Have you noticed your Neighbors appears to be spending more this year?

[backandforth]

Wondering if it's kind of widespread or more of a regional thing.

We have lived in an average neighborhood for the past decade, where most houses sell for 350-450K (it's a bedroom community to NYC with avg schools, so yeah, at that price it is middle class). It used to have more older couples with growing/grown kids, but recently more and more are replaced by young families, but many older families are still here. Over the last 6-12 months or so, I have noticed a significant increase in home renovation, yard renovation, and upgrade of cars from Ford and Subaru and the like to Lexus, BMW and Audi, pretty much everyone has a shiny new car(or cars) in their driveway, and it's not just the young family... and oh the delivery trucks from furniture stores for the financially blind...

Not sure what's going on here... are people really all getting rich from the rising stock market? Or it's a sign that people are so comfortable with their money that they spend like crazy again? I also noticed similar things at a relatives place on Long Island. I vaguely remember seeing the same in 2005/2006 when we were a lot pooper and less financially enlightened and felt the urge to keep up(thank God we didn't have much money back then), everybody was feeling rich and entitled to better stuff right before the crash... it just feels eerily similar.

Have you noticed anything like this in your neighborhood? If so, what part of country do you live in?

[Cromacster]

My neighborhood is similar.  Not so much with the cars, but the housing changes.  I live in a 300-400k market.  On my block 2 houses are being gutted and expanded.  One block over is another gut job and 2 brand new houses being built on land a church sold to a developer. 

These houses definitely stick out.  Most houses were built in late 1940 and early 1950 and are around 1,000 sqft (2,000 if they have a finished basment).  The renovations are expanding houses close to 3,000 sqft and the new builds are both around 3,500 sqft.

[Cranky]

Nope. I live in a pleasant little neighborhood where the houses sell for about $80K. (The people behind us listed their house for$93K and sold it in a matter of weeks, and the neighborhood was *shocked*.)

We're the big spenders with our crazy new driveway.

[kayvent]

I am a Canadian and I’ved noticed the same phenomenon. I think it is the economy.

- For millennials, this is the first year in their adult lives that they are seeing a 3.1% growth this year. A 3.1% growth rate is palpable. Older people are seeing this for the first time in awhile.

- After Obama’s term in the USA and Harper’s term in Canada, both countries have very low unemployment rates and relatively low deficit to gdp ratios.

- The stock market is gross. Have you seen my portfolio’s returns?

[ixtap]

I sell boats. Haven't these people who are spending more heard of global warming?? They are not visiting my office :(

[Inaya]

You're not imagining it. Credit card spending this year has exceeded 2008, pre-recession levels. Charge-offs are rising accordingly, as well.

[Undecided]

Not my neighbors specifically, but I have remarked to my wife that the number of Land Rovers in town has skyrocketed.

[boognish]

things are lookin up

[shunkman]

I work at MegaGov. Recently I have noticed that the employee parking area has a growing number of brand new BMWs, Mercedes, monster trucks, and even a Maserati. My 10-year old Toyota looks pretty sad amongst these status symbols.

[nancy33]

Yes, new cars and lots of nice stuff at the thrift stores, lots of construction too no vacant rentals rents are very high. Like before the dot com bubble when I lived in the SF Bay Area. Getting ready for the crash so I can buy real estate!

[Dicey]

I don't pay attention to what my neighbors do. I live in a damn nice house in a very HCOLA. My husband would be looked down upon by some, because he is a tradesman. They might also be shocked at our NW, but then I don't compare that either. Hmmm, there's a thread on that somewhere... Learning how to get the most bang for your buck is a mustachian trait, as is not worrying about keeping up with anybody, whatever their name is.

Today, I was working on some estate stuff at my parent's bank. I had an hour or so to kill while the bank tried to figure something out. I walked around Downtown and into some stores, particularly World Market. Shit, I can't believe how expensive everything is! Their 12 oz. bottle of Cholula Hot Sauce is $6.99. Yeah, I get two of those at Costco for that price, plus a rebate. (Minus a rebate?) I walked into ZGallerie and damn near died. Who needs all that crap? Who is everyone trying so hard to impress? They must be selling something, and lots of it, because their rents are astronomical.

Collectively, ignoring what my neighbors do, not shopping in regular retail stores and only buying groceries at the places with the best prices helps me continue to live a mighty satisfied, and grateful, mustachian life.

[99to1percent]

Our neighborhood consists of mainly young families in the 30's or early 40's with young kids.

The first owners of our house got it in 2010 for $500K including the upgrades.  We bought it a couple of years later in 2012 and costs us $600K with upgrades.  The house is now going for $1.3M and so are other houses in the neighborhoods on average.  And a lot of people are selling/cashing in. 

What's intriguing is the new families moving in who are also young in their 30's, buying these $1M-$1.5M homes and who also have Range Rovers, sports cars, boats and motorcycles, and we wonder how they are able to afford all that?

Even with our $400K+/yr income, we don't think we can afford all of that? Anyway, for us, we live on only 15% of our income and are focused on paying off our mortgage by 2020, and then start taking a little more risks and investing aggressively.

[marty998]

It's not just there... all the shopping centres here are going really upmarket. And the stores are doing pretty good trade, haven't heard the usual whinging from the billionaires complaining about poor retail sales figures.

The cars are getting nicer, the houses are being demolished to build units, people are dropping thousands on lavish holidays and weekends away.

My colleagues are probably not representative of society in general, but the attitude seems to be moving towards "we already know we're fucked with too much mortgage debt or rent, so why be miserable about it. Spend while you can".

[undercover]

Yes. I'm in a "nice" neighborhood, but nothing extremely fancy. Overall, the homes are economical, but it's about 50/50 on people driving luxury/beater cars. Some definite Mustachian types around here, but not all.

Two new luxury SUV's on my street, one being a Lexus. Several house/landscaping upgrades, but to be honest they all made sense in that they were somewhat necessary. Neighborhood has appreciated significantly, which probably explains the willingness to "let loose" (but also absolutely makes no sense considering it's not money they're ever going to see unless they decide to downgrade their lives entirely).

[surfhb]

I drive Los Angeles freeways daily and clearly see the rise in new vehicles.   Especially Dodge Chargers and Camaros.

I love passing them in my 550,000 mile Toyota Pick Up!    Makes no sense to have a car like this when you just have to drive in traffic all day....its LA idiot!

[Zamboni]

Yes, this has been the year of new siding in my neighborhood. New siding for everyone (including me!)

Also, the boom in new cars means that gently used car prices fall and there is a plentiful supply to choose from. Hooray!

The real estate market here is insane right now. In the "hot" neighborhoods, prices have tripled in the past 7 years. Tons of renovations and teardowns/new builds in those neighborhoods. This growth rate is simply not sustainable . . .

[RetiredAt63]

I live near an economically disadvantaged town, and yet our local garden center has gone all upscale with garden furnishings. 

[Maenad]

In my neighborhood, the first Fed interest rate increase got people all fired up about loans not being quite as cheap any more, so they all rushed to start the remodeling and rebuilding before things got more expensive. I drive past at least 6 major projects daily.

[misshathaway]

Yes! I go for a walk every day on the same route in my upper-middle-class neighborhood. Compared to prior years there was at least a 50% uptick on landscaping, roof, paint, driveway and walk upgrades. Several old houses were torn down and replaced with McMansions that go all the way to the edges of the lot.

Also, lately people with kids have gone all-out with Halloween decorations. I'm not talking just a pumpkin. I mean store-bought tableaus like at Christmas.

[BlueMR2]

Definitely.  Neighborhood is now full of new luxury cars compared to the entry-level beaters that everyone had just a year or 2 ago.  Lots of shiny new motorcycles appeared this Summer as well.  There's a lot of optimism around here right now.

[YttriumNitrate]

I live in a suburb of Chicago where several properties are weekend houses for city dwellers. In the past year or so, three houses nearby have gotten extra levels added. While house prices are still a good 25% off their 2007 peak, it's definitely starting to feel like 2005-2006 again.

[BuildingFrugalHabits]

I can't say that I've noticed anything in particular but I guess I don't pay that much attention to neighbor spending.  Come to think of it, people don't seem to value fancy cars around here. Probably because of the intense sun, snow, salt, hail and rocks on the roads which quickly take their toll on cars. 

[gggggg]

I live in a lower income/priced neighborhood (by choice). I haven't seen any changes, really. My neighbors do have some decent newer cars, but besides that, no. The city surrounding my neighborhood has gotten fancier in the past couple of years though.

[h82goslw]

I'm a few hours outside NYC in a neighborhood of 400K-500K houses.  ALL OF MY FRIENDS' KIDS drive nicer cars than I do. 

Additionally, I just heard on Dave Ramsey this week that 78% of Americans are living paycheck to paycheck.  Wonder how many of my neighbors are in that situation?

[mm1970]

Our neighborhood consists of mainly young families in the 30's or early 40's with young kids.

The first owners of our house got it in 2010 for $500K including the upgrades.  We bought it a couple of years later in 2012 and costs us $600K with upgrades.  The house is now going for $1.3M and so are other houses in the neighborhoods on average.  And a lot of people are selling/cashing in. 

What's intriguing is the new families moving in who are also young in their 30's, buying these $1M-$1.5M homes and who also have Range Rovers, sports cars, boats and motorcycles, and we wonder how they are able to afford all that?

Even with our $400K+/yr income, we don't think we can afford all of that? Anyway, for us, we live on only 15% of our income and are focused on paying off our mortgage by 2020, and then start taking a little more risks and investing aggressively.

I think people just have different risk profiles.  I know I don't feel like it's a great idea to spend like that, even though we could afford much of it.

I also wonder about stock options.  I have a couple of friends who work for Google.  I suspect most of their income each year comes from stock.

[sol]

I live in a lower income/priced neighborhood (by choice). I haven't seen any changes, really. My neighbors do have some decent newer cars, but besides that, no. The city surrounding my neighborhood has gotten fancier in the past couple of years though.

This seems to be the pattern in capitalist economies, where growing prosperity is concentrated among the prosperous.  In practice, it's the exact of opposite of the aphorism "a rising tide floats all boats."  Instead, growth is concentrated among the wealthiest and people at the bottom of the ladder don't move much.

On the bright side, this means that if your community or your lifestyle is rising dramatically then you're part of the wealthy elite.  Congratulations!

[clarkfan1979]

I haven't noticed anything on Kauai. Change is very slow here. I have noticed lots of new construction in areas just north of Denver with signs stating in the 500-600K range.

[DirtDiva]

...when we were a lot pooper ...

Heehee...she said poop

[SC93]

I tried it and just can't live in those upscale neighborhoods. We have friends that live in houses that cost several million dollars. Some of them have elevators, round driveways, multi car garages and all of that is great if I lived in the country in that type of house but we are city lovers and I can not stand to live like they do. We had friends and family that flipped out when we moved in to an apartment several years back.... we loved it there. But we are back in a house in a 'regular' neighborhood of older houses (ours is a 1957) and we love it here. It's an odd part of town but no trouble, not loud, no kids on our block, no barking dogs... just an old beater of a pickup down the street... if the mood strikes me I might see if it's for sale so we have an old vehicle to drive around in. And the best part is, no HOA! I will never again live in a place where someone tells me what to do. I don't notice what others are doing, I just focus on what makes us happy. If we liked a $2 million house then we would have one but I HATE those types of houses. Just because our friends or neighbors do something doesn't mean we have to follow suite. As for cars..... while I had a $1 million+ race team (sold it less than a month ago), street cars do not excite me. The lil woman likes to drive new but I think a 2001 Dodge minivan is more comfortable than most anything on the road. The only person I need to impress is her.

[BlueMR2]

ALL OF MY FRIENDS' KIDS drive nicer cars than I do. 

All the nicest and newest cars in the parking lot at work are owned by interns and fresh out of college kids...  While they talk about having gazillions of dollars in debt from school, it doesn't seem them to bother them any to add more for a car.  They're all really optimistic on the economy.  Maybe it's ignorance.  They haven't been working during a bad time to know what it can be like...

[Just Joe]

It looks to me that around our town people are going out more. And there are more new(ish) cars. Around our neighborhood things are the same. Maintenance, a few newer cars, etc. We don't live among alot of spendypants people.

[sol]

They're all really optimistic on the economy.  Maybe it's ignorance.  They haven't been working during a bad time to know what it can be like...

Isn't this a good sign?  I really WANT young people to be crazily optimistic about the economy.  I want them to eagerly commit to long careers of diligently showing up on time to take their turn on the hamster wheel that drives our economy.  I'll be worried when the next generation starts talking about living off of investments instead of building anything of value.

Go do good work, young people!  Sweat continuously, preferably for like 40 years at a megacorp in which I own significant stock.  Make awesome stuff that makes the world better, and generate profits for your shareholders along the way.

And then if you're feeling really generous, retire and be sure to die the very next day so that you don't use any social security or draw any pension.

[Wise Virgin]

I live in a lower income/priced neighborhood (by choice). I haven't seen any changes, really. My neighbors do have some decent newer cars, but besides that, no. The city surrounding my neighborhood has gotten fancier in the past couple of years though.

This seems to be the pattern in capitalist economies, where growing prosperity is concentrated among the prosperous.  In practice, it's the exact of opposite of the aphorism "a rising tide floats all boats."  Instead, growth is concentrated among the wealthiest and people at the bottom of the ladder don't move much.

On the bright side, this means that if your community or your lifestyle is rising dramatically then you're part of the wealthy elite.  Congratulations!

I don't think that is what is happening lately, sol, and I will tell you why.

The "wealthy elite" were in complete control during and after the financial crisis. Ordinary people were paralyzed. We spent years accepting a situation with no raises, no job security, and worst of all a loose labor market that allowed employers to get away with demanding things from the workforce that were unjust: work without pay; don't take your vacation; train your own replacement; do three jobs for one salary; work unpredictable schedules; and the like. That is what economic oppression looks like.

The game has changed, the script has been flipped. I knew that last November by listening to AM radio. I mean the AM radio station that has the farm reports and plays country music and has local talk. That radio station suddenly was wall-to-wall ads for Ford trucks (not the fancy chrome-wheeled kind, the construction-work kind), plumbing & heating contractors, and industrial equipment like pipes, welding, and tools.

The animal spirits had arisen. Picture something like the Incredible Hulk, as he is splitting out of his clothes and swelling up with muscle. Like the Incredible Hulk this is not an intellectual phenomenon or an economic phenomenon or an "ism" from theory but an animal phenomenon. People are tired of being poor. They will spend. They will demand raises. They will get them.

If you want to understand what is happening now, NPR will not tell you, but AM radio will.

[CheapScholar]

Related to what other people said about things being more expensive, I've noticed that as well.  Some of that can be attributed to inflation or a falling dollar, but I think most of it is sellers seeing how much they can get (which I'm ok with, the market price comes from seeing what people are willing to pay).

I've noticed this with clothing, and with takeout restaurants.  An easy area for me to see the diffence is actually cruise fares.  I've been into cruising since 2008 and probably check websites for good deals at least once a month.  Compared to even two years ago, prices have really gone up.  People have an appetite to spend and feel confident in the economy, so it makes sense that fares on cruises (a luxury with very fixed product) would go up.  You can still get good deals if you go off peak or are willing to book inside cabins, but I'd say that prices have gone up 25% the past 2 years.

[Paul der Krake]

The "wealthy elite" were in complete control during and after the financial crisis. Ordinary people were paralyzed. We spent years accepting a situation with no raises, no job security, and worst of all a loose labor market that allowed employers to get away with demanding things from the workforce that were unjust: work without pay; don't take your vacation; train your own replacement; do three jobs for one salary; work unpredictable schedules; and the like. That is what economic oppression looks like.

Maybe you have a narrower definition of what constitutes the wealthy elite, but I remember the mood in bars frequented by bankers in 2008, and there was nothing that exuded "complete control".

[zolotiyeruki]

There must be a dozen people in my neighborhood that replaced their old, builder-grade, as-small-as-you-can-and-still-call-it-a-deck decks just this past summer.  Part of it is probably the age--most of the houses were built 10-12 years ago, and are falling apart now--but I'm willing to bet that a lot has come as a result of a growing economy.  Another several decks were replaced last year, along with lots of paver patios.  I haven't noticed much on the car front, though.

It seems to me that even through the whole recession, we never saw demand slacken at the local eateries.  Come Friday night, the parking lots are always full.  Year round, economy up or down, they're busy (at least on weekends).

[Wise Virgin]

The "wealthy elite" were in complete control during and after the financial crisis. Ordinary people were paralyzed. We spent years accepting a situation with no raises, no job security, and worst of all a loose labor market that allowed employers to get away with demanding things from the workforce that were unjust: work without pay; don't take your vacation; train your own replacement; do three jobs for one salary; work unpredictable schedules; and the like. That is what economic oppression looks like.

Maybe you have a narrower definition of what constitutes the wealthy elite, but I remember the mood in bars frequented by bankers in 2008, and there was nothing that exuded "complete control".

Granted it was a "white knuckle" kind of control there at first.

[backandforth]

Thanks for sharing guys! Part of me is hoping all this spending is due to after years of being cautious and belt tightening since the recession, people actually do have more money to spend, instead of feeling more comfortable to borrow to spend, the other part of me is hoping for a recession for selfish reasons. We really want to move to closer to work to reduce the killer commute, not really a house upgrade. However, anything closer the price has gone up a lot in the past few years. If we move now it's essentially upsizing (in price, likely downsize in actual size and quality) in a hot market and I feel really stupid to do that, but he commute it long and dreadful.

On a side note, a few of the replies are quite interesting. Sounds like some of you have achieved the "Zen" state of mustachianism that you don't even notice what's going on in the neighborhoods anymore. For me, I am like the "regular" folks that if I don't work out I want cake and I get fat, and if I don't keep my eyes on the goal, I get a little envious and want to open the purse string a little (but I never really did, yeah!)

[Rufus.T.Firefly]

My neighbors bought a Tesla, so yes.

[HenryDavid]

Here in Canada it's a real thing: mostly booze and restaurants. Also probably great big TVs.

"Spending on credit and debit cards in Alberta rose three per cent last summer compared to summer 2016, according to figures released Thursday by payment processing company Moneris.
The biggest increases were for restaurants (up 4.7 per cent) and alcohol (up 4.2 per cent), while outlays also rose for household goods (3.9 per cent) and entertainment (2.2 per cent)."

http://edmontonjournal.com/news/local-news/led-by-food-booze-purchases-alberta-credit-debit-card-spending-rises

[Bucksandreds]

My neighbor bought a Bentley and a lift so that he can park 3 cars in the garage with only 2 adults living there. Average home price is about $400,000 in my neighborhood so kind of a head scratcher even for a high spender.

[Michread]

Yes, we are spending in preparation for full retirement in 2018 at 55 yo. We are getting what we need and will last us through the next 10+ yrs and beyond.

[mathlete]

Haven't noticed it personally, but I don't interact with my neighbors a whole lot.

Cross-posting this from another thread b/c it seems relevant:

It's not just you. Per the fed, motor vehicle loans outstanding have crossed one trillion and are at an all-time high.

https://fred.stlouisfed.org/series/MVLOAS

The post-recession decline in consumer credit is now merely a blip on the radar:

https://fred.stlouisfed.org/series/TOTALSL

The S&P P/E ratio is well above historic averages, and the Shiller P/E looks even worse:

http://www.multpl.com/shiller-pe/

Not sure what there is to do though, outside of staying the course while staying nimble. Waiting for the markets to become rational in order to invest more, retire, or make any other major decision, can mean a very long wait.

[Spiffy]

There is a small rental at the end of my street that I drive by daily. It has had a very high turn over recently, with people moving out only a few months after moving in. But each renter has put a giant TV box out with the trash soon after moving in. I know TVs are pretty cheap now a days, even really big ones, but it still makes me chuckle to see that. Other than that, all of the houses that have sold on my street recently are being remodeled before the new owners move in. I guess that is good. It is a very modest neighborhood full of 1600-1700 sf ranches and it could easily start going downhill.