How are people affording these crazy home prices?

[Weldor]

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.

Agreed, my first VA loan was just over 10%. Built my first for $54,000 1600ft on 1/2 acre. Nothing fancy. Sold it in the fall of 2019 for 380,000 after renting it out for years. No fancy phone here or truck payments. I bought my vehicles when I could afford them cash. I worked hard for that money and enjoyed plenty without having to go into heavy debt. But I'm old. I would not want to try to do it today, that is for sure and certain.

 

[MCS]

I sold my house in a expensive market a couple years ago for 450k then moved to a cheap market and purchased a home for 187k cash. I'm looking for another home now so I can move out of this house and rent it out. A large portion of my next mortgage will be paid by the rent from this house.

 

[IdahoElk]

Insurance just dropped me and every other CO resident. Time to shop around and it's not looking good. Taxes up too. CO thinks increasing taxes (on lower and middle class mostly) will solve issues that are created by lack of income in the first place. Sigh...

They along with every other county in the country are struggling to keep retirement plans funded, Raising taxes fraudulently is how they're doing it.

 

[darcytribe]

Well, we’re about to see what happens when a good percentage of the residential housing labor market goes away. I was chatting with a guy running a stucco crew and he estimates 1/4 of their guys will simply stay south and work in one of the luxury housing developments in Mexico. I imagine the numbers will be similar with drywall, framing, roofing and concrete. Low cost housing isn’t as profitable as mcmansions, so the chance of lower priced homes becoming cheaper in the foreseeable future are quite low. If there is an overall increase in labor cost of 15%, tariffs increasing building material costs, and inflationary pressures, I don’t claim to have a crystal ball, but see things getting worse, unless there’s a crash and a lot of value is lost.

Of course nobody does but on the basis of probabilities, I’m planning on a significant reset in the next year or so.

 

[atk629]

Boomer generation reaping what they've sown. Just a shame it didnt happen sooner.
Turns out buying half the country up, replacing the floors with cheap laminated crap and flipping it for double the price isn't very good for anyone. Who knew? Not to mention all the second and third home "investments".

 

[hunterjmj]

If I was a young man with a family in this market I'd be looking at rural America and a trade. Every community needs a plumber, electrician, hvac, mechanic, hair/nail beautician, etc. Rural communities may not have all the excitement big cities do or big money but housing costs are typically cheaper and life is a bit calmer. Thats what I did and I'd do it again.

 

[TaperPin]

Of course nobody does but on the basis of probabilities, I’m planning on a significant reset in the next year or so.

“Reset” sounds innocent - for anyone cheering for it, it is taking away huge amounts of equity from the middle class. It’s the billionaires fat with cash, like Warren Buffet, that benefit from downturns and can buy up assets for pennys on the dollar. I am at a loss why so much of the country is cheering for tax breaks for the super wealthy and policies that hurt the average guy. Pushing to increase the debt limit so Harlan Crow, Elon Musk, Jeff Bozo and the tech bros get to keep more money at the expense of our kids gets glossed over.

 

[Bluefish]

I'm watching taxes rise in proportion to the house prices. This will drive the residents out as the taxes exceed the retirement incomes of the locals. My house price has already gone up 5 times the purchase price and the taxes have doubled. The future doesn't look good.

This is happening where I live. Values have doubled or tripled since the early 00 and now property taxes are going way up. Mine went up 28% last year. I now pay more in property tax than I used to pay for my mortgage and taxes on my last house. It is going to force the retired people to leave the area as SS won’t cover the new taxes even if they own the house.

I got lucky on timing and bought a new place in 19, sold the old place in 21 which paid off the new house and even took money out of the old house. I watch the places sell in my neighborhood for 150-200% of what I paid and don’t know how people do it. The taxes alone are 12-15k per year.

 

[hunterjmj]

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

 

[atk629]

If I was a young man with a family in this market I'd be looking at rural America and a trade. Every community needs a plumber, electrician, hvac, mechanic, hair/nail beautician, etc. Rural communities may not have all the excitement big cities do or big money but housing costs are typically cheaper and life is a bit calmer. Thats what I did and I'd do it again.

True, which is why workers are imported to work illegal wages instead of hiring americans. If Trump actually does what he says (lol) there won't be a single person left working on new homes in my development it's so bad.

 

[Hnthrdr]

If he deported all illegals (which will never happen btw) there would be so many houses hitting the market the need for new builds would plummet. That and the fact that boomers are starting to drop like flies. With a shrinking populace there will be houses to go around. They may or may not be where you want to live though, which is why in RE location trumps all.

 

[Bluefish]

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

Yeah, went from $8500 to almost $12k in one year. Yet the county says, your rate went down so you should be happy. They raised all the values the year before so the increase was slightly less than the increase in value due to the rate decrease.

 

[Fatcamp]

Our kids are leaving Colorado.

Told us last night their mortgage went up $400 A MONTH due to taxes! They do well enough but have come to the conclusion they will never thrive there financially.

 

[z987k]

If he deported all illegals (which will never happen btw) there would be so many houses hitting the market the need for new builds would plummet.

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?

 

[Hnthrdr]

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?

No gotta think a little bigger, they are living in rental homes, rented apartments, condos. They are occupying housing full stop. Therefore keeping slumlords in business and buying some homes often starter homes. There are 20ish million in the country so conservatively factor they are occupying 3 million housing units. What would happen if 3 millions units hit the market over night? If you can figure it out I can tell ya

 

[WyoKid]

IMHO whether real estate, stock market, politics or cryptocurrency....it is just the rich getting richer and the middle and lower class working hard and struggling to save a few bucks just to go out to nice dinner after buying food, putting their kids through school, paying taxes and buying a home or paying the mortgage. All the while the millionaires and billionaires are the ones that survive a market downturn, high interest rates, rising inflation, and job layoffs and can still afford million dollar+ homes with tax shelters, off shore accounts, and real estate investments.

 

[z987k]

No gotta think a little bigger, they are living in rental homes, rented apartments, condos. They are occupying housing full stop. Therefore keeping slumlords in business and buying some homes often starter homes. There are 20ish million in the country so conservatively factor they are occupying 3 million housing units. What would happen if 3 millions units hit the market over night? If you can figure it out I can tell ya

Rents would decline slightly only in the markets where illegals are more concentrated and home prices stay the same.

 

[Hnthrdr]

Rents would decline slightly only in the markets where illegals are more concentrated and home prices stay the same.

I’m not so sure. Have a bunch of landlords who can’t make bank off those houses, they will sell. I mean look at what is happening to states where inventory is sitting at 5-6 month levels. Prices are dropping by 20-30% I think a lot of people underestimate how pervasive they are, most states have 100’s of thousands of illegals residing in them there was a good map that recently showed it. I wouldn’t be shocked if prices pulled back to 2019 levels. Obviously location dependent.

 

[NRA4LIFE]

Our taxes out here eclipsed $10K a few years ago. We live on 5 acres. I own 48 acres in MO and pay a whopping $32 a year in taxes.

 

[bojangles808]

If I was a young man with a family in this market I'd be looking at rural America and a trade. Every community needs a plumber, electrician, hvac, mechanic, hair/nail beautician, etc. Rural communities may not have all the excitement big cities do or big money but housing costs are typically cheaper and life is a bit calmer. Thats what I did and I'd do it again.

my neighbor just got back from montana works in construction with some guys hes family with, said he's making what he'd make in a year in half the time eventually gonna move there full time