Getting ready for the big eff you. Wife just now opened a letter from the bank, notifying us to make arrangements to make our last house payment.
This is a tough one for me. I definitely believe that schools should teach personal finance, and I agree that middle school may be a bit early for a variety of reasons, but high school may be a bit late, as the ones who need it the most already know everything, and likely will not pay attention to it. It's hard to teach kids the importance of life insurance, saving, and home ownership that early in life. The ones who "get it" are exactly the ones who probably don't need it. I was one who "got it," thanks to my mother having lived through the depression; I'm in pretty good shape financially, and am living a comfortable but not ostentatious retirement.
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Prices are stupid, house across the street is pending sale, 1,000 sqft, one bathroom, just okay condition $413,000. I flipped it back in 2004 for $120,000 I do not know what my son will ever do for homeownership. I think he is just waiting for me to croak.
We instilled a good work/saving ethic in our daughter. As a print journalist, she'll have to manage well to get ahead. She has a house she bought well before COVID and has built up some equity in it and has her 401k progressing nicely. I also save her a chunk of change doing her oil changes, tire rotations and work around her house. When she lived in Jacksonville, FL, that was a once a year thing. She had a long list of things for me and her mother to do when we visited. Sometimes I think she is waiting for me to croak, too!
The real question is , why is there a housing shortage when 1.2 million people died from Covid in the US ?
Still a tough market to rent or buy in/around Salt Lake City area. I have three kids that are potential homeowners (one couple owns a condo) and it's TOUGH and expensive to get into a home. All have good/excellent credit and good jobs (especially for their age---some of them don't have long standing credit so it's tough to buy a house at this point anyway {18 year old daughter who's not quite ready to make the jump anyway}). Our married couple is likely going to go for it last I heard and I hope it works out ok for them. They'll sell their condo and jump into a non-HOA home {there's a whole other subject, the HOA thing}. My middle son is a machinist that just finished school. He commutes 32 miles each way to work 4 days a week. He's just started getting his apprentice stuff checked off on his track to become a journeyman and gets a decent raise on each step. He's qualifying for $175k or so. He can barely buy a mobile home with that. He's concerned about buying but we're encouraging patience and continued steps to becoming a journeyman to increase his take home while he saves $ for a bigger down. I assume the investors are doing ok as they're still seemingly buyers at certain prices? I do have a friend trying to sell an 1800 sq ft rambler (same size finished basement). Nice area, market price is around $620k. It's still on the market after 4-6 weeks. Kind of surprising to be honest considering the past 7-8 years around our area. I'm not sure if they'll bump their price down to $580k or so to move the property or ????
I'm the last person anyone should listen to on these matters, but in my opinion, the vast majority of investors aren't in for the long game. A very large percentage of them bought with the intention of reselling for a profit short term and now that this is not happening in many places, they are left holding the bag... Which they cannot do for too long. Many are trying to rent those properties to weather the storm, which is further depressing the rental market, and is taking more potential homebuyers off the market, since it's cheaper to rent. It's what happens when money is thrown out of helicopters for years and the flow suddenly stops. My 2 cents (3 with current inflation levels).
I don't think you're wrong at all on the casual investor looking to make a few $. I do think there are some that are left "holding the bag" but there also seems to be "investment companies" that seem to buy TO rent the properties here. Our rental market here is still pretty unreasonable from what I'm told via my kids or the various online local "news" sites around here. With our strong tech community, it seems that we have not seen the dip here YET that other areas have seen? Our married son/daughter-in-law are looking at $500-600k to get into a 1600-1800 square foot home. This is out of SLC downtown about 20-30 miles (convenient for them anyway as that's where their lives are--our downtown is seemingly as awkward and such as other areas I've traveled to the past 5ish years).
I think the problem is that many of these "investment companies" greatly leveraged themselves to buy overpriced properties that need a certain cash flow to keep them viable. And those conditions aren't happening anymore. I heard an interesting comment the other day, interesting even if very simplistic: "In 2005 they were turning mortgages into securities, now they are turning securities into mortgages". Right now there hasn't been a bigger gap between average income and average cost to buy a house, quite a bit higher than 2006. The market has a tendency to rebalance itself, unless the "entity that shall-not-be-mentioned-in-this-forum" steps in and keeps that from happening.
They do fine because they are using our IRA and 401K contributions as the purchase money, no risk to them and they will pocket the upside without issue.
It's tough for us worker Bees, but there's plenty of money floating around. My brother sold the house that we all grew up in (in Newton, MA) for $1.1 million. The buyer demolished it and built a new, modern thing which looks like a free-standing dentist's office, but is gorgeous inside. The builder was asking $3.3 million and it went for $3.4,million. A similar thing happened to the house that my bride grew up in, as it did to the three cousins that she grew up with. Both houses were in Needham, MA . The price of a buildable lot in any decent section of Boston's suburbs is in the vicinity of $1 million. More, sometimes much more in certain select areas.
That's been the reason to live in the west my whole life. We don't have those kinds of real estate pressures. Now we are full of migrated "progressives" in our western cities and now our property values are up about 500+% from 2000 and our income has only risen about 150% (same job for same job). Towns like Jackson Hole, Park City and now Moab are for the "elite" classes. Other "cool" towns are also starting to shoot up in real estate values due to migration from coastal cities. It's tough to watch
