Author Topic: (Complainy Rant) Being priced out of the housing market  (Read 4133 times)

ElleFiji

  • Handlebar Stache
  • *****
  • Posts: 1552
Re: (Complainy Rant) Being priced out of the housing market
« Reply #50 on: August 11, 2017, 08:18:11 PM »
OP, I have this feeling a lot... but it's a feeling, not my reality. I choose to be an introvert and spend an insane amount on rent. For almost a year I've been working 6 days a week, to get close to 40 000/year. I'm dropping my hours, so I'll be closer to 30,000/year unless I decide to pick up a side hustle.

Paying down the student loans is slowing me down from getting a down payment. Once I have it, my cost of living will drop, and I'm open to roomies in a place I own (my place, my rules).

It's slower, because I choose to go slow so that I can enjoy living in my own place. But even with around 1050/month for rent, I can keep cost of living under 25 000, go on vacation, and eat out a little.
Mediocrity is not an option for me. I don't want that and neither should you.
Olivia

COEE

  • Bristles
  • ***
  • Posts: 264
Re: (Complainy Rant) Being priced out of the housing market
« Reply #51 on: August 11, 2017, 08:58:40 PM »
We were fortunate to have bought our first house when we were younger for $87.5k that was about 15 years ago.  Honestly - I don't know how the folks fresh out of high school or college do it.  Incomes sure haven't risen at the same pace as home prices.

My current neighborhood is 70's homes.  Even the houses in my neighborhood that haven't been renovated at all are hitting the 300's.  The house across the street went on sale for $419k.  I think they'll be lucky to get $380k personally - but hey - I'm not complaining if they get what they're asking.

Acorns

  • 5 O'Clock Shadow
  • *
  • Posts: 31
Re: (Complainy Rant) Being priced out of the housing market
« Reply #52 on: August 11, 2017, 10:18:19 PM »
It's really tough to come up with a specific answer to the OP without more detailed information, as they say, real estate is always about location. It's possible s/he needs to just suck it up and get a second job or a roommate, or there could be a real housing crunch in their area. I know that in my area, housing has appreciated over 20% over this time last year. I couldn't currently afford to buy a house in my current neighborhood because prices have appreciated so much since I bought. And even though I own, I am still very concerned about the situation. It now such that people who work in and contribute to the community (police, emergency service workers, teachers, grocery clerks, admin support staff, etc) can't afford to live here. Many of the homes that have sold in the past year or two have sold to foreign buyers/investors who don't even live in this country, often for cash offers. It is much better for the community to have the owners of the homes living in them and vested in the safety and stability of the community. I am glad that I own my home, but I am worried about what it will look like for my children if they want to buy a house someday in the community they grew up in.

FIREfly34

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: (Complainy Rant) Being priced out of the housing market
« Reply #53 on: August 12, 2017, 03:45:42 AM »
I have more financial info posted here https://forum.mrmoneymustache.com/case-studies/case-study-can-i-'afford'-a-new-car/
(obviously the car is no longer a priority).

I'm not necessarily looking for advice, just commiseration. I have a pretty good idea of where I stand and where to go from here. I have a couple of ideas to increase my income that don't involve a formal second job, but I might pick one up around the holidays anyways. Living alone and in a semi nice place is a high priority for me. Make of that what you will.

Paul der Krake

  • Magnum Stache
  • ******
  • Posts: 3477
  • Age: 9
  • Location: WA
Re: (Complainy Rant) Being priced out of the housing market
« Reply #54 on: August 12, 2017, 04:15:03 AM »
Median US household income is a meaningless statistic, because America is such a varied place in every respect. It's about as useful as the median outside temperature.

Bracken_Joy

  • Walrus Stache
  • *******
  • Posts: 6515
  • Location: Oregon
Re: (Complainy Rant) Being priced out of the housing market
« Reply #55 on: August 12, 2017, 07:57:45 AM »
I have more financial info posted here https://forum.mrmoneymustache.com/case-studies/case-study-can-i-'afford'-a-new-car/
(obviously the car is no longer a priority).

I'm not necessarily looking for advice, just commiseration. I have a pretty good idea of where I stand and where to go from here. I have a couple of ideas to increase my income that don't involve a formal second job, but I might pick one up around the holidays anyways. Living alone and in a semi nice place is a high priority for me. Make of that what you will.

I can get behind this. Basically, a "feels unfair" type post. I interpreted you were saying basically, it's too hard, no one can do it, so I'm not trying anymore.

If you keep doing the right stuff, it's amazing how it snowballs. For a long time before that though, it feels like you're running and running and getting nowhere. Which really sucks. But keep at it, make some changes, and you'll be shocked what you can do.
My journal: Hiding in the Ferns
Like babies? Have kids? Want to chat about Babies and Pregnancy? Group Journal Here.

dreams_and_discoveries

  • Pencil Stache
  • ****
  • Posts: 522
  • Location: London, UK
Re: (Complainy Rant) Being priced out of the housing market
« Reply #56 on: August 12, 2017, 10:12:20 AM »
I make decent money (for a single person)

Ermm, does marital status define salary? That seems like an outdated patriarchal viewpoint there....

As for your post, as I was reading it I thought it's a bit complainy...but then kudos to you for titling it as such.

For what's it's worth, you do seem quite entitled, a lower than average salary and you are not wanting to make any sacrifices and seem to expect an above average home......most of us got on the housing ladder by living in the edgier neighbourhoods, buying fixer-uppers (I lived with the previous occupants 80's decor for 3 years until I could afford to redo it all) and sharing houses to save up a deposit.

Civex

  • 5 O'Clock Shadow
  • *
  • Posts: 88
Re: (Complainy Rant) Being priced out of the housing market
« Reply #57 on: August 12, 2017, 10:16:37 AM »
Median US household income is a meaningless statistic, because America is such a varied place in every respect. It's about as useful as the median outside temperature.

Well said.

FIREfly34

  • 5 O'Clock Shadow
  • *
  • Posts: 16
Re: (Complainy Rant) Being priced out of the housing market
« Reply #58 on: August 12, 2017, 01:53:13 PM »
I make decent money (for a single person)

Ermm, does marital status define salary? That seems like an outdated patriarchal viewpoint there....

As for your post, as I was reading it I thought it's a bit complainy...but then kudos to you for titling it as such.

For what's it's worth, you do seem quite entitled, a lower than average salary and you are not wanting to make any sacrifices and seem to expect an above average home......most of us got on the housing ladder by living in the edgier neighbourhoods, buying fixer-uppers (I lived with the previous occupants 80's decor for 3 years until I could afford to redo it all) and sharing houses to save up a deposit.

I...don't even know how where to start.

First of all, if I had a partner, I would (probably) have 2 incomes to work with not 1. There is nothing patriarchal about that.

Secondly, I make an above average income for *for an individual* ie "good money for a single person." The place I live now is about average for my area and I am looking at *below average* condos in my area. Maybe my definition of "nice" is a bit broader than yours?

The problem is that right now my rent is rising at $150/year. That is not sustainable long term, even with a second job. By the time I save a downpayment (say in 4 years), I'm not expecting to even be able to afford a fixer-upper, because housing prices are already approaching absurd levels ie "following in the footsteps of Denver and Portland".

I'm just getting some stuff off my chest. I have no problem getting a second job or whatever, but I don't believe it's necessary *right now*.

I think it's time I quit the internet entirely, and focus on developing a hobby that can make me money.

GenXbiker

  • Stubble
  • **
  • Posts: 166
Re: (Complainy Rant) Being priced out of the housing market
« Reply #59 on: August 12, 2017, 02:20:33 PM »

If you were to drain your savings/401K to get a down payment on a house, don't forget to add home maintenance to your monthly expenses so that your budget can absorb those higher expenses over the long run.

https://forum.mrmoneymustache.com/welcome-to-the-forum/budgeting-home-maintenance-costs

Dicey

  • Walrus Stache
  • *******
  • Posts: 5565
  • Age: 59
  • Location: NorCal
Re: (Complainy Rant) Being priced out of the housing market
« Reply #60 on: August 13, 2017, 02:30:31 AM »
I make decent money (for a single person)

Ermm, does marital status define salary? That seems like an outdated patriarchal viewpoint there....

As for your post, as I was reading it I thought it's a bit complainy...but then kudos to you for titling it as such.

For what's it's worth, you do seem quite entitled, a lower than average salary and you are not wanting to make any sacrifices and seem to expect an above average home......most of us got on the housing ladder by living in the edgier neighbourhoods, buying fixer-uppers (I lived with the previous occupants 80's decor for 3 years until I could afford to redo it all) and sharing houses to save up a deposit.

I...don't even know how where to start.

First of all, if I had a partner, I would (probably) have 2 incomes to work with not 1. There is nothing patriarchal about that.

Secondly, I make an above average income for *for an individual* ie "good money for a single person." The place I live now is about average for my area and I am looking at *below average* condos in my area. Maybe my definition of "nice" is a bit broader than yours?

The problem is that right now my rent is rising at $150/year. That is not sustainable long term, even with a second job. By the time I save a downpayment (say in 4 years), I'm not expecting to even be able to afford a fixer-upper, because housing prices are already approaching absurd levels ie "following in the footsteps of Denver and Portland".

I'm just getting some stuff off my chest. I have no problem getting a second job or whatever, but I don't believe it's necessary *right now*.

I think it's time I quit the internet entirely, and focus on developing a hobby that can make me money.
Re: the part in bold above. I think that's an extreme response, particularly since you put up this thread in the Land of Facepunches, Badassity and the continual Throwing Down of Gauntlets. Intentionally or not, you came off as a bit of an Eeyore, who moans, "It'll never work." Much as I think Eeyore is adorable in his sweet but perpetual misery, he is clearly not mustachian and doesn't want to be.

FWIW, the internet is a great place to figure out a hobby that can make you money. There are even a number of threads on this topic here on this very forum.
I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

neverrun

  • Bristles
  • ***
  • Posts: 266
Re: (Complainy Rant) Being priced out of the housing market
« Reply #61 on: August 13, 2017, 05:13:51 AM »
On rent, maybe look into renting from an individual with one unit instead of a complex or one who has quite a few units.  In my experience (as a renter and an unplanned owner), living in an owner occupied 2 family rent tends to be more stable as the landlord prefers stability over profit as long as there is a profit.  I rented for 4 years in NYC in a raising housing market, my landlord who lived in the downstairs unit preferred a sure thing over the chance of vacancy. 

StacheyStache

  • Stubble
  • **
  • Posts: 157
Re: (Complainy Rant) Being priced out of the housing market
« Reply #62 on: August 13, 2017, 05:44:53 AM »
I absolutely get this and commiserate.  I feel like some of the bootstrappers that are posting facepunches are a little out of touch.

I'm trying to do the "right" thing and save up 20% down payment over time.  I had this plan three years ago when I first graduated and moved to the area that I was going to rent for awhile to decide where I wanted to live and save up for a down payment, put down 20% on a house within my means and raise my income to be able to save more and afford more.  I looked around at what average houses in average areas cost and said "that's what I want and I'll work and wait to get it."  By no means are these houses McMansions and I have also considered condos and townhomes as well.  My only hard requirements were safe area and good school district as I'm leaning more and more towards having kids and do not want to be forced to sell in 6-8 years. 

Well, it'll be three years this October since I moved down here.  I've raised my income from 40k to over 50k (and there are rumors of further increases before the holidays).  I've saved 50% of my after tax + pension contribution + deductions income and have been living with a significant other and sharing expenses for over a year.  I have more than one side hustle.  I am very close to meeting my down payment goal of 50k.  For the first time this summer I started looking seriously at houses.

But guess what?  Those houses I looked at three years ago are long gone and the price points of comparable homes have shot up.  My down payment now needs to look like 60k-70k and my income is not even close to keeping pace even though I've received more than a 20% pay increase since I started working and slashed expenses by moving in with BF.  Condos and townhomes are more reasonably priced mortgage-wise but have 250-450 PER MONTH regime and hoa fees EVERYWHERE in this city (250/month was the lowest I've found for a dump in a somewhat sketchy area).  I'm now looking at pushing out my buy date even further or moving an hour out to be able to afford a home. 

I'm 28 and my boyfriend is 31.  Marriage and kids are being discussed and everyone (including some of the posters posting with their facepunches here) says don't wait too long!!  But a house for a family is apparently out of the question in this area.  I can keep working and keep saving and keep raising my income and if this trend continues IT WON'T BE ENOUGH.  We are talking about moving more than an hour away from our families just to be able to afford a house.  I'm sorry but that absolutely sucks. 

To the OP:  Don't give up.  Keep hustling, keep saving, keep trying.  I know it feels insurmountable but there's nothing else you can do if you want to own a home in this day and age.  To the facepunching posters:  Give it a rest unless you've been in an ever increasing bubble where you do everything right and still lose.

Goldielocks

  • Magnum Stache
  • ******
  • Posts: 4028
  • Location: BC
Re: (Complainy Rant) Being priced out of the housing market
« Reply #63 on: August 13, 2017, 11:28:40 AM »

I...don't even know how where to start.

First of all, if I had a partner, I would (probably) have 2 incomes to work with not 1. There is nothing patriarchal about that.
That's what many people think.  However, if you are the mustachian one, then your partner is at best coming with no student loans and contributes net $500 to $800 per month to your situation.  The rest is all spent.  This is the same net money benefit as if you rented a room in the house you buy.  Often partners make us spend more on restaurants, clothes, vacations, etc, so the net is less.


Secondly, I make an above average income for *for an individual* ie "good money for a single person." The place I live now is about average for my area and I am looking at *below average* condos in my area. Maybe my definition of "nice" is a bit broader than yours?
Great.  Clarifies that you are looking for modest home, willing to upgrade, etc.   My two cents, having lived in HCOL -- we could only afford a 2 bedroom apartment, about 30 minute drive from downtown, not a whole home..  friends said it was too far out of the city to visit, etc.   We had to move out of that city to get a "house".   Like, 12 hour drive away.


The problem is that right now my rent is rising at $150/year. That is not sustainable long term, even with a second job. By the time I save a downpayment (say in 4 years), I'm not expecting to even be able to afford a fixer-upper, because housing prices are already approaching absurd levels ie "following in the footsteps of Denver and Portland".

The rent increases are not sustainable long term for the landlords, either,  they will taper off especially for smaller landlords.

The race to save for a downpayment in an increasing market is very real.. This is EXACTLY what happens in a bubble, people are worried about missing out an opportunity.  Don't fall for it.   I know that it can take 5-8 years for a bubble to pop, but don't over reach your finances, I was there in California in 2006/2007 and we wanted to buy but could not justify the cost versus our salary and the high mortgage.

Buy a home when the finances are right, and you need a home of that size, and will stay for at least 8 years. Doubly so about "finances are right" part if this is an investment speculation as well.



I'm just getting some stuff off my chest. I have no problem getting a second job or whatever, but I don't believe it's necessary *right now*.

I think it's time I quit the internet entirely, and focus on developing a hobby that can make me money.

Yep.  The complainy rant descriptor in your title gave away that you are just venting. Don't know how others missed it.

  It is good to vent sometimes to strangers.  It is also fun to say "suck it up buttercup" on the internet sometimes, too.   LOL  All are having fun here.

Dicey

  • Walrus Stache
  • *******
  • Posts: 5565
  • Age: 59
  • Location: NorCal
Re: (Complainy Rant) Being priced out of the housing market
« Reply #64 on: August 13, 2017, 11:36:50 AM »
To the facepunching posters:  Give it a rest unless you've been in an ever increasing bubble where you do everything right and still lose.
Could you please start by understanding that at least some of the "facepunching posters" have been in your and the OP's situation and somehow managed to figure out a workaround? I have, as have many others. We're answering to help by sharing our knowledge because we choose to, not because there's any rule that we have to.

Let me make this perfectly clear:

This forum has rules that must be obeyed. It also has guidelines. Swearing is encouraged, as are Badassity, Challenges,  Gauntllets and most of all, Facepunches. We poke fun at Asshats and Complainypants. We help people who ask for it, in hopes of making their journey to FIRE faster, easier, or both. Everyone's presence is optional, and we all contribute at the discretion of the moderators, who are volunteers themselves.

I called an airline recently and the hold message spelled out a bunch of conditions for travel on their airline. Then the message said something to the effect of "By continuing this call, you are agreeing to the terms and conditions set forth in this message." Posting on thus forum is kind of similar. You do not get to change the rules, or be a complainypants without repercussion. It doesn't work that way and your continued participation signifies understanding of the rules and culture in which you are participating

Now, if you're willing to be open minded, I have a few things to say about your exact situation, based on my own personal experience. If you say no, then just stop reading right here. I'm going to continue for the sake of the OP and any other reader who might benefit.

I appreciate this is a tough situation. I have always lived in a HCOLA,  was never a high wage earner, and was single until I was 54. I achieved FI prior to marriage. I purchased four homes when I was single and four more since marriage and RE. I know what the fuck I am talking about. Plus, the only monerary windfall I ever had was a $6k inheritance from my grandfather. No loans other than mortgages, either. If you are as bound and determined to own your own home as I was, you will succeed.

First, know that all Real Estate markets everywhere are cyclical. No market goes up continuously. Buying during a long upswing and expecting the market to continue to rise forever is a naive assumption. Being prepared to bravely plunge into the market when others are fleeing is one way of getting a toehold. Putting less than 20% down is an option. Buying a property that's suitable for one or more roommates is also do-able. Buying something that needs a lot of elbow grease or cosmetic improvements is a great option to build equity. Or you buy something in a more affordable area and become a landlord, as I did.

My first house was a shithole, but as the realtor was walking me through it, I recognized the floorplan as the same as my best friend's parent's house, which gave me the shivers. Turns out the house belonged to the builder's ex-wife, and this was the first of a series of custom homes he had completed around town. She was terrible with money, had three loans and was in danger of losing it. Everyone else thought I was nuts, but I had seen the "after"; I knew I could handle the "before". I had waited to go home shopping until I had a whole year's gross salary in the bank. This was literally the first and only house I looked at before making an offer. Midway through escrow, because of a misunderstanding of the way my company's excellent expense reimbursement program worked, the lender demanded a larger down payment, leaving me with a cash budget of only $6k for renovations (thanks, Grandpa!). The house was a 1600 sf 3+2 on a 7800 sf lot. It needed horrible wallpaper removed, holes patched, exterior and interior paint, all kitchen & bath cabinetry and hardware refinished, landscaping, all new flooring, new door hardware, random electrical and A/C work plus I don't remember what else. I did it, and without going into CC debt. I was a Badass when Pete had no facial hair worthy of a razor blade and long before helpful internet places like this existed.

You have made good strides in the past few years, but I posit that you prossibly could have done more. Have you taken any Real Estate courses to learn more about the process of home buying and selling? Applied for a loan to learn how that process works and what you can actually qualify for? Do you know who the top agents are in the areas you wish to buy? Have you met with one or several of them? Every realtor is willing to tell you how they bought their first property. Have you learned how mortgages work?  Title insurance? Homeowner's insurance? Taxes? Researched any first time home buyer's programs that you might qualify for? If HGTV is correct (lol) and homes in your region are sold via auction, have you haunted them until you're completely calm and comfortable in that heated environment ? That alone could save you a fortune.

I love RE and could go on forever, but I'd like to leave you with this: Mustachians would also be happy to tell the story of how they bought their first home, but neither of you asked that question. You both whinged about how difficult it was. I believe an alternate apvproach would yield more positive results and fewer Facepunches. Seriously, would you rather be coddled here or taught the skills necessary to reach your true goals?

With that, I will quietly tiptoe away so I can go check for new listings and view today's Open House schedule. May all your dreams become realities.


I did it! I have a journal!
A Lot Like This
And hell yes, I am still moving confidently in the direction of my dreams...

Mustache ride

  • 5 O'Clock Shadow
  • *
  • Posts: 32
Re: (Complainy Rant) Being priced out of the housing market
« Reply #65 on: August 13, 2017, 11:44:30 AM »
Maybe I'm the only one thinking this, but if you are only making 38k (from your case study), you shouldn't be able to afford a house by yourself. I previously worked in the DC area and would hire people off the street with very little skill for 30-40k a year doing physical labor. Even then it was hard getting people who could pass a drug test for that amount. I don't know about your area, but I'm assuming minimum wage is going up all over the US. Can I ask why you think you should be able to afford a house while only making 38k a year? Do you believe that anybody with a steady job should be able to afford a house?

COEE

  • Bristles
  • ***
  • Posts: 264
Re: (Complainy Rant) Being priced out of the housing market
« Reply #66 on: August 14, 2017, 08:13:24 AM »
Well, it'll be three years this October since I moved down here.  I've raised my income from 40k to over 50k (and there are rumors of further increases before the holidays).  I've saved 50% of my after tax + pension contribution + deductions income and have been living with a significant other and sharing expenses for over a year.  I have more than one side hustle.  I am very close to meeting my down payment goal of 50k.  For the first time this summer I started looking seriously at houses.

But guess what?  Those houses I looked at three years ago are long gone and the price points of comparable homes have shot up.  My down payment now needs to look like 60k-70k ...

I'm calling BS on this one.  If I understand your post correctly, you've saved almost 50k in almost 3 years!  (Which is kick ass by the way!  Good work!).  Now you need another 10-20k to get in today with a 20% down payment.  That's only about one more year - maybe two IF house prices continue to go up, and while the trend is currently upward, it certainly has not always been so.

This doesn't even consider any income your SO is bringing to the relationship.  Personally, I would NOT buy a house with anyone I was not married to, or who doesn't have any savings themselves.  YMMV.