instead? We’re already maxing our 401Ks

Should I keep my rental home ($1400 rental income, $600 mortgage) or sell it and take around $100K tax free, hold and let the market cool a little, then use as a down payment on a multi family property? If I hold on as rental property I have to figure out a strategy to avoid getting killed on taxes when I sell because the basis is so low. Transfer now to an LLC or Trust and reset the clock? 1031?

How much time is left on the loan? And do you know how much of that monthly payment is going to interest. There are some calculators out there that can show you a bit better. But it sounds like you're already close to the end of the mortgage, so IDK how much you'd be saving. It might be better to just invest that extra money. For almost any house, this is why it's better to stick with the 30y mortgage as opposed to the 15y. Yes, the 15y means you'll be saving tens of thousands at the end of the loan, but if you just invested the monthly difference, you would likely have MORE money in the end.

I would keep the rental, unless you're 55/60+. Sounds like you enjoy doing it, if you're even thinking of getting another one, and who knows what this market will be like. That said, if you're close to retiring, where maybe maintaining said property becomes more of a hassle, then maybe sell it and take the profit (or use the profit for a vacation home).

Not sure about the last part or why you'd get killed with taxes if you're holding.

 

[LineSkiCat14]

@kritikalcat Also, how is your tenant? If they are even decent, that's more reason not to sell. Good tenants are invaluable, especially if they stick around for a few years or more. In my mind, being a successful landlord isn't about making the MOST money, but instead about tenant retention. My goal is to have the least amount of vacant months for my properties and keep the number of new tenants as low as possible. I could charge my one tenant another $150-200.. but I'm pretty sure she'd move, and she's been here for 6 years, likely staying several more. Not worth it to try and squeeze that little bit more out of her, if it means I'm dealing with finding a new tenant (potentially worse one) in a year. Plus, just one month of that unit being unrented would wipe out any gain by that rent increase.

But on the flipside. If the tenant blows, then that might be a reason to bail now. You'd sell at an incredible time and simulteanously shed a bad tenant.

 

[Anon1640710541]

Nobody, not a single person, turns around and “invests the difference.”

Pay your house off. It feels amazing.

 

[LineSkiCat14]

Nobody, not a single person, turns around and “invests the difference.”

Pay your house off. It feels amazing.

If I didn't make the mistake of going to a 15y myself, I'd be using that extra $400/month to build towards my next property, or, yes, investing it. That's how people build up their property portfolio.

https://bestwealth.net/why-you-should-almost-never-choose-a-15-year-mortgage/

There is something to be said about being debt free, for sure. So I can see why people choose that.

 

[Rex Kwon Do]

Nobody, not a single person, turns around and “invests the difference.”

Pay your house off. It feels amazing.

Yup. Was in a position to do so, so wrote a check for my house last year. I know “the book” says it’s better to invest that money when your note % is pretty low, but it feels fantastic. I get that’s not everyone’s reality at the moment, but there was a time it wasn’t anywhere close to mine either.

I have lived some pretty volatile times in small business life, head sleeps much better on the pillow after that.

 

[kritikalcat]

On a 30 year note, a $200,000 loan would run you about $13-1400/month with escrow.

In a city like Lexington, that makes home ownership very affordable to most people that have a good job.

Mine is a little over $200K and less than $1200 with escrow - though I got it at 2.75% and haven’t looked at current rates

 

[kritikalcat]

@kritikalcat Also, how is your tenant? If they are even decent, that's more reason not to sell. Good tenants are invaluable, especially if they stick around for a few years or more. In my mind, being a successful landlord isn't about making the MOST money, but instead about tenant retention. My goal is to have the least amount of vacant months for my properties and keep the number of new tenants as low as possible. I could charge my one tenant another $150-200.. but I'm pretty sure she'd move, and she's been here for 6 years, likely staying several more. Not worth it to try and squeeze that little bit more out of her, if it means I'm dealing with finding a new tenant (potentially worse one) in a year. Plus, just one month of that unit being unrented would wipe out any gain by that rent increase.

But on the flipside. If the tenant blows, then that might be a reason to bail now. You'd sell at an incredible time and simulteanously shed a bad tenant.

The tenant is good, but I expect they will buy a place once the market cools down. Current lease goes to September and they might extend but I don’t expect to keep them long term. I’m thinking about spending the money to furnish the place and listing it with an agency that finds housing for traveling healthcare workers, but I’m on the edge of how far you can be from most of the hospitals and still do that.

 

[kritikalcat]

How much time is left on the loan? And do you know how much of that monthly payment is going to interest. There are some calculators out there that can show you a bit better. But it sounds like you're already close to the end of the mortgage, so IDK how much you'd be saving. It might be better to just invest that extra money. For almost any house, this is why it's better to stick with the 30y mortgage as opposed to the 15y. Yes, the 15y means you'll be saving tens of thousands at the end of the loan, but if you just invested the monthly difference, you would likely have MORE money in the end.

I would keep the rental, unless you're 55/60+. Sounds like you enjoy doing it, if you're even thinking of getting another one, and who knows what this market will be like. That said, if you're close to retiring, where maybe maintaining said property becomes more of a hassle, then maybe sell it and take the profit (or use the profit for a vacation home).

Not sure about the last part or why you'd get killed with taxes if you're holding.

I just bought it last year, 30 year loan to give me flexibility if I need a lower payment; but I’m putting $1600/month into extra principle payment to pay it off in 8

I’ll be 55 next year. My wife is 47

I will try to explain my thinking on the taxes later. Thanks for the reply

 

[LineSkiCat14]

The tenant is good, but I expect they will buy a place once the market cools down. Current lease goes to September and they might extend but I don’t expect to keep them long term. I’m thinking about spending the money to furnish the place and listing it with an agency that finds housing for traveling healthcare workers, but I’m on the edge of how far you can be from most of the hospitals and still do that.

So sounds like the tenant isn't long for the apartment. Which means the painstaken process of cleaning, fixing, tenant interviewing, and praying to God the tenant you picked isn't going to be an issue. Interesting idea about being close to the hospital. I try and look for properties that are near college and hospitals. Because there's an abundance of high paying jobs near by. Plus, I'll take college kids over white trash/poor people any day of the week. And if the hospital/university ever grows, they might try and buy your place. Several blocks near Albany Med were bought up and demolished. Owners of the property made out pretty well.

I just bought it last year, 30 year loan to give me flexibility if I need a lower payment; but I’m putting $1600/month into extra principle payment to pay it off in 8

I’ll be 55 next year. My wife is 47

I will try to explain my thinking on the taxes later. Thanks for the reply

Ahh, well if you're close to retiring, and it sounds like you might be getting OUT of the landlord game (and not deeper into it), then maybe paying it off ASAP is worth it for the piece of mind. Financial stability and removing it as a stressor is important.