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re: Why are homeownership rates precipitously declining?
Posted on 8/31/16 at 9:46 am to baldona
Posted on 8/31/16 at 9:46 am to baldona
This is an interesting discussion and I agree with your post 100%. We are a society of extreme instant gratification and most are not willing to delay and build wealth. I would be interested to see the data on those renting and if they are saving any money because of it. My guess is that they are not as a recent study showed that 1/2 of Americans couldn't come up with $400 if needed in an emergency. Many are buying into the new American dream that includes college debt to obtain useless degrees with no long term career plan and feel entitled to a lifestyle they can't support.
On the bright side, there are now business opportunities to buy properties for rental income.
Get off my lawn.
On the bright side, there are now business opportunities to buy properties for rental income.
Get off my lawn.
Posted on 8/31/16 at 9:46 am to setinways12
quote:
It's pretty much the equivalent of keeping a car....except it takes much longer for the house to be worth nothing than it does a car.
It takes an infinite amount of time for a house to be worth nothing (as in it won't happen) because the LAND VALUE is always going up even as the house deteriorates. I've made a lot of $ off of dumps because people wanted the lot to tear the house down and build a new house to sell for even more. Stop buying suburb houses, people! Those things don't appreciate and not as much of the value is in the LAND! Buy a small old house in the city in a desirable area with a 15 year loan, hold it a few years, do a few repairs, or nothing, and then sell it for a profit and buy a nicer, more desirable place and repeat.
Posted on 8/31/16 at 9:51 am to Cooter Davenport
quote:
Stop buying suburb houses, people! Those things don't appreciate and not as much of the value is in the LAND! Buy a small old house in the city in a desirable area with a 15 year loan, hold it a few years, do a few repairs, or nothing, and then sell it for a profit and buy a nicer, more desirable place and repeat.
In what major city is this possible? Considering also that people want to live in a safe area, and want to have a large enough house to be able to have a family in, while being able to send their kids to school?
I mean, what you are saying is 100 percent correct about land appreciation... but you still have to live it the house in the meantime, and you still have to be able to afford to get in.
Posted on 8/31/16 at 9:53 am to Tigeralum2008
quote:
Most millenials view home ownership as them being anchored to a city. In this economy it helps being able to move around free from worrying about selling your house.
Also renting means you don't need to know how to fix things around the house/apartment
Yeah, I'd say this is the primary reason. It's why I live in an apartment right now and am not a home owner.
Posted on 8/31/16 at 9:56 am to LSUFanHouston
quote:
In what major city is this possible? Considering also that people want to live in a safe area, and want to have a large enough house to be able to have a family in, while being able to send their kids to school?
In Austin. The public schools in the central part of the city are excellent and there's no crime. But, define "large enough house". For most of the 20th century 1,600 SF 3/2 was plenty to raise a family in. Today, millinials are aghast if you suggest that they inhabit less than 3,200 SF.
Posted on 8/31/16 at 9:56 am to OMLandshark
I've owned three homes in my life but now rent, if I pay a premium to rent it's worth it to me to be mobile and all the other things mentioned. Owning a home should not be a benchmark on a person's success, why does it matter if home ownership is declining?
Posted on 8/31/16 at 10:02 am to Tigeralum2008
quote:
Most millenials view home ownership as them being anchored to a city. In this economy it helps being able to move around free from worrying about selling your house.
Also renting means you don't need to know how to fix things around the house/apartment
Interesting point. There's definitely truth to that.
But housing prices in many cities is absurd. The average home price in Denver is $350k. In Boulder, it's $525k.
People in their thirties and younger want to live in fun cities with a good nightlife, not the suburbs. That's one thing that'll keep in from permanently settling in Colorado.
I was going to buy a house in Nola. But as soon as a house was put on the market, it was under contract within hours. Companies were buying houses with the intent of making them air bnb properties. And I'm not just talking about Bywater. It was all over the city.
Unless salaries catch up with housing prices, the home ownership rates will continue to decline.
Posted on 8/31/16 at 10:15 am to DoUrden
quote:
Owning a home should not be a benchmark on a person's success, why does it matter if home ownership is declining?
Other than equity, homes and their value gets passed down from homeowner to their kids. The kids inherit it they either can live in it, rent it or sell it and pocket the money.
Posted on 8/31/16 at 10:19 am to Kino74
quote:
Other than equity, homes and their value gets passed down from homeowner to their kids.
Home ownership is not the only vehicle for accumulating wealth. I just don't get why people think it's a "crisis" that fewer people own homes.
Posted on 8/31/16 at 10:22 am to DoUrden
quote:
I just don't get why people think it's a "crisis" that fewer people own homes.
I don't consider it a crisis, but from a communal aspect, home ownership is a positive and has serious value
home owners generally will care more about the community, local politics, be more involved, etc simply because they have more at stake than a renter
Posted on 8/31/16 at 10:23 am to Paul Allen
quote:
precipitously declining
Link?
Posted on 8/31/16 at 10:58 am to Paul Allen
People just aren't doing it right.. I've lived in my current house for 12 years.. It's paid off.. My options are pretty open. Maintenance is minimal b/c i'm not completely helpless and can do some shite. Taxes and Insurance are not overly hard to pay for. If I wanted to buy a new place I have a big ole down payment. A Job offer in another city just move and keep the house and collect rent.. I've always seen rent as a temporary solution and certainly nothing permanent.. guess its just me though
Posted on 8/31/16 at 11:01 am to Dire Wolf
quote:
Plus the places young people want to live don't match their salaries
I know here, what used to be decent middle class neighborhoods, are now full of houses that were bought up en masse after the bubble burst by out of city/state slum landlords and are now a bunch of Section 8/cheap arse rentals. And nobody wants to move into that shite.
This post was edited on 8/31/16 at 11:02 am
Posted on 8/31/16 at 11:09 am to Cooter Davenport
quote:
In Austin. The public schools in the central part of the city are excellent and there's no crime.
Big selling point to move from NO to here.
quote:
But, define "large enough house". For most of the 20th century 1,600 SF 3/2 was plenty to raise a family in.
This was the size of our house in NO. It was Uptown but off the beaten path, so we were able to buy it for 325k. I think we came out about even selling it since we had to bail to move here after only 2 years. But that is a lot of money to have before the age of 30, if you aren't putting 5% down of course.
We have an agreement in place on a house in NW Hills. It doesn't seem quite like the "suburbs" and I'm hoping the fact that the uniqueness of that area with the views make up for the proximity when it comes to values. They can't build every where up there due to the topography.
This post was edited on 8/31/16 at 11:12 am
Posted on 8/31/16 at 11:12 am to BluegrassBelle
I love the people talking about buying starter houses when most of the old starter house neighborhoods are now filled with Sec. 8 properties that make owning in that area a big risk. Crime rates are very low right now in total (compared to the '80s and '90s), but there seem to be fewer and fewer starter house neighborhoods that aren't out in the suburbs. Those cheap house suburbs tend to drop off hard once they get a few years old too, which makes buying there a big risk.
Posted on 8/31/16 at 11:14 am to CorporateTiger
quote:
Those cheap house suburbs tend to drop off hard once they get a few years old too, which makes buying there a big risk.
I'd be terrified to buy in a neighborhood like that. You see it all the time. It's great until the next best thing pops up .5 mile down the road.
If you look at those neighborhoods long term, many of those homes will consistently sell at essentially the same price over time, rising up and down. Which isn't always a bad thing considering the alternative is cratering.
This post was edited on 8/31/16 at 11:16 am
Posted on 8/31/16 at 11:19 am to NOLA Tiger
quote:
Many are buying into the new American dream that includes college debt to obtain useless degrees with no long term career plan and feel entitled to a lifestyle they can't support.
On the bright side, there are now business opportunities to buy properties for rental income.
I knew this would be said at some point in this thread.
Probably because the baby boomers have been preaching about the american dream since we were fricking born.
You've priced us out of it. Not ourselves. It costs far more to live the same comfortable lifestyle today than it did for you lazy fricks living in the 60s and 70s.
Have we constantly raised tuition, housing prices, and everything else? No, that was you assholes.
Hurry up and die.
Posted on 8/31/16 at 11:20 am to Teddy Ruxpin
Tons of those around Houston. "Oh this is a great suburban area with affordable housing!" Ten years later the place is a dump.
Also coming from a millennial that manages my money closely, I've done the math over and over again on buying a house. It is worth some savings compared to renting when you factor in tax benefits, appreciation, etc. However it is also a big risk. You essentially have to buy on the hopes the market goes up significantly and you can sell out at the right time. In the interim you are still paying interest, property taxes, homeowners insurance, and cover maintenance. If you have a major issue that isn't covered by insurance (for one reason or another), or the market moves against you, or you need to sell at a bad time (job transfer, layoff, etc) then you can take a big hit.
Renting right now is the safer option and isn't noticably more expensive. The wife in will probably buy soon when we are certain we have found the right house, but it isn't some kind of grand slam the way it used to be.
Also coming from a millennial that manages my money closely, I've done the math over and over again on buying a house. It is worth some savings compared to renting when you factor in tax benefits, appreciation, etc. However it is also a big risk. You essentially have to buy on the hopes the market goes up significantly and you can sell out at the right time. In the interim you are still paying interest, property taxes, homeowners insurance, and cover maintenance. If you have a major issue that isn't covered by insurance (for one reason or another), or the market moves against you, or you need to sell at a bad time (job transfer, layoff, etc) then you can take a big hit.
Renting right now is the safer option and isn't noticably more expensive. The wife in will probably buy soon when we are certain we have found the right house, but it isn't some kind of grand slam the way it used to be.
Posted on 8/31/16 at 11:29 am to CorporateTiger
I'm of the opinion that a home being an appreciating asset is going to come under significant pressure in the next decade or so. Up until this point, essentially any home built 20+ years ago is more valuable today than it was then, regardless of location. Going forward I think only the highly desirable areas will see similar appreciation due to the increasing flexibility that technology brings to most jobs.
Posted on 8/31/16 at 11:37 am to slackster
Yes, exactly. This is why that guy talking about how much he has made owning houses in Austin is ridiculous. Austin has been one of the hottest cities in the U.S. for the last 5-10 years. No shite the housing market has been on a huge uptick.
That isn't the case everywhere. Further when/if Austin cools down that you could be fricked if you bought into a massive bubble.
The idea that all (or pretty much all) land infinitely appreciates is ridiculous. You can see it happening some of the old Flavor of the Month suburbs.
That isn't the case everywhere. Further when/if Austin cools down that you could be fricked if you bought into a massive bubble.
The idea that all (or pretty much all) land infinitely appreciates is ridiculous. You can see it happening some of the old Flavor of the Month suburbs.
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