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Old 07-04-2022, 06:55 AM   #71
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I think there is a mentality and some lessons to learn like the guy mentions at the end of the video, while not necessarily needing to go full autocratic. The US has a home ownership rate of 65%, yet it is probably lower, and Singapore has a 91% rate. There really is zero reason why almost everyone can’t own their own home.
This is beginning to sound political but lots of things could be fixed if one had a different government and society. There really is zero reason why one can’t have universal healthcare either.
Singapore is the only example I know of with a mostly benevolent (I'm not sure it is an autocracy but I think I know what you mean) totalitarian government.
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Old 07-04-2022, 10:22 AM   #72
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Anecdotal accounts arenít going to sway my perspective from the major averages, trends, historical record, mathematical impossibility of this continuing, etc..
I donít really see anything here that is new. This is basically a generational conversation that my parents had with my grandparents, I had with my parents, and my children have with me. Prices on things grow over time. You canít buy a decent used car for what a new car cost when I was a child or even in high school.

Home pricing is more volatile and is based on more than inflation but very few persons I know buy a home thinking it will make them rich.
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Old 07-04-2022, 10:51 AM   #73
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I donít really see anything here that is new. This is basically a generational conversation that my parents had with my grandparents, I had with my parents, and my children have with me. Prices on things grow over time. You canít buy a decent used car for what a new car cost when I was a child or even in high school.

Home pricing is more volatile and is based on more than inflation but very few persons I know buy a home thinking it will make them rich.
The "it's a good investment" speech is common. To far too many that translates to"it will make you rich" but I don't think that's necessarily the expectation for everyone. The expectation is still that it'll exceed inflation. That's unsustainable.

However. This is not the housing climate of many past generations. It can't be. That started after WWII, and wage disparity plus easy loans seems to have reshaped some markets to be unachievable for most.
So far I've only lost money on housing, if you look at net. Neighboring homes having been foreclosed had offers at half or less our asking price when we sold in 2015. We eventually sold a few thousand less than we paid in 2002 but the place had a new roof and HVAC and upgraded appliances... Current place has already needed a roof and both HVAC. Speculatively, it'd net a profit if we sold, but less than inflation, so a loss on paper.give it some time and the cost of major maintenance balances out. But... Sell and do what? Rent?...
Second or third homes then? I doubt generations have had that luxury in most families. Sure, some have.
Honestly though it's wage disparity at the heart of current crazy housing markets. People only get rich by stepping on others and this is no exception.
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Old 07-04-2022, 11:25 AM   #74
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The "it's a good investment" speech is common. To far too many that translates to"it will make you rich" but I don't think that's necessarily the expectation for everyone. The expectation is still that it'll exceed inflation. That's unsustainable.

However. This is not the housing climate of many past generations. It can't be. That started after WWII, and wage disparity plus easy loans seems to have reshaped some markets to be unachievable for most.
So far I've only lost money on housing, if you look at net. Neighboring homes having been foreclosed had offers at half or less our asking price when we sold in 2015. We eventually sold a few thousand less than we paid in 2002 but the place had a new roof and HVAC and upgraded appliances... Current place has already needed a roof and both HVAC. Speculatively, it'd net a profit if we sold, but less than inflation, so a loss on paper.give it some time and the cost of major maintenance balances out. But... Sell and do what? Rent?...
Second or third homes then? I doubt generations have had that luxury in most families. Sure, some have.
Honestly though it's wage disparity at the heart of current crazy housing markets. People only get rich by stepping on others and this is no exception.
I thought I was the only one who ever lost money on real estate since the beginning of time. Thank you for the reality check.
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Old 07-04-2022, 12:17 PM   #75
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he's talking about accounting for maintenance costs as well.

which ought to always be done, but most don't.

when i sold my ranger, everyone i talked to patted me on the back for making $500. told me i did things right. i bought it for $5k, and sold at $5500. but i put $4500 in maintenance into it. no one questioned what i did to make it better, everyone just looked at the raw sales figure without all the life and maintenance costs behind them because it told a much more positive story than reality.
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Old 07-04-2022, 12:23 PM   #76
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This is beginning to sound political but lots of things could be fixed if one had a different government and society. There really is zero reason why one canít have universal healthcare either.
Singapore is the only example I know of with a mostly benevolent (I'm not sure it is an autocracy but I think I know what you mean) totalitarian government.
I think many subjects that deal with a society and that call for solutions inevitably sound political. As far as the forum rules, the conversation isn't political if it isn't directed at blaming parties for actions or inactions, which I don't think I have done. The issue of affordable housing, and the paradox behind the mentality that a person home is an investment vehicle, crosses party lines and really affects us all.

The issues learned from Singapore isn't to restructure government or to have the government start grabbing up private land however they want to build whatever they want for "the good of the people". We could start with the concept that owning should be an available option in the market. If we ask ourselves why are affordable homes not available in our market, and if we ask ourselves if we are fine with the market moving further and further away from home ownership to home renting, as it moves further into the hands of the few, then we can examine the pressures in the market leading to this disparity and determine if we are on a trajectory that is sustainable, beneficial, strengthens or weakens our economy, strengthens or weakens the stability of our society, etc. When we do that, I predict we will decide that we would be better off if people across most of the economic spectrum had an option to buy, even if it means those at the top had less opportunity to build wealth as landlords. I think one place to start is to zone housing with more diversity, so that multifamily structures like duplex, condominiums and apartments are in the same neighborhoods as single family homes. We could also build with small shops and retail in R1 neighborhoods.


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Old 07-04-2022, 12:24 PM   #77
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Over the years I've netted some profit on real estate transactions. I've also lost money. These are for my primary residence. I'd never try to use real estate as an investment tool, expecting meaningful gains on a regular basis. I consider owning a home as being better than the alternative of renting. After paying for principal, interest, taxes, insurance, utilities and maintenance at least I have substantial equity in my house. If I had rented something comparable all these years I'd just have a stack of rent receipts.
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Old 07-04-2022, 12:47 PM   #78
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I donít really see anything here that is new. This is basically a generational conversation that my parents had with my grandparents, I had with my parents, and my children have with me. Prices on things grow over time. You canít buy a decent used car for what a new car cost when I was a child or even in high school.

Home pricing is more volatile and is based on more than inflation but very few persons I know buy a home thinking it will make them rich.
I don't think anyone thinks it will make them rich. I think people believe it will build them wealth--that it will appreciate faster than the rate of natural inflation. This is something most people are told and believe, that after 30 years of ownership, even if a $300k home means paying $650k for the home in principle and interest, a home will be worth at least $650k at the end of that 30 years, so that interest doesn't matter, but more than that, they are told the home will build wealth beyond that $650k, meaning it might be worth $850 or a million or more. This model of thinking that a home is an investment and should grow beyond inflation is inherently flawed and the market couldn't sustain such a situation indefinitely.

Again, being rich, being wealthy and gaining wealth are three different, but overlapping concepts.

Also, generations have probably been talking about this for some time, but few are focusing on solutions. Even the guy in this video who talks about the changes in the housing market across generations has a typical economist answer that the supply and demand of the market will naturally fix things in time, and he could be right. I'm not saying the end is coming shortly or in the next generation because this isn't to fear monger. I'm just pointing out that it isn't sustainable, and we are predictable moving closer and closer to the mathematical limitations of how far we can push this inequality between wage growth and housing growth before something has got to give. I can't predict the future or know what economic pressures will affect the market in another five or ten years, but I think this is worth a conversation and closer scrutiny at this time. We tend to be more reactive than proactive, and that can have devastating consequences for the market like it did with the last recession.

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Old 07-04-2022, 12:59 PM   #79
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Over the years I've netted some profit on real estate transactions. I've also lost money. These are for my primary residence. I'd never try to use real estate as an investment tool, expecting meaningful gains on a regular basis. I consider owning a home as being better than the alternative of renting. After paying for principal, interest, taxes, insurance, utilities and maintenance at least I have substantial equity in my house. If I had rented something comparable all these years I'd just have a stack of rent receipts.
Renting hasn't matched the growth of buying, so it can be a good way to build wealth by saving money on the cost of living and investing the difference. If the minimum home in a market like mine is $400k+, but renting an apartment can be as low as $1,500 then renting and investing $1,000 per month, might be better than paying $2,500+ for the same apartment. At least, it can in the beginning. Over time, the rent will rise, but we know that compound interest over time will favor heavy investments at the beginning over new additions at the end, so it could work out to be the better way of generating wealth, or more specifically, renting shouldn't just leave you with a stack of rent receipts if you invested. At least, this is true in most markets, as the graphs and discussing below point out.

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https://www.ft86club.com/forums/show...2&postcount=36
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Old 07-04-2022, 01:45 PM   #80
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If base understanding on amortization and investing were taught at a high school level average folks would be in a better position to make these type of choices. Even with the knowledge a large amount wouldnít I believe. I would say 10% of people I know my age even save money at all let alone make an attempt to invest in their future.
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Old 07-04-2022, 02:02 PM   #81
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If base understanding on amortization and investing were taught at a high school level average folks would be in a better position to make these type of choices. Even with the knowledge a large amount wouldnít I believe. I would say 10% of people I know my age even save money at all let alone make an attempt to invest in their future.
Well, this is part of the issue. Part of the mentality problem comes from three notions: I can enter this bidding war because A) if I don't buy now, the homes will just be more expensive in a week, month, year, and B) if I pay this much more, it won't matter because it'll appreciate someday, and C) this amateur reno is worth X when actually it is worth x-$$$. If everyone had a better understanding then the fever would be less intense, but we have Tulip Mania for houses partially because of the lack of understanding. These house flippers who add some crown molding, painting, fake granite counters and cheap flooring and flip a home for $100k over what they paid in upfront cost, labor and materials are part of the problem. These TV shows have really sold the idea that some amateur doing crap work can really add significant value to a home covering up a turd. It is just another thing feeding the fire.
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Old 07-04-2022, 02:18 PM   #82
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he's talking about accounting for maintenance costs as well.

which ought to always be done, but most don't.

when i sold my ranger, everyone i talked to patted me on the back for making $500. told me i did things right. i bought it for $5k, and sold at $5500. but i put $4500 in maintenance into it. no one questioned what i did to make it better, everyone just looked at the raw sales figure without all the life and maintenance costs behind them because it told a much more positive story than reality.
Excluding upkeep we sold at a loss on the last place. Less than what we paid. Including it was ugly. Compared to renting, likely $20k loss over 12 years. Didn't help it took forever to sell because "too small"

Current estimate if I sold does include upkeep, as I keep track of effective monthly cost in order to compare against renting (since I don't plan to go home free) we've only been here 8 years so definitely upside down. I also include property taxes in this calculation. Once we pay off the house it helps. And paying aggressively is better than investing in funds lately so we've been doing that.
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Old 07-04-2022, 02:32 PM   #83
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Excluding upkeep we sold at a loss on the last place. Less than what we paid. Including it was ugly. Compared to renting, likely $20k loss over 12 years. Didn't help it took forever to sell because "too small"

Current estimate if I sold does include upkeep, as I keep track of effective monthly cost in order to compare against renting (since I don't plan to go home free) we've only been here 8 years so definitely upside down. I also include property taxes in this calculation. Once we pay off the house it helps. And paying aggressively is better than investing in funds lately so we've been doing that.
Pretty much the same. Lost on the listed price. With commissions and tax figured in it was about 32K lost. Closer to 50 if we include improvements.
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Old 07-04-2022, 03:19 PM   #84
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I think one place to start is to zone housing with more diversity, so that multifamily structures like duplex, condominiums and apartments are in the same neighborhoods as single family homes. We could also build with small shops and retail in R1 neighborhoods.
I live in a neighborhood like that. Just shy of being the coolest neighborhood in the world (on some random top 10 list published online) but I believe you noted many of the reasons right here.

On my block are apartments, 3-flats, and single-family residences for rent (also a few lower levels rented out I believe); To buy are condos (6 in a building I think) and single family. Price range is <400k to ~1.4mil last I looked. There is a 3-flat currently under renovation and going on the market soon - not sure if it'll be buy or rent (though often owners live in one of the available floors). And a mix of the common 25'x125' lots with a handful at 35'x125 and some full double lots. Alleys are amazing too, I have to say. Still have a good few older trees, though those are slowly being taken out (ash trees get hit by the ash borer, many others were ignored when water/sewer mains were put in and are now causing issues...) and houses aren't right up against the walk (which is a huge bonus for me; I feel trapped by the places that go right up to the edge... not to mention places without big old trees)

Walk a few blocks and there is a lovely street of shops and restaurants - on the one side they even ban chains. Lots of local business - not always successful. Grocery, pharma all within easy walking distance. Even my doctor is a 3 block walk. Multiple bus options, and <1mi to three different rail transit options. Income likely varies quite widely as well.
I'm not a city person, but I rather like it here.
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