So there's been some discussion about economics and home ownership recently. Thought some folks would find this interesting. Let's compare our current situation to the "Great Depression"
The average (mean) annual income during the great depression was $1,368 according to archives.gov. Housing values dropped approximately 35% during the great depression according to encyclopedia.com, and best example I can find of an average is about $3900.
According to Statistica.com, the average sales price of a new home in 2021 was $453,700 U.S. dollars. According to Statista.com, the average US income in 2020 of $71,456.
Depression Era:
Result: 35.08%
Modern Era:
Result: 15.8%
So, according to these numbers, housing was more affordable during the Great Depression than it is now.
I won't give my opinion on this, it's pretty complex really. But I will say that my big takeaway here isn't necessarily housing affordability, but an acknowledgment that our entire country has been robbed blind by central banks through the use of debt-based fiat currency. The dollar is worth absolutely nothing compared to what it was prior to 1913.
If I was 20 yrs. old today, flat broke, with just a high school education, I could be a homeowner (well, mortgage holder) within ten years, regardless of the economy. Show me somebody whining about not being able to own a home, and ask about their credit rating? Their work history? Their spending history and savings?
I'm not saying that it's easy, but it is still being done every day. Mexicans and Asians do not let the economic situation stop them. It's only the entitled Americans who sit on ass doing nothing but whine.
Yes, everyone knows life was actually more affordable during the original Depression.
We've lived through more drastic market downturns than the Great Depression over the last 50 years. Great Depression folks actually got off easy.
Another point you're missing is the % of income that goes to taxation at all levels. That, too has skyrocketed.
And also the concentration of wealth is even worse today than it was back in the late 1920s.
Part of it is the banking system and government greed. Another is demographics and historical timing, the post-WWII economic and baby booms ushered in the era we see today of worthless money, insane taxation levels, corporate greed etc etc through protracted growth and low interest rates etc.
The baby boomers, at their size of demographic and avg lifespan have been the main actor in getting to the global financial mess we see today.
Many many babyboomers became accidental millionaires via the housing market, they earned more money than they should have by mere historical timing. They also live so long now as to accumulate and hoard wealth much longer than their previous generations. Today this demographic controls most of the wealth on earth, and are blocking the financial and social mobility of newer generations by not retiring, or retiring at 100years old, refusing to pay employees living wages etc.
This accidentally wealthy and monstrously huge demographic segment has jacked up the price of everything everywhere simply by virtue of having disposal income and willingly paying more for the same things that costed less in the past, over decades and decades.
When the babyboomers are gone it will be on one hell of a demographic and socio-cultural adjustment.
They will have left behind a poor and globalized (i.e. unstable) society with huge expensive governments and pretty much everyone will be wage slaves.
I get a huge kick hearing older folks ask 19-20-25 year olds "why dont you just move to the big city and make 120k right out of university?"..... as if that's even an option for anyone.
quote:
Originally posted by banjo bill-eIf I was 20 yrs. old today, flat broke, with just a high school education, I could be a homeowner (well, mortgage holder) within ten years, regardless of the economy. Show me somebody whining about not being able to own a home, and ask about their credit rating? Their work history? Their spending history and savings?
I'm not saying that it's easy, but it is still being done every day. Mexicans and Asians do not let the economic situation stop them. It's only the entitled Americans who sit on ass doing nothing but whine.
Being a debt ridden mortgage owner is not owning a home.
Living off debt is nothing to be proud of or strive for.
The reality is that a 20 year old today has to live under a bridge at a salary of 30k/year.
The days of buying your home on your lower working class wage are long long gone. People exist today to hand tax money to the government, nothing else.
Antoine, it looks like I barely qualify as a boomer [1946] .... I worked, payed my taxes, generally kept my nose clean.... don't know just what I should have done [drastically] differently to stave off our current dilemma???
This pops to mind when the value (?) of labor/work comes up..... it's more than a couple of decades old, so everybody will have to make their own adjustments for inflation or other economic factors [I hope it comes out clear enuff to be readable]:
banjo bill-e I'd really be interested in your game plan for how you'd do this. Seriously. Even at $30/hr 50hr/week, you can't afford to buy a house these days.
And come on guys, lets not try to turn this into a generational war thing. I love my parents, I'm sure you love your kids. And honestly, every generation thinks the other generations are lazy and out of touch. It's such a boring conversation. Baby Boomers spent their youth smoking doobies, doing LSD, and having sex without condoms (until HIV showed up). Don't give us that line about hard work, everyone knows what you spent your youth doing and it wasn't working hard that's for sure. Sex Drugs and Rock-n-Roll.
Just a little friendly banter, to be clear. Let's try to keep this about economics.
Edited by - KCJones on 03/21/2023 14:06:01
.... Ooops!! ... "Sept 2, 2005" right there ^^ in plain sight!! Pay attention fcol, Owen!! 
Edited by - Owen on 03/21/2023 14:13:39
Let me give a little different idea than has been given:
Instead of paying several thousand a month for a brand new $400,000 plus house, how about buying one that's already been owned by at least one or more owners and doesn't cost near that much, say in the $200,000 range Maybe purchase a "fixer-upper" and pay even less or, if you hit it lucky, take over payments on one that someone is about to lose, maybe in the 100-150,000 range. Mortgage payments would be half or less than a brand new one and one could afford to do some renovations with some of the money not given for a brand new house.
Young adults today don't seem to want to do any work to own a home. Most seem to want a brand new house, brand new appliances, brand new furniture and so on. With a bunch of sweat equity, an older home can be transformed into a good lucking, very expensive home but most won't do the work.
Just a thought.
Makes me wonder how my son and daughter both owned homes since many think it is about impossible. I guess it is because they both got educations in a field that needed their majors, and in my daughter's case she received her Masters degree at a college where her curriculum had a 93% placement rate paid of a student loan of $54,000 in less than three years and owned a house while still in her 20's. Maybe, although my son started off at $12 an hour in a big city (Atlanta), maybe his 600 hours his second year on the job of overtime helped propel him to home ownership. Yes, they both have mortgages, but who didn't start that way?
$200,000 home? Bachelors+Masters Degree in 3 years for $54,000? What planet are you living on?
The point of this thread isn't "X generation is better than Y Generation". It's "Debt-based fiat currency has destroyed the value of the dollar and enslaved our children"
Edited by - KCJones on 03/21/2023 14:46:12
Sherry: "Young adults today don't seem to want to do any work to own a home. Most seem to want a brand new house, brand new appliances, brand new furniture and so on. With a bunch of sweat equity, an older home can be transformed into a good lucking, very expensive home but most won't do the work."
Could that ^^ brush be a bit on the wide side? Are there stats to support "most"?
I'll admit that I don't get out-and-about as much as I used to so I might be somewhat ignorant, and I'm not saying it's a basis for extrapolation, but I personally. don't know any young adults that "don't seem to want to work" or "won't do the work."
How would I do it? The same way that I did it. I would live on less than I earned, I would establish A-1 credit, I would meet with a local banker and tell them that my goal was home ownership, and most will be glad to provide expert advice on how to accomplish that. I would save my down payment and closing cost funds and purchase a "starter home" that was within my means. It would not be my dream home or my forever home but I would stop paying rent and begin building equity.
But this is best accomplished as part of a team. Find a life partner with similar goals and much more becomes possible.
There is a huge difference between "living off debt" and in obtaining a mortgage on an appreciating asset. All through the 2000s my home increased in value---every month---by more than my mortgage payment, taxes, and insurance combined. Yeah, I was really feeling "debt ridden" for sure. I'll take all of that I can get!
quote:
Originally posted by OwenAntoine, it looks like I barely qualify as a boomer [1946] .... I worked, payed my taxes, generally kept my nose clean.... don't know just what I should have done [drastically] differently to stave off our current dilemma???
This pops to mind when the value (?) of labor/work comes up..... it's more than a couple of decades old, so everybody will have to make their own adjustments for inflation or other economic factors [I hope it comes out clear enuff to be readable]:
I wish my parents would have encouraged me to work in tech. Any tech professional my age worth their salt is making more than the equivalent MD or JD with ease.
Anyone click on the help wanted link in the Buc-ees thread? $100K to $250K for managers, decent pay and benefits for all workers, and I have little doubt that anyone willing to prove their value cannot work their way into management. No degree required. Might have to start working nights and weekends. Might have to be dependable. So, just crazy talk I suppose.
quote:
Originally posted by banjo bill-eIf I was 20 yrs. old today, flat broke, with just a high school education, I could be a homeowner (well, mortgage holder) within ten years, regardless of the economy. Show me somebody whining about not being able to own a home, and ask about their credit rating? Their work history? Their spending history and savings?
I'm not saying that it's easy, but it is still being done every day. Mexicans and Asians do not let the economic situation stop them. It's only the entitled Americans who sit on ass doing nothing but whine.
This is so painfully flippant. The rent for a one bedroom apartment when I graduated High School was 500 bucks. I could work and live, that same exact apartment is now 1400 but wages have not increased at a commensurate level. We also need people to go to college to do the jobs that require that level of education. That education is now literally 10x what is was when I graduated High School.
Side note: Asia isn't a country and Mexico is. While Latino immigrants do purchase homes they usually do so with a larger family group of up to four or five incomes and tend to do so in communities that are affordable do to their lack of white people.
The path I took to get to where I am barely exists anymore, and I didn't have to work 100 hours a week walking barefoot in the snow to get to my job either. There are plenty of people that work Damned hard, and are good stewards of their finances, that still struggle being able to afford a home. Hell, I only can afford my home because I bought it 30 years ago.
quote:
Originally posted by TexasbanjoLet me give a little different idea than has been given:
Instead of paying several thousand a month for a brand new $400,000 plus house, how about buying one that's already been owned by at least one or more owners and doesn't cost near that much, say in the $200,000 range Maybe purchase a "fixer-upper" and pay even less or, if you hit it lucky, take over payments on one that someone is about to lose, maybe in the 100-150,000 range. Mortgage payments would be half or less than a brand new one and one could afford to do some renovations with some of the money not given for a brand new house.
Young adults today don't seem to want to do any work to own a home. Most seem to want a brand new house, brand new appliances, brand new furniture and so on. With a bunch of sweat equity, an older home can be transformed into a good lucking, very expensive home but most won't do the work.
Just a thought.
I think that people talking about a 200k fixer upper really forget their roots.
It's very hard to agree or disagree with any of this when everyone in the discussion seems to live in a different economy. New York has always been a city of renters. Small towns in the U.S. and Canada always seem to have affordable housing if a person can find a steady job at city wages. Our first family home was purchased in East Vancouver for about $4000 in 1945. It was a brand new house but it was also no bigger than a 2 car garage. They haven't built houses that small in Vancouver since the 1950's. If the basic cheap lot is now $1,000,000 why would anyone bother building a vacation cabin ? The original working class district was on the waterfront. You breathed in the fumes from every mill and factory in the area. Working people didn't have cars so you either lived near a streetcar line or you lived near your job. Since the end of world war 2 most people wanted to live away from their work so the home builders went further out of town. With nothing but trouble in many parts of the world everyone wants to move to North America. Immigrants will typically move to the big cities where they can take the job that the local people don't want. It's much easier for them to move to where their fellow countrymen are living. Nobody wants to be the only brown person in their new town. As for lodging many of these immigrants are use to living on top of each other so crowding 12 people into 1 house isn't considered a hardship. As Bill previously explained they live in crowded conditions, work hard, save money, and eventually buy their own real estate.
If you can find one, there are sometimes fixer-uppers around here in the 240k-300k range. Mostly in Stockton and Sacramento. Some are even in safe neighborhoods. Banks selling foreclosed houses often want more than the current market will bring. Hardest thing is probably saving up the down payment.
quote:
Originally posted by TexasbanjoMaybe purchase a "fixer-upper" and pay even less or, if you hit it lucky, take over payments on one that someone is about to lose, maybe in the 100-150,000 range.
Houses like that have one thing in common: no jobs for hundreds of miles around...
Just a thought...
quote:
Originally posted by OwenAntoine, it looks like I barely qualify as a boomer [1946] .... I worked, payed my taxes, generally kept my nose clean.... don't know just what I should have done [drastically] differently to stave off our current dilemma???
This pops to mind when the value (?) of labor/work comes up..... it's more than a couple of decades old, so everybody will have to make their own adjustments for inflation or other economic factors [I hope it comes out clear enuff to be readable]:
These days though, online gaming tournaments actually do get into the seven digit prize money winnings...
The economic comparison was made clear as day by a news story I read yesterday.
A 104 year old woman has sold her home that she has lived in for 102 years. Her father bought the modest house in 1921 for $400. That purchase price is roughly equivalent to $24,000 in today’s money.
That medium sized house in a decent area just sold for $380,000.
The vast gulf between $24,000 and $380,000 in today’s money sharply illustrates how access to the basic necessity of a home has altered beyond recognition. For many it is an impossibility.
Thats not sustainable. And it is a ticking time bomb we've planted ourselves, under the fixed delusion it won't have consequences that will cause enormous harm.
Edited by - adstrom on 03/22/2023 04:32:52
quote:
Originally posted by Bart Veermanquote:
Originally posted by TexasbanjoMaybe purchase a "fixer-upper" and pay even less or, if you hit it lucky, take over payments on one that someone is about to lose, maybe in the 100-150,000 range.
Houses like that have one thing in common: no jobs for hundreds of miles around...
Just a thought...
Maybe where you live that's true. Around here, you can find fixer-uppers galore but few people want to put out the sweat equity to fix them up.
I think it's pretty telling that the solutions suggested here are things like "meeting with a local banker" and "saving up a down payment for a starter home". It's really telling how in tune folks are with the modern economy.
I'll say this: Don't you think that, maybe, just possibly, the modern global economy and debt-based monetary system is different than it was before? Isn't it more likely, when you look at the numbers on inflation, wage stagnation, and concentration of wealth, that it's possible that those factors are driving the issue? Do you really think that "the new generation" is really all that different than literally every generation of humans that have came before them?
C'mon. Take a step back and listen to what you're saying.
Edited by - KCJones on 03/22/2023 05:26:19
quote:
Originally posted by OwenAntoine, it looks like I barely qualify as a boomer [1946] .... I worked, payed my taxes, generally kept my nose clean.... don't know just what I should have done [drastically] differently to stave off our current dilemma???
This pops to mind when the value (?) of labor/work comes up..... it's more than a couple of decades old, so everybody will have to make their own adjustments for inflation or other economic factors [I hope it comes out clear enuff to be readable]:
My son did all those things, and very well. Majored in Computer Game design in college and now makes more money than I ever dreamed of making working for a major Data Base company. He does not design games, though he did have a board game on the market. He has a global reputation in his field and has had job offers all over the world. Oh yes, and he's no longer a he. Yet despite this, and having an excellent credit rating, and is great at managing money, there is the issue of down payment for purchasing a house. Saving that, while paying rent and paying down $100,000 in college loans is what is keeping her from purchasing a house. Her rent just went up again for the third time.
Heres some data.
In 2019 Wyoming, I built a simple 1200 sqft home with full basement on a premium 1 ac lot. Building materials are expensive in WY. Good labor almost impossible to hire but easily found. 95k lot, 85k building materials, 40k labor. Asked 375k, got multiple offers, sold for 435k. Minus 3% to buyers broker. Buyers in their 70s.
AZ 2022 Remolded and flipped a home in Tucson area that we purchased in 2017 as rental. Paid 70k, put 35k in, multiple offers got us 325k. Minus 2.5% to buyers broker. Buyer was 83.
Inherited land in TN. Hired builder to build us a 1350 sqft home with walk out basement. 258k. I supply land and pay for city water hookup. I also did trenching and flattened a hill with a dozer.
I subed on a home remodel in Cody WY 10 years back. A celebrity bought a ranch and wanted to triple the home size to 9000 sqft. Project went on for 2 years. I only worked on it 6 months. That project was 2.7 million total. Cody is considered the cheap Jackson Wy alternative. Shower walls were made of stone slabs with fossils and cost 60k alone. Nothing for someone willing to buy a 10 to 25k banjo right? lol
Real numbers. Affordable is relative.
