patrick.net

Remember: There is no such thing as "everyone being permanently priced out of the market."

It could take 15 years or 25 years, but the boomers will eventually make the long-overdue appointment at the funeral home, where the mortician will yank away the breathing tubes and encrusted diapers.

Then comes the celebration: the burning of the Woodstock memorabilia and the throwing away of the Emerson, Lake and Palmer 8-track tapes, plus a final derisive chorus of "Talking 'Bout My Generation" as the boomer ashes scatter into the wind.

Either prices come down at that point, or the government will cover half the cost of the purchase.

HydroCabron says

It could take 15 years or 25 years, but the boomers will eventually make the long-overdue appointment at the funeral home, where the mortician will yank away the breathing tubes and encrusted diapers.

The problem is this: the population will grow despite the passing of boomers and we are not building enough. So prices will just climb at the level appropriate to exclude enough people. The millenials will get there in time... when the next generation is itself excluded.

There was a time when people would just go into the woods and build log cabins as they needed.
Now housing is totally controlled by people who profit from it, including current owners.
So it has been made into this privilege that people spend their lives paying for.
A commodity the price of which has to keep rising just to avoid plunging the world into a new dark age (or so they say).

Well you can always move to the Midwest and find decent homes for decent prices. I will be done paying my mortgage in about 5 yrs and still have other liquid investments. No way in hell would that be true in CA.

HydroCabron says

Then comes the celebration: the burning of the Woodstock memorabilia and the throwing away of the Emerson, Lake and Palmer 8-track tapes, plus a final derisive chorus of "Talking 'Bout My Generation" as the boomer ashes scatter into the wind.

Your lips to God's Ear. First, however, we have to endure a decade or more onslaught of Senior Hook-up Websites and Depends Ads to the Tune of "Satisfaction" by the Stones.

The woods are all on protected park land, and the rest of it is owned by corporations, kept barren to maintain housing prices high.
You've got to place your domestic abode somewhere! Unless you buy a boat and live like a retired pirate.

why don't we just do away with intergenerational separation and institute one continuous mindfuck?
we can then delete the word "exclusion" from Merriam webster, libby style..

Heraclitusstudent says

. when the next generation is itself excluded.

Welcome to my world.

It took me 40 something years to get my shit together enough to buy a "Starter Home".

I imagine that if the only skills you possess is a Liberal arts degree, that number might be greater moving forward.

Call it Crazy says

Here is all the starter home they can afford

If you could collateralize and securitize that tent, it would suddenly be worth more than the GDP of Germany. Someone could conceivably live in it, so no matter how much you pay, its price can only ever go UP!

Last week, at a store, a customer unintentionally leaned together two pieces of drywall. The inadvertent creation of a lean-to potential dwelling caused a seismic surge in GDP, registering 5.9 on the FRED graphs' Richter scale. Alas, GDP returned to its previous level when the customer decided to purchase only one of the two pieces.

Heraclitusstudent says

Young Adults Are Losing All Hope of Buying a Starter Home

Hope? They still had hope? Fools.

Buying a home? I think they are buying a mortgage.

Call it Crazy says

Here is all the starter home they can afford:

Nah more like this:

Log cabins were what maybe 20x25 feet? Most of humanity has lived and died in small houses without granite countertops and giant TV's.

Heraclitusstudent says

Now housing is totally controlled by people who profit from it, including current owners.

Uh, excuse me? And instead it's suppose to be 'controlled' by who??? The government? The ... who?? Last I looked it wasn't a non-profit, and as long as people are stupid enough to pay insane amounts for housing in CA, it will remain as is. I don't understand what the alternative is?

Heraclitusstudent says

So it has been made into this privilege that people spend their lives paying for.

OR - people could use the brains God gave them and move to somewhere that a house doesn't cost you the rest of your life's earnings. You want to live somewhere, well there are costs associated with living there including gas, food, taxes, utilities and housing. You want to (need to) live in CA, then you get to pay too much for gas, too much in taxes, too much for utilities and too much for housing. You don't want to pay that much, go find somewhere else to live.

Heraclitusstudent says

A commodity the price of which has to keep rising just to avoid plunging the world into a new dark age (or so they say).

No - a commodity that stupid people are willing to pay stupid prices to obtain. Many areas of this country have people who think/feel that this is the ONLY place to live - good for you, now you get to pay the price. If you don't hang with those lemmings, you won't have to pay like all those sheeple.

a mortgage is a lifelong chain around ones neck.
why would one hope for that?
the thread title is an oxymoron.

Heraclitusstudent says

Young Adults Are Losing All Hope of Buying a Starter Home

SoftShell says

a mortgage is a lifelong chain around ones neck.

why would one hope for that?

But rent isn't? You're going to pay to live somewhere whether you have a mortgage or not.

Heraclitusstudent says

So it has been made into this privilege that people spend their lives paying for.

A commodity the price of which has to keep rising just to avoid plunging the world into a new dark age (or so they say).

Financialization.

HydroCabron says

Then comes the celebration: the burning of the Woodstock memorabilia and the throwing away of the Emerson, Lake and Palmer 8-track tapes, plus a final derisive chorus of "Talking 'Bout My Generation" as the boomer ashes scatter into the wind.

You don't have to wait for them to die to throw out their junk! You only have to wait until they make it to the nursing home, or get dementia.

http://www.mybudget360.com/young-broke-americans-debt-young-american-worker-college-debt/

Even when the boomers die off and houses fall in value due to over supply you'll still a decent income to buy one.
There are lots of Boomer era houses for sell here, (Baton Rouge)lots with "new price" in the listings.
The only thing that is selling are houses for the"high dollar" crowd.
The median here is around 180k, too rich for most young people.
Or you can choose to live in undesirable (the hood) area. it's a "tale of two cities"

Cash is so old fashioned. Debt for college, debt for homes, debt debt debt. Build a log cabin where? In a National Forest? The Rangers will take your ass in. In a cheap rural area? Where will you work, in a Meth Lab? Many rural areas regulate the size of houses, because they don't want to be overrun by vacation homes.

I've decided to view my mortgage/home as a "joint investment" with the bank. After all, I do have a substantial amount of capital invested in it.

jvolstad says

Buying a home? I think they are buying a mortgage.

While it may seem that way at first, you would be surprised how time flies. When the bubble peaked, I still had approx. 20+ years to go. Now, here we are in year 2015 and I am astonished to realize I only have 9 years left (I pay on a slightly accelerated pace), meaning I will be 51 years old with no more mortgage payment for the rest of my life. Compare this to the handful of regular posters who admit that they have rented the same house for 10 - 15 years or longer. If Patrick had bought when he seriously thought about it in 1999, he too would be seriously contemplating life that was largely payment free. Hopefully his savings are as large as he likely has another 30-50 more years of possibly escalating payments ahead of him.

Heraclitusstudent says

Young Adults Are Losing All Hope of Buying a Starter Home

I'm not very well traveled so I'll defer to the experts.

Is the usa the only place where certain houses are referred to as Starter homes?

komputodo says

I'm not very well traveled so I'll defer to the experts.

Is the usa the only place where certain houses are referred to as Starter homes?

Nope.
http://www.new-homes.co.uk/starter-homes/
http://www.stuff.co.nz/national/politics/2305522/Cheap-starter-homes-with-style
http://www.whichmortgage.ca/article/canadians-stuck-in-starter-homes-181904.aspx
http://www.french-property.com/vp/nv/ds/brittany-morbihan-guer-house/id/533026/

Cheap rv in a Kmart parking lot is mortgage rent free. There are always options

tatupu70 says

But rent isn't? You're going to pay to live somewhere whether you have a mortgage or not.

What are you mutts whining about. You should be thankful for California manufacturing this housing shortage and the consequent rise in the cost of housing given to you by the Fed. Otherwise Calif would be Texas.

You are ingrates.

SoftShell says

Cheap rv in a Kmart parking lot is mortgage rent free. There are always options

As long as you remember you're just renting the RV from the bank and from the state. Debt slave.

CDon says

If Patrick had bought when he seriously thought about it in 1999, he too would be seriously contemplating life that was largely payment free

Decent houses in Palo Alto/Mountain view area were 1M+ in in 1999 already which means even he paid it off he would still be paying 1K + per month in property taxes. Prices in that area are highly correlated with Nasdaq. Buying Nasdaq in 2009 would have produced much better unleveraged return than the housing there.

tr6 says

Decent houses in Palo Alto/Mountain view area were 1M+ in in 1999 already which means even he paid it off he would still be paying 1K + per month in property taxes. Prices in that area are highly correlated with Nasdaq. Buying Nasdaq in 2009 would have produced much better unleveraged return than the housing there.

But you can't live in a stock certificate. Buying a house allows you to not pay rent so you have to include that in your return calculations.

Call it Crazy says

Really? You don't think you could get a nice RV free and clear for the same 20% down payment you put on a crap shack in Illinois?

Maybe, but you're still renting from the state at that point.

Heraclitusstudent says

The problem is this: the population will grow despite the passing of boomers and we are not building enough.

Building more homes goes hand in hand with the ability to get mortgage loans. Why does my 23 year old who qualifies in every possible way, not get a loan for a silly technicality. Her company pays part of her earnings in the form of bonuses, so she won't qualify until August when she will have had 2 years of receiving bonuses. Her FICO is 800. Debt free. 20% down.
In the meantime that $400K condo will end up at $450K in 6 months. The housing market is picking up again my friends. I assure all of you, prices will be a lot higher by December.

Strategist says

he housing market is picking up again my friends. I assure all of you, prices will be a lot higher by December.

I guess it is incumbent upon me to say, think that one over before you give your daughter such bad advice.

Have her read Patrick's book on the subject.

Call it Crazy says

Strategist says

In the meantime that $400K condo will end up at $450K in 6 months.

Tell her to move to NJ, that $450K condo would be $175K here... Just think how much she'll save on the mortgage payments!!

My wife would kill me if I encouraged our baby to move out of state. Besides, she loves California and her job is in Irvine.

indigenous says

Strategist says

he housing market is picking up again my friends. I assure all of you, prices will be a lot higher by December.

I guess it is incumbent upon me to say, think that one over before you give your daughter such bad advice.

Have her read Patrick's book on the subject.

You can't go wrong buying property in Orange County. It's just not possible. She will get room mates that will cover most of the payments, resulting in her share being the same as her room mates. The difference being, she will get the tax write off.

Strategist says

Besides, she loves California and her job is in Irvine.

Irving Texas you say?

It is just that the timing is off. And the whole anchor thing which will keep her from moving if a better opportunity comes up or marriage.

indigenous says

It is just that the timing is off. And the whole anchor thing which will keep her from moving if a better opportunity comes up or marriage.

hmmmm. good point. She could rent it if she moves, as she will be breakeven. I don't mind managing it for her.

Yup cept the prices ARE going to come down. Don't be a: those who don't know history are doomed to repeat it type dude.

indigenous says

Yup cept the prices ARE going to come down. Don't be a: those who don't know history are doomed to repeat it type dude.

That's where we disagree. Prices have already started to jump, with the lower priced condos in Ladera Ranch where she wants to buy, getting snapped up.
We went to check out new homes they are building next to Ladera Ranch, which gave us sticker shock. $800K for a new 2500 sq ft home, on a 3500 to 4000 sq ft lot. Add to that $100K in upgrades, and Mello Roos to your payments. All those homes are getting snapped up.
It felt like the Bay Area. :(

Strategist says

That's where we disagree. Prices have already started to jump, with the lower priced condos in Ladera Ranch where she wants to buy, getting snapped up.

We went to check out new homes they are building next to Ladera Ranch, which gave us sticker shock. $800K for a new 2500 sq ft home, on a 3500 to 4000 sq ft lot. Add to that $100K in upgrades, and Mello Roos to your payments. All those homes are getting snapped up.

It felt like the Bay Area. :(

Ok but don't say I didn't warn you, you are being taken in by Group Think, Mass Hysteria type deal. You WILL regret it.

BTW giving financial advise is not something I do lightly but in this case your thinking is so egregiously bad I have to say something.

I wonder how much of the economy suffers in Calif because of the increased cost of housing that takes away from discretionary spending?

I mean if there were no regulations the volume of housing would be much higher and the cost much lower. Sort of like how NYC limits the number of taxi licenses that it puts out. To where I have heard Rothbard say the going rate is 100k for a license or Sowell say the price is 500k

bob2356 says

komputodo says

I'm not very well traveled so I'll defer to the experts.

Is the usa the only place where certain houses are referred to as Starter homes?

Nope.

http://www.new-homes.co.uk/starter-homes/

http://www.stuff.co.nz/national/politics/2305522/Cheap-starter-homes-with-style

http://www.whichmortgage.ca/article/canadians-stuck-in-starter-homes-181904.aspx

http://www.french-property.com/vp/nv/ds/brittany-morbihan-guer-house/id/533026/

LOL...I wasn't asking if americans call small homes in other countries "starter homes". I was asking if the people in other countries referred to small homes as STARTER HOMES.

Please correct me if I'm wrong. Is it true that most people in other nations, spent most of the pay in houses and as such don't have much discretionary spending? In USA, post-war policy turns almost every American households into a middle income household, Americans become the biggest consumers. If my thinking is correct, we are now "reverting to the mean"... just like any nations.

komputodo says

LOL...I wasn't asking if americans call small homes in other countries "starter homes". I was asking if the people in other countries referred to small homes as STARTER HOMES.

Try reading the link names. .co.uk is uk .co.nz is nz .ca is canada. french-property.com is also uk which is why all the phone numbers are international code 44. Those pages ARE people in other countries.