patrick.net

B.A.C.A.H. says

A houseload of such hot-bunking hard-working adults living their American Dream pool their money and make it work to get a mortgage.

My neighborhood has many such folks That's why it's so difficult to find parking where I live.

So what third world shithole town in California do you live in ?

Yes, they over-occupy a house and do other things to make the neighborhood look like a third world shithole.

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AD says

So what third world shithole town in California do you live in ?

Cool And Hip San Jose, in The Cool And Hip Silicon Valley USA.

AD says

make the neighborhood look like a third world shithole.

Ahem, make the neighborhood look like a third world a shithole.

AmericanKulak says

And you've got the infamous NJ Property Tax, which must be murder on a $400k+ house.

Before they all left Long Island or died out, this was a big freaking concern of my Long Island middle class homeowner relatives back in the 70's - 80's. The taxes were so high that it took a long time to sell a house.

The taxes on a new purchase are even more ridiculous here in the Bay Area. But so far at least we have no shortage of Greater Fools rushing to buy-in to the super high taxes that come with the "privilege" of being a Cool And Hip Bay Area Homeowner. Like that dude with the handle "BayArea" who used to post on this blog.

B.A.C.A.H. says

Before they all left Long Island or died out, this was a big freaking concern of my Long Island middle class homeowner relatives back in the 70's - 80's. The taxes were so high that it took a long time to sell a house.

Friends who still live there say there are now 5-6 story apartment buildings all along 25A and as far east as Wildwood Park.

The South Shore is worse... there are now big time M13 gangs and daily gang-related murders all over the Town of Babylon.

RWSGFY says

mell says

WookieMan says

Most boomers are on fixed income.

That means nothing, everybody is when they stop working. There is no reason for a boomer to be broke, just look at the house price appreciation. It's the same for the east coast. Pension and 401k plans just started getting slashed in the past 2 decades til now, and some may still be too high to be sustainable.

I understand the "pensions getting slashed", but what does "401k getting slashed" mean?

You are correct, I used it as a broader term for benefits. There are annuities, 401ks, pensions, sometimes employers match 401ks. Used to be the norm, not anymore. So matching got slashed, not the 401k itself.

B.A.C.A.H. says

AmericanKulak says

Hector the Mexican and Alice the $18/hr cashier single mom can't afford $450k for a 1800 sq ft ticky tack shack they don't need and can't buy.

A houseload of such hot-bunking hard-working adults living their American Dream pool their money and make it work to get a mortgage.

My neighborhood has many such folks That's why it's so difficult to find parking where I live.

Exactly. Back in the days a single earner would do, no over occupation. It's ridiculous to argue that today's avg wages have an even remotely similar buying power than the boomers.

@B.A.C.A.H. Around south east side, prices are rising at least in some pockets. I know someone sold for 2.7 and bought slightly up on the hill side for 3.7m cash (nvidia options)

AmericanKulak says

there are now big time M13 gangs and daily gang-related murders all over the Town of Babylon.

That's sad. I never lived there, but when I was a kid visited a lot.

I have lots of fond memories of times in The Village of Babylon and visiting folks in South Shore Communities, taking LIRR into NY, going by car to the Mets and Yankees.

One relative "escaped" to the North Shore (long since retired and "escaped" again to low-tax Tennessee).

I'm glad for the "Haddonfield" childhood I had. Those days are gone.

My grandparents lived a stone's throw from the Babylon HS and Public Library.

mell says

Exactly. Back in the days a single earner would do, no over occupation. It's ridiculous to argue that today's avg wages have an even remotely similar buying power than the boomers.

Aaron Clary (Fellow NY'er and Xer) has a great intro on this:
https://www.youtube.com/live/PYo2KrXm7eM?si=8elVbe4deIsanpp5&t=32

"I brought my first house for twenty five thousand dollars, I worked all year waiting tables at the dinner and saved every dime for the $5000 downpayment! You can pick yourself up by the bootstrapps, bucko!"

I had a taste of it, so no harsh feelings on my end for the Boomers, but to tell Zoomers this is more out of touch and out of date than lacing Hall and Oates drinks with LSD. 12-year old Kias with 100k Doordash miles are going for $10k, you don't even get a Guinea Gunboat or 70s Dart with a backseat big enough to have an orgy in the width of 3 rows of economy on Delta.

And those boomers who are like "$25? that's bullshit" my dad's first house, which last sold for $380k around 2000, he brought NEW for $40k in 1970. And Nassau County was one of the highest priced suburbs in the country then.

I remember visiting 1200 sq ft ranch modles in Sebastian, FL for $80k in the mid 90s when my dad was about to retire as a teen. New.

Based on internet search :

Median price of house in USA in 1975: $39,300
Median household income in USA in 1975: $11,800
Home price to income ratio in 1975: 3.3
Average 30 year mortgage rate: 9%

Median price of house in USA in 2024: $420,800
Median household income in USA in 2024: $77,345
Home price to income ratio in 2024: 5.4
Average 30 year mortgage rate: 7%

1970 was a census year.

The median house price in 1970 was $23,000
Source: https://www.huduser.gov/periodicals/ushmc/winter2001/histdat08.htm

The median income: $9,840 (I also saw $8,900 but also that the Census jerked around their metrics several times)
https://web.stanford.edu/class/polisci120a/immigration/Median%20Household%20Income.pdf

So a house was about 2.5x-3x the median income in 1970.

Did those median incomes in 1970 include a workforce that had college degrees (and attendant debt) to the extent the modern one does? .

What was the college tuition like at a State School in 1970 vs. 2020? Trade Schools? Weren't Public Schools providing Trade Education to HS Students for free in the 60s and 70s vs. today?

Most importantly, what was the demographic skew of the population in 1970 vs. 2020?

AmericanKulak says

Yep, from 300% of income to ~500+% of income.

If the ratio is 3 or less, then there is incentive to save a lot of money and make at least a 50% downpayment.

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AD says

If the ratio is 3 or less, then there is incentive to save a lot of money and make at least a 50% downpayment.

Agreed.

Here's one question: What was the average age of a purchased house 30-40 years ago versus today. There are claims we didn't build enough, and claims we did. My hot take - not married to it - is that we built fine, but built the wrong kind. Wokies wanting multifamily 15 minute city shit and the Obamunist plan to move Sec 8 multfamily buildings smack dab into nice suburban neighborhoods, and Developers still thinking June and Ward Cleaver but on zero lots. When we needed modest 2-3 bed, 1.5-2 baths as the household size is smaller today with more single income households.

My area isn't a good metric because of Space Program. There's a shit ton of hasty 60s cinderblocks for Apollo and the USAF Missile Range, very little in the 70s, then a boatload of Yuppie Palaces in the 80s (Shuttle) including the Geometric Domed Moldy Monsters, then very little in the late 90s - 2010s as the Shuttle got clawed back then cancelled. Starting in the mid 2010s they built again, and MOAR started as COVID got going, but now those Condo and Zero Lot developers are going bananas trying to move them fast.

AmericanKulak says

What was the average age of a purchased house 30-40 years ago versus today. T

So much difference then and now as far as economy and demographics. Women are more employed now, for example.

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AD says

So much difference then and now as far as economy and demographics. Women are more employed now, for example.

The life insurance purchasing is almost as low, regardless of income or dependent status, interestingly...

AmericanKulak says

$450k for a 1800 sq ft ticky tack shack

Bargain! BUY!

FortwayeAsFuckJoeBiden says

in idaho out here, a lot of people moved in which spiked sales a lot. it keeps going. however interesting enough flippers see losses. 4 different guys who came here tried flipping, 3 lost money and one made very little. no one buys flips here, mainly new construction.

This looks crazy!

HeadSet says

Around here, there is a shortage of home listed because people do not want to sell their homes. One major reason is this example:

Current home, $1,000,000 mortgage at 2% has a monthly payment of $3,696.
Downsize home, $750,000 mortgage at 7% has a monthly payment of $4,990.

Moving to a smaller home at today's interest rates actually can increase the monthly nut and that is after costs like realtor commission and loan origination fees.

One possible exception to the above is if you have lots of equity in the home. If you had a $2MM home with a $1MM mortgage, you could take $0.9MM profits (after taxes) and buy the lower-cost home outright.

That said... yeah, the current surge in interest rates has put a big halt to many buyers.

AmericanKulak says

Did those median incomes in 1970 include a workforce that had college degrees (and attendant debt) to the extent the modern one does? .

I'm reasonably sure that college debt is a relatively new phenomenon.

Debt can and does kill societies.

GNL says

Debt can and does kill societies.

Personal debt is anti-American.

gabbar says

Personal debt is anti-American.

Oh, personal debt is an American tradition. Irresponsible, yes, but quite the practice in the US.

HeadSet says

gabbar says

Personal debt is anti-American.

Oh, personal debt is an American tradition. Irresponsible, yes, but quite the practice in the US.

Yet to meet a millionaire that didn't use debt to make their wealth. You don't use your own money if you want to be wealthy. And then YOU become the bank and make more. Rarely are W-2'ers millionaires. Their check goes to putting food on the table and their house. They're broke or on food stamps even if they pull in $100k.

WookieMan says

Yet to meet a millionaire that didn't use debt to make their wealth.

Personal debt and investment debt are two different things. Borrowing to buy rental property or company equipment is not the same as borrowing to buy that 'vette.

WookieMan says

HeadSet says

gabbar says

Personal debt is anti-American.

Oh, personal debt is an American tradition. Irresponsible, yes, but quite the practice in the US.

Yet to meet a millionaire that didn't use debt to make their wealth. You don't use your own money if you want to be wealthy. And then YOU become the bank and make more. Rarely are W-2'ers millionaires. Their check goes to putting food on the table and their house. They're broke or on food stamps even if they pull in $100k.

It still can and will end up crushing a society over time.

I'm a guy who didn't use debt to achieve wealth.
I'm a weirdo to my friends however.

HeadSet says

WookieMan says

Yet to meet a millionaire that didn't use debt to make their wealth.

Personal debt and investment debt are two different things. Borrowing to buy rental property or company equipment is not the same as borrowing to buy that 'vette.

Personal debt is what is used to build wealth at the beginning if you have no family money. Putting a skid steer on your credit card to start a construction company is personal debt. There are stories everywhere of people using personal CC's to put a down payment on rental properties. You need OPM or personal credit to make the big money.

clambo says

I'm a guy who didn't use debt to achieve wealth.
I'm a weirdo to my friends however.

Like I said, there are people that can do it. My wife and I could retire tomorrow if we wanted at 41 and live to 95. If you save and live frugally when you're young it's pretty easy. I don't want the hassle of big wealth, but could easily get into 9 figures pretty quickly. I don't like dealing with people. Whether he's P Diddy or P Diddler now, his song was right. Mo money mo problems.

We'll build the house, go on 3-4 trips a year or buy a vacation property in the Caribbean and call it a day. My mom and MIL will take care of any finances for the grandkids as there's about $2M for my two sons. MIL has another $1.5(ish).

I like my financial independence. I don't need more money or care to work for more money. Life is short. I don't want to spend all my time adding digits to a banks account working like a dog.

I started my company with zero debt.

Year of supply now in Naples, FL at current sales volume.

Rent Prices Are Dropping Across Florida’s Most Populous Metros

Asking rents fell a record 12% year over year in Jacksonville last month, and also declined in Tampa, Orlando and Miami. Austin, TX posted a record drop, too.

Florida and Texas built a lot of apartments to meet surging demand during the pandemic, and now property owners are lowering prices as they compete for tenants.

Nationwide, the median asking rent rose roughly 1% in June to the highest level since 2022.

https://www.redfin.com/news/rents-fall-in-florida-austin-june-2024/

This is true. Orlando built an absolute shitload of apartment complexes in the past 3 years.

Today: "If you want a house as ritzy as that, you need to buck up and pick yourself up by the bootstraps bucko, and finish the MBA degree and really hustle with 200 resumes!""

"Wooooow, Demographics is like... a bummer, mannn"

We all need to get off this bad trip, man. New labor force entry is now 1-1.5M/year. Before 2008 it was 2-2.5M. That is WITH wild mass migration.

But none of this will effect home prices, it's gonna be a groovie movie until the end of time.

Assuming 30% gross wages attributable to shelter costs, only 26% of the population qualifies to buy a median home.
(The "Every household is $100k+ these days unless you are a total bum" mega-myth)

Problem is 3/4 of those 26% already own a home.

So a median home seller is trying to find the 5-6% of people with the income to afford the house who don't already own. Why would somebody with a 3.5% mortgage want to get screwed buying the same sort of house at a higher price, double the rate, and worse tax assessment and insurance environment?

With the typical homeloan over 7% and an almost unanimous consensus that housing market will turn sharply to favoring buyers. Many more believe the Fed will cut rates sometime in the next few quarters, so why buy now?

DemocratsAreTotallyFucked says

Banks won't do it the same way if it gets bad. So I'd say delinquency is a bad metric. Length of loan is the biggie. How many years have they paid the up front amortized interest. Most are 5+ years deep. Foreclosing just drags down their other loans. Forbearance and other means of keeping the owner in the home make more sense.

Reality is the banks made their money already on any home sold in the last 10 years. Take a month or two off and tack it on the end. REO's are a bitch for the servicer. You're looking at $20k even for a shitty house. Better off eating that for 3-4 months. Wouldn't help with inflation is the only thing. But who knows what the fuck is going on anymore. This is going to be a fucked up fall.

Under Basil 3, banks can't hold as many mortgage assets on their books like last time. Non-bank lenders took over the majority of mortgage financing. The banks originated then off load to MBS tranches or directly.

Also, people can't afford to make payments because of structural increases in their home costs, they won't be able to in the future as well, barring some large increase in their income.

WookieMan says

I like my financial independence. I don't need more money or care to work for more money. Life is short. I don't want to spend all my time adding digits to a banks account working like a dog.

What do you do to stay productive and live a fulfilling life?