How are people affording these crazy home prices?

[WiscoHoundsman]

We bought 6 acres in 2017 for 35k and then built a house in 2020 for about 400k. Skipped the starter home. Our small town school (less than 100 kids in the high school) just keeps taking more in taxes. Our taxes this year went up $1800 just for the school. We pay 9700 in taxes on a 3700 sf house. In rural Wisconsin. Our mortgage payment is $1500 a month but taxes are $800 ish pretty crazy

Everyone says move someplace rural but best be checking property taxes. Some schools are hurting badly and it shows on the tax bill.

 

[KsRancher]

12k for taxes? Ours went up to about $900 last year and it pissed me off.

Ours have almost doubled since we bought our house. Signed the papers 10yrs ago today. $1127 the first year. $2183 this year. This is on a $107,000 house. Insurance went up 28% this year to $320/month and have never had a claim

 

[ddd-shooter]

My first house was 130k. I made about 45k a year. I worked it over and sold it for 240k. I bought a complete pos on 5 acres for 144k and developed a nice place which sold it for 350k while making about 50k.

Today any skilled labor can make 70k easy enough and top hands will be able to double that or more.

Not having car payments, the new iphone 27 and $43k worth of sitka and guns makes saving pretty easy. I hear the rent stories and completely understand as we were making 2k a month on our rental but today in spokane you absolutely can rent a place for $1k a month. Is it a great place in a nice neighborhood?....no, but do you want to fast track to a home or do you want to entertain in your rental.

Wealth is not about instant returns. It takes risk and time.

How many people complaining about the cost of homes have a top tier cell phone, a car newer than 10 years and credit card payments?

This is the time to talk to your grandparents who paid 10+% interest.

The first step to keeping money in your pocket would be to stop reading these forums and be at work.

Ok
45k for a 130k house is 3x your income.
Average HOUSEHOLD income today is 80k
Average house sold today is 400k.
That’s 5x your income level.

It’s not the 1k iPhone that’s the issue.

 

[longspeak74]

My father and my brother are both builders. I run a landscape company.
Running the numbers, still makes sense to keep my existing home.

 

[Wrench]

Ok
45k for a 130k house is 3x your income.
Average HOUSEHOLD income today is 80k
Average house sold today is 400k.
That’s 5x your income level.

It’s not the 1k iPhone that’s the issue.

If your combined household income is 80k you might reconsider your occupation. That wage comes to about $3.00 over minimum wage.

I have had all of the contractors who worked on my project asking if I knew anyone who would apprentice.

Our apprentices start out at $81k for a 1st period ape. We are a higher paid craft than most, but not much.

 

[CorbLand]

If your combined household income is 80k you might reconsider your occupation. That wage comes to about $3.00 over minimum wage.

I have had all of the contractors who worked on my project asking if I knew anyone who would apprentice.

Our apprentices start out at $81k for a 1st period ape. We are a higher paid craft than most, but not much.

80K is just shy of 40 an hour. Divide that by 2 puts you a little below 20 bucks an hour. Federal minimum wage is 7.25.

 

[z987k]

80K is just shy of 40 an hour. Divide that by 2 puts you a little below 20 bucks an hour. Federal minimum wage is 7.25.

It's $16.66 in WA.

 

[Bluefish]

It's $16.66 in WA.

That’s still only $34k a year. 2080 working hours in a year.

 

[CorbLand]

It's $16.66 in WA.

You don’t get to use a national average on home prices and then a single state’s minimum wage. Apple to apples.

Quick google search puts the average home price at 600,000 in Washington. That’s 50% more than the US average.

 

[z987k]

You don’t get to use a national average on home prices and then a single state’s minimum wage. Apple to apples.

Quick google search puts the average home price at 600,000 in Washington. That’s 50% more than the US average.

I'm just pointing to where Wench is coming from.

 

[CorbLand]

I'm just pointing to where Wench is coming from.

And I am saying that when you compare things it has to be apples to apples. Combined 80K in Washington is not good considering that (based on quick google search) the median household income there is a little over 90K. You go to the town I was born in and 80K combined is almost top 1%. Housing prices reflect that.

This is why you have to use apple to apple comparisons.

 

[Stache Attack]

Whoa tagging in on this one. Very interesting post and no I’m not a scum realtor. I have bought three houses in four (almost five) years. First staring out at a 3.8 fixed going for 210,000 sold for 230,000 a year later. Second for 160,000 (yes it was a shit hole!) at a stellar 2.5% fixed rate . Fixed up and sold for 240,000. Yada yada wanted new area had good offer and wife is flexible in work locations. Bought new house at a 5.75% (that hurt) 220,000 all said and done fair house but not great.

I don’t think I’ll get burned as we have done some work and slowly doing more. Have my eyes on a old farm house that wife says will be forever after fix up…

Housing is very expensive here and I buy below our means. Live fairly small lives and enjoy the fix up process besides the arguments.

Too many people buy too much house when we really don’t need it and complain on cost. Is it outrageous the prices, yes! We chose to drive a bit further for amenities and saved 100,000 vs comparable homes.

We’ve been lucky to build equity and cash but it has come from good timing and a pile of labor for re sale value. I hate thinking of upfront costs when we all should think of a house as the stock market. Value, area, and potential sale timing/price

 

[Hnthrdr]

Yep I’ve bought 4 houses since 2018, been wild considering my old man is a RE agent so I grew up knowing roughly what I thought property was worth in my area, bottom line it’s worth what people will pay for it, and oh man people want to live on the west side of the Denver metro real bad. First purchase was a steal in the current market( thought I was getting taken at 360k for a starter home, now is a great rental but would sell for 550k) , the rest have been wisely purchased with location chosen above all and purchasing places that have sweat equity available. Lots of folks want turn key which is nice but you will pay 2-3x what that person put into it. Latest purchase might be my favorite because of location, but it’s a 1913 stone house that is about to take all of my free time for the next 4 months or so. It’s funny because I do think there will be a RE pull back, but if you are in the right area it will likely not effect you much, but it’s just another investment vehicle, and it’s tangible, has serves a purpose and can provide semi passive income. The house hacking is obviously a major subject now, but starting out young try to house hack, try not to get too emotional about places look objectively as you can and be logical about it. Have roommates, or finish a loft or a basement and rent it out. Interest rates will likely hover around 8% for a while… heck they may even go above that. Don’t expect rates to fall for 18-20ish months and likely back in the 5’s. But who knows?

 

[bakerra2]

Crazy all day long


Sent from my iPhone using Tapatalk

 

[Alpine4x4]

I'm just pointing to where Wench is coming from.

Median house price in rural central WA is $570k. Sorry, but $16.66/hr ain't getting you anywhere.

Unfortunately a lot of rural areas are seeing hyper inflation from out of staters. People that sold their 1000sq/ft hole in calie for $1m and then move somewhere "cheaper". Its driving prices through the roof. Just look at what's happened to Bozeman...

 

[Alpine4x4]

This is an interesting narrative to me.
For this to be true, there has to be a large population of illegal immigrants buying historically unaffordable houses with cash.
Are we hiring them for middle management now instead of picking strawberries?

You do realize that with the amount of OT these guys work they make as much as most middle management right? Especially in a sanctuary state like WA with a high minimum wage. I know, I sign their checks.

Beyond that the strategy employed is usually to have more than one family in the house to cut costs further. Its not uncommon to see two families or 3 generations all together all working to provide.

 

[WeiserBucks]

And I am saying that when you compare things it has to be apples to apples. Combined 80K in Washington is not good considering that (based on quick google search) the median household income there is a little over 90K. You go to the town I was born in and 80K combined is almost top 1%. Housing prices reflect that.

This is why you have to use apple to apple comparisons.

$20 hr in my neck of the woods is considered a good income. Not many people willing to commute and there's almost zero industry locally. People scoffing at $80k household income are simply out of touch with many rural areas.

 

[Wrench]

I certainly wasn't scoffing at lower wages. I completely understand that there's value in location and that location may reduce income potential.

With that said when I wanted my first house I took a remote alaska job for a summer and made enough to buy 60% of my house in one summer. The moral of the story being that you're not going to be able to purchase an average home on average income. You'll either have to save or earn more.....or lower the standard of the home you want.

It took me a long time to end up where I am but I live in a school district that is 40x60 miles and we have 600 kids total. The local community is 600 people. We don't have a traffic light in the whole county......but there's also no money to be made here. I travel 65 miles every day for a job that pays $150k.

 

[bowhuntercoop]

$20 hr in my neck of the woods is considered a good income. Not many people willing to commute and there's almost zero industry locally. People scoffing at $80k household income are simply out of touch with many rural areas.

In my part of Sourh Carolina 20 bucks an hr makes you feel rich. Drive 3-4 hours to Charleston and you wil starve. Plenty of people making 250k-500k plus just to live a decent life down there.

I have a buddy that owns an It company down there, he pays over 7k a month….for rent for his house on broad street. Insane to me but he loves the city life.

 

[Pony Soldier]

Sadly enough the former norm was proportional income to local costs. When I came home, I took a $10,000 cut in pay but bought a house and 30 acres for $60,000. The toughest was taking a $24,000 loss on the sale of my place during a housing crash.

With the migration of well to do people to the poorer rural areas the local economies have suffered. The local wages haven't gone up yet the willingness of a Denver migrant to pay $1M for 90 acres of wetlands has dragged our local property values beyond imaginarion. It's not what the property is worth but how much you have to get to be able to move somewhere else.

I fear that to equalize this insanity, we may have to experience a real estate and possibly an economic collapse for a reset. That will make life extremely tramatic for our kids and grandkids. Without that the future may contain a large number of homeless retirees that can't afford the taxes on their places.