Article in NYT re: Americans losing faith in value of college degree

[ScoutTN]

1 hour ago, fairfarmhand said:

And That's really frustrating. My oldest dd25 and her dh would love to find a 1200 square foot house with 1 or 1.5 baths and a small yard. They don't want granite countertops (mostly the cost of that kind of thing) fancy floors, built ins or anything extravagant. They want a basic starter home. And apparently they don't exist. 

They exist in my neighborhood, on the SE side of your city, starting at about $350K for ones that really need work. ☹️☹️

Edited September 7, 2023 by ScoutTN

[Bootsie]

17 hours ago, Ginevra said:

 

Meanwhile, non-American students (and their parents) still idealize and have a high degree of participation in college. Of course, most developed nations subsidize college educations at a much greater rate than the US, leaving American students slower to build wealth, even if they do earn higher wages. 

Discuss. 

 

I am curious about this.  Is there any evidence that studnets in other countries build wealth more quickly?  If the government subsidizes education, it must recoup that money from somewhere, presumably from taxing its citizens.  It seems that the tradeoff would be pay directly for an education or have the governemnt subisidize education and then pay taxes to pay for the education (and higher taxes would decrease the rate of wealth building).  Or, it could be that the taxes fall more heavily on those who don't receive the education--which would allow for those who are educated to build wealth more quickly due to a transfer from those who are not educated.

[fairfarmhand]

24 minutes ago, ScoutTN said:

They exist in my neighborhood, on the SE side of your city, starting at about $350K for ones that really need work. ☹️☹️

And isn't that crazy?

Here where we are there's only large fancy homes. And in the city, there are the smaller ones that need work and those are STILL out of reach of young couples.

[Corraleno]

25 minutes ago, Bootsie said:

These statistics would not tell us anything about how the average middle class family was living in 1995--what type of home they were living in and whether they owned it., whether they vacationed for a week, whether their kids had a car, and whehter mom worked full-time or part-time.  I am questioning whether the picture of how the average lived in 1995 is accurate.  Moreover, I do not think that has been the typical lifestyle of middleclass families historically.  Although it may have appeared "normal" to some people, and is their point of reference, the question is whether that is an truly accurate point of reference as what is "normal".  

And, while college tuition and medical prices have increased faster than the rate of inflation in the past few decades, that means that other items that the average family purchases have moved lass than inflation.  Looking at the rise in prices in a couple of areas does not point to a rise in the cost of living above that of inflation.  

I grew up well below middle class, with parents who grew up in poverty and married as teens. My dad mostly worked unskilled blue collar jobs like truck driving and construction, although he also worked as a cop for a few years, and my parents could still afford to buy a tiny 2BR bungalow in 1962, which my dad eventually added onto to make it 3 BR so all four kids didn't have to share a room. After divorce and remarriages in the 1970s, my high-school-dropout stepfather supported my mother, younger sibs, and half-brother on the income of a power company lineman, and they had enough money for a house, nice car, and several vacations a year, including ski trips. My stepmother worked part time at a school and my dad worked as a deck hand on fishing boats, and they were able to buy a dilapidated 5 bedroom, 1 bath fixer-upper and support 5 kids. They drove used cars and didn't take many vacations, but my step siblings were all able to buy decent used cars as teens with money they earned from minimum wage summer jobs. Most of my siblings and step-siblings married young and were able to buy nice houses, drive nice cars, and raise 2-3 kids on just the husband's salary — and none of those men had college educations. All that was totally "normal" in the NJ/Pennsylvania area in the 1960s/70s/80s/90s.

[Bootsie]

The house that I lived in during elementary school happens to be on the market now--my parents would have bought in in the mid 1960s.  It is 3 bedroom and one bath.  Since we lived there the carport has been turned into a garage, but other than that, it looks as if nothing much has changed of the basic house.  It is freshly painted and is in good condition.  It is on the market for $135,000.   

The house we moved to in 1972 just sold this past May for $189,000.  It is four-bedroom and 2 bath.  It has new hardwood floors throughout (rather than the gold shag carpet we had).  It has marble countertops (rather than the gold countertops we had); it has new white cabinets and stainless steel appliances (rather than avocado green we had)  The bathrooms have been redone.  It has a microwave and ceiling fans we did not have; a covered patio we did not have;, a covered carport we did not have, and the family room; a wal has been removed for more of an open floor plan and the family room has been extended to have more square feet. 

I think these houses are as affordable to young famiies in the area as they were for my parents.  

[prairiewindmomma]

So if US median (August 2023) house to income price ratio is 4.6, does that mean median household income in your city (assuming an average house is 150k) is $32,600?
 

Is your area running a 4.6 house to income average? (My area house to income price ratio is higher than 4.6, so curious where yours fits in.) 

[4kidlets4me]

12 minutes ago, prairiewindmomma said:

So if US median (August 2023) house to income price ratio is 4.6, does that mean median household income in your city (assuming an average house is 150k) is $32,600?
 

Is your area running a 4.6 house to income average? (My area house to income price ratio is higher than 4.6, so curious where yours fits in.) 

I found an article from 2021 that says ours is 8.5. I'm sure it's gone up in the last 2 years. Nearly every house in my neighborhood is $1M+.

[Bootsie]

16 minutes ago, prairiewindmomma said:

So if US median (August 2023) house to income price ratio is 4.6, does that mean median household income in your city (assuming an average house is 150k) is $32,600?
 

Is your area running a 4.6 house to income average? (My area house to income price ratio is higher than 4.6, so curious where yours fits in.) 

The median household income in that county was $58,020 in 2021

[Heartstrings]

2 hours ago, Bootsie said:

I am curious about this.  Is there any evidence that studnets in other countries build wealth more quickly?  If the government subsidizes education, it must recoup that money from somewhere, presumably from taxing its citizens.  It seems that the tradeoff would be pay directly for an education or have the governemnt subisidize education and then pay taxes to pay for the education (and higher taxes would decrease the rate of wealth building).  Or, it could be that the taxes fall more heavily on those who don't receive the education--which would allow for those who are educated to build wealth more quickly due to a transfer from those who are not educated.

Watching videos from people in other other countries it seems most pay a little bit more in taxes, but get subsidized health care, child care, education and maternal leave.  
 

The bulk of our taxes go to the military.   Spending more than the next 20 or so countries combined comes from somewhere.  That’s what we get instead.  
 

 

ETA: by BULK I mean it’s our 3rd largest outlay at around 16% of the total budget, behind Medicaid/Medicare and Social Security only.  

Edited September 7, 2023 by Heartstrings

[fairfarmhand]

54 minutes ago, Bootsie said:

The house that I lived in during elementary school happens to be on the market now--my parents would have bought in in the mid 1960s.  It is 3 bedroom and one bath.  Since we lived there the carport has been turned into a garage, but other than that, it looks as if nothing much has changed of the basic house.  It is freshly painted and is in good condition.  It is on the market for $135,000.   

The house we moved to in 1972 just sold this past May for $189,000.  It is four-bedroom and 2 bath.  It has new hardwood floors throughout (rather than the gold shag carpet we had).  It has marble countertops (rather than the gold countertops we had); it has new white cabinets and stainless steel appliances (rather than avocado green we had)  The bathrooms have been redone.  It has a microwave and ceiling fans we did not have; a covered patio we did not have;, a covered carport we did not have, and the family room; a wal has been removed for more of an open floor plan and the family room has been extended to have more square feet. 

I think these houses are as affordable to young famiies in the area as they were for my parents.  

I wish there were some houses like this in our area.

My dd and her dh would snap that up. 

[prairiewindmomma]

11 minutes ago, 4kidlets4me said:

I found an article from 2021 that says ours is 8.5. I'm sure it's gone up in the last 2 years. Nearly every house in my neighborhood is $1M+.

We sit at 7.3 for our metro. 

If the assumption of $150k for an average house in Bootsie’s childhood county is correct, that sits at about 2.6 (rounding up). That’s a completely different dynamic from mine in terms of housing affordability. 

[Heartstrings]

This American in Germany that I follow did the math for her own family.  A family of 3 on $70k per year pays about 3% more in taxes in Germany.  A difference of less than $3000 per year. 
 

https://www.tiktok.com/t/ZT82mEyrh/

Here’s just a little sample of what she’s gotten for those taxes. Daycare only cost $2000 per year, maternity leave pay for the child in daycare of $300 per month for the first year, the national minimum.  Plus generally free college tuition and basically free health care.  She uses an average figure of $6000-$8000 in America for daycare but it’s closer to $10k-$13k a year for full time care in my area.  
 

https://www.tiktok.com/t/ZT82m7wrf/

 

 

Edited September 7, 2023 by Heartstrings

[Heartstrings]

I honestly think the idea that European countries pay a ton more in tax than we do is just propaganda.  Same with us having more freedom.  

[Corraleno]

1 hour ago, Bootsie said:

The house that I lived in during elementary school happens to be on the market now--my parents would have bought in in the mid 1960s.  It is 3 bedroom and one bath.  Since we lived there the carport has been turned into a garage, but other than that, it looks as if nothing much has changed of the basic house.  It is freshly painted and is in good condition.  It is on the market for $135,000.   

The house we moved to in 1972 just sold this past May for $189,000.  It is four-bedroom and 2 bath.  It has new hardwood floors throughout (rather than the gold shag carpet we had).  It has marble countertops (rather than the gold countertops we had); it has new white cabinets and stainless steel appliances (rather than avocado green we had)  The bathrooms have been redone.  It has a microwave and ceiling fans we did not have; a covered patio we did not have;, a covered carport we did not have, and the family room; a wal has been removed for more of an open floor plan and the family room has been extended to have more square feet. 

I think these houses are as affordable to young famiies in the area as they were for my parents.  

That illustrates my point about some areas being incredibly inflated and others not even keeping up with inflation, which is why the "averages" are so deceptive.

I don't know what kind of jobs/schools/amenities there are in those locations, but TBH I would not be inclined to buy a home in an area where house prices don't even keep pace with inflation. Even assuming the original purchase prices were very low, a house bought for $30K in 1965 should be worth ~$290K today just to keep up with inflation, and a house bought for $50K in 1972 should be worth ~$365K, so those were not good investments. If a person had rented instead and invested the down payment (not to mention interest/taxes/insurance/upkeep costs), they would have come out way ahead —  just plonking $10K in the S&P500 in 1972 instead of using it as a down payment would be worth $325K now. Even allowing for the fact that depressed housing prices in that area may result in lower effective inflation rates, compared to the national average, it still doesn't seem like home ownership is a good investment there.

I just looked up the small 3BR house I mentioned that I grew up in; I think my parents paid around $25K for it in 1962 and then added a bedroom and expanded the kitchen in the 1970s; it's current value is estimated at $650K, in a neighborhood where the nicer houses on the street are valued at $750-800K, and a 2BR/1BA 1000 sq' house a few streets over is currently listed for $500K. If the value of my childhood home had just kept up with inflation, instead of vastly exceeding it, it would be worth ~$250K now, or maybe ~$350K considering the added space. Not many young couples can afford to pay half million for a tiny 2BR/1BA fixer-upper as their "starter home."

Edited September 7, 2023 by Corraleno

[Penelope]

19 minutes ago, Heartstrings said:

This American in Germany that I follow did the math for her own family.  A family of 3 on $70k per year pays about 3% more in taxes in Germany.  A difference of less than $3000 per year. 
 

https://www.tiktok.com/t/ZT82mEyrh/

 

 

 

I think this is too simplified a comparison to know for sure, even  for this one example. Property taxes, which I think are more likely in the US, vehicle taxes, fuel taxes, and huge differences in sales taxes— much higher in general in Europe, which adds up. There are taxes added on utility bills we pay here; how about over there? Probably there are other things I’m not thinking of. 
 

It’s a good point that it could vary a lot with different family incomes and situations, and might not be true that EU taxes are higher than the US in every situation. 

Edited September 7, 2023 by Penelope

[SKL]

56 minutes ago, Heartstrings said:

Watching videos from people in other other countries it seems most pay a little bit more in taxes, but get subsidized health care, child care, education and maternal leave.  
 

The bulk of our taxes go to the military.   Spending more than the next 20 or so countries combined comes from somewhere.  That’s what we get instead.  

The bolded is untrue.  The vast majority of US federal tax dollars go to social programs - health subsidies, social security, welfare, and benefits for veterans and federal retirees, in that order.

Edited September 7, 2023 by SKL

[SKL]

I agree that houses are too expensive right now - as are cars, food,,,,.  That is a fairly recent thing, and who knows how long it will last.

Personally I'd wait and save a bit rather than buy a starter home in the current market, unless they happen to find one at a great value.

[Heartstrings]

4 minutes ago, SKL said:

The bolded is untrue.

You’re correct, defense is the biggest item after Medicaid/Medicare and social security.  It is true that we spend more on defense than another country, more than almost all of the other countries combined.  That is where our money is going where other countries offer benefits to their citizens.  If we could tone that down even just modestly we could do a lot of quality of life stuff for the population without touching current taxes.  
 

[prairiewindmomma]

10 minutes ago, SKL said:

The bolded is untrue.  The vast majority of US federal tax dollars go to social programs - health subsidies, social security, welfare, and benefits for veterans and federal retirees, in that order.

To put % of this, Fiscal year 2022, according to this: https://www.cbpp.org/research/federal-budget/where-do-our-federal-tax-dollars-go

25% health insurance

21% social security

13% defense department

11% economic security programs

 

 

[SKL]

3 minutes ago, Heartstrings said:

You’re correct, defense is the biggest item after Medicaid/Medicare and social security.  It is true that we spend more on defense than another country, more than almost all of the other countries combined.  That is where our money is going where other countries offer benefits to their citizens.  If we could tone that down even just modestly we could do a lot of quality of life stuff for the population without touching current taxes.  
 

The US isn't really comparable to the other countries though.  We have more people and/or more land mass, we defend more than just the U.S., and we are more technologically advanced than  most countries.

We also have relatively advanced medical care for the average person.  There is room for improvement in terms of non-emergency access for people in certain situations, yes - a minority of Americans (about 8% per google right now).  Access isn't perfect in other countries either.

Higher education access - some countries will use tax money to send the best students to school, yes - these will statistically tend to be the students who need the subsidy least, being paid for by folks who don't get to go to college.  I don't really want that system here.

There's room for improvement, but we aren't going to get there by citing false statistics, are we?

[Heartstrings]

17 minutes ago, SKL said:

here's room for improvement, but we aren't going to get there by citing false statistics, are we?

Before we get snotty, I said a “bulk” which is a descriptor not a statistic.  I corrected it when you took issue with the word.  No one is citing false statistics and I resent the accusation. 
 

Im glad your happy with how our taxes get spent.  I’d rather the population in general benefit more instead of just military contractors.  
 

We can quibble over definitions all day long.  What you consider as “room for improvement” I consider a near disaster. Saying that people have access to a health care system is fine and dandy, acknowledging that accessing it comes with a risk of bankruptcy is another.  Sure, there is world class healthcare available, but if I have to forgo accessing it due to cost how am I helped?  Where as in “peer” countries that isn’t an issue.  

Edited September 7, 2023 by Heartstrings

[Faith-manor]

I can compare France and the US since my sister and brother in law live there.

In the U.S., we pay a lot of tax on already taxed income on top of more taxed income. So while a bracket might be, say 22%. The reality is the effective tax rate on a list of of middle class Americans is 40%. We pay sales tax from income that has been taxed, on far more items than in France. We pay fuel taxes plus millages for road improvements out of already taxed income which had paid township taxes, city, taxes, you name it. We pay sales tax on used items in thrift stores that have already been taxed at the point of sale, on used cars, and if you live in Michigan, every single year your license and registration for your car is based on the taxable value of your car, a car that had been taxed over and over and over again. The minimum tax is 29.2% total but upwards again of that 45% if you are in the 22% or higher federal income tax rate and depending on what state you live in, and what millages your townships have passed.

So for us, we pay, at last estimate, about 40% of our entire income in some shape or form to taxes. Out of this, we have had to contribute significantly to our children's college educations, pay health insurance premiums and deductibles, pay for homeschooling because despite all the money we paid to the local school district - it is total crap, money thrown in the toilet from a family perspective -  and then all of the regular expenses of living. We have no public transportation which would allow us to cut expenses by being a one car family, barely usable health insurance, crumbling infrastructure, roads that aren't taken care of properly in the winter, a laughable "education system", like many families worry about medical bankruptcy, out of sight utility costs, and the list just goes on of the things we don't have that if paying taxes at this rate, citizens should have or should not worry about.

My brother in law and sister make about 63% of what we have for annual income. They never worry about healthcare ever. French healthcare saved my sister's life. She would be dead if she had stayed in the states, and bankrupted right up to that horrible death. They are a one car family because they have robust transport in town and countryside. The education is VERY good compared to the US. Utilities cost less though housing is a little more. Their quality of life is higher. Their life expectancy is longer. They have guaranteed vacation, more than Mark has though he had worked 20 years longer than brother in law, and will retire much older than bil. Now I will say that if you think bureaucracy is bad here, it is twice as bad in France. Seriously! Government employees have NO concept of customer service. So that is definitely a source of angst. But, across the board, their stress is less just because employers cannot be horrible task masters, there social safety nets, and they just do not have to constant worry about healthcare access and affordability. This country does not ration healthcare except that it takes a very very conservative stance on experimental drug treatments.

France is not perfect by any stretch of the imagination. It has issues. But it is a country in which citizens receive a tremendous amount of benefit from the taxes they pay, and parents do not worry about how their children will afford college or trades education.

So to be perfectly honest, I would rather be living in France and paying taxes there, making less money but having more disposable income and enjoying the fruits of my taxes, than here where my taxes subsidize corporations and billionaires, and all I have to show for it the most ungodly, immoral, hoarding of weaponry while simultaneously NOT taking care of military personnel and veterans, especially veterans. I would personally rather take care of the citizenry as a whole, not just the uber wealthy.

 

[SKL]

7 minutes ago, Heartstrings said:

Before we get snotty, I said a “bulk” which is a descriptor not a statistic.  I corrected it when you took issue with the word.  No one is citing false statistics and I resent the accusation. 
 

Im glad your happy with how our taxes get spent.  I’d rather the population in general benefit more instead of just military contractors.  
 

We can quibble over definitions all day long.  What you consider as “room for improvement” I consider a near disaster. Saying that people have access to a health care system is fine and dandy, acknowledging that accessing it comes with a risk of bankruptcy is another.  Sure, there is world class healthcare available, but if I have to forgo accessing it due to cost how am I helped?  Where as in “peer” countries that isn’t an issue.  

Your post was misleading, as the commonly understood meaning of "the bulk of" is "most of."  It ticks me off when, on a multi-national message board, people make statements that amount to extreme misinformation about one country, which many readers are unlikely to question.

You think we should spend less on the military - that's your right.  I didn't say I was happy with how our taxes are spent.  I just prefer fact over fiction in this kind of exchange.

[Bootsie]

1 hour ago, prairiewindmomma said:

We sit at 7.3 for our metro. 

If the assumption of $150k for an average house in Bootsie’s childhood county is correct, that sits at about 2.6 (rounding up). That’s a completely different dynamic from mine in terms of housing affordability. 

I checked and the average home value in the county is $184,000.  Housing markets are extremely localized, making national averages meaningless.  Not only has the long-run average price increase varied greatly across the US, the timing of the run-ups in various market segments has been very different.

And I think two different ideas are running through this discussion:

1) How much more is average housing than average household income today compared to a previous time period?

and

2) How easy is it for young families to buy a house equivalent to what their parents and grandparents bought?  

Those are not equivalent questions.

 

 

[Bootsie]

1 hour ago, Penelope said:

I think this is too simplified a comparison to know for sure, even  for this one example. Property taxes, which I think are more likely in the US, vehicle taxes, fuel taxes, and huge differences in sales taxes— much higher in general in Europe, which adds up. There are taxes added on utility bills we pay here; how about over there? Probably there are other things I’m not thinking of. 
 

It’s a good point that it could vary a lot with different family incomes and situations, and might not be true that EU taxes are higher than the US in every situation. 

But, European countries have value added taxes, which are really sales taxes but not as obvious to the purchaser.  

[SKL]

On the subject of housing costs, I thought I'd do a little research experiment.

It happens that the 1925 house my parents owned when I was born still exists, and in fact was sold as recently as 2021.

The house is 2br, 1 bath, 728 square feet (you read that right - super tiny).  It's located in a modest residential area of a city.  My mom, then aged 19, bought this house for $9,000 in 1963.  (It's been owned by ?? others since then.)  In 2021, it sold for $29,000.  From the description, you can tell it's a fixer-upper.

Our next house, built in 1924 and purchased by my folks in 1968 for $19,000, was last on the market in 2008, when it sold for $92,000.  We bought it as a 2br, 1 bath and now (with a finished attic) it's a 4br, 1.5 bath with 1659 sq. ft.  The location is walkable from the first house - same city, perhaps a little less modest neighborhood.

I know we have lots of fairly reasonable fixer-uppers in the metro area where I live.  But I think, due to the trend of bigger and bigger houses over time, one would need to be open to older homes in working-class neighborhoods.

 

[Corraleno]

7 minutes ago, SKL said:

We also have relatively advanced medical care for the average person.  There is room for improvement in terms of non-emergency access for people in certain situations, yes - a minority of Americans (about 8% per google right now).  Access isn't perfect in other countries either.

• About half of U.S. adults say they have difficulty affording health care costs. About four in ten U.S. adults say they have delayed or gone without medical care in the last year due to cost, with dental services being the most common type of care adults report putting off due to cost.

  Substantial shares of adults 65 or older report difficulty paying for various aspects of health care, especially services not generally covered by Medicare, such as hearing services, dental and prescription drug costs.

  The cost of health care often prevents people from getting needed care or filling prescriptions. About a quarter of adults say they or family member in their household have not filled a prescription, cut pills in half, or skipped doses of medicine in the last year because of the cost, with larger shares of those in households with lower incomes, Black and Hispanic adults, and women reporting this.

  High health care costs disproportionately affect uninsured adults, Black and Hispanic adults, and those with lower incomes. Larger shares of U.S. adults in each of these groups report difficulty affording various types of care and delaying or forgoing medical care due to the cost.

  Those who are covered by health insurance are not immune to the burden of health care costs. About one-third of insured adults worry about affording their monthly health insurance premium, and 44% worry about affording their deductible before health insurance kicks in.

  Health care debt is a burden for a large share of Americans. About four in ten adults (41%) report having debt due to medical or dental bills including debts owed to credit cards, collections agencies, family and friends, banks, and other lenders to pay for their health care costs, with disproportionate 

 

7 minutes ago, SKL said:

Higher education access - some countries will use tax money to send the best students to school, yes - these will statistically tend to be the students who need the subsidy least, being paid for by folks who don't get to go to college.  I don't really want that system here.

But European countries where university is free or heavily subsidized for those who qualify, also generally have free or heavily subsidized training and apprenticeship programs for the majority of the population that do not go to college, so it's not at all the equivalent of "poor people paying for rich kids to go to college" while their own kids are stuck working fast food for minimum wage, it's more like the population as a whole agrees to educate the small-ish percentage of the population that are the most qualified, in order to fill the jobs that require that level of education, and then they pay for the rest to get training necessary to fill the other jobs that the country needs. And a college education doesn't necessarily provide a huge advantage in terms of income. For example, one reason healthcare costs are lower in European countries is because doctors don't come out of med school $150-200K in debt, and their salaries are generally much lower than in the US (e.g. average salary of a physician in the UK or Germany is ~$120-150K vs ~$350K in the US).

A ridiculous percentage of income for working class American families goes to health insurance, healthcare, and childcare, and many young families are still paying off debt from college, all of which are cheap or free in most of Europe. 

[SKL]

Just now, Corraleno said:

• About half of U.S. adults say they have difficulty affording health care costs. About four in ten U.S. adults say they have delayed or gone without medical care in the last year due to cost, with dental services being the most common type of care adults report putting off due to cost.

  Substantial shares of adults 65 or older report difficulty paying for various aspects of health care, especially services not generally covered by Medicare, such as hearing services, dental and prescription drug costs.

  The cost of health care often prevents people from getting needed care or filling prescriptions. About a quarter of adults say they or family member in their household have not filled a prescription, cut pills in half, or skipped doses of medicine in the last year because of the cost, with larger shares of those in households with lower incomes, Black and Hispanic adults, and women reporting this.

  High health care costs disproportionately affect uninsured adults, Black and Hispanic adults, and those with lower incomes. Larger shares of U.S. adults in each of these groups report difficulty affording various types of care and delaying or forgoing medical care due to the cost.

  Those who are covered by health insurance are not immune to the burden of health care costs. About one-third of insured adults worry about affording their monthly health insurance premium, and 44% worry about affording their deductible before health insurance kicks in.

  Health care debt is a burden for a large share of Americans. About four in ten adults (41%) report having debt due to medical or dental bills including debts owed to credit cards, collections agencies, family and friends, banks, and other lenders to pay for their health care costs, with disproportionate 

 

We're talking about dental care now?  I wasn't aware that other countries provide fabulous free dental care to all.

[BusyMom5]

I've retyped an answer several times.  I'd like to get back to the article regarding the cost of college.  For reference, my DH and I are Gen X, 2 kids in college, 2 in high school, and 2 that are younger.  I am right in the thick of paying ridiculous prices to try to launch my kids and spend s lot of time looking into the details.

I think the reason prices have become so high is because we borrow so much, and no one is saying NO.  My generation took out student loans and paid them back, but now that our kids are at this age, our kids can only borrow $5500, and parents have to borrow the rest in Parent Plus loans.  

1.  $5500 is way too low and should be bumped to $10K, and all should be no interest until graduation.

2.  There should be a cap on the amount parents can borrow per kid, just like the cap for Student Loans.  I'm thinking another $10K max!  This would mean the maximum loan for any one student is 80K. 40 students, 40 parents.   

3.  The degree matters -  schools should be required to show salary rates of their graduates for each degree at 1, 3, 5, and 10 years after graduation.   Students and parents should be presented with this information at orientation when they sign up for classes.  I'm thinking something like the Schumer Box on credit card applications that are required to write out in plain sight what the terns are.  

4.  It isn't fair to say at the same time that students can only borrow $5500, parents borrow the rest.  Then turn around and say parents have no right to see any information about the student's academic record.  

5.  Around 40% of incoming freshman do not finish their degree (and some schools this is higher).   That's huge.  It's unacceptable.  Either admission needs to be more strict or we need more counseling, job shadowing,  etc. Before anyone drops loads of borrowed money.

 

The more I watch, the more I become convinced that all loans are causing a lot of the inflation.  They create a false market.  You see it in the housing market, car market, and the student loan market.  Very few people pay for a house or car with cash, they borrow it.  As long as someone is allowed to borrow, they will.

[athena1277]

There’s a paying for college Facebook group I’m in that has a very diverse membership.  The biggest problem I see is that the cost of college has vastly outpaced the pay of most families.  Students get stressors out over taking too many AP classes and other activities to look good for admission and scholarships.  Parents push this because they think their kid needs it to get into a good college.  They think their child can get a full scholarship.  Then senior year happens.  Once they get through the admissions process and commit to a school, they lean that a “full ride” is a unicorn.  Even a full tuition scholarship plus federal student loans leaves most students owing tens of thousands of dollars per year.  Families end up making the hard decision to not go to that school (often at the last minute) or parents co-signing huge loans.  Loans parents cannot afford to pay back.

In my opinion, there are 2 things that have driven up college costs.  One is that colleges are competing with each other to have the most amenities and fanciest everything to attract students, instead of looking for ways to keep college affordable.  The other is the financial system that allows students and parents to take out huge loans they can’t pay back.  You can’t get out of them through bankruptcy.  Some you can’t even get out of if the student dies.  
 

 

[SKL]

2 minutes ago, BusyMom5 said:

I've retyped an answer several times.  I'd like to get back to the article regarding the cost of college.  For reference, my DH and I are Gen X, 2 kids in college, 2 in high school, and 2 that are younger.  I am right in the thick of paying ridiculous prices to try to launch my kids and spend s lot of time looking into the details.

I think the reason prices have become so high is because we borrow so much, and no one is saying NO.  My generation took out student loans and paid them back, but now that our kids are at this age, our kids can only borrow $5500, and parents have to borrow the rest in Parent Plus loans.  

1.  $5500 is way too low and should be bumped to $10K, and all should be no interest until graduation.

2.  There should be a cap on the amount parents can borrow per kid, just like the cap for Student Loans.  I'm thinking another $10K max!  This would mean the maximum loan for any one student is 80K. 40 students, 40 parents.   

3.  The degree matters -  schools should be required to show salary rates of their graduates for each degree at 1, 3, 5, and 10 years after graduation.   Students and parents should be presented with this information at orientation when they sign up for classes.  I'm thinking something like the Schumer Box on credit card applications that are required to write out in plain sight what the terns are.  

4.  It isn't fair to say at the same time that students can only borrow $5500, parents borrow the rest.  Then turn around and say parents have no right to see any information about the student's academic record.  

5.  Around 40% of incoming freshman do not finish their degree (and some schools this is higher).   That's huge.  It's unacceptable.  Either admission needs to be more strict or we need more counseling, job shadowing,  etc. Before anyone drops loads of borrowed money.

 

The more I watch, the more I become convinced that all loans are causing a lot of the inflation.  They create a false market.  You see it in the housing market, car market, and the student loan market.  Very few people pay for a house or car with cash, they borrow it.  As long as someone is allowed to borrow, they will.

I agree that the easy availability of student loans props up the cost of a university education.

I wouldn't want to do away with the loans, which do provide access to first generation students.  But I do think there should be a sensible way to limit them and to allow more rational ways to pay them off.  (For example, at least in the past, there was a program where working in a low-income school district would allow teachers to work off their student loans over time.  I think there's something like that for social workers also.)

I like the fact that there are more options for repayment now, but I don't like the fact that some of those options essentially guarantee that the loans will never never be paid off.  I know people in their 50s who are still paying off their student loans.  Maybe they'll make the last payment the day before they retire.  There has to be a better plan.

[Bootsie]

3 minutes ago, BusyMom5 said:

I've retyped an answer several times.  I'd like to get back to the article regarding the cost of college.  For reference, my DH and I are Gen X, 2 kids in college, 2 in high school, and 2 that are younger.  I am right in the thick of paying ridiculous prices to try to launch my kids and spend s lot of time looking into the details.

I think the reason prices have become so high is because we borrow so much, and no one is saying NO.  My generation took out student loans and paid them back, but now that our kids are at this age, our kids can only borrow $5500, and parents have to borrow the rest in Parent Plus loans.  

1.  $5500 is way too low and should be bumped to $10K, and all should be no interest until graduation.

2.  There should be a cap on the amount parents can borrow per kid, just like the cap for Student Loans.  I'm thinking another $10K max!  This would mean the maximum loan for any one student is 80K. 40 students, 40 parents.   

3.  The degree matters -  schools should be required to show salary rates of their graduates for each degree at 1, 3, 5, and 10 years after graduation.   Students and parents should be presented with this information at orientation when they sign up for classes.  I'm thinking something like the Schumer Box on credit card applications that are required to write out in plain sight what the terns are.  

4.  It isn't fair to say at the same time that students can only borrow $5500, parents borrow the rest.  Then turn around and say parents have no right to see any information about the student's academic record.  

5.  Around 40% of incoming freshman do not finish their degree (and some schools this is higher).   That's huge.  It's unacceptable.  Either admission needs to be more strict or we need more counseling, job shadowing,  etc. Before anyone drops loads of borrowed money.

 

The more I watch, the more I become convinced that all loans are causing a lot of the inflation.  They create a false market.  You see it in the housing market, car market, and the student loan market.  Very few people pay for a house or car with cash, they borrow it.  As long as someone is allowed to borrow, they will.

How are schools supposed to know the salary rates for their graduates?  That is the student's private information that the university cannot force them to share--much less several years post-graduation?

 

[Bootsie]

As a thought experiment with regards to college education costs:

If a professor earns $100,000 per year, the university's cost of the faculty member is close to $200,000 (by the time benefits and taxes are considered).  If that professor teaches 200 students per year, the per student cost of that faculty member is $1000.  If a student takes 10 classes per year, that is $10,000 per year of faculty cost for that student.  Then the university has library costs, computer costs, building maintenance costs, accommodations office costs, accreditation costs, registrar's office costs. writing center costs, janitorial staff costs, printer costs ....  

How cheaply can a college education actually be provided?  

[Shoeless]

2 minutes ago, athena1277 said:

There’s a paying for college Facebook group I’m in that has a very diverse membership.  The biggest problem I see is that the cost of college has vastly outpaced the pay of most families.  Students get stressors out over taking too many AP classes and other activities to look good for admission and scholarships.  Parents push this because they think their kid needs it to get into a good college.  They think their child can get a full scholarship.  Then senior year happens.  Once they get through the admissions process and commit to a school, they lean that a “full ride” is a unicorn.  Even a full tuition scholarship plus federal student loans leaves most students owing tens of thousands of dollars per year.  Families end up making the hard decision to not go to that school (often at the last minute) or parents co-signing huge loans.  Loans parents cannot afford to pay back.

In my opinion, there are 2 things that have driven up college costs.  One is that colleges are competing with each other to have the most amenities and fanciest everything to attract students, instead of looking for ways to keep college affordable.  The other is the financial system that allows students and parents to take out huge loans they can’t pay back.  You can’t get out of them through bankruptcy.  Some you can’t even get out of if the student dies.  
 

 

Yes, this! 

I looked at my alma mater to see what has changed since I left, and boy is it nice now. I mean, really nice!  They have 1500 fewer students than when I was there, but 3 additional dining halls and new, townhouse style apartments. They also put in a bazillion dollar pool and science center. They have cafes in every academic building now and a campus Starbucks and Tim Hortons. 

This is a fine arts school. It is never, ever going to be a player in collegiate sports so why spend that kind of money on a nice-to-have pool with Olympic diving boards? A beautiful but underutilized science center? I'm glad students have fresh salads readily available for lunches, but does every building need its own cafe? Admin knew that attendance was projected to drop but they put in fancy apartments anyway. And the students still complain the food sucks, the dorms are dumpy, and there's nothing to do. I don't get it. 

Now the school is running a deficit and I'm a little worried it's entering a death spiral. 

My rant aside, this was.a lot of money foolishly spent that is now passed on to the students and parents via room, board, activities fees. They added a lot of fancy stuff to try to be all things to all people instead of investing in what the are known for and it may be the death of the school.

 

[athena1277]

11 minutes ago, Bootsie said:

As a thought experiment with regards to college education costs:

If a professor earns $100,000 per year, the university's cost of the faculty member is close to $200,000 (by the time benefits and taxes are considered).  If that professor teaches 200 students per year, the per student cost of that faculty member is $1000.  If a student takes 10 classes per year, that is $10,000 per year of faculty cost for that student.  Then the university has library costs, computer costs, building maintenance costs, accommodations office costs, accreditation costs, registrar's office costs. writing center costs, janitorial staff costs, printer costs ....  

How cheaply can a college education actually be provided?  

It wold be cheaper if the focused more on education than unnecessary amenities.  Students don’t need lazy rivers and on campus steak houses to get an education.  Here’s one article that tells you about some of them.  https://www.insider.com/list-of-colleges-with-the-best-perks-and-amenities-2019-7#high-point-university-has-a-luxury-steakhouse-on-campus-3

[Bootsie]

5 minutes ago, athena1277 said:

It wold be cheaper if the focused more on education than unnecessary amenities.  Students don’t need lazy rivers and on campus steak houses to get an education.  Here’s one article that tells you about some of them.  https://www.insider.com/list-of-colleges-with-the-best-perks-and-amenities-2019-7#high-point-university-has-a-luxury-steakhouse-on-campus-3

I have taught at universities (and my children attended universities) that do not have lazy rivers or on-campus steak houses.  I agree that those types of amenities are not necessary for a college education--and many schools do NOT provide them--so choices of schools where those type of amenities are priced into the cost of an education are available.  But, the question still remains:  how cheaply can a university provide a quality education?

[Sneezyone]

5 hours ago, Bootsie said:

I am curious about this.  Is there any evidence that studnets in other countries build wealth more quickly?  If the government subsidizes education, it must recoup that money from somewhere, presumably from taxing its citizens.  It seems that the tradeoff would be pay directly for an education or have the governemnt subisidize education and then pay taxes to pay for the education (and higher taxes would decrease the rate of wealth building).  Or, it could be that the taxes fall more heavily on those who don't receive the education--which would allow for those who are educated to build wealth more quickly due to a transfer from those who are not educated.

There is evidence that immigrants who arrive with familial/social and financial capital build wealth/establish themselves more quickly. This isn’t news.https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2831393/ Lots of people have been looking at this. I trust your google works like mine.

Edited September 7, 2023 by Sneezyone

[Sneezyone]

32 minutes ago, athena1277 said:

It wold be cheaper if the focused more on education than unnecessary amenities.  Students don’t need lazy rivers and on campus steak houses to get an education.  Here’s one article that tells you about some of them.  https://www.insider.com/list-of-colleges-with-the-best-perks-and-amenities-2019-7#high-point-university-has-a-luxury-steakhouse-on-campus-3

It’s not the amenities or professors. It’s the admin overhead and, related, state disinvestment. I’ve been encouraged to pursue a PhD locally and teach as a practitioner. The pay is peanuts compared to what I already make.

Edited September 7, 2023 by Sneezyone

[Sneezyone]

58 minutes ago, Bootsie said:

How are schools supposed to know the salary rates for their graduates?  That is the student's private information that the university cannot force them to share--much less several years post-graduation?

 

It’s posted online and based on graduate survey respondents. You can search for ‘pay “university”, average degree, ncbi’ and get data or  check out the scorecard:https://collegescorecard.ed.gov/search/?page=0&sort=threshold_earnings:desc&search=Ohio State University-Main Campus https://collegescorecard.ed.gov/search/?page=0&sort=threshold_earnings:desc&search=Ohio State University-Main Campus

Edited September 7, 2023 by Sneezyone

[Sneezyone]

1 hour ago, BusyMom5 said:

I've retyped an answer several times.  I'd like to get back to the article regarding the cost of college.  For reference, my DH and I are Gen X, 2 kids in college, 2 in high school, and 2 that are younger.  I am right in the thick of paying ridiculous prices to try to launch my kids and spend s lot of time looking into the details.

I think the reason prices have become so high is because we borrow so much, and no one is saying NO.  My generation took out student loans and paid them back, but now that our kids are at this age, our kids can only borrow $5500, and parents have to borrow the rest in Parent Plus loans.  

1.  $5500 is way too low and should be bumped to $10K, and all should be no interest until graduation.

2.  There should be a cap on the amount parents can borrow per kid, just like the cap for Student Loans.  I'm thinking another $10K max!  This would mean the maximum loan for any one student is 80K. 40 students, 40 parents.   

3.  The degree matters -  schools should be required to show salary rates of their graduates for each degree at 1, 3, 5, and 10 years after graduation.   Students and parents should be presented with this information at orientation when they sign up for classes.  I'm thinking something like the Schumer Box on credit card applications that are required to write out in plain sight what the terns are.  

4.  It isn't fair to say at the same time that students can only borrow $5500, parents borrow the rest.  Then turn around and say parents have no right to see any information about the student's academic record.  

5.  Around 40% of incoming freshman do not finish their degree (and some schools this is higher).   That's huge.  It's unacceptable.  Either admission needs to be more strict or we need more counseling, job shadowing,  etc. Before anyone drops loads of borrowed money.

 

The more I watch, the more I become convinced that all loans are causing a lot of the inflation.  They create a false market.  You see it in the housing market, car market, and the student loan market.  Very few people pay for a house or car with cash, they borrow it.  As long as someone is allowed to borrow, they will.

The issue is that this proposal hurts the least well resourced families the most. Those parents CANNOT borrow at all because they have no credit and that debt load is transferred (as a GIFT?!) to students. Who makes up the majority of college eligible students these days and going forward?? THE LEAST RESOURCED KIDS.

Edited September 7, 2023 by Sneezyone

[Sneezyone]

4 hours ago, Bootsie said:

The house that I lived in during elementary school happens to be on the market now--my parents would have bought in in the mid 1960s.  It is 3 bedroom and one bath.  Since we lived there the carport has been turned into a garage, but other than that, it looks as if nothing much has changed of the basic house.  It is freshly painted and is in good condition.  It is on the market for $135,000.   

The house we moved to in 1972 just sold this past May for $189,000.  It is four-bedroom and 2 bath.  It has new hardwood floors throughout (rather than the gold shag carpet we had).  It has marble countertops (rather than the gold countertops we had); it has new white cabinets and stainless steel appliances (rather than avocado green we had)  The bathrooms have been redone.  It has a microwave and ceiling fans we did not have; a covered patio we did not have;, a covered carport we did not have, and the family room; a wal has been removed for more of an open floor plan and the family room has been extended to have more square feet. 

I think these houses are as affordable to young famiies in the area as they were for my parents.  

Does anyone want to live there? Supply/demand still apply, no?

Edited September 7, 2023 by Sneezyone

[Heartstrings]

30 minutes ago, Bootsie said:

how cheaply can a university provide a quality education?

There is a floor to how cheaply it can be done, for sure.  I thought your point earlier breaking down the cost was spot on.  It simply costs money to run a university.  Electricity, salaries of professors, the back office roles like accounting and payroll, the cafeteria lady, grounds keepers, maintenance guys etc. etc. all have to come from somewhere.  States used to cover a larger percentage of it for public universities, now the burden has been shifted to families.  I don't think that gets talked about as much as it should.  The states have done a good job getting us to look everywhere but at them. 

[Ginevra]

5 hours ago, Bootsie said:

I am curious about this.  Is there any evidence that studnets in other countries build wealth more quickly?  If the government subsidizes education, it must recoup that money from somewhere, presumably from taxing its citizens.  It seems that the tradeoff would be pay directly for an education or have the governemnt subisidize education and then pay taxes to pay for the education (and higher taxes would decrease the rate of wealth building).  Or, it could be that the taxes fall more heavily on those who don't receive the education--which would allow for those who are educated to build wealth more quickly due to a transfer from those who are not educated.

The article speaks about how current US college grads do not build wealth post-college at the rate college grads did pre-1980. I do not remember if the article talks about wealth building of college grads in other countries or not. I can look at it again to see if this stat is in there; just not at the moment. 
 

I do think there are other, more complex reasons for that outcome in addition to students having debt. For one thing, many young grads do not have a near goal of home ownership. My parents were parents in their early 20s and wanted/had a home right away. 

[Happy2BaMom]

1 hour ago, athena1277 said:

It wold be cheaper if the focused more on education than unnecessary amenities.  Students don’t need lazy rivers and on campus steak houses to get an education.  Here’s one article that tells you about some of them.  https://www.insider.com/list-of-colleges-with-the-best-perks-and-amenities-2019-7#high-point-university-has-a-luxury-steakhouse-on-campus-3

I always find articles like this rather irritating, because they leave a lot out in order to sensationalize the headlines. I actually did a little more digging:

-High Point U touts the "Steak House" as a learning lab for students to practice professional and social etiquette in a business-professional environment, with restaurant staff providing instruction and guidance to students on proper table customs, esp with featured international foods. Students are expected to make reservations, dress appropriately, practice conversation on current topics, and cell phones are not allowed. While one can still see this venture as 'unnecessary' it's a little different than the headline of "luxury steakhouse on campus". I'm also sure 'High Point U' needs help in drawing students.

- Other things included in the article are things like Ohio University offering "a personalized birthday cake for students"....but the cake has to be ordered and privately paid for by parents or friends of the student (I'm sure it's a money-making service); the University of MN offering "underground walking tunnels"....in Minneapolis, where winter wind chills can hit -60F; the Western Washington University having "outdoor adventures (like hiking)"...not sure how either of those could be considered unnecessary / luxurious. And that lazy river at the University of Missouri? It's part of the Rec Center, and the current fee to access the entire Rec Center is $176 per semester/student....a drop in the bucket as far as college costs go. The Rec Center is also on track to pay for itself in the next 5-7 years.

 

I've toured dozens of colleges (sigh) with my kids over the last few years and, while I may quibble with certain services, overall I've been struck by how much it much cost to keep it all running. Building maintenance and upkeep alone must cost a fortune. I really haven't seen that much that has struck me as wildly luxurious. I certainly no longer would want to live on campus in any kind of dormitory.

Edited September 7, 2023 by Happy2BaMom

[fairfarmhand]

3 hours ago, SKL said:

I agree that houses are too expensive right now - as are cars, food,,,,.  That is a fairly recent thing, and who knows how long it will last.

Personally I'd wait and save a bit rather than buy a starter home in the current market, unless they happen to find one at a great value.

The problem that a lot of young people run into is that rent went up so saving for a house feels pretty impossible. It takes a long time r save up a decent down payment when you can only p it back a few hundred dollars a month.

[catz]

2 hours ago, BusyMom5 said:

 

1.  $5500 is way too low and should be bumped to $10K, and all should be no interest until graduation.

I agree with a lot of what you are saying, but I think we should work to give qualified students an education option that will fall into the current federal loan leavels (which shift over time).  I think 30K of debt for most students for UG is ok.  I think pushing higher than that will leave some students in risky situations post graduation.  And frankly if borrowers aren't comfortable giving students more due to risk, we should be shooting to now have students borrow more than this.  I'd like to see FAFSA punching numbers that is no more than 10-15% of parental income and making sure every student has some public option at that level.  When people default on loans, we are all paying for that anyway.  

I'd also like to see programs that will specifically finance education for jobs we need filled.  Like med school for 5-10 years in a health care desert.

2.  There should be a cap on the amount parents can borrow per kid, just like the cap for Student Loans.  I'm thinking another $10K max!  This would mean the maximum loan for any one student is 80K. 40 students, 40 parents.   

I agree.  Parent plus loans are SO risky.  I don't think people should borrow what they couldn't otherwise qualify for beyond federal student loans.  

5.  Around 40% of incoming freshman do not finish their degree (and some schools this is higher).   That's huge.  It's unacceptable.  Either admission needs to be more strict or we need more counseling, job shadowing,  etc. Before anyone drops loads of borrowed money.

One of the biggest reason students drop out is money/funding.  I do think almost every campus could be doing better with mental health.  But some student aren't ready and gapping should be normalized if path and readiness is not clear.  But I think funding students could help a lot.  

I'd like to see schools doing workships with parents and students on financing and borrowing before creating college lists.  I'd like to see marketing colleges are able to release be regulated.  

I think High Point U's steak house is interesting.  I think colleges should be doing more to teach students how to network and walk in a professional world.  Having hired new grads myself, having someone come in and being reasonably confident, able to have a small talk conversation, seem like someone who may be enjoyable to have in a workplace can make a BIG difference.  I think a lot of us have some social anxieties, but practice makes perfect.

I have a kid that just graduated college that kind of hit the jackpot in terms of new grad jobs - over 6 figures urban midwest, large stock and relocation package.  At age 22.  He gave  up higher ranked schools for a more affordable school.  ALL of us are debt free and he actually had an amazing UG experience at a top 15 public.  He was definitely a bit disappointed but these past 2 years later covid, has had SUCH an amazing college experience.  And he's not a football or party kid.

One thing I was going to say is I had the opportunity recently to tour his campus where he will be working.  This is a large company.  This company has a range of roles and hires a range of students from many schools (including top 20s).  But with a range of majors too.  This company has this really crazy rigorous hiriing process.  Less than 3% of applicants are hired.  But there are people with music and history and other humanities degrees working there making upper middle class salaries.  So I'm not sure how you tell who gets a chance at one degree over another other than some of these programs are just naturally competitive.  I have a kid that just auditioned for music programs and sub 20% acceptance is pretty typical for any school you've heard of and I'm not talking about Juilliard for what she was auditioning for.  

Anyway, haven't sat at a keyboard but have been watching this thread with interest since we're in the thick of college land.  Not picking on you BusyMom, you just had a coup;le interesting points to jump off of.  

Edited September 7, 2023 by catz

[Faith-manor]

44 minutes ago, Heartstrings said:

There is a floor to how cheaply it can be done, for sure.  I thought your point earlier breaking down the cost was spot on.  It simply costs money to run a university.  Electricity, salaries of professors, the back office roles like accounting and payroll, the cafeteria lady, grounds keepers, maintenance guys etc. etc. all have to come from somewhere.  States used to cover a larger percentage of it for public universities, now the burden has been shifted to families.  I don't think that gets talked about as much as it should.  The states have done a good job getting us to look everywhere but at them. 

While they use the tax money for a lot of projects that enrich their political buddies but do nothing for the people who paid the taxes.

This is the heart of the issue. We pay a lot of taxes, and get not much for it. The middle and lower classes provide the welfare that makes 3% bizarrely rich, and those rich narcissists feel NO moral obligation to the very people who enriched their pockets.

The system isn't sustainable. 

[Frances]

6 hours ago, Bootsie said:

I am curious about this.  Is there any evidence that studnets in other countries build wealth more quickly?  If the government subsidizes education, it must recoup that money from somewhere, presumably from taxing its citizens.  It seems that the tradeoff would be pay directly for an education or have the governemnt subisidize education and then pay taxes to pay for the education (and higher taxes would decrease the rate of wealth building).  Or, it could be that the taxes fall more heavily on those who don't receive the education--which would allow for those who are educated to build wealth more quickly due to a transfer from those who are not educated.

I’m not sure one needs to worry as much about building wealth in many of these countries because some of the big ticket items (healthcare, college, childcare) in the US are covered in these countries. I think our outsize spending on military relative to other countries is where lots of the difference lies in what we get for our taxes.

Edited September 7, 2023 by Frances

[Frances]

5 hours ago, Bootsie said:

The house that I lived in during elementary school happens to be on the market now--my parents would have bought in in the mid 1960s.  It is 3 bedroom and one bath.  Since we lived there the carport has been turned into a garage, but other than that, it looks as if nothing much has changed of the basic house.  It is freshly painted and is in good condition.  It is on the market for $135,000.   

The house we moved to in 1972 just sold this past May for $189,000.  It is four-bedroom and 2 bath.  It has new hardwood floors throughout (rather than the gold shag carpet we had).  It has marble countertops (rather than the gold countertops we had); it has new white cabinets and stainless steel appliances (rather than avocado green we had)  The bathrooms have been redone.  It has a microwave and ceiling fans we did not have; a covered patio we did not have;, a covered carport we did not have, and the family room; a wal has been removed for more of an open floor plan and the family room has been extended to have more square feet. 

I think these houses are as affordable to young famiies in the area as they were for my parents.  

This is amazing and so wonderful for the young adults living there. Do you think it’s because the area is somewhat undesirable or more so because there is actually enough housing stock relative to the population?

[Frances]

4 hours ago, SKL said:

I agree that houses are too expensive right now - as are cars, food,,,,.  That is a fairly recent thing, and who knows how long it will last.

Personally I'd wait and save a bit rather than buy a starter home in the current market, unless they happen to find one at a great value.

At least in my state, the biggest problem was under building after the Great Recession combined with strict land use laws, so that we don’t have remotely enough houses compared to the number who want them, especially as we currently have an abnormally large group of people in the family formation years. While it’s certainly not the best time to buy here due to the relatively high interests rates, it could be decades, if ever, before housing supply and demand are more in sync. So waiting will not likely help much and could hurt. We were ranked in the top 25 least affordable places to purchase a home (using the median housing/median income ratio) back when we bought 25 years ago and remain there today. Real estate is so location specific.

Edited September 7, 2023 by Frances