How are people affording these crazy home prices?

[CJohnson]

I think that real estate has been undervalued in some places for a while now and the COVID-sparked exodus from cities has shown that.

What I can't really fathom is how people are paying $80, $90K+ for a truck right now, and even before the chip shortage. If someone can explain that to me, I'd appreciate it.

 

[Actual_Cryptid]

I’m confused at the fact that all of us outdoors people feel the need to be confined to a big city to earn a higher income to live in a more expensive house. I’d much rather own a house that costs less in a more rural area, less crime, enjoy no traffic jams Know my neighbors/community, let kids know there classmates, have accountability for your actions and just enjoy simple life. Not a lazy non motivated person by any means of the word. Actually own and operate my own business and seem to always have to be working the way it is. Not in the market for a move. Not trying to capitalize on fluctuating markets. My common sense tells me I shouldn’t be buying a house for $800k. Living within my means.

Yeah but that's not really an option for most people. The businesses that can survive without relying on interstate and global trade and ancillary services are slim to none. Builder? Where do your materials come from, who owns and works at the train yard, who drives your materials to the depot, who works at the power plant so you have electric and gas, etc. My wife doesn't have a job if there's not a level 1 trauma center in town, which limits our options, and as much as I'd like to retire from crunching numbers to a nice farm the buy-in is steep, and everybody knows that behind every comfortable farmer is a wife with a job in town.

I'm not saying go to Costa Rica and have try ayhuasca, but it benefits us all to remember that we're always interconnected, man. My great grandad was a country doctor, he sure as knew that his little piece of the foothills of GA was connected to Atlanta. Even the old west, little towns lived and died by the mail. Still the case, when I worked in an peds ER here we saw a fair number of flipped ATVs, ODs, and gunshot wounds from the farm towns, enough that we had an in-house air evac team, the difference between a kid who'd survive to have a story about the follies of youth and a grieving parent.

Just some food for thought. The burger flipper in downtown Chicago gas more in common with the farmhand ten miles outside Red Bud than with the investment banker up the street.

I guess that's off topic. I will say that the craze for investment real estate is driving the bubble. HGTV and the like had everybody thinking they could house-flip their way into the yacht club, now it's everybody thinking they're gonna be a landlord and live like a king. I suspect, give it a year and there will be a moderate correction as a bunch of people realize that rental real estate isn't a passive investment. Maybe 3 years for a full correction; judging by some of the places I rented as a younger man it takes awhile for people to realize that you do in fact have to do repairs and maintenance. Give time for rates to increase a bit as well. If Congress ever gets off their butts and passes this infrastructure bill that'll flub my timeline. It'll mean a lot of good jobs and opportunities for people to build new businesses.

 

[jlh42581]

What I can't really fathom is how people are paying $80, $90K+ for a truck right now, and even before the chip shortage. If someone can explain that to me, I'd appreciate it.

Theyre financing them for 10 years

 

[TxxAgg]

Theyre financing them for 10 years

Yep. Financing 7-10 yrs instead of 3-5.

 

[bozeman]

Financing into MORE debt.......yep, thats a smart route. Have you ever stopped to wander if you really NEED a $500k house or an $80k truck? Really?

 

[go_deep]

Friend of mine sells RV's. Most of the campers he sold this year were zero down, zero payments till January 2022, to qualified buyers.
That'll end well.

 

[BroncoAZ]

Theyre financing them for 10 years

When Navy Federal is offering 2.29% for 72 months I usually choose that option. I typically pay them off in less than 2 years, but I like the cushion of the longer term in case something went wrong. 10 year financing on a car should be illegal, seems like predatory lending to me.

I buy trucks for my employer. You can still buy a nicely equipped truck (Chevy 1500 LT 4x4) for $50K MSRP. A decently equipped F-250 XLT 7.3 4x4 can be had for $55K. Nobody is forced into buying a $80-90K pickup, but people are impulsive and buy the F-250 Platinum in a diesel to tow their bass boat.

https://shop.ford.com/build/superduty/#/config/Config%5B%7CFord%7CSuperDuty%7C2022%7C1%7C1.%7C603A.W2B.160.HX...XLT.4X4.99N.CRW.YZKAA.X4M.17X.17V.SRW.250.CBB.%5D

 

[ewade07]

I think this is the situation most people are looking at...

 

[jlh42581]

I cant tell you how many times ive seen on anonymous forums... "How do I tell my wife I refinanced our house and lost it all on paying bills to live a life we couldnt afford to live"

Its really alarming, too many times to count honestly.

 

[BroncoAZ]

Financing into MORE debt.......yep, thats a smart route. Have you ever stopped to wander if you really NEED a $500k house or an $80k truck? Really?

I need a place to live, I’m not willing to pay rent. Where I moved for a great career opportunity and significantly higher salary basic houses are $500K, realistically $700-800K for something nice. If I wanted to move over an hour from work I could find a basic house for $350 and a nice house for $500K. 10-15 hours per week commuting in terrible traffic lowers my standard of living too much, I choose the higher mortgage. I do put 20% down and won’t go over 15 years on the mortgage, making the payment even uglier.

For years I lived with a terrible commute, then the last 4 years I was traveling 45 weeks per year for my job. My current employer is 15 minutes from the house, zero overnight travel. My health is better, I’m spending much more time with my wife, much more time on my boat this summer, etc.

 

[CoStick]

Financing into MORE debt.......yep, thats a smart route. Have you ever stopped to wander if you really NEED a $500k house or an $80k truck? Really?

Plenty of people can do it without debt.

 

[SirChooCH]

Yep. Financing 7-10 yrs instead of 3-5.

I just bought a used F150 and the money guy comes out with his "most common options". $0 down, $1k down, $3k down....think these monthly unemployment checks were the problem with trucks not being in stock.

 

[go_deep]

CC debt, vehicle debt is on the rise

As Americans spend, credit card debt is ticking back up

Early in the pandemic, there were encouraging and surprising signs about the decline of credit card debt. In fact, 42% of those with credit card debt, or 59 million Americans, say they have added to their balances since the beginning of the pandemic, according to a new study by personal finance...

www.yahoo.com

 

[unclericco]

I’m that guy that was an idiot and sold my house in 2019 when the market was at an all time high where I live in Southern Utah and had decided that it was a good time to sell. We had a 4900sq/ft custom built home and our 2 oldest had just moved out so it left us with 1 kid at home. I talked my wife into selling because it seemed like we were due for a correction in my mind since it had been over 10 years since the last dip and we never planned on retiring in this home. Also with only 1 son at hike we didn’t need a hike the size of what we were living in. We had planned on buying property after we rented for a year or so and building our next home that would take us into retirement and live in until we die. So we ended up selling for $570k which at that time seemed like a ton since we had bought it 9 years earlier for $350k. Used some of the equity to pay off all our debt so we were debt free and kept a nice chunk of money in the bank. Now we have literally priced ourselves out of the market where we live and this is we’re we want to retire. Our house would have easily sold for a million right now. That’s over $400k that we have lost by selling. I’m so sick about how this has all worked out and not even sure what to think or do anymore. I make a great 6 figure salary but can’t imagine what people do to afford these $700k + mortgages. Are people in serious debt or is the rest of the country just making more money than I can even imagine. Talking to the realtors around here they are saying that many of the people buying the homes where we live in St. George are buying them as second homes and many paying cash. That’s just crazy. Also they say these are well qualified loans and have income to pay the mortgages unlike the 2008 housing crisis where they gave anyone a loan even without income verification.

What’s the end game here. Are these high prices here to stay (new normal) or is something catastrophic gonna happen or will there just be a small dip in real estate? I don’t know what or who to believe anymore. All I know is I’m always second guessing myself for selling but on the other hand happy I’m 100% debt free. My biggest concern is I had planned on retiring in 5 years. (Age 55). Now not owning a home I know that’s most likely a pipe dream and not gonna happen. I can’t go into retirement with a $3k a month mortgage. What are your thoughts. Should I buy now or wait it out at this point? My next home will be my forever home more than likely.


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I'm from Southern Utah and actually lived in St. George for a short time. Unfortunately, people have discovered St. George from all over the world and they realize how great of an area it is and rich folks are moving in like mad. The secret is out and it's become this expensive place to live now. It's not just St. George though. I just retrieved my camper last weekend off the mountain in Utah where I grew up and it's a constant convoy of visitors going up and down the main canyon road there. It was never ever like that when I grew up there. With regard to St. George, we go to the Parade of Homes most years there and we ask them who the hell is buying these incredible houses. More often than not they are actually 2nd homes if you can believe that.

House prices overall I believe will come down as supply chains are restored and materials come down. Demand will eventually cool. To me it's mostly the same old supply and demand issue. I could have sold my house and made a mint but I had a friend ask me if all that money would make me happy. It's my house that gives me the most happiness in my case and I'll probably never sell it

 

[eamyrick]

What are their rental alternatives? Even with prices climbing, it seems like renting a decent place costs more than a mortgage anyway. If you have a 3/2 and can rent a bedroom, it’s way cheaper than renting your own place and you’re getting equity out of the deal.

Before my wife and I bought our first home we had a 2/1 condo in South Austin 5 minutes from downtown for $750 a month and that included water. Once again, salaries were 10-12% less then. Now, my Mom’s 1 bedroom apartment 30 minutes from downtown is $1150. A house for a small family is 2k+ On our street, all of the recent sales for double what we paid were bought by investors and immediately had a for lease sign in the yard. Most were leases long term between 3-5 year terms. Circle back and the average guy working the public sector has 30-40% less in his pocket and the only thing that can mean long term is more debt.

 

[wind gypsy]

Before my wife and I bought our first home we had a 2/1 condo in South Austin 5 minutes from downtown for $750 a month and that included water. Once again, salaries were 10-12% less then. Now, my Mom’s 1 bedroom apartment 30 minutes from downtown is $1150. A house for a small family is 2k+ On our street, all of the recent sales for double what we paid were bought by investors and immediately had a for lease sign in the yard. Most were leases long term between 3-5 year terms. Circle back and the average guy working the public sector has 30-40% less in his pocket and the only thing that can mean long term is more debt.

I can see how the living costs would be tough on a modest salary. But if one is to pay $2k+ for rent, they could still have a mortgage for that or less and at least earn equity. If rental market is that hot it shouldn't be hard to rent a room or worst case if a move is necessary you could rent it and cover the mortgage and then some. The hard part is probably competing to buy with a low % down FHA or similar financing situation.

 

[bozeman]

Plenty of people can do it without debt.

must not be the case.......links have been provided and research is easy to show the mounting mortgage and automobile debt in the US.......

 

[jlh42581]

Can tell you this, I am not sure where people work that have that kind of disposable income but I must be holding my mouth wrong. People must be making WAY MORE money than I realize. Six figures where your house tops out just above 100k is not the house thats six figures and combined 2-300k. Maybe I just dont like hanging on by my asshole skin every month wondering if this is the month I lose it all. Hell I look for reasons to not spend money, not buy more and trust me my wife loves new shit. I swear she finds a new way to spend money every day. The houses are never big enough, the vacations always need one upped, the vehicles always have NEEDED safety features, the cell phones running 4G isnt good enough we better buy new ones and get 5G. Lucky for my house I just say no.

How is it that no one sees all this consumer spending as the problem with the environment. Blame it all on shit like diesel or gasoline.

 

[Customweld]

Can tell you this, I am not sure where people work that have that kind of disposable income but I must be holding my mouth wrong. People must be making WAY MORE money than I realize. Six figures where your house tops out just above 100k is not the house thats six figures and combined 2-300k. Maybe I just dont like hanging on by my asshole skin every month wondering if this is the month I lose it all. Hell I look for reasons to not spend money, not buy more and trust me my wife loves new shit. I swear she finds a new way to spend money every day. The houses are never big enough, the vacations always need one upped, the vehicles always have NEEDED safety features, the cell phones running 4G isnt good enough we better buy new ones and get 5G. Lucky for my house I just say no.

How is it that no one sees all this consumer spending as the problem with the environment. Blame it all on shit like diesel or gasoline.

You have to admit, the marketing and advertising industry has done an impressive job at convincing us to buy $h!* that we all know we don't really need.

 

[bozeman]

You have to admit, the marketing and advertising industry has done an impressive job at convincing us to buy $h!* that we all know we don't really need.

That's why the classifieds section here is loaded.....