Maintaining five acres and two cows was more work than they anticipated.
February 5, 2022 1:54 PM Subscribe
They Rushed to Buy in the Pandemic. Here’s What They Would Change. For nearly two years, home buyers have been shopping in conditions ripe for regret. Prices have soared, inventory has plunged and competition has been brutal in markets across the country. With fixer-uppers fetching multiple offers, buyers must make snap decisions about what is often the biggest financial investment of their lives.
Invariably, someone makes a choice they wish they hadn’t. Unpaywall
evergreen nyt article regarding problems of everyday americans:
She set her maximum budget at $900,000, but soon realized that if she wanted to stay in the central neighborhood, she would have to pay more. She pushed her budget up to $1.3 million, reassessing her priorities.posted by j_curiouser at 2:17 PM on February 5, 2022 [85 favorites]
This article was of interest to me because I want to move to the Salt Lake City area, and I have been watching prices there go up and up and up, wondering whether I made a huge mistake not buying earlier in the pandemic.
I saw the first couple ended up using the house they bought for an AirBnB. Since we keep hearing that a lot of the problem is inventory, I wonder how much AirBnB is contributing to that, and I don't recall seeing that addressed in stories about pandemic real estate. How many people are hanging on to their old homes because they can get $200 a night using them for AirBnB?
posted by FencingGal at 2:17 PM on February 5, 2022 [14 favorites]
I saw the first couple ended up using the house they bought for an AirBnB. Since we keep hearing that a lot of the problem is inventory, I wonder how much AirBnB is contributing to that, and I don't recall seeing that addressed in stories about pandemic real estate. How many people are hanging on to their old homes because they can get $200 a night using them for AirBnB?
posted by FencingGal at 2:17 PM on February 5, 2022 [14 favorites]
We bought our first house in September 2021 here in Savannah GA. We had moved down to an apartment from Minnesota in June and we very surprised at just how much state to state moving cost to begin with. Once here we retained our realtor and while we didn't expect to move again so quickly we kept in mind that the expense to break our lease was fixed and if we kept within our budget we could count on that as an expected added cost. We were also super lucky to have had cash in hand from the sale of my father's home after he passed in 2019 (we'd never have been able to buy otherwise). As we started to look it was clear that houses were selling quickly and inventory was getting more and more slim. Having our finances in order, preapproval and cash in hand ready in addition to keeping strict guidelines on what we could afford helped us land this house and get an amazing interest rate. With rents and prices continuing to rise we feel super lucky to have the stars aligned - as of today there are only 700 homes on the market for all of Savannah, that's about 60% less than when we put our offer in and even then our realtor said that inventory was the lowest she'd ever seen.
I have a feeling it's only going to get crazier... the financing qualification process is way more robust than is was back in the mid 2000s. Cash is king and it can be really frustrating to get out bid - but keeping your realistic budget in mind is a must to not find yourself in regretsville.
posted by djseafood at 2:45 PM on February 5, 2022 [7 favorites]
I have a feeling it's only going to get crazier... the financing qualification process is way more robust than is was back in the mid 2000s. Cash is king and it can be really frustrating to get out bid - but keeping your realistic budget in mind is a must to not find yourself in regretsville.
posted by djseafood at 2:45 PM on February 5, 2022 [7 favorites]
And to FencingGal - AirBnB is a huge impact on the housing market here in Savannah, GA as this is such a tourism based local economy.
posted by djseafood at 2:49 PM on February 5, 2022 [5 favorites]
posted by djseafood at 2:49 PM on February 5, 2022 [5 favorites]
We've decided to keep renting and keep saving to take advantage of the eventual correction in the real estate market. Luckily, I think our rental situation is stable, and I don't think the homeowner has any plans to sell or jack up our rent.
posted by COD at 2:54 PM on February 5, 2022 [3 favorites]
posted by COD at 2:54 PM on February 5, 2022 [3 favorites]
That last place, the Williamsburg one, is such a bad deal. They don't talk about the maintenance at all, but a "luxury" building with a pool? You are going to be paying high fees forever.
posted by dame at 3:07 PM on February 5, 2022 [1 favorite]
posted by dame at 3:07 PM on February 5, 2022 [1 favorite]
AirBnB has been a disaster all over America, even with some cities' attempts to limit the ability of apartment and house owners to rent them out to an unlimited degree.
posted by PhineasGage at 3:22 PM on February 5, 2022 [35 favorites]
posted by PhineasGage at 3:22 PM on February 5, 2022 [35 favorites]
I’m kind of perplexed that there’s enough demand for AirBnB to warp entire regional real estate markets. Who has money left over from their home housing costs to spend a lot of time on vacation? It seems to me that driving up the market should reduce consumption demand.
posted by clew at 3:39 PM on February 5, 2022 [11 favorites]
posted by clew at 3:39 PM on February 5, 2022 [11 favorites]
Airbnb is wretched for rent, and also juices prices up
I wish there were more reports on who owns the properties in a given city. People need to know the names and faces of their slumlords, price gamers and bulk buyers
Support your local housing rights activists and attorneys
posted by eustatic at 3:53 PM on February 5, 2022 [48 favorites]
I wish there were more reports on who owns the properties in a given city. People need to know the names and faces of their slumlords, price gamers and bulk buyers
Support your local housing rights activists and attorneys
posted by eustatic at 3:53 PM on February 5, 2022 [48 favorites]
Mr. Parman lowered his expectations and found a 3,600-square-foot four square style house
What the heck was he looking for originally, an aircraft hangar?
posted by credulous at 4:12 PM on February 5, 2022 [90 favorites]
What the heck was he looking for originally, an aircraft hangar?
posted by credulous at 4:12 PM on February 5, 2022 [90 favorites]
What the heck was he looking for originally, an aircraft hangar?What's the opposite of eponysterical?
posted by credulous
posted by PhineasGage at 4:16 PM on February 5, 2022 [33 favorites]
Prices are going bonkers where I live in Palm Beach County, FL. We could probably sell our house now for twice what we bought it for in 2012, but then of course we wouldn't be able to afford someplace new to live.
posted by Daily Alice at 4:16 PM on February 5, 2022 [9 favorites]
posted by Daily Alice at 4:16 PM on February 5, 2022 [9 favorites]
We bought our first house in September 2021 here in Savannah GA.
Also a Savannahian and djseafood described what we’ve been seeing in the area. It’s been cray cray.
posted by Brandon Blatcher at 4:22 PM on February 5, 2022
Also a Savannahian and djseafood described what we’ve been seeing in the area. It’s been cray cray.
posted by Brandon Blatcher at 4:22 PM on February 5, 2022
Wait wait wait. Five acres and two cows is too much for them to handle, and paying rent and a mortgage is a stretch so they're.... keeping the farmhouse and turning it into an AirBnB? Do they think the people who stay there will look after the property? Are they going to pay two mortgages and run a rental business, and think that will be easier than one rent and one mortgage?
posted by The corpse in the library at 4:24 PM on February 5, 2022 [36 favorites]
posted by The corpse in the library at 4:24 PM on February 5, 2022 [36 favorites]
The cows were apparently given away so hopefully are fine!
I've always rented because I was either poor or too unwilling to commit to buying, but this house has gone up in rent every damn year, which hasn't happened to me before. I too wonder why the owner doesn't just sell in this market, because eventually he is going to price me out of here (or would if I wasn't already having to move out of state). And I'm a good renter, I take care of the property, alert them to issues (which they don't always address) and pay on time. That used to be a negotiating point, but maybe it's too crazy now.
I guess like a lot of people I'm wondering where this ends. We have to live somewhere...
posted by emjaybee at 4:27 PM on February 5, 2022 [9 favorites]
I've always rented because I was either poor or too unwilling to commit to buying, but this house has gone up in rent every damn year, which hasn't happened to me before. I too wonder why the owner doesn't just sell in this market, because eventually he is going to price me out of here (or would if I wasn't already having to move out of state). And I'm a good renter, I take care of the property, alert them to issues (which they don't always address) and pay on time. That used to be a negotiating point, but maybe it's too crazy now.
I guess like a lot of people I'm wondering where this ends. We have to live somewhere...
posted by emjaybee at 4:27 PM on February 5, 2022 [9 favorites]
We bought a house for the first time in 2021 - it is amazing what not paying childcare for 3 children and getting Biden Bucks will do for turbocharging your liquidity! Butttt....we paid almost $200k for a flipper-upper in what is affectionately referred to as "Meth on Main." My neighborhood is full of very nice people living in houses that are falling apart because their slum lord owners won't fix them, and we are the Very Nice White Couple that are harbingers of gentrification.
So far, I've dropped almost $15k in immediately need repairs on this place, and that's not even counting the fact that I regularly worry about an electric short upstairs, the fact the insulation is so piss-poor that we are going to probably have to open up the walls next summer and blow insulation in, and that the porch the flipper put in was so poorly built that it's going to rot away within two years.
I love the house. I just wish that my honey-do list wasn't about $50k long on a house that was priced at $60k four years ago.
posted by gwydapllew at 4:57 PM on February 5, 2022 [10 favorites]
So far, I've dropped almost $15k in immediately need repairs on this place, and that's not even counting the fact that I regularly worry about an electric short upstairs, the fact the insulation is so piss-poor that we are going to probably have to open up the walls next summer and blow insulation in, and that the porch the flipper put in was so poorly built that it's going to rot away within two years.
I love the house. I just wish that my honey-do list wasn't about $50k long on a house that was priced at $60k four years ago.
posted by gwydapllew at 4:57 PM on February 5, 2022 [10 favorites]
evergreen nyt article regarding problems of everyday americans
Ahahaha thank you, I was like: you are profiling 4 people and two of them are buying for over a 1 million dollar budget. Keep it classy, NYT!
posted by corb at 5:09 PM on February 5, 2022 [16 favorites]
Ahahaha thank you, I was like: you are profiling 4 people and two of them are buying for over a 1 million dollar budget. Keep it classy, NYT!
posted by corb at 5:09 PM on February 5, 2022 [16 favorites]
I’m kind of perplexed that there’s enough demand for AirBnB to warp entire regional real estate markets. Who has money left over from their home housing costs to spend a lot of time on vacation?
Families with kids who bought pre-pandemic. I am in no way defending AirBnB but the difference between 2 hotel rooms (so you don’t have to have lights out at 8 and no sex) + 2 restaurant meals a day for 4 ppl, one of whom will tantrum vs. an Air BnB where ppl get bedrooms and there’s a living rm and a kitchen is huge.
posted by warriorqueen at 5:37 PM on February 5, 2022 [24 favorites]
Families with kids who bought pre-pandemic. I am in no way defending AirBnB but the difference between 2 hotel rooms (so you don’t have to have lights out at 8 and no sex) + 2 restaurant meals a day for 4 ppl, one of whom will tantrum vs. an Air BnB where ppl get bedrooms and there’s a living rm and a kitchen is huge.
posted by warriorqueen at 5:37 PM on February 5, 2022 [24 favorites]
Keep it classy, NYT!
There's a regular feature in the Times called 'The Hunt' with the templated headline:
"They wanted to live in (high desirably neighborhood) but had only (insert moderately ludicrous amount to spend) on an (obscenely small apartment). Which option would you choose?"
posted by Insert Clever Name Here at 5:46 PM on February 5, 2022 [8 favorites]
There's a regular feature in the Times called 'The Hunt' with the templated headline:
"They wanted to live in (high desirably neighborhood) but had only (insert moderately ludicrous amount to spend) on an (obscenely small apartment). Which option would you choose?"
posted by Insert Clever Name Here at 5:46 PM on February 5, 2022 [8 favorites]
We bought this year and one thing we noticed was that the pressure to make snap decisions and the perceived hotness of the market was leading to protracted disputes before closing, and places getting re-listed. People would make their bids, get into the inspection process, and get cold feet. Places where we got outbid ultimately went for less, months later, and we could only shrug.
posted by anhedonic at 5:49 PM on February 5, 2022 [3 favorites]
posted by anhedonic at 5:49 PM on February 5, 2022 [3 favorites]
We're about to pay off our mortgage on a duplex in central New Jersey. My wife wants to move to a single family somewhere. I'm not adverse to the idea, but given the fact that we've almost paid off this house, and anywhere we move to in any place we actually want to be is likely to cost more than we can sell this house for, I'm finding it hard to see the upside. I keep feeling like the best possible thing we can do for our 17 year old is to give him a house he can live in or sell outright.
posted by mollweide at 5:50 PM on February 5, 2022 [6 favorites]
posted by mollweide at 5:50 PM on February 5, 2022 [6 favorites]
I feel like I'm supposed to hateread the opening couple who couldn't handle quiet and cows. I'm just hoping they aren't assuming that Instagram accurately represents (a) AirBnB management and (b) childrearing.
posted by clew at 6:23 PM on February 5, 2022 [6 favorites]
posted by clew at 6:23 PM on February 5, 2022 [6 favorites]
I just realized that even if you hold for 10 years, someone is shelling out a couple hundred bucks a month just for the 6% realtor commission.
That's kind of a bummer.
posted by credulous at 6:24 PM on February 5, 2022 [3 favorites]
That's kind of a bummer.
posted by credulous at 6:24 PM on February 5, 2022 [3 favorites]
I was a total housing bear 15 years ago but I think It's Different Now . . .
Housing is *incredibly* expensive just about everywhere on this planet (except maybe Japan bit it ain't exactly cheap there yet even though they've had little appreciation since their O.G. bubble crash of the early 90s).
Wanna see a beautiful graph?
https://fred.stlouisfed.org/graph/?g=LHFo
wages go up, rents go up. You want off this treadmill you gotta outbid the next guy(s), and the Wall Street investors (along with the millions of mom & pop local investors) who want to keep you working for them.
posted by Heywood Mogroot III at 6:34 PM on February 5, 2022 [4 favorites]
Housing is *incredibly* expensive just about everywhere on this planet (except maybe Japan bit it ain't exactly cheap there yet even though they've had little appreciation since their O.G. bubble crash of the early 90s).
Wanna see a beautiful graph?
https://fred.stlouisfed.org/graph/?g=LHFo
wages go up, rents go up. You want off this treadmill you gotta outbid the next guy(s), and the Wall Street investors (along with the millions of mom & pop local investors) who want to keep you working for them.
posted by Heywood Mogroot III at 6:34 PM on February 5, 2022 [4 favorites]
Who has money left over from their home housing costs to spend a lot of time on vacation?
It's simple, just build a time machine and buy your home in 2009.
posted by meowzilla at 6:51 PM on February 5, 2022 [7 favorites]
It's simple, just build a time machine and buy your home in 2009.
posted by meowzilla at 6:51 PM on February 5, 2022 [7 favorites]
It's simple, just build a time machine and buy your home in 2009.
We bought our house in 1998 and it still doesn't work that way. And I absolutely understand we're lucky.
posted by mollweide at 7:02 PM on February 5, 2022 [1 favorite]
We bought our house in 1998 and it still doesn't work that way. And I absolutely understand we're lucky.
posted by mollweide at 7:02 PM on February 5, 2022 [1 favorite]
I’ve lived in this city for 43 years. It’s always been a bit terribly high wage but low cost of living place, with typically affordable rents. In the last couple of years, however, that’s changed. Rents are skyrocketing. Wages… aren’t. There was a big thing in the news last week about a property investor who bought a senior’s apartment complex and raised the rent by 50% so that they’d all move out and he could flip the place. In the local subreddit, there are now a lot of despairing posts about rising rents and of people not being able to afford them. The buying options, as you might figure, aren’t great either. Out of state investors, particularly from CA, are putting big cash offers on houses and waiving inspections and such since they don’t have to clear a mortgage lender. We have about 5-1/2 years left on our mortgage but we probably have four times as much equity as we owe on the loan balance (we bought in the 90s with the intention to live here, we didn’t see it as a financial vehicle.) We constantly get solicitations to buy the house by mail and text, and I don’t answer unfamiliar numbers but I’m sure many of the unanswered calls are also wanting to buy. It’s crazy.
We bought when we did because our new landlord was an absolute jerk. We bought a very modest place, and the market was a lot better for first time buyers then. I’m not going to say we’re shrewd or anything like that. We’re lucky. Anyone who’s doing well at this stage of life is lucky. Yes, you may have made the smart financial choices and avoided a lot of common traps, but you’ve still had bounces go your way. Now I’m looking at the current market. Renters here are trapped. The rents everywhere, even in the really bad parts of town, are shooting up. They can’t afford to buy. The people who normally could have afforded to buy in the past are getting outbid by investors. Seniors who don’t have a financial cushion and a home that they own outright are often straight up fucked now. Certain parts of the state (hello, Sedona) are now overrun with AirBnBs, which has screwed the markets there.
The market will correct eventually. It always does. The problem is that it is correcting from such a ridiculously high level that even when it drops it will still remain out of reach of many. People like to call millenials and Gen Z snowflakes and such, but good god did they get a shit deal. If the housing market continues out of control, it’s going to wreck the economy.
posted by azpenguin at 7:09 PM on February 5, 2022 [27 favorites]
We bought when we did because our new landlord was an absolute jerk. We bought a very modest place, and the market was a lot better for first time buyers then. I’m not going to say we’re shrewd or anything like that. We’re lucky. Anyone who’s doing well at this stage of life is lucky. Yes, you may have made the smart financial choices and avoided a lot of common traps, but you’ve still had bounces go your way. Now I’m looking at the current market. Renters here are trapped. The rents everywhere, even in the really bad parts of town, are shooting up. They can’t afford to buy. The people who normally could have afforded to buy in the past are getting outbid by investors. Seniors who don’t have a financial cushion and a home that they own outright are often straight up fucked now. Certain parts of the state (hello, Sedona) are now overrun with AirBnBs, which has screwed the markets there.
The market will correct eventually. It always does. The problem is that it is correcting from such a ridiculously high level that even when it drops it will still remain out of reach of many. People like to call millenials and Gen Z snowflakes and such, but good god did they get a shit deal. If the housing market continues out of control, it’s going to wreck the economy.
posted by azpenguin at 7:09 PM on February 5, 2022 [27 favorites]
I wonder how much AirBnB is contributing to that,
I managed to buy just before the pandemic in Park City, up the hill from Salt Lake. We have an HOA - which I’m a little dubious about - but they don’t do much as fees are only $100 a year and the neighborhood is fairly chill. But holy cow are they (and all the HOAs around us) dead set against AirBNB and they actively go after people trying to break the HOA rule against rentals less than 30 days….and in this case I’m ok with that! I think we have one house in our neighborhood on AirBNB - and it’s just a single room in an occupied home so everyone’s ok with it.
posted by inflatablekiwi at 7:17 PM on February 5, 2022 [7 favorites]
I managed to buy just before the pandemic in Park City, up the hill from Salt Lake. We have an HOA - which I’m a little dubious about - but they don’t do much as fees are only $100 a year and the neighborhood is fairly chill. But holy cow are they (and all the HOAs around us) dead set against AirBNB and they actively go after people trying to break the HOA rule against rentals less than 30 days….and in this case I’m ok with that! I think we have one house in our neighborhood on AirBNB - and it’s just a single room in an occupied home so everyone’s ok with it.
posted by inflatablekiwi at 7:17 PM on February 5, 2022 [7 favorites]
AirBnB absolutely is a huge driver of increasing rents in many cities. Miami had an affordability problem before the pandemic driven by AirBnB and absentee condo owners leaving units empty and the pandemic has only made things worse. Rents are up 50% from last year thanks to all the newly remote workers and units are still being turned into AirBnBs.
When the place I was living was sold last summer the new owner wouldn't even give me a price to renew the lease. Eventually they did the paperwork right and managed to force us out. Took them a few tries, though. Now it's on AirBnB for a few hundred bucks a night, as I expected it would be from their unwillingness to make any offer at all.
posted by wierdo at 7:30 PM on February 5, 2022 [4 favorites]
When the place I was living was sold last summer the new owner wouldn't even give me a price to renew the lease. Eventually they did the paperwork right and managed to force us out. Took them a few tries, though. Now it's on AirBnB for a few hundred bucks a night, as I expected it would be from their unwillingness to make any offer at all.
posted by wierdo at 7:30 PM on February 5, 2022 [4 favorites]
She pushed her budget up to $1.3 million, reassessing her priorities.
That seems so easy, just push your budget up. I should have thought of that when we were buying a house.
posted by octothorpe at 7:37 PM on February 5, 2022 [34 favorites]
That seems so easy, just push your budget up. I should have thought of that when we were buying a house.
posted by octothorpe at 7:37 PM on February 5, 2022 [34 favorites]
It's simple, just build a time machine and buy your home in 2009
A lot of my friends bought in 09/10 and it smarts. I was single and didn’t want to buy alone. In fact, all my single female friends missed this boat. It’s frustrating to hear younger generations complaining about not having a house when plenty of Gen X aren’t settled yet. I’m happy for my friends who got a cheap house but they keep trying to get me to buy the houses for sale nearby. I’d love to but those are going for three times the price they paid even though they’re being sold as tear downs. Most banks wouldn’t give me a mortgage on that and even so I can’t compete about with the all cash offer from a developer who will flip it for $1.5 million in a year. Where do we live when all of the houses are over a million in Chicago?
I love this city I’ve lived in/near almost my entire life but in the past few years, especially in the past six months, my partner and I have been tip toeing around the idea of moving to another city. It won’t be one of our top choices or near family or friends, those are all as expensive. We aren’t suburban people. We fly to work in a different city and could live anywhere. There’s nice houses we could afford in Milwaukee and Minneapolis but I would like to live near my friends. I’ve been watching the market for more than five years and lately doubled my expectation of the budget I will need for a house that I like okay but needs work. There will be a correction, but in how long? I don’t want to be twiddling my thumbs waiting to buy into my 50s. The longer the pandemic goes on the less considerate my neighbors become. They’re fed up. I’m fed up. My partner is beyond fed up. I want out of underneath the stompy accordionist who flushes her toilet every time I shower and out of the mid-day sex romps and crying fits below me. I’m responsible and thoughtful about big purchases but I see why people felt like they had to do anything to buy a house.
posted by Bunglegirl at 7:48 PM on February 5, 2022 [7 favorites]
A lot of my friends bought in 09/10 and it smarts. I was single and didn’t want to buy alone. In fact, all my single female friends missed this boat. It’s frustrating to hear younger generations complaining about not having a house when plenty of Gen X aren’t settled yet. I’m happy for my friends who got a cheap house but they keep trying to get me to buy the houses for sale nearby. I’d love to but those are going for three times the price they paid even though they’re being sold as tear downs. Most banks wouldn’t give me a mortgage on that and even so I can’t compete about with the all cash offer from a developer who will flip it for $1.5 million in a year. Where do we live when all of the houses are over a million in Chicago?
I love this city I’ve lived in/near almost my entire life but in the past few years, especially in the past six months, my partner and I have been tip toeing around the idea of moving to another city. It won’t be one of our top choices or near family or friends, those are all as expensive. We aren’t suburban people. We fly to work in a different city and could live anywhere. There’s nice houses we could afford in Milwaukee and Minneapolis but I would like to live near my friends. I’ve been watching the market for more than five years and lately doubled my expectation of the budget I will need for a house that I like okay but needs work. There will be a correction, but in how long? I don’t want to be twiddling my thumbs waiting to buy into my 50s. The longer the pandemic goes on the less considerate my neighbors become. They’re fed up. I’m fed up. My partner is beyond fed up. I want out of underneath the stompy accordionist who flushes her toilet every time I shower and out of the mid-day sex romps and crying fits below me. I’m responsible and thoughtful about big purchases but I see why people felt like they had to do anything to buy a house.
posted by Bunglegirl at 7:48 PM on February 5, 2022 [7 favorites]
I'm really surprised that no one has mentioned the goat yet.
Ms. Mohan and Mr. Flynn were surrounded by animals, including this goat on a neighbor’s property.
Oh the humanity!!! A goat!!! A menacing goat!!! No wonder they ran back to Boca!
posted by Toddles at 7:48 PM on February 5, 2022 [11 favorites]
Ms. Mohan and Mr. Flynn were surrounded by animals, including this goat on a neighbor’s property.
Oh the humanity!!! A goat!!! A menacing goat!!! No wonder they ran back to Boca!
posted by Toddles at 7:48 PM on February 5, 2022 [11 favorites]
“I decided, I’ve done a lot of traveling, I’ve had a lot of fun. I’ve done the thing where I’m like, ‘I’m hungry for pasta, I’m going to go to Rome for three days,’” said Ms. DiSantis, 47, who works for Amazon. “I can stop doing that. I can afford to be a little house poor.”
Is that a parody? That can't be real.
posted by WaterAndPixels at 8:02 PM on February 5, 2022 [73 favorites]
Is that a parody? That can't be real.
posted by WaterAndPixels at 8:02 PM on February 5, 2022 [73 favorites]
Why do people agree to be interviewed. Why.
posted by The corpse in the library at 8:17 PM on February 5, 2022 [20 favorites]
posted by The corpse in the library at 8:17 PM on February 5, 2022 [20 favorites]
for most areas seeing price increases, it is not the type of bubble there was in the early 2000s, where loans were being given to anyone with a pulse without checking their income, and many defaulted. today's price inflation is happening because people who can afford it are moving to midsized cities because they want to live there (not to mention the ongoing trend in big city central districts which was only temporarily put on hold by covid). i dont think it's people with bad credit buying second homes as speculative assets, like it was pre-great recession.
for that reason, i dont think there will be a huge crash in home prices where others can buy the dip, like a 2010 foreclosure redux. the only correction there will be is that the acceleration of prices may slow, but the trajectory will stay the same.
not saying anyone should panic buy, or buy at all if they are not sure. owning a house can be a misery (see, this article). but if you DO want to own, don't count on some sort of crash in home prices that you can time.
posted by wibari at 8:33 PM on February 5, 2022 [8 favorites]
for that reason, i dont think there will be a huge crash in home prices where others can buy the dip, like a 2010 foreclosure redux. the only correction there will be is that the acceleration of prices may slow, but the trajectory will stay the same.
not saying anyone should panic buy, or buy at all if they are not sure. owning a house can be a misery (see, this article). but if you DO want to own, don't count on some sort of crash in home prices that you can time.
posted by wibari at 8:33 PM on February 5, 2022 [8 favorites]
I thought the article was unironically then I saw the comments. XD
posted by jacquicoombe at 8:41 PM on February 5, 2022
posted by jacquicoombe at 8:41 PM on February 5, 2022
I would just like to mention that the development of Boca Raton plays a part in a Sondheim musical, so I have this weird perspective on that particular city. Also, I have a jingle that runs through my head every time I read or think the name.
posted by hippybear at 8:49 PM on February 5, 2022
posted by hippybear at 8:49 PM on February 5, 2022
another issue with today's housing market is the boomers are age 58 to 76 this year, and their boomer echo offspring (aka Millenials) are age 22 - 40.
demographics will ease off later this decade, but it's going to suck until then
posted by Heywood Mogroot III at 8:52 PM on February 5, 2022 [1 favorite]
demographics will ease off later this decade, but it's going to suck until then
posted by Heywood Mogroot III at 8:52 PM on February 5, 2022 [1 favorite]
“Rushed to buy during the pandemic?” Was this a common enough phenomenon to warrant an article? Between getting fired, being scared shitless to leave the house and being actively ill, a noteworthy amount of people were doing this?
posted by Selena777 at 8:56 PM on February 5, 2022 [4 favorites]
posted by Selena777 at 8:56 PM on February 5, 2022 [4 favorites]
Lots of people had cruddy landlord/roommate situations and too little room to make work from home reasonable... And savings levels blew up during the pandemic, meaning, yeah, lots of people buying houses.
posted by kaibutsu at 9:11 PM on February 5, 2022 [7 favorites]
posted by kaibutsu at 9:11 PM on February 5, 2022 [7 favorites]
demographics will ease off later this decade, but it's going to suck until then
There might be a massive wave of cash from the inheritance of all the boomers who'll slowly leave us. No idea what it'll do to the market though, on the one hand, more houses, on the other, more money flowing in to pay for houses.
” Was this a common enough phenomenon to warrant an article? Between getting fired, being scared shitless to leave the house and being actively ill, a noteworthy amount of people were doing this?
A lot of people had jobs that could be done remote, in industries that weren't affected, or profited (hello amazon!). They lived in condos/appartments that were good enough to live in if you worked outside, but suddenly got a lot less interesting, since all the restrictions really curtailed the nice perks of living in urban areas and relying on shared spaces.
posted by WaterAndPixels at 9:13 PM on February 5, 2022 [9 favorites]
There might be a massive wave of cash from the inheritance of all the boomers who'll slowly leave us. No idea what it'll do to the market though, on the one hand, more houses, on the other, more money flowing in to pay for houses.
” Was this a common enough phenomenon to warrant an article? Between getting fired, being scared shitless to leave the house and being actively ill, a noteworthy amount of people were doing this?
A lot of people had jobs that could be done remote, in industries that weren't affected, or profited (hello amazon!). They lived in condos/appartments that were good enough to live in if you worked outside, but suddenly got a lot less interesting, since all the restrictions really curtailed the nice perks of living in urban areas and relying on shared spaces.
posted by WaterAndPixels at 9:13 PM on February 5, 2022 [9 favorites]
I found a demographic article a while ago that said the postWWII baby boom will take much longer than we’d think to get out of the housing market - long life expectancies and younger spouses staying in the house, iirc. Still significant into the 2060s, which I guess makes sense if house-owning people often live into their late 80s.
I linked it in a comment to… something.
posted by clew at 9:36 PM on February 5, 2022 [1 favorite]
I linked it in a comment to… something.
posted by clew at 9:36 PM on February 5, 2022 [1 favorite]
> evergreen nyt article regarding problems of everyday americans:
>She set her maximum budget at $900,000, but soon realized that if she wanted to stay in the central neighborhood, she would have to pay more. She pushed her budget up to $1.3 million, reassessing her priorities
This is about average for a detached home anywhere within a four hour radius of Toronto. I’m talking about eg a 1500 sq ft post-war bungalow with bad or no renos. No conditions, no inspections. Just a shack on a patch of land. Everyone wants land. One bedroom condos are now going for $700k. There’s no rental stock. Ordinary people are making it happen using inheritances-in-advance and fake mortgage applications through shady brokers. Investors are blowing up the market, both individuals and massive real estate investment trusts that almost no one can compete against. $500k over asking (about $400k over comparables) for a townhouse (with a maintenance/strata fee) in the burbs, not even the “good” burbs. Money laundering is heavily and widely suspected, too. So desperate Torontonians are flooding markets further out, and displacing those people.
Real estate is the largest % of the Canadian GDP, fully a third of it. The weather and the people (near me) are cold. Salaries are flat. It’s impossible to make it here.
(Young people with healthy parents can take off and start fresh somewhere else, I hope they do. I can’t :/) None of this is ok!
As far as moving to the country, though, hell no. Not going anywhere there isn’t a decent hospital within a 20 minute drive. Outcomes are different out there.
posted by cotton dress sock at 9:51 PM on February 5, 2022 [21 favorites]
>She set her maximum budget at $900,000, but soon realized that if she wanted to stay in the central neighborhood, she would have to pay more. She pushed her budget up to $1.3 million, reassessing her priorities
This is about average for a detached home anywhere within a four hour radius of Toronto. I’m talking about eg a 1500 sq ft post-war bungalow with bad or no renos. No conditions, no inspections. Just a shack on a patch of land. Everyone wants land. One bedroom condos are now going for $700k. There’s no rental stock. Ordinary people are making it happen using inheritances-in-advance and fake mortgage applications through shady brokers. Investors are blowing up the market, both individuals and massive real estate investment trusts that almost no one can compete against. $500k over asking (about $400k over comparables) for a townhouse (with a maintenance/strata fee) in the burbs, not even the “good” burbs. Money laundering is heavily and widely suspected, too. So desperate Torontonians are flooding markets further out, and displacing those people.
Real estate is the largest % of the Canadian GDP, fully a third of it. The weather and the people (near me) are cold. Salaries are flat. It’s impossible to make it here.
(Young people with healthy parents can take off and start fresh somewhere else, I hope they do. I can’t :/) None of this is ok!
As far as moving to the country, though, hell no. Not going anywhere there isn’t a decent hospital within a 20 minute drive. Outcomes are different out there.
posted by cotton dress sock at 9:51 PM on February 5, 2022 [21 favorites]
I feel like I'm supposed to hateread the opening couple who couldn't handle quiet and cows.
I wanted to hateread but I just feel sorry for them. They didn't have dreams of being the landed gentry, it was a the cheapest house, all they could afford, and they assumed they could manage. And would like it.
It was an avoidable mistake. The AirBnB route seems like it'll be another mistake they could also avoid. But they're just trying to get by.
posted by mark k at 10:12 PM on February 5, 2022 [2 favorites]
I wanted to hateread but I just feel sorry for them. They didn't have dreams of being the landed gentry, it was a the cheapest house, all they could afford, and they assumed they could manage. And would like it.
It was an avoidable mistake. The AirBnB route seems like it'll be another mistake they could also avoid. But they're just trying to get by.
posted by mark k at 10:12 PM on February 5, 2022 [2 favorites]
“Rushed to buy during the pandemic?” Was this a common enough phenomenon to warrant an article? Between getting fired, being scared shitless to leave the house and being actively ill, a noteworthy amount of people were doing this?
Yes, in fact...
Due to the reduction in travel, eating out, entertainment... the savings rate in Australia quadrupled from 5% of income to 20% of income. (click on the 10 year historical view)
One year of enforced savings actually meant a whole lot of people had enough money for a home deposit, and nothing else to do with their money, so they went and bought houses. Of course, this was also aided by the central banks lowering the interest rates at the same time.
posted by xdvesper at 10:28 PM on February 5, 2022 [5 favorites]
Yes, in fact...
Due to the reduction in travel, eating out, entertainment... the savings rate in Australia quadrupled from 5% of income to 20% of income. (click on the 10 year historical view)
One year of enforced savings actually meant a whole lot of people had enough money for a home deposit, and nothing else to do with their money, so they went and bought houses. Of course, this was also aided by the central banks lowering the interest rates at the same time.
posted by xdvesper at 10:28 PM on February 5, 2022 [5 favorites]
1.3 million is like.... 30 years of my income, and I'm making the most I've ever done. Am I going to be able to eat in ten years?
posted by Jacen at 11:46 PM on February 5, 2022 [10 favorites]
posted by Jacen at 11:46 PM on February 5, 2022 [10 favorites]
The cows were apparently given away so hopefully are fine!
Next you'll be telling me they've gone to live on a farm upstate.
posted by Paul Slade at 1:42 AM on February 6, 2022 [16 favorites]
Next you'll be telling me they've gone to live on a farm upstate.
posted by Paul Slade at 1:42 AM on February 6, 2022 [16 favorites]
I'm another Gen Xer who realizes I will probably just be renting for the rest of my life. Literally all we're looking for is along the lines of a 70s-80s 3/2 brick ranch within 20 miles of my job. It would be nice if it were near such fancy amenities as a public library and/or a sidewalk. Maybe even one of the little neighborhood shacks that sells Caribbean food? That would be nice.
The cash buyer flippers are buying them all, removing the interior walls, painting everything gray, adding some subway tiles and barn doors, converting the garage into a "bonus room", and asking double what they paid for it, which is triple what it cost 2 years ago. And then some other cash buyer purchases it.
But tell me again about the pain of only being able to afford a historic 4 bedroom in downtown Lexington or having to stretch the budget above a million for the Puget Sound views.
posted by hydropsyche at 4:24 AM on February 6, 2022 [21 favorites]
The cash buyer flippers are buying them all, removing the interior walls, painting everything gray, adding some subway tiles and barn doors, converting the garage into a "bonus room", and asking double what they paid for it, which is triple what it cost 2 years ago. And then some other cash buyer purchases it.
But tell me again about the pain of only being able to afford a historic 4 bedroom in downtown Lexington or having to stretch the budget above a million for the Puget Sound views.
posted by hydropsyche at 4:24 AM on February 6, 2022 [21 favorites]
My landlord decided to sell my beloved “lived there for almost 16 years rental” in late 2019. He offered it to me at a ridiculous price, but I live in (arguably) the most expensive part of an overpriced metro, and I genuinely tried to work out if there was any way that I, a single, non-handy 40something year old woman could afford/justify spending more than i could afford on a charmingly decrepit 900 square foot mill house with a cracked foundation, a basement that turned into a awimming pool when it rained, “pre-war” electrical, and a bathroom with a door that wouldn’t close all the way that was literally sinking into the basement (l literally kept a bathrobe in the basement just in case the tub ever collapsed through the floor and i ended up naked in the on the red clay of the crawl space and had to get back upstairs —basement accessible only by external cellar door around back), and literally everything else that needed fixing/replacing. Despite it all, I loved that house and miss it all the time.
Fortunately, i have family in yhe real estate business who prevailed on me to—at least—look at some comps, which is how I found the house I ended up buying, move-in ready. It was not at all tge house I thought I wanted, but it would end up being the house I needed during the pandemic and I think it was maybe the last house in this neck of the woods to sell for just under market value. I closed the second week of Jan 2020, the came lockdown and the houses in my neighborhood are selling for not-quite double what a paid for mine, but close ebough that you can see it from here.
I was enormously lucky. In a period of everything else going tits up, the house has been a relief and not just because you don’t realize how much stress goes into managing a house that is literally falling apart around you until, like, you can reasonably expect to close the windows, turn on the heat and not see your own breath in winter, as you watch tv in hat, coat and gloves.
On the other hand, i know that if I ever sell this house, i won’t be able to afford anything as nice (or increasingly anything at all) without moving outside the area. And that sucks. So hopefully i can stay put.
posted by thivaia at 5:49 AM on February 6, 2022 [11 favorites]
Fortunately, i have family in yhe real estate business who prevailed on me to—at least—look at some comps, which is how I found the house I ended up buying, move-in ready. It was not at all tge house I thought I wanted, but it would end up being the house I needed during the pandemic and I think it was maybe the last house in this neck of the woods to sell for just under market value. I closed the second week of Jan 2020, the came lockdown and the houses in my neighborhood are selling for not-quite double what a paid for mine, but close ebough that you can see it from here.
I was enormously lucky. In a period of everything else going tits up, the house has been a relief and not just because you don’t realize how much stress goes into managing a house that is literally falling apart around you until, like, you can reasonably expect to close the windows, turn on the heat and not see your own breath in winter, as you watch tv in hat, coat and gloves.
On the other hand, i know that if I ever sell this house, i won’t be able to afford anything as nice (or increasingly anything at all) without moving outside the area. And that sucks. So hopefully i can stay put.
posted by thivaia at 5:49 AM on February 6, 2022 [11 favorites]
From the fools for farmers to the millionaire at Amazon who heads to Rome when she wants pasta (they have pasta in Seattle) this seems deliberately written to inspire the hate read. If the new york times contacts me about my living situation I'm going to save my dignity and kindly tell them to find someone else to subtly mock in the nation's most important newspaper
posted by dis_integration at 6:14 AM on February 6, 2022 [11 favorites]
posted by dis_integration at 6:14 AM on February 6, 2022 [11 favorites]
I wonder how much AirBnB is contributing to that
I searched for AirBnB stays in Salt Lake City on a random Tuesday in August, limiting the search to 'entire place'. I was able to find about 500 results. Thus, it's safe to assume that there are about 500 AirBnBs there that might otherwise be filled by local residents as permanent housing.
Over the past year, the Salt Lake City MSA has issued about 1000 building permits for new housing units every month.
If AirBnB were banned in SLC tomorrow, it would jump the housing market forward to the plentiful-housing utopia that SLC can't otherwise expect to reach until sometime later this month.
As for Savannah, Georgia, mentioned upthread, I found about 300 'full-place' AirBnBs there. Chatham County, Georgia (which contains all of Savannah) had 1754 building permits for private housing structures issued in 2020, the last year for which data is available. An AirBnB ban would be the equivalent of two months' housing construction there.
posted by Hatashran at 6:42 AM on February 6, 2022 [5 favorites]
I searched for AirBnB stays in Salt Lake City on a random Tuesday in August, limiting the search to 'entire place'. I was able to find about 500 results. Thus, it's safe to assume that there are about 500 AirBnBs there that might otherwise be filled by local residents as permanent housing.
Over the past year, the Salt Lake City MSA has issued about 1000 building permits for new housing units every month.
If AirBnB were banned in SLC tomorrow, it would jump the housing market forward to the plentiful-housing utopia that SLC can't otherwise expect to reach until sometime later this month.
As for Savannah, Georgia, mentioned upthread, I found about 300 'full-place' AirBnBs there. Chatham County, Georgia (which contains all of Savannah) had 1754 building permits for private housing structures issued in 2020, the last year for which data is available. An AirBnB ban would be the equivalent of two months' housing construction there.
posted by Hatashran at 6:42 AM on February 6, 2022 [5 favorites]
There might be a massive wave of cash from the inheritance of all the boomers who'll slowly leave us.
Keywords: “might” and “slowly.” The longer they live, the more their savings dwindle. Independent living places are very pricey. Many boomers are going to be reliant on the savings of their children to make ends meet if not get fully supported. Which means those children will be losing savings for their own futures and/or savings for their children.
posted by amanda at 7:18 AM on February 6, 2022 [9 favorites]
Keywords: “might” and “slowly.” The longer they live, the more their savings dwindle. Independent living places are very pricey. Many boomers are going to be reliant on the savings of their children to make ends meet if not get fully supported. Which means those children will be losing savings for their own futures and/or savings for their children.
posted by amanda at 7:18 AM on February 6, 2022 [9 favorites]
I don't even know what to say other than we got our small flat in downtown Toronto for 550k four years ago (with decades of savings and a shitload of luck) and now we could sell it for 750k. In another four years, who knows? It's bullshit. But I wouldn't live anywhere else, five-fifteen minutes on foot from everything I want. So I dunno. Jen Keesmaat has decided she won't run for mayor again, she'll just build as much well designed housing as possible. So many complicated feelings.
posted by seanmpuckett at 7:30 AM on February 6, 2022 [1 favorite]
posted by seanmpuckett at 7:30 AM on February 6, 2022 [1 favorite]
We boomers range in age from 58 to 76 right now and while obviously some of us are going to pass away every year, we're going to be here for a while.
posted by octothorpe at 7:39 AM on February 6, 2022 [4 favorites]
posted by octothorpe at 7:39 AM on February 6, 2022 [4 favorites]
Another Savannahian
Air B&B is one thing, but I constantly get telemarketer calls/texts wanting to know if I want to sell my house. I read that many of these are large investment houses (e.g. Blackrock) who buy and then rent out the property. My standard response to these texts is now "FOAD".
I have a rental property, a duplex I bought as a burned building I rehabbed and lived in for 10 years. That was 20 years or so ago. I have not gone up on rent, the building is paid for, and the low rent encourages people to stay, giving me fewer headaches.
posted by rudd135 at 8:06 AM on February 6, 2022 [4 favorites]
Air B&B is one thing, but I constantly get telemarketer calls/texts wanting to know if I want to sell my house. I read that many of these are large investment houses (e.g. Blackrock) who buy and then rent out the property. My standard response to these texts is now "FOAD".
I have a rental property, a duplex I bought as a burned building I rehabbed and lived in for 10 years. That was 20 years or so ago. I have not gone up on rent, the building is paid for, and the low rent encourages people to stay, giving me fewer headaches.
posted by rudd135 at 8:06 AM on February 6, 2022 [4 favorites]
Keywords: “might” and “slowly.” The longer they live, the more their savings dwindle.
Indeed. When my mother died this past autumn,the Wealth Extraction Industry, I mean long-term care, had seen to it that I and my siblings received only a tiny pittance of what had been once been a sizable inheritance.
posted by los pantalones del muerte at 8:26 AM on February 6, 2022 [11 favorites]
Indeed. When my mother died this past autumn,
posted by los pantalones del muerte at 8:26 AM on February 6, 2022 [11 favorites]
Yup, if my experience and that of acquaintances is anything to go on, the transfer of wealth won't be happening from boomers to their children but to long term care facilities and health care systems.
posted by whistle pig at 8:31 AM on February 6, 2022 [22 favorites]
posted by whistle pig at 8:31 AM on February 6, 2022 [22 favorites]
The GTA exodus is real. Kingston has been seeing an influx of wealthy (by our house-buying standards here in YGK) Torontonians who can work remotely, tired of paying for a shoebox condo or just selling their houses/condos outright, to buy a house with a yard or whatever they're looking for. I have an activist friend who works with low income communities and a lot of the rentals around us here in Skeleton Park are being bought up at insane prices and doing reno-victing. Our downtown neighbourhood was in Phase One of gentrification when we bought in 2014--the wave probably started in 2008--and we are now in late Phase Two. The 112 year old house we bought for 205K in 2014 would like go for 700K if we were to sell. But as some posters pointed upthread, sell to move where?
I mean, we love Kingston but if we ever wanted to move, fuck, we couldn't afford to rent or buy.
tl/;dr people got a lot of cojones for selling for high five figures some of these places where you only get outside pictures
posted by Kitteh at 8:35 AM on February 6, 2022 [2 favorites]
I mean, we love Kingston but if we ever wanted to move, fuck, we couldn't afford to rent or buy.
tl/;dr people got a lot of cojones for selling for high five figures some of these places where you only get outside pictures
posted by Kitteh at 8:35 AM on February 6, 2022 [2 favorites]
We moved into a rent-to-own in 2010, locking our price in then. Bought a few years later. Glad we did. Housing market started to rocket in our area - apparently we were on the leading edge of this part of the city getting trendy. We literally could not afford to live here if we didn’t already own the house. List prices for places much smaller than ours are double what we paid. It’s pretty insane.
posted by caution live frogs at 8:46 AM on February 6, 2022
posted by caution live frogs at 8:46 AM on February 6, 2022
Just as an unverified data point, the realtor I recently talked to in Salt Lake told me that one in five buyers there are paying with cash. I was looking at a house (online) that was just barely in my price range, and he said he expected it to go for $20,000 more than what it was listed for.
I stupidly entered my info onto a real estate site to get some information, and I am getting lots of calls from an agent who wants to list my condo even though I told her the one time I talked to her that I rarely pick up my phone and that email is the best way to reach me. She has an uncanny ability to call when I'm in the middle of a blood draw or chemo infusion.
posted by FencingGal at 8:52 AM on February 6, 2022 [2 favorites]
I stupidly entered my info onto a real estate site to get some information, and I am getting lots of calls from an agent who wants to list my condo even though I told her the one time I talked to her that I rarely pick up my phone and that email is the best way to reach me. She has an uncanny ability to call when I'm in the middle of a blood draw or chemo infusion.
posted by FencingGal at 8:52 AM on February 6, 2022 [2 favorites]
There might be a massive wave of cash from the inheritance of all the boomers who'll slowly leave us. No idea what it'll do to the market though
According to my local housing policy analyst "new household formation" -- boomers helping their kids move out and buy property -- low interest rates and lack of supply are driving the crisis here in BC, along with in migration from other parts of the county. Everyone blames Airbnb, foreign investment and the like but those effects are relatively small.
I just bought a place yesterday and let me tell you: it is entirely demoralizing when a pretty nice place and an utter dump go on the market for roughly the same million dollars but the nice one goes for a quarter million over asking. We got very lucky though and got a good deal, much less than that. But we'll see what gremlins come out of the woodwork...
posted by klanawa at 9:00 AM on February 6, 2022 [4 favorites]
According to my local housing policy analyst "new household formation" -- boomers helping their kids move out and buy property -- low interest rates and lack of supply are driving the crisis here in BC, along with in migration from other parts of the county. Everyone blames Airbnb, foreign investment and the like but those effects are relatively small.
I just bought a place yesterday and let me tell you: it is entirely demoralizing when a pretty nice place and an utter dump go on the market for roughly the same million dollars but the nice one goes for a quarter million over asking. We got very lucky though and got a good deal, much less than that. But we'll see what gremlins come out of the woodwork...
posted by klanawa at 9:00 AM on February 6, 2022 [4 favorites]
Air B&B is one thing, but I constantly get telemarketer calls/texts wanting to know if I want to sell my house. I read that many of these are large investment houses (e.g. Blackrock) who buy and then rent out the property. My standard response to these texts is now "FOAD".
You should embrace the capitalist spirit: Charge them $1000 for a walkthrough and then ghost them.
posted by kaibutsu at 9:14 AM on February 6, 2022 [5 favorites]
You should embrace the capitalist spirit: Charge them $1000 for a walkthrough and then ghost them.
posted by kaibutsu at 9:14 AM on February 6, 2022 [5 favorites]
it is not the type of bubble there was in the early 2000s, where loans were being given to anyone with a pulse without checking their income, and many defaulted. today's price inflation is happening because people who can afford it are moving to midsized cities because they want to live thereWhile I agree we probably won’t see a repeat of the subprime crisis, I wonder what happens if interest rates keep going up. Thirty-year mortgage rates have already risen from a low of 2.65% one year ago to about 3.60% today. If rates keep growing faster than wages, at some point it has to put downward pressure on prices, right? Of course, that doesn’t really help new buyers if it just means that high rates, instead of high prices, are making homes unaffordable.
For comparison, thirty-year mortgage rates in the early 2000s were around 6%.
posted by mbrubeck at 9:15 AM on February 6, 2022
‘OK, I’ll move to Montana and get a house that is everything I want for half the price.’”
This has broken western Montana. Home prices in Bozeman and Missoula have doubled since COVID began because of people from out-of-state moving in. Home ownership for the lower and middle classes has become impossible. Last year Montana had the highest ratio in the country of people moving in to people moving out. Missoula had four people move in for every one person who left.
We used to be the Last Best Place. Now we are becoming Just Like The Coasts.
posted by ITravelMontana at 9:26 AM on February 6, 2022 [11 favorites]
This has broken western Montana. Home prices in Bozeman and Missoula have doubled since COVID began because of people from out-of-state moving in. Home ownership for the lower and middle classes has become impossible. Last year Montana had the highest ratio in the country of people moving in to people moving out. Missoula had four people move in for every one person who left.
We used to be the Last Best Place. Now we are becoming Just Like The Coasts.
posted by ITravelMontana at 9:26 AM on February 6, 2022 [11 favorites]
Y'know, if I were an evil developer trying to sell overpriced homes in the middle of nowhere, I might send a bunch of trucks with excessively loud horns to the city to convince people to move out...
Then buy the condos they vacate, hold on to them for a bit, and sell them back later!
posted by alexei at 9:56 AM on February 6, 2022 [1 favorite]
Then buy the condos they vacate, hold on to them for a bit, and sell them back later!
posted by alexei at 9:56 AM on February 6, 2022 [1 favorite]
Many boomers are going to be reliant on the savings of their children to make ends meet if not get fully supported. Which means those children will be losing savings for their own futures and/or savings for their children.
Not being content with setting the planet on fire, Boomers are now working to also destroy the very concept of a future at all.
posted by aramaic at 9:56 AM on February 6, 2022 [1 favorite]
Not being content with setting the planet on fire, Boomers are now working to also destroy the very concept of a future at all.
posted by aramaic at 9:56 AM on February 6, 2022 [1 favorite]
I don’t know that that’s fair if it’s mostly healthcare/long term care stuff. What are they supposed to do if their children can’t take care of them?
I know I’m coming at this from a different cultural position but I’m expecting my parents to move in with me when they start having a hard time. If I couldn’t do that then a long term care facility seems necessary.
posted by corb at 10:21 AM on February 6, 2022 [10 favorites]
I know I’m coming at this from a different cultural position but I’m expecting my parents to move in with me when they start having a hard time. If I couldn’t do that then a long term care facility seems necessary.
posted by corb at 10:21 AM on February 6, 2022 [10 favorites]
corb, the people I know have parents who live across the country (and don't want to move) or have conditions requiring fulltime care that an employed child can't provide.
(I hope this isn't a derail. I just know lots of people my age who aren't getting any kind of inheritance to help with housing costs. )
posted by whistle pig at 10:39 AM on February 6, 2022 [1 favorite]
(I hope this isn't a derail. I just know lots of people my age who aren't getting any kind of inheritance to help with housing costs. )
posted by whistle pig at 10:39 AM on February 6, 2022 [1 favorite]
https://fred.stlouisfed.org/graph/?g=LIAF
Germany & Japan at ~4X have the least home price inflation since 1970 among these nations.
UK is 60X, OZ 50X, Canada 30X, US & Netherlands at ~17X.
posted by Heywood Mogroot III at 10:45 AM on February 6, 2022 [3 favorites]
Germany & Japan at ~4X have the least home price inflation since 1970 among these nations.
UK is 60X, OZ 50X, Canada 30X, US & Netherlands at ~17X.
posted by Heywood Mogroot III at 10:45 AM on February 6, 2022 [3 favorites]
long term care facility is $10,000+
a month.
posted by Heywood Mogroot III at 10:46 AM on February 6, 2022 [5 favorites]
a month.
posted by Heywood Mogroot III at 10:46 AM on February 6, 2022 [5 favorites]
what happens if interest rates keep going up
Rates dipped one last time to 3.3% in November, now they're at 4.2% . . .
This is good for a 10% haircut in principal amount to keep the same monthly payment (not accounting for the mortgage interest deduction).
https://fred.stlouisfed.org/series/MORTGAGE30US
This graph shows we've had one helluva tailwind on home valuations thanks to easy money policies since they put Greenspan in.
The shakeout will come if and when mortgage rates double to 6% again . . . 6% knocks a $440,000 principal @ 3.3% down to $320,000 on a monthly payment basis.
posted by Heywood Mogroot III at 11:02 AM on February 6, 2022 [1 favorite]
Rates dipped one last time to 3.3% in November, now they're at 4.2% . . .
This is good for a 10% haircut in principal amount to keep the same monthly payment (not accounting for the mortgage interest deduction).
https://fred.stlouisfed.org/series/MORTGAGE30US
This graph shows we've had one helluva tailwind on home valuations thanks to easy money policies since they put Greenspan in.
The shakeout will come if and when mortgage rates double to 6% again . . . 6% knocks a $440,000 principal @ 3.3% down to $320,000 on a monthly payment basis.
posted by Heywood Mogroot III at 11:02 AM on February 6, 2022 [1 favorite]
Interest rates can (and will) go up and it should bring the prices on larger and more expensive homes down to earth a bit. Unfortunately smaller "affordable" homes (1000-1700 sq ft sub $300K) are not being built anywhere leading first time home buyers to feel the squeeze for the foreseeable future.
Not to mention the cost of building materials remains sky high...
posted by djseafood at 11:11 AM on February 6, 2022 [1 favorite]
Not to mention the cost of building materials remains sky high...
posted by djseafood at 11:11 AM on February 6, 2022 [1 favorite]
https://fred.stlouisfed.org/graph/?g=LICw
real property prices, 1980 = 100 -- shows how the US is actually behind the ROW on price inflation -- except Germany & Japan which got really expensive in the 80s and stayed there.
posted by Heywood Mogroot III at 11:18 AM on February 6, 2022 [1 favorite]
real property prices, 1980 = 100 -- shows how the US is actually behind the ROW on price inflation -- except Germany & Japan which got really expensive in the 80s and stayed there.
posted by Heywood Mogroot III at 11:18 AM on February 6, 2022 [1 favorite]
I don’t think a lot of people appreciate the kind of time bomb that long term care is going to be on the economy. As more and more boomers retire, many will exhaust their savings on LTC. Those that don’t have sufficient savings to afford it - and that’s a LOT of savings - will seek government assistance. Eventually, between lack of available space, lack of money for people to pay for it, and unwillingness of many states to care for their population, we are going to have a very big problem, even more so than we already do. The LTC industry is a huge money suck, like health care and student loans.
posted by azpenguin at 12:12 PM on February 6, 2022 [21 favorites]
posted by azpenguin at 12:12 PM on February 6, 2022 [21 favorites]
Just leaving this here: we're running out of houses.
As of December 2021, there were just 790,000 existing single-family homes available for sale, the lowest level on record.
posted by arkhangel at 1:30 PM on February 6, 2022 [1 favorite]
As of December 2021, there were just 790,000 existing single-family homes available for sale, the lowest level on record.
posted by arkhangel at 1:30 PM on February 6, 2022 [1 favorite]
“Nobody tells you what actual hard work that is and how time consuming it is.”
Nobody who has ever mowed a lawn, of any size, using whatever equipment, has any illusions about how time-consuming maintenance of nothing more than the yard itself would be when scaled up to multiple acres.
Of course, we shouldn't be planting fake-ass lawns that require constant maintenance, and "properties" typically do not have them, but the point remains.
posted by turbid dahlia at 1:32 PM on February 6, 2022 [1 favorite]
Nobody who has ever mowed a lawn, of any size, using whatever equipment, has any illusions about how time-consuming maintenance of nothing more than the yard itself would be when scaled up to multiple acres.
Of course, we shouldn't be planting fake-ass lawns that require constant maintenance, and "properties" typically do not have them, but the point remains.
posted by turbid dahlia at 1:32 PM on February 6, 2022 [1 favorite]
In western Montana, the part of Montana where the picturesque mountains are, real estate is some of the most expensive in the whole country. It only seems reasonable if you compare it to costal California, where are a lot of people are moving from now that the internet is good enough in Montana to support remote work.
posted by subdee at 2:30 PM on February 6, 2022
posted by subdee at 2:30 PM on February 6, 2022
We bought our house just before the pandemic started (in June 2018), the prices were high then and driven by the low interest rates. We got a 15 year mortgage at that 2.65%. We like our house and are happy with it, there was no bidding war and actually we paid about 12k less than the list price. Since buying, we've had to rebuild the ENTIRE garage which cost about $15k, with us doing a lot of the work ourselves and paying friends to do the roof. We also had to replace a retaining wall which was another 10k. If we had to do it again, we'd still buy the house. I think the big thing that made it work for us is that RJ is handy, and his friends are also handy. The taxes are low here so the mortgage is affordable and we can save for repairs. And all the work we had to do was outdoors, so we could live in the house and work on the improvements slowly over the last two years, as we could afford them. Houses that dont need any work cost so much more than houses that need work, but there's a big difference between work that doesn't affect your everyday living and work that does.
posted by subdee at 2:37 PM on February 6, 2022 [1 favorite]
posted by subdee at 2:37 PM on February 6, 2022 [1 favorite]
I always describe myself as buying the last normal priced house on the market-- we (two childless elder millennials) found a for sale by owner place being sold by a guy who needed to sell fast to be able to take a job on the other side of Oregon. Got the key July 1, 2020. Since then the housing shortage has gotten so bad in Klamath Falls that my employer is having a hard time hiring faculty and staff because there's nowhere for them to live. I've also lost students for the same reason.
posted by Tesseractive at 2:57 PM on February 6, 2022 [2 favorites]
posted by Tesseractive at 2:57 PM on February 6, 2022 [2 favorites]
President freecell solves the stock issue this way: You may buy a house only if you will personally be living there. You may move and rent a prior house out if you are personally going over there to fix shit. That’s it. No property investment firms, no empires of dozen, hundreds, or thousands of homes. Sorry!
posted by freecellwizard at 3:05 PM on February 6, 2022 [19 favorites]
posted by freecellwizard at 3:05 PM on February 6, 2022 [19 favorites]
“Rushed to buy during the pandemic?” Was this a common enough phenomenon to warrant an article? Between getting fired, being scared shitless to leave the house and being actively ill, a noteworthy amount of people were doing this?
As well as other things mentioned here, people realising that, because their company is going to make WFH permanent, they don't need to live in the outer-outer suburbs of Melbourne with a $1M mortgage and 2-hour commute. Instead, they can use the equity in their house to pay cash for a property in a town near the beach and live the good life.
posted by dg at 3:49 PM on February 6, 2022 [3 favorites]
As well as other things mentioned here, people realising that, because their company is going to make WFH permanent, they don't need to live in the outer-outer suburbs of Melbourne with a $1M mortgage and 2-hour commute. Instead, they can use the equity in their house to pay cash for a property in a town near the beach and live the good life.
posted by dg at 3:49 PM on February 6, 2022 [3 favorites]
Situation report from a town of 60k inhabitants in southern Austria:
My wife and I bought our first place last September. After watching the local market closely for 6 years while renting, we found a nice, 3-bedroom, modern penthouse in the center of town for sale by owner for 350K euros. We paid a sizable down payment and locked in a 1.3% interest rate for 20 years. We painted the interior, ground a layer off the parquet floor and did some other minor repairs for around 12K before moving in in November.
We plan to do a lot more to the place over the next few years, but it's already amazing, with 13ft ceilings and views of the mountains and a park from our 300 sq ft balcony. The nearest ski area is 15 minutes away, and we’re surrounded by marvelous hiking and biking trails, as well as pristine alpine lakes.
Emigrating from the US to Austria is the best decision I have ever made.
posted by syzygy at 4:03 PM on February 6, 2022 [4 favorites]
My wife and I bought our first place last September. After watching the local market closely for 6 years while renting, we found a nice, 3-bedroom, modern penthouse in the center of town for sale by owner for 350K euros. We paid a sizable down payment and locked in a 1.3% interest rate for 20 years. We painted the interior, ground a layer off the parquet floor and did some other minor repairs for around 12K before moving in in November.
We plan to do a lot more to the place over the next few years, but it's already amazing, with 13ft ceilings and views of the mountains and a park from our 300 sq ft balcony. The nearest ski area is 15 minutes away, and we’re surrounded by marvelous hiking and biking trails, as well as pristine alpine lakes.
Emigrating from the US to Austria is the best decision I have ever made.
posted by syzygy at 4:03 PM on February 6, 2022 [4 favorites]
I grew up in a "seachange" family, as they used to call it, and honsetly, people really do underestimate the amount of work in living rural. That's always been the case.
That said, as city people, we bought our first house in Beaveron, Oregon during the pandemic - we got very, very lucky with a bunch of factors (extra savings from a cancelled holiday, I was already working from home, and I'm in an industry which wasn't terribly badly affected). It was... look, it was a still stretch, but the thing that amazed me is in between buying it in August 2020 and now, we've been getting cash offers at 25%+ more than we paid for it. There is no way in hell we'd be able to afford to buy our house if we had to buy it today - and that's only 18 months later!
(It has been argued to me by people with more money than us, that we shouldn't have been within 25% of our limits anyhow - but, you know.... here we are, right. But in particular, it turns out this was cheaper for us than renting to requirements, beacuse the modifications we needed to make to handle my disability were much cheaper than the delta to renting an appropriate home that I could actually live in).
I'm pretty sure this is societally a bad thing - there is no way that this house should have gone up in value to the tune of a quarter of its value in the space of 18 months. We've got two friends staying with us right now because they've been completely priced out of even rental here. They work full time, and currently their option is to move so far out of town that they can't get to their jobs. This is a shitty situation.
posted by jaymzjulian at 4:30 PM on February 6, 2022 [6 favorites]
That said, as city people, we bought our first house in Beaveron, Oregon during the pandemic - we got very, very lucky with a bunch of factors (extra savings from a cancelled holiday, I was already working from home, and I'm in an industry which wasn't terribly badly affected). It was... look, it was a still stretch, but the thing that amazed me is in between buying it in August 2020 and now, we've been getting cash offers at 25%+ more than we paid for it. There is no way in hell we'd be able to afford to buy our house if we had to buy it today - and that's only 18 months later!
(It has been argued to me by people with more money than us, that we shouldn't have been within 25% of our limits anyhow - but, you know.... here we are, right. But in particular, it turns out this was cheaper for us than renting to requirements, beacuse the modifications we needed to make to handle my disability were much cheaper than the delta to renting an appropriate home that I could actually live in).
I'm pretty sure this is societally a bad thing - there is no way that this house should have gone up in value to the tune of a quarter of its value in the space of 18 months. We've got two friends staying with us right now because they've been completely priced out of even rental here. They work full time, and currently their option is to move so far out of town that they can't get to their jobs. This is a shitty situation.
posted by jaymzjulian at 4:30 PM on February 6, 2022 [6 favorites]
President Jefferson actually proposed a "geometric tax" on property holdings:
https://www.goodreads.com/quotes/923221-another-means-of-silently-lessening-the-inequality-of-property-is
He was referring to farmsteads in the context of pre-Revolutionary France, but the principle should still apply in our now largely service economy.
posted by Heywood Mogroot III at 7:01 PM on February 6, 2022
https://www.goodreads.com/quotes/923221-another-means-of-silently-lessening-the-inequality-of-property-is
He was referring to farmsteads in the context of pre-Revolutionary France, but the principle should still apply in our now largely service economy.
posted by Heywood Mogroot III at 7:01 PM on February 6, 2022
Yeah, we both our house just over two years ago and have been getting phone calls about weekly for the past year or so pretty much asking us to name our price because they have desperate buyers. Based on recent sales locally (including next door), it seems our house has increased in price around 40% in those two years, maybe more once we finish the extensive renovations underway. If and when we get around to selling, I'm not going to refuse to take the profit, but this sort of movement is just wrong and we're not far away from a scenario where the only way a young person can ever hope to own a house is by inheriting one.
posted by dg at 7:14 PM on February 6, 2022 [3 favorites]
posted by dg at 7:14 PM on February 6, 2022 [3 favorites]
prematurely clicked 'post'
This is also reflected in rents, of course - my son and his girlfriend just got their first place and they are paying almost as much for a converted garage as I paid to rent a four-bedroom house five years ago. All part of the vicious circle keeping our children poor.
posted by dg at 7:17 PM on February 6, 2022 [5 favorites]
This is also reflected in rents, of course - my son and his girlfriend just got their first place and they are paying almost as much for a converted garage as I paid to rent a four-bedroom house five years ago. All part of the vicious circle keeping our children poor.
posted by dg at 7:17 PM on February 6, 2022 [5 favorites]
Caught in the rental trap, we’re trying to turn our flat into a co-op. Here’s what we’ve learned. (From today's Guardian.)
posted by Paul Slade at 2:05 AM on February 7, 2022
posted by Paul Slade at 2:05 AM on February 7, 2022
Way late to the party, but... the guy spent $630K on a four-bedroom, 3,600 sf house-- and he lives there alone five days a week, with his husband joining him on weekends?
People should be able to spend their money as they want, I guess, but I don't get why you buy so much more house than you need. Also, spending $630K and then griping about spending $5K to take down a dead tree? C'mon, man.
posted by martin q blank at 6:58 AM on February 7, 2022 [6 favorites]
People should be able to spend their money as they want, I guess, but I don't get why you buy so much more house than you need. Also, spending $630K and then griping about spending $5K to take down a dead tree? C'mon, man.
posted by martin q blank at 6:58 AM on February 7, 2022 [6 favorites]
Yeah, I was struck by both that couple and the Seattle woman living in houses that are larger than the house my family of four lives in.
I guess we all expand, goldfishlike, to fit the house we live in; if I had extra bedrooms I could have a craft room, a home office, who knows what.
posted by The corpse in the library at 8:04 AM on February 7, 2022 [2 favorites]
I guess we all expand, goldfishlike, to fit the house we live in; if I had extra bedrooms I could have a craft room, a home office, who knows what.
posted by The corpse in the library at 8:04 AM on February 7, 2022 [2 favorites]
I guess we all expand, goldfishlike, to fit the house we live in; if I had extra bedrooms I could have a craft room, a home office, who knows what.
posted by The corpse in the library at 8:04 AM on February 7
I’m not sure I want to visit your home’s library.
posted by notoriety public at 8:23 AM on February 7, 2022 [8 favorites]
posted by The corpse in the library at 8:04 AM on February 7
I’m not sure I want to visit your home’s library.
posted by notoriety public at 8:23 AM on February 7, 2022 [8 favorites]
That did bother me. To put it in perspective, my Manhattan one-bed is ~515 sq ft. Now, I wouldn't mind maybe another 200 sq ft myself, but it's a two-story house. So, assuming a full basement, each floor is more than two of my apartments. For two people. One of whom lives there only part-time and isn't working from home.
Honestly, the mere thought of having to clean that much space makes me want to take to my nonexistent fainting couch.
posted by praemunire at 9:26 AM on February 7, 2022 [2 favorites]
Honestly, the mere thought of having to clean that much space makes me want to take to my nonexistent fainting couch.
posted by praemunire at 9:26 AM on February 7, 2022 [2 favorites]
I guess we all expand, goldfishlike, to fit the house we live in; if I had extra bedrooms I could have a craft room, a home office, who knows what.
I suppose some people do, but I don't know that it's universal. I am actually currently re-evaluating my apartment search because I've been watching my partner flounder to fill/use his relatively large apartment. Previously, I would have said yes, give me as much apartment as possible, but it's starting to seem like actually, I kind of just need, like...1.5 more rooms than I currently have.
posted by We put our faith in Blast Hardcheese at 10:13 AM on February 7, 2022
I suppose some people do, but I don't know that it's universal. I am actually currently re-evaluating my apartment search because I've been watching my partner flounder to fill/use his relatively large apartment. Previously, I would have said yes, give me as much apartment as possible, but it's starting to seem like actually, I kind of just need, like...1.5 more rooms than I currently have.
posted by We put our faith in Blast Hardcheese at 10:13 AM on February 7, 2022
The market is insane right now. I am not a homeowner but am related to a homeowner and I am getting constant texts from realtors being like “hey if this person ever wants to sell drop me a line, you can get a referral fee”.
My guess is that it’s people who are finding their house too small when all people in it are constantly home.
posted by corb at 10:22 AM on February 7, 2022
My guess is that it’s people who are finding their house too small when all people in it are constantly home.
posted by corb at 10:22 AM on February 7, 2022
I've looked into this (because I get calls daily, and also got a call for my parents' vacation mobile home worth about $15k). It only costs about $200 a day to get a US firm to cold call if you already have the lists of numbers. International firms are even less than that. The return on that is amazing if you get one offer per week.
It's about double to get them to get the data for you.
posted by The_Vegetables at 1:24 PM on February 7, 2022
It's about double to get them to get the data for you.
posted by The_Vegetables at 1:24 PM on February 7, 2022
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Oof! SO many children’s books in the 80s taught me that farming/living off the land was hard - Laura Ingalls Wilder, The Island Of The Blue Dolphins, My Side Of The Mountain, Julie of the Wolves. I hope those cows turned out ok.
posted by rrrrrrrrrt at 2:11 PM on February 5, 2022 [72 favorites]