I hate these articles.
Please tell me more how that down payment assistance program will help you buy that $1m house you mentioned, Mr dude.
(Narrator: it doesn’t. I don’t mean to rip dpa’s cuz it’s a good idea, but there’s little way it can help people in locations with crazy housing markets. If you make a salary that qualifies, there is still no house you can afford that’s not a tear down. If you make more, you don’t qualify so you still can’t afford it.)
😡
https://www.forbes.com/sites/jamiegold/2023/08/08/heres-how-gen-z-can-become-homeowners/
@Beanc Give it a few months. The apartment market is beginning to soften. Housing is probably next.
https://fortune.com/2023/09/18/rental-market-softening-lardlords-offering-deals-says-redfin/
@Coctaanatis I appreciate the optimism, but the improvement required when median houses are 10-20 times median salary is….. if solved by softening.
As the author notes, the house he grew up in , accounting for inflation whatnot, would be about $250k and sold for over $1M.
It’s untenable.
@Beanc Older houses really aren't comperable to modern houses. Most were much smaller, lacked air-conditioning and building materials were lower grade. Fortunately, most of the really bad houses, think coldwater shotgun shacks, tiny capes, etc., are gone.
Also location makes a huge difference. As cities and suburbia have grown, so have median house prices. But in many rural areas houses are, even at today's inflated prices, relatively inexpensive.
@Coctaanatis @Beanc: The home I sold in 2016 for $145,000 because that was what it was appraised at then was on the market again earlier this year for $235,700. It's a 2,010 sq. ft. ranch style house on one acre and with a nearly matching rental house less than thirty feet to its west. The house is a modular built in July of 2001. There are 1.5x as many houses within two miles as there were in 2001.
The house is NOT worth $235,000.
@thedisasterautist @Beanc Prices are very high now, but if you see my earlier comment, real estate prices regress towards a mean trend line.
(And, yes, I used one for California, but it applies more broadly.)
Prices well above the trend line are a good sign not to buy as historically they tend to peak and then fall back to the line.
@Coctaanatis @thedisasterautist yes. But the point we’re making is that real housing price growth is crazy.
Yes the prices are high compared to the trend.
But of the TREND is much higher than it was 20-30 years ago (and it is/ adjusted for salaries or inflation or whatnot) , then its a huge barrier for new entrants.
And yes, per FRED, ot applies broadly,
@Beanc @Coctaanatis: I wasn't arguing that it didn't/wasn't. I wasn't disagreeing. I was just exampling(?) of how bananas it all is.
@thedisasterautist @Coctaanatis haha no I was agreeing with you.
Anyhoo…
Buy me house?
*bats eyelashes*
@Beanc @Coctaanatis: I can't even afford an apartment, alas.
@thedisasterautist
Sorry.
It’s all crap 😭
@Coctaanatis
Sure. But you’re arguing things I didn’t post. Personally, I don’t care that the houses I can’t afford big/fancy- frankly, that’s part of the issue. And tbh, I don’t think housing was *that* different 20-30 yrs ago.
Back to OP. I said if you’re in a city with a hot market, it’s near impossible (genz )to buy a house. Many jobs *require* urban location. I have few options in location. Further, real housing prices (FRED) are country-wide, so on the whole, rural /city still trends.
You showed CA. So let’s look at LA.
MEDIANS:
Gross Salary: 38k/3k mo
household: 80k/6k mo
Median home price: 800k/est. 5k mo all-in
The above ignores income taxes as well.
If you subscribe to the “housing 1/3 of gross) a median 2-person household should have a salary of ~$15k / mo to buy a median house.
DPA in la county requires a salary max of ~ 70k. Huge gap. Obviously we’re talking medians here, but that gap should say a lot - Even if you’re looking for a crap house.
@Beanc @Coctaanatis
Worth noting that a new buyer of property in LA county gets new exciting property tax rates too. And they can be breath-taking.
@b4cks4w @Beanc Sure, and if the trend line is at 200%, of the price in 2000, but the market is at 450%, what does that tell you about where the probable future direction of the market is? It may take a bit, but look at what happen in 2008.
And, yes, real estate taxes are a pain, but not compared to carrying a house at a high interest rate.
I make good money and still can't buy a home in Portland, where I want to live.
I could afford a not-great house here in Dallas, in a neighborhood that doesn't suit my needs as someone who doesn't drive.
I wondered how some of my friends managed to buy houses, and realized they all have two (or three) incomes. (And bought them a decade ago.) For a single person? Home ownership if pretty much out of reach.
@b4cks4w heh. Didn’t know they changed em.
I just used Zillow estimates, tho I would hope)?) they estimate the most recent rates.
@Beanc my understanding from being out there a while back is new buyers always get an updated rate and legacy owners keep whatever rate they started with. So families do acrobatics to pass properties along.
@Coctaanatis
Sure, but that chart proves my point (although CA specific, the issue isn’t).
The price index is the baseline.
Houses are five times more expensive than one (or two) generations up *at the baseline*
Said differently, that house that is $ 1m + in the article will *never* drop to the 258k it would be just accounting for inflation, that older generations saw the joy of.