Housing Market Rebound Lopsided-interesting article

[TranquilMind]

http://www.msn.com/en-us/money/realestate/lopsided-housing-rebound-leaves-millions-of-people-out-in-the-cold/ar-BBvtvFU?li=BBnbfcL

 

"Home prices rose in 83% of the nation’s 178 major real-estate markets in the second quarter, according to figures released Wednesday by the National Association of Realtors. Overall prices are now just 2% below the peak reached in July 2006, according to S&P CoreLogic Case-Shiller Indices.

But most of the price gains, economists said, stem from a lack of fresh supply rather than a surge of buyers. The pace of new home construction remains at levels typically associated with recessions, while the homeownership rate in the second quarter was at its lowest point since the Census Bureau began tracking quarterly data in 1965 and the share of first-time home purchases remains mired near three-decade lows.

 

The lopsided recovery has shut out millions of aspiring homeowners who have been forced to rent because of damaged credit, swelling student loans, tough credit standards and a dearth of affordable homes, economists said.

 

“I don’t think we are in a normal housing market,†said Lawrence Yun, chief economist at the National Association of Realtors. “The losers are clearly the rising rental population that isn’t able to participate in this housing equity appreciation. They are missing out on [a big] source of middle-class wealth.â€

 

This has concerned me for awhile, so I started unloading entry level (my former rentals) properties a few years ago while there were young buyers who were able to afford them.  For the first time, there are homes in my very desirable (but affordable for the area) subdivision, but they are just sitting there.  The Seller slightly overpriced them and the only one that has sold took months to do so and was extremely dated inside so it was the lowest priced.   It really concerns me that the interest rates are still in the 3's - which is unbelievable- and they still are not buying. 

 

As boomers are hitting retirement age and need to sell to downsize, there won't be young buyers who can afford their homes.

 

Political speculation from the article here: 

 

Anxiety about missed economic opportunities is a key driver of the anti-incumbent anger on both sides of the political spectrum that has shaken up the 2016 election season, helping fuel the insurgent presidential campaigns of Donald Trump and Bernie Sanders.

 

“You have these people who can’t get housing, and it’s turning into this rage,†said Kevin Finkel, executive vice president at Philadelphia-based Resource Real Estate, which owns or manages 25,550 apartments around the U.S.

[Crimson Wife]

Where I live, regular would-be homebuyers are finding their offers beat out by all-cash investors. Not so much in the East Bay but in San Francisco and Silicon Valley, many of these are foreign buyers who aren't even renting the homes out but leaving them empty. I wish that the state would impose a purchase surcharge on non-citizens and use the proceeds to subsidize the construction of affordable housing for teachers, law enforcement, firefighters, etc. who cannot afford to live in the towns they serve.

[TranquilMind]

Where I live, regular would-be homebuyers are finding their offers beat out by all-cash investors. Not so much in the East Bay but in San Francisco and Silicon Valley, many of these are foreign buyers who aren't even renting the homes out but leaving them empty. I wish that the state would impose a purchase surcharge on non-citizens and use the proceeds to subsidize the construction of affordable housing for teachers, law enforcement, firefighters, etc. who cannot afford to live in the towns they serve.

Yeah, I know.  I rarely go to an auction now where a homeowner gets the house, but usually an investor. 

 

It must be a really huge problem where you are, since housing is so expensive.  I'm still in a low COL area, and even here, young couples are having a hard time buying houses.  Almost every time I sell, they also want closing costs.  I sold one last year that was completely renovated and amazing.  It was in a lower cost neighborhood and sold in 24 hours above ask, so I was sure it was a homeowner.  Nope, just found out it was an investor who then rented it out at $600 more than I had been asking in its unrenovated state (which was still nice, but just original). 

 

I don't want investors buying all these 3/2 ranches!  We need homeowners. 

 

 

[Carol in Cal.]

Where I live, regular would-be homebuyers are finding their offers beat out by all-cash investors. Not so much in the East Bay but in San Francisco and Silicon Valley, many of these are foreign buyers who aren't even renting the homes out but leaving them empty. I wish that the state would impose a purchase surcharge on non-citizens and use the proceeds to subsidize the construction of affordable housing for teachers, law enforcement, firefighters, etc. who cannot afford to live in the towns they serve.

Now that the Chinese stock market has crashed, though, that effect has diminished.

[Guest]

..

Edited August 11, 2016 by Heigh Ho

[TranquilMind]

Boomers here are not downsizing. They have voted themselves significant property tax exemptions and are aging in place. They have restricted parcel size for new home construction, making those homes unaffordable to people who do not have jobs with big city wages...its very deliberate, and its meant to keep children, who require expensive public schools, out.

 

Hmm.  Where is that?

 

I live in an older, well-established area and there is a wide diversity here of ages, races, religions...everything.  So that's what is happening here.  I'm curious where you are, if you don't mind saying.  Those boomers are going to need someone to buy their houses, sooner or later. 

 

[MysteryJen]

I live in a hot market in CO. We lost our first 3 offers to all cash and investors. It was extremely disheartening to see 400k houses being treated as flips and then rented out for extremely high rents. The speculation here is that all this cash is related to pot money.

Who knows? I feel so sorry for young families in this area.

 

Sent from my LG-H345 using Tapatalk

[Guest]

..

Edited August 11, 2016 by Heigh Ho

[Arcadia]

Here the new construction are mainly townhomes that are near or over a million and rental apartments. The sales price for a condo unit in my complex with the same floor plan as mine has been sold at 50% more this year than when we bought in 2006 new.

 

It is hard to buy here right now for the younger folks. Easier for folks my age upgrading from condo to townhomes.

Edited August 11, 2016 by Arcadia

[TranquilMind]

I live in a hot market in CO. We lost our first 3 offers to all cash and investors. It was extremely disheartening to see 400k houses being treated as flips and then rented out for extremely high rents. The speculation here is that all this cash is related to pot money.

Who knows? I feel so sorry for young families in this area.

 

Sent from my LG-H345 using Tapatalk

Yes, I bet it is. 

 

I do too.  I've sold a few houses to them but I'm seeing fewer of them looking at local properties.  My particular neighborhood usually sells in a day or a week, tops.  There are rarely houses here. 

 

For illustrative purposes, there were three offers by noon on my own very average (for the area) house on the first day about a decade and a half ago. This was pretty standard.

 

Today, there are about 5 just sitting there. One just sold. Two were way overpriced (a fatal error when selling).  But man, I have just never seen this before.  The interest rates are still in the three's, the last time I checked. 

 

It's pretty eye-opening if young people can't buy houses with a three percent interest rate.    Our first house had a 9 percent interest rate. 

Edited August 11, 2016 by TranquilMind

[TranquilMind]

Here the new construction are mainly townhomes that are near or over a million and rental apartments. The sales price for a condo unit in much complex with the same floor plan as mine has been sold at 50% more this year than when we bought in 2006 new.

 

It is hard to buy here right now for the younger folks. Easier for folks my age upgrading from condo to townhomes.

 

That concerns me a lot.  Yes, there are a lot of us upgrading over time, but someone has to buy the houses we are selling. 

 

[gardenmom5]

Where I live, regular would-be homebuyers are finding their offers beat out by all-cash investors. Not so much in the East Bay but in San Francisco and Silicon Valley, many of these are foreign buyers who aren't even renting the homes out but leaving them empty. I wish that the state would impose a purchase surcharge on non-citizens and use the proceeds to subsidize the construction of affordable housing for teachers, law enforcement, firefighters, etc. who cannot afford to live in the towns they serve.

 

we have similar here. buying $1m+ homes, and barely speak english, if any.   in the last ten years, we've had five houses torn down, and a dozen $1.1M+ built in their place.  not including the extensive remodels

a neighborhood not far from here has been a focus of investors coming in, tearing down, and building rooming houses (for college students -many are foreign) - for which the area is not zoned and they'll end up with stop work orders.

 

one of the biggest reasons dd&dsil moved to texas was the significantly cheaper real estate.   he would have stayed here if his employer had given him just a fraction of the raise he got by going to texas - and they still have  a much lower cola. (and one of dd bridesmaids is now moving 15 away from her. and her favorite cousin is moving there this month too.)

[Faithful_Steward]

We sold last year and we're renting. Waiting for the bubble to pop before we buy again...

[ashfern]

In our area the building is crazy. We have 2000+ houses going up in a 2 mile radius. One of the cities has been annexing property all over the place with no care about the infrastructure. Our traffic is already bad, I can't imagine how much worse it's going to get. All of these subdivisions are $300,000 and up. Nothing really for the first time home buyer.

[TranquilMind]

In our area the building is crazy. We have 2000+ houses going up in a 2 mile radius. One of the cities has been annexing property all over the place with no care about the infrastructure. Our traffic is already bad, I can't imagine how much worse it's going to get. All of these subdivisions are $300,000 and up. Nothing really for the first time home buyer.

 

Wow, that is crazy.  Sounds like a traffic issue for sure. 

 

I can't even imagine buying a $300,000 home NOW, much less when we were starting out.  But we are in a lower cost area, so $300,000 is pretty nice.  I did live in one once, but we bought it for a hundred grand less and then renovated. 

 

[Guest]

I wonder if we're going to see people fleeing to the Midwest and more rural areas? My town has plenty of nice homes for sale in the $150,000 range. There aren't tons of high-paying jobs but there are enough.

[pinkmint]

The whole investors snatching up houses thing makes me mad. I guess it works out nicely for them but here we are, DH and I are mid 30's and early 40's and there's no hope at this time of us ever owning a home... or living anywhere desirable for that matter the way rents have been going.

 

It really sucks. We're just a family trying to have some place to live and we have to compete against individuals who are concerned with nothing but turning a profit and making it increasingly difficult for people like us to ever own a home.

[Crimson Wife]

That concerns me a lot.  Yes, there are a lot of us upgrading over time, but someone has to buy the houses we are selling. 

 

 

Not necessarily if the rental market stays hot. The children of the Boomers who inherit the homes may decide to just rent them out and divide the proceeds among the siblings (there are ways of structuring a trust to make sure all the co-owners are getting a fair deal). It's a "Matthew effect" situation where the haves keep getting more and the have-nots keep falling further behind.

[Frances]

Where I live, regular would-be homebuyers are finding their offers beat out by all-cash investors. Not so much in the East Bay but in San Francisco and Silicon Valley, many of these are foreign buyers who aren't even renting the homes out but leaving them empty. I wish that the state would impose a purchase surcharge on non-citizens and use the proceeds to subsidize the construction of affordable housing for teachers, law enforcement, firefighters, etc. who cannot afford to live in the towns they serve.

And I think many regular sellers in your state are coming to my state and making cash offers for more than the asking price. Also an issue here is new supply not keeping up with demand, as the popular areas in my state are growing at unprecedented rates.

[Pawz4me]

DH and I are boomers (barely). We slightly downsized earlier this year. Our previous house sold in thirteen days to a youngish (early 30's) just married couple. There was quite a lot of investment activity going on in our neighborhood, though. That's one reason we wanted out.

[gardenmom5]

Wow, that is crazy.  Sounds like a traffic issue for sure. 

 

I can't even imagine buying a $300,000 home NOW, much less when we were starting out.  But we are in a lower cost area, so $300,000 is pretty nice.  I did live in one once, but we bought it for a hundred grand less and then renovated. 

 

 

around here - $300K is a fixer in the boonies.

there has been a lot of new construction - $1m+ (on a postage stamp lot), or "cheap" apartments.

 

(the county has required the building boom of cheap apartments - but the roads don't keep up. we actually have a increasing school age population after years of declines. they're now building a new elementary.  (can't use any of those shuttered elementaries, because they district uses them for office space.)

but the county has also made it much more difficult to build single family homes (they want very high density) - which has driven up prices.  then they complain that  first time buyers are closed out of the market. . ... the disconnect is strong with them.

The whole investors snatching up houses thing makes me mad. I guess it works out nicely for them but here we are, DH and I are mid 30's and early 40's and there's no hope at this time of us ever owning a home... or living anywhere desirable for that matter the way rents have been going.

 

It really sucks. We're just a family trying to have some place to live and we have to compete against individuals who are concerned with nothing but turning a profit and making it increasingly difficult for people like us to ever own a home.

 

I don't understand where these investors are coming from.  I've known a couple houses where the rumors among the neighbors were eastern european mob.

 

I wonder what things will be like when my boys are out of school and trying to find jobs and housing.

[sarasue7272]

We just  bought after 8 years renting. Our last rental was really high. It was a nice house, but the rent was $300 more than our new to us house. 
When we got in it, the choices were good size house that we could be comfortable in for high rent, or tiny house with tiny yard for $200 less. I see really nice homes, 350k-500k, for rent at over $2000. Who can afford that?? I assume people with bad credit but good jobs. That would be us (not quite that good of a job), but our last house was in my name only. So when everything went bust and we needed to sell in 2008 to move to a new state/new job, I ended up with bad credit, but DH's is great. Thank goodness. I am glad to be homeowners again! 

We are in metro atlanta, and the new construction I see is 280K at the lowest, usually 300-400k. I don't see how first time buyers can do that, but you know, people take on lots of debt. 

[pinkmint]

I think there's probably different breeds of investors. I have heard nearly conspiracy theory sounding things about powerful wealthy low-profile cooperations swooping up houses, wealthy foreign royalty etc but then you also have local "house flippers" who grab up affordable houses and renovate them out of affordability.

 

It feels like being the little guy up against all these people who couldn't care less that modest income families want a place to raise their children. They just want to add to their wealth.

[SamanthaCarter]

We have a house (in our old city out of state) that won't sell in the amount of time we can comfortably pay the mortgage while waiting for a buyer. Not an expensive house, and not a beater. Just an ordinary, well maintained brick ranch. We've been going back and forth for 6 years between trying to sell it and renting it. We really don't want to be landlords, but we've been forced into it. What a stupid, frustrating fiasco.

 

So unlucky. :( I feel like we sort of got the worst of the financial crisis. Had to move for a job because employer wasn't doing well, and then couldn't sell the house because the bottom fell out of the market. Now that the market is starting to improve there, it seems our neighborhood isn't as popular as it once was. 

Edited August 11, 2016 by SamanthaCarter

[TranquilMind]

Not necessarily if the rental market stays hot. The children of the Boomers who inherit the homes may decide to just rent them out and divide the proceeds among the siblings (there are ways of structuring a trust to make sure all the co-owners are getting a fair deal). It's a "Matthew effect" situation where the haves keep getting more and the have-nots keep falling further behind.

 

Ok, but rental costs tend to be higher monthly costs than buying.  At some point, you run out of prospects that can afford your rent (and also pay you enough for maintenance and repairs, a hefty yearly cost alone). 

 

[TranquilMind]

I think there's probably different breeds of investors. I have heard nearly conspiracy theory sounding things about powerful wealthy low-profile cooperations swooping up houses, wealthy foreign royalty etc but then you also have local "house flippers" who grab up affordable houses and renovate them out of affordability.

 

It feels like being the little guy up against all these people who couldn't care less that modest income families want a place to raise their children. They just want to add to their wealth.

 

I think all the HGTV flipping shows have definitely had an impact here.  Every Joe Blow and his brother thinks he can flip a house and make millions. 

 

[Wheres Toto]

around here - $300K is a fixer in the boonies.

there has been a lot of new construction - $1m+ (on a postage stamp lot), or "cheap" apartments.

 

(the county has required the building boom of cheap apartments - but the roads don't keep up. we actually have a increasing school age population after years of declines. they're now building a new elementary.  (can't use any of those shuttered elementaries, because they district uses them for office space.)

but the county has also made it much more difficult to build single family homes (they want very high density) - which has driven up prices.  then they complain that  first time buyers are closed out of the market. . ... the disconnect is strong with them.

 

I don't understand where these investors are coming from.  I've known a couple houses where the rumors among the neighbors were eastern european mob.

 

I wonder what things will be like when my boys are out of school and trying to find jobs and housing.

 

Seriously on the bolded.  Our 750 square foot, 1940's bungalow would sell for around $275-300K with just a little work put in (like fixing the roof).   We are in a good loation thought. 

 

The only house I've seen in the entire state for under $100K is a similar sized bungalow in a flood zone where the floors are underwater whenever it rains heavy (it's a foreclosure which I'm sure they are expecting to be torn-down) being sold as-is.

[Carol in Cal.]

I don't think you can get a shed in my city for $300,000.  It's crazy.

[Scarlett]

In my area I just saw a 750 SF 2/1 renovated bungalow for 54k. It says it is a short sale. The remodel isn't high end or anything but it is clean and fresh and nice looking. I haven't driven by the actual house but I know the area and it is a nice neighborhood. It even has a 14 X 14 shed in the back yard with concrete floor and electric.

 

Real estate is so weird. I wish I knew what my house is worth....both as is ( about half renovated) and what it would bring if we finished it. We paid 41500 for it. It sits on an acre, with an in ground pool and nice shop (30 X 40) one mile from a popular lake.

[Crimson Wife]

My cousin's husband runs a real estate investment fund. I think it was something like a $25k minimum buy-in and they were hoping to raise several million total. I forget the details because DH passed on it when he heard the size of the minimum. Might've been a profitable investment but too risky for us to have that large an amount tied up in one fund.

 

So not all real estate investors are pot growers or Mafia kingpins. Plenty are just regular (albeit well-heeled) businesspeople.

[MaeFlowers]

I think there are a few things going on. One, investors are and have been scooping up houses for flips. However, most aren't flipping they're buying to rent. My dh is a real estate agent. His investors and the others their brokerage works with buy to rent. Some of the their investors are small, only buying one or two houses, while others are buying hundreds of houses per year (hedge funds). They are mostly buying what would be starter homes. (And there is still a shortage of rentals.)

Second, building is just starting back up but they are not building starter homes. Most of the new houses are double that price.

There isn't a shortage of buyers here. Unless the house is crap, houses have multiple offers quickly. The loan officers are approving people but there are just no houses.

I'm sure it's different for every area. We are planning to buy in the next six months but if the market doesn't change, we may postpone.

[poppy]

We just moved.   We kept the old house as  a rental. 

House is 1000 sq ft and 2 bedrooms. Realtor said  $400,000 to sell or $2500/month to rent.

SO, if someone bought our house with a 30 year mortgage, they would be paying under $2000/month.

But inventory is so low for starter homes that we should be able to get a renter quick.

Renting is crazy expensive!

 

[TranquilMind]

We just moved. We kept the old house as a rental.

House is 1000 sq ft and 2 bedrooms. Realtor said $400,000 to sell or $2500/month to rent.

SO, if someone bought our house with a 30 year mortgage, they would be paying under $2000/month.

But inventory is so low for starter homes that we should be able to get a renter quick.

Renting is crazy expensive!

That is some massive price for a house that small. You can buy those under 100K in much of my state and the surrounding states.

[BooksandBoys]

I wonder if we're going to see people fleeing to the Midwest and more rural areas? My town has plenty of nice homes for sale in the $150,000 range. There aren't tons of high-paying jobs but there are enough.

We just did. We left a high COL area where we were homeowners but drowning financially for a much better job in a low COL area. We aren't homeowners, though. This particular area has a housing market that moves like sludge, so we're renting because we don't know what our long term plans are. We loved where we lived, but we just couldn't make it there. Thankfully, we sold in a very, very hot market (and we sold to a family in that hot market - a homeschooling family!), so we gained some traction. Can't say the same for the family that bought our house, but I'm glad they could even find housing...in our area, that was so difficult!

[Farrar]

What we've seen here is that the market has come back, but it's just really different now. Buyers want different things than before - primarily to be closer in to the city, either in the city or in an older suburb. The homes that no one is buying that haven't recovered their value are the mega mansions in the exurbs.

 

I'm all for new construction when the market can support it. But it seems like the continually building further and further out has finally come to a halt in many parts of the US. It's part of the trend of people moving back to the cities.

 

I hadn't thought much about how it's going to effect the wealth of Millennials who are renting. On the one hand, yeah, they're not - on the whole - getting the benefit of appreciating property. But they're also not getting the drawbacks and risks of things like subprime mortgages. I don't feel like I know enough to know if it's going to be bad overall for them as a generation.

[blackjackoaktree]

we are in a situation where rent for a three bedroom is SO much money that there's just no way we will be able to save up for a downpayment.  Homes in this area sell for $150K or less. Homes in this area like mine rent for $1500 or more. It's insane. We have three jobs between us and still cannot make enough money to overcome the debt ratio to get the loan, mostly because of my husband's student loan. And it's not gargantuan, but it's big enough so that we just cannot buy a house.

 

It's very irritating and defeating because it makes me afraid I will be old and alone in a bad neighborhood one day because it'll be the only thing available to me.

[DawnM]

Renting is always going to go by supply and demand.

 

Around the slump in 2008, many foreclosed or did a short sale because they lost their job, had to move, or whatever. 

 

Rentals are high.

 

The price of used cars went WAY up as well.  So much so that if you needed a used car loan (7%) it was often cheaper overall to buy new at 1% or so.  Of course, that depended on your credit.  I have friends whose credit is shot and on a used car loan they were paying around 20% interest, but the new car dealership wouldn't touch them.

 

Our city is quite diverse in terms of housing costs.  You can get a 1960s ranch in a really bad area for $50K.  It will be run down, but livable, and a bit dangerous.   That same house, near the city, in an area that is fantastic, can go for $400K.

 

We wanted to move this summer.  We were going to sell our house (fantastic area but too far out for my taste), but once we started looking around, yikes!  The costs were simply way too much.  We were going to get a smaller house to compensate, but even then, we were going to need to spend $100K to even touch that area for any decent sized house.  We don't want a starter home with no yard.  I would rather drive further than do that.

 

So, we are driving further.  Although it isn't *too* bad and we are now committed to living here for the next 6 years min. to get our youngest through high school.

[Scarlett]

Renting is always going to go by supply and demand.

 

Around the slump in 2008, many foreclosed or did a short sale because they lost their job, had to move, or whatever.

 

Rentals are high.

 

The price of used cars went WAY up as well. So much so that if you needed a used car loan (7%) it was often cheaper overall to buy new at 1% or so. Of course, that depended on your credit. I have friends whose credit is shot and on a used car loan they were paying around 20% interest, but the new car dealership wouldn't touch them.

 

Our city is quite diverse in terms of housing costs. You can get a 1960s ranch in a really bad area for $50K. It will be run down, but livable, and a bit dangerous. That same house, near the city, in an area that is fantastic, can go for $400K.

 

We wanted to move this summer. We were going to sell our house (fantastic area but too far out for my taste), but once we started looking around, yikes! The costs were simply way too much. We were going to get a smaller house to compensate, but even then, we were going to need to spend $100K to even touch that area for any decent sized house. We don't want a starter home with no yard. I would rather drive further than do that.

 

So, we are driving further. Although it isn't *too* bad and we are now committed to living here for the next 6 years min. to get our youngest through high school.

How far out do you live?

 

We live 15 minutes from a Wal Mart/public schools. 45 minutes to a larger city where Dh works. At this point I would love to just live in town and only be 30 minutes from the city.

[Scarlett]

What we've seen here is that the market has come back, but it's just really different now. Buyers want different things than before - primarily to be closer in to the city, either in the city or in an older suburb. The homes that no one is buying that haven't recovered their value are the mega mansions in the exurbs.

 

I'm all for new construction when the market can support it. But it seems like the continually building further and further out has finally come to a halt in many parts of the US. It's part of the trend of people moving back to the cities.

 

I hadn't thought much about how it's going to effect the wealth of Millennials who are renting. On the one hand, yeah, they're not - on the whole - getting the benefit of appreciating property. But they're also not getting the drawbacks and risks of things like subprime mortgages. I don't feel like I know enough to know if it's going to be bad overall for them as a generation.

There was a story on NPR yesterday about the decline of the use of cars for daily use to get to a job. It is al tied into what we are discussing here.

[ktgrok]

 

 

The price of used cars went WAY up as well.  So much so that if you needed a used car loan (7%) it was often cheaper overall to buy new at 1% or so.  Of course, that depended on your credit.  I have friends whose credit is shot and on a used car loan they were paying around 20% interest, but the new car dealership wouldn't touch them.

 

 

 

 

Ok, so I'm not crazy!!! We are ready to get a new used car, and I've had total sticker shock. Buying something similar in how old and how many miles will now cost more than double what it did about 6 years ago. We bought a 5 yr old van with 60K miles for 6K then. Now one like that is more like 15K!

[JumpyTheFrog]

There was a story on NPR yesterday about the decline of the use of cars for daily use to get to a job. It is al tied into what we are discussing here.

I figured Cash for Clunkers took so many cars off the road that the supply of used cars dropped and that's why used car values increased for several years.

[poppy]

What we've seen here is that the market has come back, but it's just really different now. Buyers want different things than before - primarily to be closer in to the city, either in the city or in an older suburb. The homes that no one is buying that haven't recovered their value are the mega mansions in the exurbs.

 

I'm all for new construction when the market can support it. But it seems like the continually building further and further out has finally come to a halt in many parts of the US. It's part of the trend of people moving back to the cities.

 

I hadn't thought much about how it's going to effect the wealth of Millennials who are renting. On the one hand, yeah, they're not - on the whole - getting the benefit of appreciating property. But they're also not getting the drawbacks and risks of things like subprime mortgages. I don't feel like I know enough to know if it's going to be bad overall for them as a generation.

 

Exactly what I've seen in Boston. 

Lots of empty $600,000 home 50 minutes from the city that are 3000 sq ft. 

Huge demand for $600,0000 homes 20 minutes from the city that are 2000 sq ft.

 

[Scarlett]

I figured Cash for Clunkers took so many cars off the road that the supply of used cars dropped and that's why used car values increased for several years.

They didn't mention that. They mentioned that young people have huge student debt and they want to live closer to their jobs, so the car expense is one to go.

[DawnM]

Ok, so I'm not crazy!!! We are ready to get a new used car, and I've had total sticker shock. Buying something similar in how old and how many miles will now cost more than double what it did about 6 years ago. We bought a 5 yr old van with 60K miles for 6K then. Now one like that is more like 15K!

 

 

Well, I didn't say you weren't crazy.  I just said used car prices are up and so are used car interest rates.  Those are two different things

 

:lol:  :lol:  :lol:

[DawnM]

How far out do you live?

 

We live 15 minutes from a Wal Mart/public schools. 45 minutes to a larger city where Dh works. At this point I would love to just live in town and only be 30 minutes from the city.

 

 

If you go due north (not freeway) we are 20 miles from the downtown area.  Without traffic it is around 35 min.  With traffic, an hour.

 

If you travel the freeways, you have to go around and it is about 25 miles, but the same amount of time roughly.

[ktgrok]

Well, I didn't say you weren't crazy.  I just said used car prices are up and so are used car interest rates.  Those are two different things

 

:lol:  :lol:  :lol:

 

LOL!  True, I'm probably crazy, just not about this :)

SaveSave

[DawnM]

LOL!  True, I'm probably crazy, just not about this :)

SaveSave

 

 

Ok, I keep seeing the "SaveSave"

 

What does it do?  

[ktgrok]

Ok, I keep seeing the "SaveSave"

 

What does it do?  

 

I have NO idea!!! it keeps popping up though. I'm afraid to click it!

[Carrie12345]

http://www.msn.com/en-us/money/realestate/lopsided-housing-rebound-leaves-millions-of-people-out-in-the-cold/ar-BBvtvFU?li=BBnbfcL

 

"Home prices rose in 83% of the nation’s 178 major real-estate markets in the second quarter, according to figures released Wednesday by the National Association of Realtors. Overall prices are now just 2% below the peak reached in July 2006, according to S&P CoreLogic Case-Shiller Indices.

But most of the price gains, economists said, stem from a lack of fresh supply rather than a surge of buyers. The pace of new home construction remains at levels typically associated with recessions, while the homeownership rate in the second quarter was at its lowest point since the Census Bureau began tracking quarterly data in 1965 and the share of first-time home purchases remains mired near three-decade lows.

 

 

 

This is far from the case in our area.

 

Our township (approx. 3,000 homes to 5,000 people, give or take) has 84 empty lots for sale (from $3,500 to $400k) and 166 homes for sale.  When you add pre-foreclosures and foreclosures, it's 256 homes.

 

They're all at rock bottom prices.  My mortgage balance (purchased in 2005) can't compete with the cheap inventory.  The house across the street has been sitting empty for years.  2 doors down, a 5bd/3ba colonial sold dirt cheap.

[Bluegoat]

The market here is a little strange.  I think if I had to sell now, I would be worried.  And it is probably less geared to young families than anyone else.

 

On the one hand, we're being told that the markets here in Canada are inflated, which I believe, though mine is not nearly the worst.  OTOH, prices here in the past, maybe six months, have gone down.  But anything newer is still sooo expensive, to the point that I wonder how people with a regular salary can afford it. 

 

Also, we are really seeing the effects of the move toward prefering urban living - anything in areas that are in more inner city areas are very desirable and much more expensive.  The city has for a few years now in their development plan said they want to avoid building in new areas, and instead promote densification - running the numbers it became clear that adding new housing by building in new areas is completely unaffordable for the city, we need to build where there is already infrastructure.

 

They haven't been that great at following this - there is still a lot of new developments, the fact is that developers donate a lot of money.  They have been trying to create density, but it seems almost exclusivly through building towers in the core downtown area. 

 

The problem with this is towers kind of suck in terms of making dark shadows and being ugly, they aren't great to live in because there are too many people to get to know.  They tend not to be suitable for families unless they are quite small.  And now, some of those people are having to commute out of the core to work, in part  because the city keeps encouraging things like business parks.  THat is silly since part of the downtown living rational is supposed to be walkability. 

 

But what they have been ignoring is there are lots of other areas that are almost exclusively single family dwellings or duplexes, the lowest density places, that also already have infrastructure, that could hold a lot more people with nice, neighbourhood sized buildings.  THis would be of benefit for providing a reasonable customer base for the local shops, and making it for local businesses to get local employees. It would mean that people could stay in those neighbourhoods when their economic or life stage changes.  It would also make it economical to have better public transit to these places which is something they keep saying they want.

 

Anyway - these older less dense areas, or some which are mixed density, tend to be the ones young families can afford, if they can afford anything.  I am seeing far more homes in these areas up for rent though, it used to be uncommon. 

 

What I am not seeing much of at all is buildings suitable for families in these or the more urban areas.  You have to be very solidly middle class to afford the new construction, and the newer urban developments are people my parent's age, and couples without kids.