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re: The Medium income Amercan Family now earns 1/2 the income needed to buy the avg home.
Posted on 3/13/25 at 9:06 am to the808bass
Posted on 3/13/25 at 9:06 am to the808bass
quote:
They’re buying 2M+ homes per year? Your math seems off.
Sorry. Single family homes. I do several flips a year and if they want a property they will simply outbid you every single time. I have buddies in Alabama & Georgia who also do flips and say the same.
On 100k property they want they’ll go 110k - 115k every time. They have the leverage with subs to hit margins. It is what it is.
This post was edited on 3/13/25 at 9:07 am
1
Posted on 3/13/25 at 9:07 am to SlayTime
How many single family homes are selling in a year?
Posted on 3/13/25 at 9:09 am to 50_Tiger
quote:
I was you 5 years ago. Townhouse. Preferably one with a decent HOA. In fact I know a few in my area (Viridian) are for sale low 4's, the problem is the HOA payment is CRAZY.
I feel like our townhouse HOA here in ATL is pretty reasonable, $210/mo which covers water bill, we have a pool, have to upkeep our own roads, etc...
Interestingly enough a lot of the single family neighborhoods with HOA are usually in the $50-$100 range per household, pretty cheap, usually larger neighborhoods although they have tennis on top of pool usually as well (and playground a lot of times). I guess they have to pay a water bill though (We dont)
Posted on 3/13/25 at 9:09 am to GeauxTigers123
quote:
Bro problem is that jobs are moving to big metros.
There are 40K jobs that are not in DFW. Imagine that 40K jobs elsewhere will be 75K+ in DFW.
quote:Find a 40K job in a small town. I'm in a small town and could easily get a job making $20 an hour ($40K).
A home in dfw would be a shack in the ghetto at that price.
quote:I choose to commute 67 miles (1.5 hours) to work in a metro and make $100K+, but that is my choice and I do not complain about it.
High 200s will get you a starter home that will be 1.5 hours in traffic to the parts of town that people actually work in.
This post was edited on 3/13/25 at 9:11 am
Posted on 3/13/25 at 9:10 am to the808bass
quote:
How many single family homes are selling in a year?
Primary market around 2.5 - 2.75 million
Secondary (wholesale) 350k - 500k
Edit - Regarding secondary market, I’d bet the hedgies buy 75% or more of the properties.
This post was edited on 3/13/25 at 9:13 am
Posted on 3/13/25 at 9:11 am to llfshoals
quote:
Just goes to show how little you know about real estate.
Rausch Coleman builds a lot of these. LINK
That’s just one of many. Lower income yes, undesirable areas no. HOA’s will specifically restrict out section 8.
No offense but your link takes you "Calera Alabama" homes which I've never even heard of. Looks like it literally in the middle of nowhere Alabama, almost 40 minutes outside Birmingham
Posted on 3/13/25 at 9:14 am to thunderbird1100
quote:
I feel like our townhouse HOA here in ATL is pretty reasonable, $210/mo which covers water bill, we have a pool, have to upkeep our own roads, etc...
Interestingly enough a lot of the single family neighborhoods with HOA are usually in the $50-$100 range per household, pretty cheap, usually larger neighborhoods although they have tennis on top of pool usually as well (and playground a lot of times). I guess they have to pay a water bill though (We dont)
House have a diff HOA payment which is significantly less, mostly due to private ownership required upkeep opposed to a company. Also Townhouses here have insurance for roofing etc, in fact this past week the roofers have probably made a good bit of cash from claims after the high wind.
The current quarter HOA payment for Townhouses is 1050. It's alot and they have taken a few things away while increasing the price over the years but the neighborhood is top tier.
Posted on 3/13/25 at 9:15 am to thunderbird1100
quote:
literally in the middle of nowhere Alabama, almost 40 minutes outside Birmingham
That is your definition of middle of nowhere?
It is right off of I-65. Good area in Shelby, Co.
Posted on 3/13/25 at 9:17 am to RiverCityTider
Housing prices have far outstripped earnings.
People who already own a house are okay. They sell their house at a high price and buy another one. It is the people who don't own a house that are struggling to get into the market.
People who already own a house are okay. They sell their house at a high price and buy another one. It is the people who don't own a house that are struggling to get into the market.
Posted on 3/13/25 at 9:20 am to SlayTime
quote:
Blackrock alone buys greater than 40% of homes sold in US YoY. It’s anticipated they will spend close to 200 billion in 2025.
If they are overpaying for houses then they will crash hard.
Plus: Blackrock doesn’t buy individual homes. They buy apartments and townhomes.
This post was edited on 3/13/25 at 9:24 am
Posted on 3/13/25 at 9:21 am to Night Vision
quote:
What are they blowing all their money on?
Well a home on a nice street is 500k+.
A questionable street is 400k.
As I said you will be sitting in traffic 1.5 hours each way to find a house in the high 200s.
Posted on 3/13/25 at 9:21 am to RiverCityTider
Bought a run down fixer upper for 45k in 1989. I made about 24k a year. My kids could each afford a home 2x their gross annual income but don't want that type of run down house as a starter. That is the difference.
Posted on 3/13/25 at 9:21 am to thunderbird1100
It’s a Rausch Coleman site, one of many of their subdivisions. The undesirable area….is Birmingham.
Calera is one of the residential areas around Birmingham. Driving 30-40 minutes is nothing, and beats the daylights out of trying to live in Birmingham.
Calera is one of the residential areas around Birmingham. Driving 30-40 minutes is nothing, and beats the daylights out of trying to live in Birmingham.
Posted on 3/13/25 at 9:23 am to Night Vision
quote:
What are they blowing all their money on?
If you go by someone like Dave Ramsey's advice, which I'm not saying you should or shouldnt, just know he's a popular face especially for a lot of people who probably post on this board would know about.
He only recommends 15 year mortgages, and the housing cost - meaning mortgage, taxes, insurance, hoa, etc...to not exceed 25% of your take home (really after tax is his argument, not what literally hits your bank account) pay.
To put that in perspective a couple's household making $100k gross and we'll be nice and say they live in a no state income tax state like Tennessee would have an after tax pay of about $78.5k/yr, or about $6.5k/mo. This means under his guideline, after you make your down payment, your housing cost (again, mortgage, insurance, taxes, hoa) should not be higher than $1,625/mo on that income. You know what house you can buy for $1,625/mo assuming it has no HOA to make it 25% of your after tax pay on a 15 year, say 5.8% mortgage in Tennessee?
$350k house? Nope, payment after 20% down would be about $2.6k/mo.
$300k house? Nope, payment after 20% down would be $2.25k/mo
$250k house surely? Nope, payment after 20% down would be jsut under $1.9k/mo.
Using his advice you shouldnt buy more than a $215k house on a $100k gross income in a no income tax state as we currently stand.
So yeah, good luck with that
Posted on 3/13/25 at 9:26 am to Night Vision
quote:
That is your definition of middle of nowhere?
I mean, it kind of is. I have family over in that area. I'm not saying it isn't nice, but it isn't really near anything. Telling someone that works in Birmingham to look at houses in Calera kind of proves his point.
Posted on 3/13/25 at 9:26 am to thunderbird1100
Yeah. And white coat investor recommends to try to keep mortgage to 2x your annual. Income (he does make exceptions for high cost of living areas).
Ramsey doesn’t make exceptions. His formula basically says homes are only for high earners after the last 5 years.
Ramsey doesn’t make exceptions. His formula basically says homes are only for high earners after the last 5 years.
Posted on 3/13/25 at 9:26 am to Night Vision
quote:
That is your definition of middle of nowhere?
Yes, most anyone who has lived in any decent sized metro area in their life would call middle of nowhere Alabama, middle of nowhere
Sorry but Calera Alabama; 40 minutes outside of Birmingham (again not the biggest draw in itself) isnt exactly a place pleople have a burning desire and want to move to - hence that place having $220k-$250k brand new single family housing.
And being "right off I-65" is far from a selling point. I had to make the drive from ATL to Baton Rouge a ton back in college days and I-65 was the WORST part of that drive from Montgomery to mobile every single time. Literally 2.5 hours of nothing.
This post was edited on 3/13/25 at 9:31 am
Posted on 3/13/25 at 9:28 am to 50_Tiger
quote:
House have a diff HOA payment which is significantly less, mostly due to private ownership required upkeep opposed to a company. Also Townhouses here have insurance for roofing etc, in fact this past week the roofers have probably made a good bit of cash from claims after the high wind.
The current quarter HOA payment for Townhouses is 1050. It's alot and they have taken a few things away while increasing the price over the years but the neighborhood is top tier.
Another thing is ours includes landscaping and the single family homes dont include that typically in the low HOAs there. Definitely a significant cost
Posted on 3/13/25 at 9:29 am to thunderbird1100
quote:
Using his advice you shouldnt buy more than a $215k house on a $100k gross income in a no income tax state as we currently stand.
Yea, that is where the problem is. It isn't that they can't afford a house, it is that they can't afford what is being asked for a hosue. I think Dave's numbers are way too conservative, so you could bump that number up some, but it really isn't making that much difference.
Starter homes aren't going for that, unless you are really remote. That is fine for some, but that being the necessity to afford something is the issue.
Posted on 3/13/25 at 9:30 am to The Baker
quote:
What you “went through” is not even close to what’s happening right now.
Two things are true at the same time.
This generation is certainly the generation of credit, financing, and instant gratification.
Low income doesn’t stop hardly anyone from a $1000 phone, new clothes, new car, expensive vacations, etc.
This post was edited on 3/13/25 at 9:31 am
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