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re: Are we at a generational housing peak?
Posted on 3/11/17 at 3:53 pm to lynxcat
Posted on 3/11/17 at 3:53 pm to lynxcat
Selling a home in the local market in in isn't difficult at all. In a much less active market coming up on 24 months ago, my parents sold three separate pieces of property-an acre with a mobile home, 2+ acres with our childhood SFR and another 1.1 acres of unrestricted property beside the SFR in a rural neighborhood.
The mobile home was on the market for about 1 week. The Home got a full price offer after 2 hours on the market before the walk through. The unimproved acre in the same hood sold in 3 weeks.
A lease on an apartment is quicker and easier. But it's also far less lucrative and provides less tax and credit advantages compared to home ownership. To say nothing of the potential for passive income generation and/or realizing liquid assets via appreciation and the equity paying at closing.
If a younger generation doesn't see the value in it, it's because they are less financially literate IMO. The curious thing is that I interviewed in a group setting for a loan officer gig way back when and I heard incredibly similar statements about the market being saturated, homeownership levels plateauing, and it being less difficult to move based on opportunity if needed or wanted. All as reasons for the guy interviewing us to prefer to rent.
It's been 20 years or so since that time and I still hear the same comments about housing starts, the market, etc...and things keep moving forward. I think each successive generation keeps thinking they're unique, different and somewhat special.
Not just Millenials. But Gen Y'ers and X'ers too. They have all said the same things and the RE market and the biz surrounding home ownership doesn't seem to stop moving forward.
The mobile home was on the market for about 1 week. The Home got a full price offer after 2 hours on the market before the walk through. The unimproved acre in the same hood sold in 3 weeks.
A lease on an apartment is quicker and easier. But it's also far less lucrative and provides less tax and credit advantages compared to home ownership. To say nothing of the potential for passive income generation and/or realizing liquid assets via appreciation and the equity paying at closing.
If a younger generation doesn't see the value in it, it's because they are less financially literate IMO. The curious thing is that I interviewed in a group setting for a loan officer gig way back when and I heard incredibly similar statements about the market being saturated, homeownership levels plateauing, and it being less difficult to move based on opportunity if needed or wanted. All as reasons for the guy interviewing us to prefer to rent.
It's been 20 years or so since that time and I still hear the same comments about housing starts, the market, etc...and things keep moving forward. I think each successive generation keeps thinking they're unique, different and somewhat special.
Not just Millenials. But Gen Y'ers and X'ers too. They have all said the same things and the RE market and the biz surrounding home ownership doesn't seem to stop moving forward.
This post was edited on 3/11/17 at 3:55 pm
Posted on 3/11/17 at 4:07 pm to GFunk
To say that anyone who doesn't want to buy a home at a certain stage in life is inherently financially illiterate is quite the stretch. Unless someone is living in the same location for multiple years, then it is hard to make the case for buying. There are layers of actual costs and opportunity costs to consider when evaluating the pros and the cons to home ownership.
Speaking in generalizations about entire generations is quite silly and overly simplistic.
Speaking in generalizations about entire generations is quite silly and overly simplistic.
Posted on 3/11/17 at 4:46 pm to GFunk
quote:
Not just Millenials. But Gen Y'ers and X'ers too. They have all said the same things and the RE market and the biz surrounding home ownership doesn't seem to stop moving forward.
This time though I legit see concern bc automation is here and going to come like a freight train and take away jobs. Obviously people will still live places, but I imagine the wealth gap will expand over time and higher end areas will be fine but lower middle class to bottom properties will struggle. I hope I'm wrong I just dont see how long term we're not on some sort of basic income like bernie sanders supporters want to take care of those displaced by automation
Posted on 3/12/17 at 1:29 pm to GFunk
quote:
A lease on an apartment is quicker and easier. But it's also far less lucrative and provides less tax and credit advantages compared to home ownership. To say nothing of the potential for passive income generation and/or realizing liquid assets via appreciation and the equity paying at closing.
I don't know how saying owning a house is a credit advantage... I guess paying on time raises your credit score.
The tax and credit stuff is pretty overblown at this point. With most people paying 3-4 percent interest rates, unless you are paying a lot of taxes as well, you likely are, at best, only getting itemized deductions slightly above the standard deduction, especially if you are married. If you buy a bigger house, you make more money, you will get more bang out of that... but younger people (who are the ones not buying) don't have either of those.
Appreciation is a thing, in the global sense, but even that is market to market specific.
The only true advantages I see are building equity via paying down the note, and not having to worry about someone jacking up your rent or, if you rent a house, the owner deciding he doesn't want to rent anymore. Both of those are significant advantages, but they must be compared to the costs and aggravation of maintenance and permenence.
I think there is probably an age, where the homeownership rate won't be much different. Maybe it's age 35-40 or so. Todays' 40 year olds are probably just as likely to own a home as the 40 year olds, 30 years ago. The difference is today's 28-35 year olds are much less likely to own compared to their peers 30 years ago.
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