Home purchase

[BigHornRam]

Attacking the deficit one gallon of white paint at a time.

I primed the economy a couple weeks ago, with 60 gallons of Benjamin Moore.

 

[BuzzH]

This is where I’m hung up.

You’ve said so yourself your home(s) are worth enough you could sell them and use the proceeds to hunt whatever you want, wherever you want. Perhaps paraphrasing.

Why would I not want that? Why is that not a good thing? You no doubt have sacrificed and scrimped where necessary.

Of course you want that, I wish more people could attain the position I'm in. But the facts will quickly tell you that 98% of the American public wont.

The thing is I didn't have to sacrifice and scrimp.

I was lucky, born completely by chance at the right time, nothing at all to do with sacrificing and crimping.

I paid for college playing Pulaski motor for the FS. That math doesn't math these days.

I paid for over half a dall sheep hunt in Alaska with a 2 week fire check. Think anyone is clearing 15-20k in 2 weeks swinging a Pulaski these days to do the same?

Same with purchasing a couple houses, had wayyy more to do with my birth year than anything else.

There's just no way the playing field is the same for 25 year olds today than when I was that age. The few people that are claiming the younger generations just arent working hard enough, arent ambitious enough, aren't motivated, arent willing to sacrifice, blah blah, they're full of crap and need to hit the smelling salts.

 

[mdhunter]

I am 58 and have had a fortunate career which gives me financial freedom. I am in both camps when in comes to home ownership. Part of me thinks it’s tougher for sure when buying homes for the younger generation. Part of me thinks younger people are poisoned by social media and the desire to keep up with the Jone’s and make themselves feel bad. I also think with a declining population the home ownership price run up may be about played out. The only thing that may keep it going is the 80 trillion dollars that is going to be passed from the baby boomers down in the next decade or so. The last part of me subscribes to the theory “ you know you are getting old when you think start thinking there is no way these kids are going to make it”, lol. The little bastards are smarter than we think…

 

[Pucky Freak]

165k home in 2017 w/ 20% down. During COVID looked at a 400k dream property - no neighbors, amazing views, bass pond, timber for hunting, dead end road, quiet. W/ 2% mortgage rate we could have taken out a 30-yr fixed, and really boosted our wealth long-term. The property is probably worth 650-700k today. We decided to pass and stick to our simpler life, which is more realistic w/ 4 young kids. In 2023 we paid off our house, which is now worth at least 300k. Zero regrets.

Today I could afford my own home w/ a big down payment. If I was looking to buy my first home today as a younger version of myself, w/ the only different factor being today’s higher interest rates, I’d be limited to properties $145k and under. So, less than half of value of my current home, which in my geographic area is a shoebox or the set of a haunted house.

Since 2017 I’ve added a fenced-in yard, a 4th bedroom, an oversized heated garage and other improvements, did nearly all the work myself (I contracted fencing). I’d put the value of my property at about $250k w/o the improvements, but that is still far above 145k. Just wild to consider how much easier I had it.

 

[BigHornRam]

Of course you want that, I wish more people could attain the position I'm in. But the facts will quickly tell you that 98% of the American public wont.

The thing is I didn't have to sacrifice and scrimp.

I was lucky, born completely by chance at the right time, nothing at all to do with sacrificing and crimping.

I paid for college playing Pulaski motor for the FS. That math doesn't math these days.

I paid for over half a dall sheep hunt in Alaska with a 2 week fire check. Think anyone is clearing 15-20k in 2 weeks swinging a Pulaski these days to do the same?

Same with purchasing a couple houses, had wayyy more to do with my birth year than anything else.

There's just no way the playing field is the same for 25 year olds today than when I was that age. The few people that are claiming the younger generations just arent working hard enough, arent ambitious enough, aren't motivated, arent willing to sacrifice, blah blah, they're full of crap and need to hit the smelling salts.

Buzz is in the top 2% club. That's an amazing achievement! Based on the younger generation I know, the sky is the limit, and they are going to do well.....as long as they don't listen to grumpy old guys like Buzz telling them they won't.

 

[WyoCoalMiner]

Already high pitched whining and talks of tax increases.

Yes, but not near as high pitched as the "my property tax is too high" whine.

 

[CPAjeff]

Yes, I could afford the home we’re currently in all over again. Purchased back in 2020 and it has doubled in value. House payment back then was 17% of our monthly net pay (one income). With increases in taxes, insurance rates, and wages, our current payment is 10% of our monthly net pay. The home will be paid off in the next five years. There’s a big difference between needs and wants.

With that being said, I'm not naive to the fact of rapidly increasing housing costs and lagging wage increases.

 

[mevertsen]

Yes, I could afford the home we’re currently in all over again. Purchased back in 2020 and it has doubled in value. House payment back then was 14% of our monthly net pay (one income). With increases in taxes, insurance rates, and wages, our current payment is 10% of our monthly net pay. The home will be paid off in the next five years. There’s a big difference between needs and wants.

I'm not arguing your property hasnt doubled in value in 5 years.

I believe it.

What I fail to understand is how that is sustainable long term?

Certainly good for the person that was fortunate to buy at the bottom, but in all my years I worked, the best yearly wage increase I got was close to 5 percent.

Your home annualized at 14 or 15 percent.

 

[SAJ-99]

Maybe readjusting?

https://www.realtor.com/news/trends/home-prices-below-asking-cotality/

 

[Steiny77]

Great, cool there's cheaper houses, right alonf with lower average wages in other parts of the country. There is of course the issue of finding reasonable employment in those places.

Also fair to note, GM, Ford, Toyota, Walmart, grocery stores, insurance agencies, etc. don't particulary give 2 shits what your wage is or where you live. Those guys dont charge 10k less for their vehicles to help their fellow man who lives in an area with more affordable housing. Walmart, Safeway, etc don't charge a person based on their income.

So while you want to simply say, move to a place with lower housing prices, and I don't totally disagree with you, in many cases that cheaper housing may be as or even more out of reach for a variety of reasons.

I do appreciate the thought and it may work for some. I talk to a lot of people across the US and the common theme I hear is wages arent keeping up with the price of most consumer goods.

I've kind of found the opposite to be true regarding location & wages.
We've got a lake home near Traverse City, MI which is a very affluent tourist area, homes are overpriced, high taxes, all the same stuff people gripe about in the west and coastal towns.

The saying in TC regarding wages is "Two thirds the pay, for a view of the bay". Employers in these affluent areas actually take advantage / screw over their employees by paying them less, because they know people want to live there so badly. Those same employees can go to downstate central Michigan (staying away from metro and college towns) and make a lot more money plus housing and other things are more affordable.

 

[BigHornRam]

I'm not arguing your property hasnt doubled in value in 5 years.

I believe it.

What I fail to understand is how that is sustainable long term?

Certainly good for the person that was fortunate to buy at the bottom, but in all my years I worked, the best yearly wage increase I got was close to 5 percent.

Your home annualized at 14 or 15 percent.

Sooner or later bubbles pop. They always do. That's the market correcting its self. What we don't need is the government stepping in and regulating the price of housing, like some here think we need to do. That will end in disaster.

 

[CPAjeff]

I'm not arguing your property hasnt doubled in value in 5 years.

I believe it.

What I fail to understand is how that is sustainable long term?

Certainly good for the person that was fortunate to buy at the bottom, but in all my years I worked, the best yearly wage increase I got was close to 5 percent.

Your home annualized at 14 or 15 percent.

It's not sustainable long term. I completely believe the bubble will pop and will eliminate the vast majority of "paper wealth." Because of this, I don't put much merit in the inclusion of equity when looking at a person's net worth (contrary to Dave Ramsey - love the guy though). At 2.25% interest rate on our mortgage, I almost feel like I'm stealing . . .

Some folks that I've chatted with insist on maintaining a mortgage to get a break on their income taxes, and while I understand their thinking, I'm not in that camp. Being debt free is a fantastic way to live.

I've been fortunate to purchase new homes at the absolute best times - housing crash of 2010 and early stages of COVID. Truth be told, I just got insanely lucky.

 

[mevertsen]

It's not sustainable long term. I completely believe the bubble will pop and will eliminate the vast majority of "paper wealth." Because of this, I don't put much merit in the inclusion of equity when looking at a person's net worth (contrary to Dave Ramsey - love the guy though). At 2.25% interest rate on our mortgage, I almost feel like I'm stealing . . .

Some folks that I've chatted with insist on maintaining a mortgage to get a break on their income taxes, and while I understand their thinking, I'm not in that camp. Being debt free is a fantastic way to live.

I've been fortunate to purchase new homes at the absolute best times - housing crash of 2010 and early stages of COVID. Truth be told, I just got insanely lucky.

Agree on the debt free.

Small house here. Interest was 4.25 originally, 5.0 after our refinance. (Explanation. Went from an FHA mortgage, to a local real estate loan from the credit union. Got rid of PMI, have to pay our own taxes, and the credit union has carried the note, so a slightly higher rate, but we are killing the mortgage off in quick order)

We have never had enough to itemize and deduct the interest on taxes, even with the massive reduction in income between 2023 and 2024. And I suspect a lot of people dont either, but it sure sounds good.

To the point its a waste of my time to even try. So I am going to add my wife's W2 forms, my 1099-r, and hit submit in turbo tax.

In all the years the years we tried, we could never itemize. That includes going to a CPA for several years.

 

[rjthehunter]

Buzz is in the top 2% club. That's an amazing achievement! Based on the younger generation I know, the sky is the limit, and they are going to do well.....as long as they don't listen to grumpy old guys like Buzz telling them they won't.

$520k a year to be in the top 2% in America. I didn't know gov work paid so well!

I have plenty of friends my age that own homes and have careers they're excelling at. The loudest ones are the people with the "It isn't fair" mindset. Homeownership is attainable for anyone with the right effort and placement.

I can't go buy a house in Key West, FL. It's too expensive of an area to live in. Likewise with many people in the West right now. It wasn't that way originally, but in our lifetimes, it has become that way. I go at life with a "whatever it takes" attitude. I wish more people shared the same mindset. If houses are too expensive for your income, you move somewhere they are affordable. You don't blame the system. If the demand to live there goes down, the prices will likely go down, or at least plateau out a bit.

 

[BigHornRam]

If? Try picking up a paper once a year. Already high pitched whining and talks of tax increases.

Do digital papers count?

Governor Gordon Joins Interior Secretary Doug Burgum to Launch Policies Bolstering Wyoming Coal Production – Sheridan Media https://share.google/5ywhcEXyV7UwBQL8O

 

[brownbear932008]

Maybe readjusting?

https://www.realtor.com/news/trends/home-prices-below-asking-cotality/

Most likely, I've noticed houses in my area beginning to sit on the market when a few years ago those homes would have moved quickly. I think the combination of cost/interest rates are starting to show. Houses are still moving fast if the price is right though.

 

[Treeshark]

$520k a year to be in the top 2% in America. I didn't know gov work paid so well!

Not to speak for @Buzz, but net worth and income are not the same thing. Guessing he’s talking about the former vs latter.

By the time a guy is in his 50’s, it becomes fairly common for income from one’s job to be secondary to investment income.

 

[BuzzH]

Not to speak for @Buzz, but net worth and income are not the same thing. Guessing he’s talking about the former vs latter.

By the time a guy is in his 50’s, it becomes fairly common for income from one’s job to be secondary to investment income.

Correct, top 2% in net worth, and yes rental income and investment income is topping take home pay.

I dont believe most folks in the younger generations will ever get there. The system is absolutely rigged against them.

Only way I see it happening for a vast majority is inherentance, winning the lotto, or forgoing home ownership. Pretty tough to have jobs that allow home ownership, maxing 401, living expenses, and still doing some fun stuff.

 

[Knight.54]

No way.
I bought a house in 1997. The way things are trending it could realistically be valued at 10 times what I bought it for within the next 3-4 years(obviously, the trend may change soon.)

I’m in a coastal vacation area. Covid made this market crazy. Although it’s softening a little bit it will never get back to where it was. It’s a finite resource—coastal land.

 

[BigHornRam]

By the time a guy is in his 50’s, it becomes fairly common for income from one’s job to be secondary to investment income.

Do you think today's twenty somethings will get to benefit from their investments when they become fifty somethings, like buzz has? If they work hard, live within their means, and invest wisely. Or is that a thing of the past too?