And 50% is actually good by todays standards!
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What’s on your mind?
- Thread starter Gutwrench
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It looks like a US$70,000 house to me.
A few weeks ago, I was discussing houses and value with the owners of the home where I rent a room. My house in Florida that I bought for $127,000 and sold for $214,000 was estimated at $440,000.
The trouble with Idaho real estate is that a load of people from the San Francisco Bay Area, which is near me, wanted to go cheap, and moved to rural areas, driving up the cost of real estate. They did the same thing out here in California's Central Valley but it's so crowded out here that people want to go further away.
It depends on where you live. California is one of the most expensive states to live in, and has been for quite awhile, so that makes sense. I performed several times out in CA from 2017-2019, and even then, I remember people saying housing was unaffordable. If housing prices don't go up drastically by the time I graduate (which, I know, famous last words), I don't anticipate spending anywhere near 50% of my income on housing costs, unless I decide to live in a really expensive city.
I attended a music production/music education workshop in LA two years ago, and I was told by the Worldwide Chief of Music Production at EA (cannot remember his actual title, but it was something close to that) that you do NOT need to live in NY or LA to work in my field. That used to be the case, but not anymore. With the competition of the job markets in those cities especially, they do not seem all that appealing to me anyway.
In plus, (smaller) companies in high-cost-of-living areas outsource that type of work to production houses around the country/world, so it really is not necessary to live in LA or New York anymore. Whether outsourcing that work is a good thing or not is of course a question to consider, but in my mind, it is, because it increases accessibility. Of course, there are also issues with production houses which I won't get into because that's not what we're talking about.
So far, I have lived in two states in different parts of the country, and it has been interesting to draw comparisons. Though one thing is similar, and that is the relatively low cost of living.
Anyway, I am personally not worried about cost of living when I get to the working point of my life. And I have a little over two years to see what happens to the housing market. As far as buying a house, I totally don't care. My parents didn't buy until WAY later than most people--that's fine. They also didn't marry or have children (my brother and I) until way later. The house we rented when I was a kid was great. In fact, it was kind of perfect in a lot of ways.
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Yep. Half of my salary for the year goes towards rent which is not coming down anytime soon.
So to afford a $70K down payment, we would have to eat ramen and bread every day of the year, not have any car payments, credit cards, or student loans. Then we would have to live with my parents just to have a glimmer of hope of being able to afford the down payment....NOT the house...just the DOWN PAYMENT.
It's beyond stupid.
Yep. Well, Vancouver Island, but yeah.. the same prices.
That's absolutely insane. Although I've known for awhile that Canada is roughly 35% more expensive to live in compared to the U.S. There's a really good video comparing Canada's cost of living vs. the U.S., which is where I found that statistic.
I have an Aunt and Uncle that lived in Nanaimo until they were priced out of their rental. Now they're doing the wandering nomad thing and aiming for Eastern Canada but we'll see what happens with that.
I just looked at what we paid for our first house, well flat back in the 90's. I paid about 50% of my annual salary as a deposit. The property price was about 4.85 times my annual salary back then. This one is 5 times your annual salary. So not that different. But the reality was you could borrow more back then. It was very tough and I could only afford it by working 7 days a week and starting early and finishing late each day to save the deposit (I was paid overtime back then).
When we sold the price 3 years later we sold it for 80% more than we paid for it. Use we had improved it somewhat, but also the market was with us.
With my wife and I both working full time, and saving what we can, we're no where close to affording anything. So while I understand your point (my parents bought their house in the early 90's and were in a similar boat), the math isn't mathing anymore.
You used to be able to afford a house on a single salary. You may not have had the nicest car or the nicest anything afterwards but you had a house to your name. My grandparents did it and my parents did it.
Now, two people working full time jobs (or multiple jobs) can barely afford rent, let alone a down payment on a house that is grossly over priced.
So I'm not saying that your house buying experience wasn't a struggle or anything like that. All I'm saying is that buying a house in the 90's is VASTLY different than what it is now. 20% on a house that supposedly costs $350,000 is impossible to afford when you factor in the cost of everything going up and wages not keeping pace.
I lay awake at nights wondering how I can afford to pay my rent, assuming the rent keeps going up year to year, while I struggle to find a better paying job and knowing that my current job absolutely will not give us cost of living raises.
Agree with what you are saying and it is the deposit that is really killing you. Obviously everyone's situation is different. We were also renting whilst we saved up. We had no TV, internet, mobile phone or take away or meals out for a couple of years whilst we saved. No holidays or car payments. No credit cards or loans either. That worked for us then. It might not be enough now.
We finished our mortgage and lived mortgage and rent free for a good few years. Then we moved to a more expensive 'project' house. That wasn't the plan. But there you go. We still spend very little and have been on a single income for many years. It's not easy, but it is our situation for reasons I won't go into here.
My only advice I can offer is is there a way you could move back in with parents or a really much cheaper place for a year whilst you get a deposit together? Might not be practical or desirable but I have known people do that.
we have small houses like that in my Los Angeles neighborhood.......they'd be listed at well over a million though, then whoever buys them will tear them down and build 2 to 4 much larger places on the property
There are plenty of programs that allow you go buy with as little as 3% down, but you have to pay PMI until you hit 20% equity. So if you are in an area with rapidly appreciating properties, then not a big deal.
a Zillow survey from 2022 reports the following about how much buyer put down for their purchase. It's really a shop around at different lenders to find lending programs that are available.....you can find options other than 20%.I'm remembering that what was available changes from year to year, just as interest rates routinely change.
Well, no, - rather, well, yes, - agreed, I hear (or read) and understand what you are saying.
Sunny California is gray, wet, and chilly just now. The atmospheric river is going to help alleviate any drought conditions, though.
Not really affecting us down South. But it’s still wet and grey. At least the rain got rid of Tuesday’s snow.
Yes, it is very frustrating and likely unfair. The reality is that the expectations of many home buyers and government regulations are based on a world that no longer exists.
1. When my parents bought their first home in a suburban area it was built in as former fruit tree orchard. There was plenty of land available for home building. That era in many metropolitan areas, such as California, is gone. Urban populations have soared meaning more people competing for ever diminishing space. That home years later was sold for just the land at ~100x what they paid. The house was demolished.
2. The costs of materials have risen. Expectations of what should be included in a home, such as central A/C, and other amenities have risen.
3. Costs in areas with lower cost housing are rising due to buyers fleeing from high cost areas. The ability of people to work from home anyplace in the country just accelerated this trend.
3. Goverment regulations - such as building and zoning - are still based on these earlier expectations. Changes to make things somewhat easier, i.e. make more housing available, are opposed by current owners who don't want things to change. California has some new regulations to force cities to build more housing. One cities response: they can't build multi-unit homes since their city is a mountain lion habitat.
Don't know what the solution is but as I see it:
1. Buyer expectations that you can have 1/4 of an acre to build a house with a pool, or even just a basic home with a yard, in many cases are no longer realistic in many parts of the country. They need to accept multi-unit houses with some shared open space if they are lucky.
2. Governments must change their regulations to allow much more housing to be built. Given that there is so little land available this means they have to allow multi story and multi unit developments.
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Likewise.
Absolute downpour last night (and earlier this morning - actually, I gave the farmers' market a miss, and when I phoned the French bakery yesterday they informed me that they weren't sure that they would be able to open today), but at least that awful snow has melted. Never thought I'd welcome a downpour.
No French bread? I hope you have a plan b.
Not been outside since this morning when I chased a squirrel off the bird feeders.
