re: Wall Street Journal - 100k not enough anymore for home ownership

Something I found in my area a few years ago when house shopping, there is a severe shortage of "affordable" inventory in major metro areas. If a 3 bed 2 bath 1950's ranch fixer-upper "starter home" comes on the market, it gets snatched up by a REIT for rental, or a developer who bulldozes to build a $500k house on the lot.

The housing market is due for a correction. I'm not doom and gloom, I am just aware of cycles and have seen this before when I was in the mortgage business 15 years ago.

Local muni's need to stop rubber stamping permits for teardowns and high-end developments. In my area, at least. I can't speak for every area. All real estate is local.

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Meanwhile their savings are shite, still have student loans, and barely making retirement contributions.

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They tell you this, or do you just assume? I have no idea what my friends student loans, savings, and retirement accounts look like.

Sure it is. But nobody wants a shitty home.

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They tell you this, or do you just assume? I have no idea what my friends student loans, savings, and retirement accounts look like.

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We used to have a poker night weekly and watch MNF, now we just hang out, talk shop, drink unsweet tea, and pay our bills together. It’s great fun.

Of course I make assumptions. But I also have a lot of friends that work for the government. So their pay is pretty well known.

The thing that gets people honestly with the larger houses is the small things like slightly higher taxes, utility bills, and the increased cost of furnishings. That $500-1000/ month comes in 5 different small bills so you don’t think anything of it. But $1,000/ month to savings adds up bigly over time.

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They left out “to buy the house they want”.

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i think this is the key. sure the first house i bought was not what i wanted but what i could afford. The house was 140k and i was maybe making 48k per year. Money was super tight but at 25 years old it was one of the best financial decisions i have made.

The next step up for us where we live is from a 2,000 sq ft house at $300,000 to a 3,000 sq ft house and price per square foot on new construction is at $200 or more in this area. In essence that’s going to be $300 a square foot more for those 1,000 feet and a note of almost double. I can’t stomach having to pay that and the $12,000-$18,000 we would have to pay on a mortgage for that pads our retirement each year and gives us an extra family vacation.

It’s a huge decision, but the smartest thing we can do is stay put and not worry about the Jones’s.

If you live in BR you have to also consider whether you will have to pay for Private School Tuition. $100K doesn't go a long way in many places.

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Average new home in Baton Rouge will run you $160sqft. You can drive 2 hours north to Jackson Ms and build a new custom home for $100 sq ft. Someone explain that one to me. I sure cant.

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You really don't understand this?

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I make in the 60s thousand a year, 4 kids, stay at home wife.

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This is impressive, and I commend you, but this is just not the norm for people living in regions with legitimate jobs and growth potential.

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I know what you are trying to say but I disagree. The issue is that most 1500 sq ft homes are not in neighborhoods that someone that makes $100,000 wants to live. End of story...The key words there are MOST and WANTS.

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No, the issue is that there are very few 1500 sq ft homes to begin with in and around these legitimate cities. Which forces them to the suburbs. Okay, that’s not an issue, but now they are still stuck picking through 2500+ sq ft homes with a 2+ hour round trip commutes.

I’m from Avoyelles Parish, so I know there are plenty of decent 1500 sq ft houses to be had for $80 sq ft, but no matter what you want to say those homes do not exist in even the suburbs of these major cities. That is my point.