Home purchase is so much harder for young people than it was 20 years ago

a reply to: Quetzalcoatl14
Yes, same kind of social issue.

Bought my house for $270K in 1995. It's now assessed at $795K. We're a bedroom community to Seattle. Now I could sell this place and live for the rest of my life, especially if I moved to a low-populace area. The problem here is that I have no real desire to move, so it simply means that my property taxes have gone up to about $600 per month. This puts tremendous pressure on my monthly income. So realistically these high prices are doing no one any good.

a reply to: schuyler

$600 a month? You're retired, right? That's a heck of a hit you're taking.

originally posted by: schuyler
Bought my house for $270K in 1995. It's now assessed at $795K. We're a bedroom community to Seattle. Now I could sell this place and live for the rest of my life, especially if I moved to a low-populace area. The problem here is that I have no real desire to move, so it simply means that my property taxes have gone up to about $600 per month. This puts tremendous pressure on my monthly income. So realistically these high prices are doing no one any good.

May I ask what the wages/property price ratio was in 1995 compared to today? That's the issue I'm feeling for young adults these days.

...maximum local government property taxes here are less than half of £600 per month, even for a multi million pound property.


...and any non residential registered land you own is subject to no taxes at all, woodland, forest, pasture, etc.

a reply to: CornishCeltGuy

As a realtor in Atlanta, it's become outrageously expensive anywhere close to the city.

No one wants to speak out loud the atrocity of real estate in the Atlanta area.

The suburbs have also increased. Builders only build for the upper middle and upper classes-there is nothing for first time homeowners unless you are in the country or buying cookie cutter junk built houses. The builders here have gotten away with building slum houses just outside of Atlanta.

There are no homes for first time homebuyers unless it's trash in a trashy neighborhood.

Wages have stagnated-but don't talk about it. The economy is a farce for those who really know. Realtors won't tell you that, ever.

We all have our problems. If you bought low and stayed put through the good and bad times-you are pretty safe.

The game the banks played on the poor and the game between the cheating builders of the slums and the city/county inspectors was/is/continues to be a joke.

a reply to: Justso

Gosh, that sounds a terrible picture you paint for your area but I get ya.
Not too different to things here in my area.

a reply to: CornishCeltGuy

It's really awful but true.

And in Florida when the crash hit-houses were bought by the Chinese in the hundreds. Now the rent is 3 times what the actual mortgage is but there are no paying jobs so hardly anyone even afford the rent.

Banks are so tough and wages so low that the quality of life for original Floridians is pushing them out of the state for better jobs and opportunities to be a homeowner.

The US is in a real bubble/upside down market.

If you have money and have been able to play the flipping game then you are one of the few survivors of the uneven US economy/housing market.

After 30 years seeing the ups and down, I have never experienced such a huge rental market compared to purchasers.

It is a sad time for most of our adult children.

I bought a house for 130k in 1980 that just sold for over 1mill. That's not available to most young buyers today.

originally posted by: Justso
a reply to: CornishCeltGuy

It is a sad time for most of our adult children.

Yes
Same in my corner of the world...slight differences with the back stories, but same.
...again, gutted for my lad he isn't the age he is now but in 90's Britain.

originally posted by: CornishCeltGuy

originally posted by: schuyler
Bought my house for $270K in 1995. It's now assessed at $795K. We're a bedroom community to Seattle. Now I could sell this place and live for the rest of my life, especially if I moved to a low-populace area. The problem here is that I have no real desire to move, so it simply means that my property taxes have gone up to about $600 per month. This puts tremendous pressure on my monthly income. So realistically these high prices are doing no one any good.

May I ask what the wages/property price ratio was in 1995 compared to today? That's the issue I'm feeling for young adults these days.

...maximum local government property taxes here are less than half of £600 per month, even for a multi million pound property.

I can speak to half the question, anyway. Property taxes are limited to 1% of actual value plus special levies, which in practice works out to 1.4% or so. That is actually fairly low compared to other states. It's not the bottom of the pile but I think it is in the bottom third or so. I traded in another house so I did not have to finance it all. it's been over 20 years and is now paid off, but the tax bill is just shy of what my mortgage payment was. For someone to buy this house and finance the whole thing they would have to have an income approaching $250K a year to qualify. Two married professional hot shot programmers from Amazon might just be able to swing it. I'm within commuting distance of Amazon and Microsoft. That's what is driving this. My own alternative is to downsize to a smaller place away from the Big City. Or die. That would work, too.

a reply to: schuyler
Sounds a nightmare!
Die works here as well, but sew up all the loose ends first lol

I'll share a story that an old timer once told me. This guy got out of the service back around the 1940's and was able to purchase, with the pay he had saved, an eighty acre farm with a farm house on it. He tore down the house and built a new one. All paid for. No loans. That won't happen today.

As for myself, I paid twelve thousand dollars for my first house and put a lot of "sweat equity" into. My wife and I lived in a "project" for many years. It eventually appraised for over 200K and I used my new found equity to purchase more properties. You gotta find the sweat deals, the ones that aren't listed under the realtors websites. You've gotta know a guy who knows a guy. Deals are swept up before anyone even knows they're on the market. If you have your eye on a prospect, so do fifty other people. I've had realtors show me "investment" property that weren't even worth the match to burn them.

originally posted by: CornishCeltGuy
a reply to: schuyler
Sounds a nightmare!
Die works here as well, but sew up all the loose ends first lol

Didn't really mean to sound like I'm in any sort of trouble. The situation certainly sucks, but I have some flexibility. I understand the major point. Young People are starting out with zero net worth, so that means no flexibility at all. The cheap "starter house" in an okay neighborhood is fast disappearing, and in my area, simply does not exist at all. The only people who have a chance of making it are young, educated professionals in the right fields. If you have a degree in engineering, you'll probably wind up doing fine, but if you're in retail, there's no way you are going to get ahead unless you inherit.

well I cant say what its like in your area But here in north west Florida all it takes is 25 k a year
a credit score of over 670 and wala you have a nice home .
My son bought his at 23 3 % FIX rate ( and I thought 5.2 was good lol )

110,000 $ 3 beds 2 baths 1200 square feet built in 1964 so solid as a rock also just redone and wile the owner did it him self and was no construction worker other then bad measurements it looks good .

He was approved up to 120 k and could have pushed and got 130 easy But being I tought him live within your ability .
Nice area schools close and ok . Rarly cops running down these streets .

every one around us normal .
Heck it was even easier and better for him then me it took me ten years he did it in 3 .

O morgage total 723 $ includes escrow OVER he got 300 $ back from over paying .
But I must admit my son has the knack for money in general always has even at 7 he had me buying pokamon cards for 25 Cents and would sell them for 5 $ lol .

a reply to: midnightstar

Wouldn't his mortgage be almost half his take home pay?

The problem of real estate affordability is a symptom of the Federal Reserve system and why it needs to go.

Several people have commented how the threshold to enter home ownership is basically entering a new class level. A lot of the cost of a house is the previous owners selling (at a profit), and so the banks are loaning out money on a property almost perpetually. The new owner is indirectly paying for some of the previous owners finance charges in the cost of the house, and usually borrowing money to do it. The income average hasn't increased at the same rate as inflation and it slowly eats away at the majority of people that can't afford real estate without financing.

It is all by design to keep people indebted. The first major debt for most people today is school loans that aren't forgivable upon bankruptcy or even death. If this Federal Reserve debt backed system continues eventually even the top earners will be dependent on government subsidies.

originally posted by: lakenheath24
The thing that confounds me, is that your credit rating goes down if you dont have enuff credit, or don't use credit enuff. It is mad. My old man is a millionaire, and was in Lowes one day. He got refused a c/c because he hadn't used any credit in 15 years. Never mind all his assets and 50+ years of paying mortgages and loans and such with never a missed payment. It truly is a scam.

Good for your old man. He doesn't need credit anyway

The scam they hope to play is get you behind so they can foreclose on your life.

Never had a loan or credit card. If I couldn't afford something I didn't need it.

originally posted by: CornishCeltGuy
a reply to: ufoorbhunter


I spoke to my lad about this before, and he's like me, would prefer to take the financial hit living in a beautiful rural region than have more bricks for his £ up north. Even our biggest SW city has less people than Stoke-on-Trent...or so wiki tells me lol

£45 grand will get you one here mate and it'll often be well kitted out too. Stokies seem to be quite house proud on keeping things well maintained and comfy. It's a bargain really and there's loads of work around in the pots and Toyota, Bentley car plants, Rolls in Derby, JCB, etc, loads of engineering if that's what he goes into. But life in the rural SW with the beauty and coasts is far better, I just got stuck here as my line of work is pretty much only in Stoke lol, but the people are nice and it still is pretty rural and green. As a stop gap and to get him on the ladder it might be a possibility but he might get trapped here by higher rises in Cornwall and the gap between making the leap to the next level being to great.

It is similar to Wales really where you are they are in the same boat with the house prices going uploads and the natives being under pressure from holidays homes buyers. I dunno what the answer is really, maybe ban Londoners from the locality house purchasing. Sounds drastic but what else can be done bar building loads of new houses in your green belt and only letting them go to natives of Cornwall. Where do you start with that? Make your lad take a DNA test to prove his worthiness of being Cornish enough to be allocated a new build? It is a tricky one............

a reply to: CornishCeltGuy

You would have to know the old man. Tight as a drum. Zero % interest offering and he wanted a ride-on lawnmower, so he applied for the CC and got tuned down. Made him mad as hell! To be fair, 90% of his money is locked up in investments for his " rest home" expenses.

Anyhoo, my kids are a good example.....they are a professional couple in London and make excellent money, except they have to live in London. They paid 895k pounds for a home that would cost 250k max in Newmarket. They are thinking of moving back up this way, but the added hours of commuting would mean they dont see their daughter, Its bad enuff as it is....my grandaughter is 19months and she is the first to get dropped off at daycare, and the last to get picked up. We watch her on thursdays now, so that helps. They are petrified of interest rates rising, which nobody has talked about. That will enslave everyone that has taken a loan out for the past 10 years. Doom and gloom man!!!!!!!!!!!!!!!!!!!

a reply to: intrptr

He's 76. It took him many years to get to that level of independence. I remember drinking powdered milk to save money. He was an A/C heating engineer, and we barely made ends meet a lot of times. I remember getting my azz handed to me in high school cuz I wore off-brand clothes, but I never complained cuz I knew the situation.

It took me a lot of years to get where I am, and I still aint financially independent. It is not an easy thing to achieve for most people.

a reply to: ufoorbhunter
45k will get you a parking space here, maybe a garage!
It's mad how only a couple of hundred miles makes such a difference in prices on our little island.
I had a job in Bradford the other week and although I wouldn't want to live there I met some fantastic friendly people. I work all over, and it's fair to say the more north I go the more openly friendly I find 'normal' people to be.
I'll never leave the SW, unless I find cash to get closer to the equator, but if I wanted to get the best £ to bricks ratio I totally agree, up norf is the place to go.