Home purchase

[BigHornRam]

lol, let’s just discount how much wider the gap is now…yep after 219 posts we’ve decided everything will be ok.

No. Things were hard back in the 70's just like they are currently hard. The economy goes up and down. Nothing new. The gap will shrink and it will expand. That's life.

Yelling chicken little to the younger generations is kind of silly IMO.

 

[PoleX]

Some quick math based on some national averages:

Housing Increase Median House Price 2015-2025 ($289,200-$410,800): 42%
S&P500 Increase 2015-2025 (someone else verify): 250-300%
Average Hourly Earnings 2015-2025 ($24.75/hr to $36.53/hr): 48% Increase
Average Rental Price Increase 2015-2025 ($959-$1539): 60.4% Increase

Based on the numbers above, there was a way to not purchase a house and still get ahead. Is buying a home harder now than it was 10 years ago, definitely. What I've seen is folks giving up, and rather than putting that money in other money making vehicles, they end up using it on newer vehicles, ski passes, fancy gym memberships, tv subscriptions, expensive phones, ect., ect. Consumerism is alive and well, hence the market improvement shown above....I have a hard time listening to people complain that show up to work in a newer truck with a 200$ pair of sunglasses and a stone glacier laptop backpack.

 

[Steiny77]

I don't see all the gloom and doom. In my opinion, for someone that wants to hustle there has never been a better time to get wealthy. Employers are starving for decent help and many offer great signing bonuses, great wages and benefit plans. For anyone with the guts to take on self employment, just about every service industry or trade is very short handed, most of the players are aging out and people wait in line for a good service businesses. You can pretty well name your price if you can perform.

My kids are doing great at 36 & 40, one has paid off their home and the other tells me it's down to $10k or so left on the mortgage. My 40 something nephew tells me he has already accumulated over $500k in his 401k. None of these kids are doctors or CEO's, just smart hard workers that have their act together. There was never a time that a huge percentage of the population was wealthy, able to have second homes, drive Cadillac's, hunt game in exotic places, etc.

The biggest wealth difference today is the fact that there are very few pensions anymore. A big percentage of the middle class population used to rely on a pension and SS at retirement age so they didn't need to save as much in their working years. That money got spent on lifestyle. Pensions are mostly gone, that doesn't work because we live too long now.

 

[Dave N]

Some quick math based on some national averages:

Housing Increase Median House Price 2015-2025 ($289,200-$410,800): 42%
S&P500 Increase 2015-2025 (someone else verify): 250-300%
Average Hourly Earnings 2015-2025 ($24.75/hr to $36.53/hr): 48% Increase
Average Rental Price Increase 2015-2025 ($959-$1539): 60.4% Increase

Based on the numbers above, there was a way to not purchase a house and still get ahead. Is buying a home harder now than it was 10 years ago, definitely. What I've seen is folks giving up, and rather than putting that money in other money making vehicles, they end up using it on newer vehicles, ski passes, fancy gym memberships, tv subscriptions, expensive phones, ect., ect. Consumerism is alive and well, hence the market improvement shown above....I have a hard time listening to people complain that show up to work in a newer truck with a 200$ pair of sunglasses and a stone glacier laptop backpack.

Must have been nice. MY hourly wage increase from 2015(and a few years earlier) through 2021 was 0%. Zip zero zilch. I have no idea just where a $36.50 job is average.

 

[SAJ-99]

I chased the millenial dream, got multiple advanced degrees while munching on avocado toast, took on student debt, and now make wages that are considered comfortable compared to the rest of Montana.

Just curious, do you think you knee-capped yourself by staying in Montana?

lol, let’s just discount how much wider the gap is now…yep after 219 posts we’ve decided everything will be ok.

I think the definition of Ok-not ok is different. BHR is honest. He's a boomer and realizes it's OK for him. I guarantee that it will not look the same for those younger. CPA firms are merging and outsourcing a lot of the work to other countries and AI will make things like paralegals and entry level financial analyst positions almost obsolete. Some will say "Make sure you can swing a hammer because that will never go away". Might be true, but I wouldn't bet on it. It's only a matter of time before they can replicate the work of a hungover framer. Not to mention a lot of the people the framer is building a home for today will not have jobs.

 

[PoleX]

Must have been nice. MY hourly wage increase from 2015(and a few years earlier) through 2021 was 0%. Zip zero zilch. I have no idea just where a $36.50 job is average.

It was a national average....you can apparently work at a hardware store and make damn near 60-70K in Bozeman.

I don't doubt it either as I used to work in manufacturing with hrly folks making 30/hr and that was 6 years ago now. We used to loose new hires to taco bell cause they were paying guys 22-24/hr to make tacos.

 

[SD_Prairie_Goat]

Back to original question, yes I could buy the remainder of the loan today, but why spend the cash when the loan is at 2.25%. I can easily beat that amount in the market or even a high yield savings account which is 3.6% ish today.




Now as for the rest of the conversation since. Could I buy what my home is currently valued at? Yes, but I am extremely fortunate in my career when it comes to pay increases.

Looking at the rest of my peers my age, no one I know is doing as well as me. But I also have lived in a low cost of living area, while making a big city salary the last 5 years or so. Not too many other people are able to get the best of both worlds and I have made the most of it.

Now that I am moving out to a high cost of living area, the math gets much more depressing. Going to triple my housing costs when compared to the value of my house currently. Almost 6x what I bought my house for originally. But that's what happens when you want to move to an area that everyone else wants to live in.


And can I just say, real estate agents are a joke. What do they do in HCOL areas to justify 2.5% of the purchase price vs what they do in normal cost of living areas. I'm sorry, but I struggle to see what value they bring to justify $20k to help you find a house. For the most part all they seem to do is schedule house showings on the buying side of things. Ok rant about purchasing a house over.

 

[BigHornRam]

I think the definition of Ok-not ok is different. BHR is honest. He's a boomer and realizes it's OK for him. I guarantee that it will not look the same for those younger. CPA firms are merging and outsourcing a lot of the work to other countries and AI will make things like paralegals and entry level financial analyst positions almost obsolete. Some will say "Make sure you can swing a hammer because that will never go away". Might be true, but I wouldn't bet on it. It's only a matter of time before they can replicate the work of a hungover framer. Not to mention a lot of the people the framer is building a home for today will not have jobs.

Hungover framers don't last long. I'll play along to help you make your point. When I was a twenty something sider/framer that rented an apartment like most young people starting out, Black Monday hit. The guy I was working with said " what's the big deal. We don't own any stocks." I said no we don't, but the wealthy people that are buying the higher end homes we are building do.

It was a bump in the road for home building for a short period of time, but a good learning lesson for a young guy just starting out in a career.

 

[rjthehunter]

I think there's a lot of speculation from an older generation looking at a younger generation, presumably without much insight.

I'm still under 30, have owned a home for 5 years, my salary has gone up 55% in the past 5 years through promotions & raises. I think people who try to make careers out of HS jobs will struggle. You aren't going to make "homeowner" money stocking shelves at a local grocery store. From what I see, my generation is doing good compared to the bleak outlook of this thread has painted.

 

[npaden]

A couple of the younger brighter folks here at our firm talk to me about where they are at and what they are looking forward to. Youngest that I talk to regularly has a $300k house, $100k in his 401k already and does a little investing on the side. He is 27 and making $100k already. If you just slap a CPI inflation adjustment to all those numbers he is WAY ahead of where I was at 27. He hasn't had any real outside help on any of those things and I had for sure no help.

Is he an outlier? Probably, but it for sure can be done.

 

[Elky Welky]

Just curious, do you think you knee-capped yourself by staying in Montana?

Absolutely, with one caveat. I love this State and it is home, so I picked a career, and a city, that would allow me to continue the lifestyle that I enjoy having here knowing full well that I could do better elsewhere. My comment above wasn't a complaint; not every bet pans out and I knew up front I was taking a lifestyle tax.

The caveat, however, is that nobody could have expected Covid, Yellowstone, and the housing market that followed. I could have absolutely, with my career where it is now, afford a home at 2018 prices.

 

[OleRedbeard]

We built ours in 2016 on a decent amount of acreage. After reading this I looked up what my house is worth just to entertain myself. I live in the middle of nowhere and it blows my mind somebody would be willing to pay what they actually say its worth. I think we had maybe 188000 in it up to the point of moving in. Since then I have built a few barns and fence along with some other stuff but not anything that would justify it being close to 400,000.... to get back to the question... could I buy my house today, yes but it be astronomical payment. Would I... heck no. Not for what they think its worth. I guess that is why I have so many new neighbors from other states living up the road and such.

 

[BigHornRam]

There's a 70 acre parcel of hay ground near by, which my wife and I have been chatting about purchasing. The main reason behind this is to give our children, should they decide to live around us when they're older, a few acres to start their lives on. Much to what @BuzzH is saying, the future looks pretty bleak for the next generation when it comes to home ownership, retirement, etc. While it won't be totally impossible, the odds don't look incredibly good.

There is newer Amish community that sprung up around here, on the Willwood side of the river. Would be about 5 miles south of me as the crow flies. They bought up a big used up farm of maybe 1000 acres, and are parceling it out to church members. They help each other build their homes, and some of the starter sheds they first move into are rather primitive. Not something of interest to me, but it works for them, and they do have large families to support.

Sounds a little like what you have in mind for your children, and an affordable way for young folks to achieve home ownership. Good for you for thinking about them.

 

[Treeshark]

I did a bit of digging into income vs home price data by state because of this thread.

There is definitely a significant difference in regions of the county. I can see why you Montana guys are feeling squeezed out.

Example: WI out-paces MT by approximately $6k per year in household income, yet the median come price is roughly $180k less. That is loco.

*I found this data during a relatively quick Google search, not sure of the veracity.

 

[Elky Welky]

I did a bit of digging into income vs home price data by stage because of this thread.

There is definitely a significant difference in regions of the county. I can see why you Montana guys are feeling squeezed out.

I think I misspoke earlier with my statistics, but yeah, the struggle is real.

Typical Montana home value up 66% in four years

Residential valuations produced by the Montana Department of Revenue for property tax purposes chart a major rise in Montana property values.

montanafreepress.org

'Double-edged sword': Montana's housing market least affordable in entire U.S.

Missoula Mayor Andrea Davis said people from higher-wage states are moving here and retiring here and snapping up homes, which increases housing prices.

www.bozemandailychronicle.com

It's Official: MT Wages Unable To Match Skyrocketing Costs

Montana housing prices are skyrocketing, and these Harvard study numbers show how our average wages/income aren't keeping up. What does this mean for Montana?

925kaar.com

 

[Treeshark]

It would be intersting to see what percentage of Montana homes are either owned by people living out of state or by people owning more than one home.

I would have to assume it’s pretty high.

 

[Southern Elk]

I did a bit of digging into income vs home price data by stage because of this thread.

There is definitely a significant difference in regions of the county. I can see why you Montana guys are feeling squeezed out.

Example: WI out-paces MT by approximately $6k per year in household income, yet the median come price is roughly $180k less. That is loco.

*I found this data during a relatively quick Google search, not sure of the veracity.

Yep. But we don’t have to bitch about NR hunting licenses and that’s something you can’t put a price on.

 

[Treeshark]

Yep. But we don’t have to bitch about NR hunting licenses and that’s something you can’t put a price on.

I’m not letting you bait me into that one. Only @Forkyfinder is able to do that!

 

[rjthehunter]

Yep. But we don’t have to bitch about NR hunting licenses and that’s something you can’t put a price on.

Paying only $250k for a house that cost $750k in MT accounts for a LOTTTT of NR tags, and even a couple of sheep hunts!

 

[Forkyfinder]

I’m not letting you bait me into that one. Only @Forkyfinder is able to do that!

This made my 15 minutes.

Paying only $250k for a house that cost $750k in MT accounts for a LOTTTT of NR tags, and even a couple of sheep hunts!

Well hey - im glad youre happy with your discount living farther from the countries relevant things

Id love you both to know that disney world, of all f'ing places, charges R less than NR.