The American economy is broken in several ways, but one of the biggest is housing. When I was a wee Wilder in my twenties, I bought a house that was about twice my income. The mortgage payment was doable, just barely.
I just looked up what it’s going for today, and the answer was . . . over 10 times what I paid for it. Was it a nice house? Sure. But not that nice. Why did it go up 10 times in value?
-WiscoDave
Why the price went up? Greed!!!
ReplyDeleteDidn't bother to read the article, did you?
DeleteNo I didn't, I still say that greed is a very important factor. In just about anything not right anymore.
DeleteThen why in the hell do I even bother posting anything anymore?
DeleteEvery day I get closer and closer to closing the comment section for good.
I like the effort and the blog. Thank you for your hard work.
DeleteKenny, I support if you do. You put a lot of work into this. It's gotten that too many people make it a chore. A lack of social good graces abounds.
DeleteI'm with Chuck and Rick. I'm a near daily reader and have been for years. I keep coming back for the sheer entertainment of your wide-net capture of the human condition from cute to zany, tragic to thoughful and all of it interesting.
DeleteThe whiny complainers piss me off, too, and I'm embarassed for them to be so ignorantly arrogant on your own hard-won turf here. Eff 'em!
I understand this is a lot of work and wouldn't be surprised at a decision to hang it up. You've been doing this for a long time, a true Internet vet. If there is ever an Internet Hall of Fame you have certainly earned your place in it!
When we bought our first property in 1985 interest rates were 11 to 13. We got an owner to finance the 5 acres at 10%. Sold it a couple years later.
ReplyDeleteGot our first house in 89. Rates were just under 10%.
I don't wanna hear complaints about 5% rates now. They act like somebody just dropped a house in our laps.
I dunno about anyone else, but the wife and i fought and scrapped and finagled and saved for that first house.
In 1975 I borrowed $200 from my grandparents to make a down payment on a 3 bdrm house from a private owner. I drove 70 miles to work one way to be in the country.
DeleteAnd how much did that house cost you in 1989? Average home price was 120k then, 4th quarter of 2024: 419k.
DeleteNow ask what his wages were back in 1989, or are you going to overlook that part?
DeleteNope, not overlooking that at all. Whatever $100 he made then, had the equivalent buying power of $254 dollars today. So even adjusting value backwards to say the house in 1989 cost 300k at 10% interest, it is still ~300 less per month than todays 420k house at 7.5%. So, yeah, houses were cheaper and the dollar went further, even if you weren't paid as much
DeleteAll I remember about 1975 was I was in high school working part time for about $2 an hour, gas was 34 cents a gallon for good leaded 97octane and my girlfriend grew a great pair of titties that summer...... 1984 was rough down here because the oil field had been in a slump during the Carter nightmare and was slowly working it's way back up to speed...
DeleteAll in all I still believe we had a better America back then.
JD
I planned to build a new house in 2017. Had the contract in place with builder. The only thing left was financing. The appraisal came in well under the cost to build and would have required a significant cash down payment that I did not have so I moved on. Over the course of the next couple years, I continued to search for a house. Very few houses on the market and when one popped up, there would be 15 people bidding on it the first two days on the market. Many people offered cash well over asking price. People needing a mortgage had no chance. I finally found a house in Dec. 2019 that needed some work. I paid $170k for it and have put a lot of money into fixing it up. An identical model across the street was listed couple weeks ago at $300k and sold immediately. I could sell mine for at least that much and probably more so almost double in 5 years for a modest 3 bedroom less than 1,500 sf. in a central Michigan suburb.
ReplyDeleteSo in my experience and observations, demand, availability, high interest rates, and high cost for new construction have all had a huge impact on housing. I work in the construction industry and construction costs have increased across the board, up to 30%, from early 2021 until now.
I don't any of these factors changing any time soon. Interest rates maybe but that won't do much good if the other factors don't improve!
I remember the Carter interest rates. Brutal. That house was in a desirable neighborhood and was just barely affordable.
ReplyDeleteThe prices today reflect not only investor buying but also how shit the dollar value is.
Whenever you hear, “this was $500,000 in 1925. Worth 1.2 billion in today’s dollars.”
It ain’t because today’s dollars are more valuable.
I'm happy someone talked about the elephant in the room ... those 30 million illegal aliens have to live somewhere.
ReplyDeleteMy son and his wife both skipped college and entered the workforce. They bought an okay house, nice neighborhood for about 180K. I think it's appraised at $450K now.
Both my daughters went to a 4 year university. They'll both be rent slaves for the foreseeable future. Its amazing how fast the houses went from affordable to unaffordable. Oh, the one daughter makes more than my son and his wife combined, but the son is way ahead financially.
The price didn't go up - your money is worth less.
ReplyDeleteNice fantasy. Unfortunately the facts on housing prices vs wages and the value of the dollar disagree with your absolutely unresearched, baseless claim. $30,000 dollars in 1950 does not equal 1.5 million dollars today. However a house worth $30,000 in 1950 will (all else being equal) cost approximately that much today. I should know. That's what my neighbor's house sold for back in 1951, and the latter price is within a couple hundred thousand of the asking price last month. It sold for more. Not even that special of a house. The market is beyond distorted, and it's unsustainable.
DeleteA friend of my son's is renting, in North Carolina, and paying more than my mortgage for monthly rent on a house smaller than mine. The nearest house they might've been able to swing was smaller than the rental, and the mortgage would have been around double the rent they're paying, with a ridiculous down payment.
I live in a suburb outside of Houston. Over the past 20 years they have built up the area quite a bit. I used to drive to work past empty fields and farms, now it's all subdivisions and stores. The thing is, no one but no one is building starter homes anymore. I remember back in the 80's there were several new developments in my hometown that were advertised as starter homes, smaller, simple lay-out, fewer options, and relatively cheap. That just doesn't happen anymore. Once a developer around here finally gets rights to build, they go straight for the McMansion style houses cause why build a cheap house when the way more expensive house still sells right away. As a result, young people are stuck in apartments much much longer and never get a chance to build any equity. That's a killer right there.
ReplyDeleteOH, and good schools? Yeah, we all know what that means.
Bought my first house in 1970 for $18K. Lived there for 48 years(until the wife passed). Realtor friend convinced me to put it on the market for $260K. It sold in 3 days - before it even got on the market - for $270K. Not the end of the story. The buyer put an estimated $200K(by my friend) into it and sold it six months later for $800K. This was an older house2/1 built in 1923 with a garage apt in the back.
ReplyDeleteOne of the things he doesn't mention is to tack on the principal and interest payments for the loans those college kids got. About $600 bucks a month for the next 20+ years. assuming they have been regularly employed with sufficient income to pay that. If they haven't, their credit rating is in the toilet, too, even if they've been doing everything else right. All of which is (part of) why more women than men are graduating from college. But the ones who do aren't starting families, and aren't going to anytime soon.
ReplyDelete