Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-06-2008, 03:29 PM   #21
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by Khan View Post
A washer and dryer in a detached garage? What genius thought of that?
The house is a small one built in 1944. I'd be impressed if the architects were prescient enough to predict the future need for a "utility room."

If we ever added on a master suite to the back of the house, we'd definitely include a utility room. Otherwise we keep trudging to the garage, hoping to get laundry our done AROUND days like today, when it's currently 36 degrees, drizzling and muddy outside.
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-06-2008, 03:51 PM   #22
Recycles dryer sheets
 
Join Date: Jan 2006
Posts: 168
Quote:
Originally Posted by barbarus View Post
Taken from an article quoting NAR figures.

"From 2000 to 2006, median family income rose almost 14 percent, to $57,612.
Over the same period, the median-priced existing home increased about 50 percent, to $221,900. By other indicators, the increase was even greater.

Of course incomes here are three or four times higher, but most Americans really do fall into the range quoted in the article.

Either incomes double or houses fall by 50%.
Looks pretty spot on to me:

Down payment - 5% = $11,095

30 year fixed at 5.75% = $1,229

Gross income = $4,800 per month

% of gross income = 25%

Taxes, insurance, pmi, etc. are all variable that will push the ratio up vs. higher down payments, lower interest rates, and tax deductions pushing it down.

I certainly don't think houses will fall another 50%. I think of it as houses becoming more fairly valued after a decade of little/no growth in the 90's. We did get extended, as always, but I think we have bottomed out in my market and will probably move sideways for a few more years.
__________________

__________________
David

I get up at 7 yeah, and I go to work at 9. Got no time for livin yes I'm workin all the time. Seems to me I could live my life a lot better than I think I am. I guess thats why they call me the Working Man.
DJRR is offline   Reply With Quote
Old 03-06-2008, 03:53 PM   #23
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Quote:
Originally Posted by ziggy29 View Post
The house is a small one built in 1944. I'd be impressed if the architects were prescient enough to predict the future need for a "utility room."

If we ever added on a master suite to the back of the house, we'd definitely include a utility room. Otherwise we keep trudging to the garage, hoping to get laundry our done AROUND days like today, when it's currently 36 degrees, drizzling and muddy outside.
Maybe you can build a covered walkway. Even if you had a utility room, you will still get drenched when unloading groceries in the rain, and such. I really hate that, especially when the wind is blowing. But at least in my case, I don't have to walk 50 feet in the rain (just 20 or so).

My next house will have an ATTACHED garage, with door opener too, and laundry inside. I might not die without one, but I will stamp my feet and pout.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-06-2008, 05:34 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 11,979
Quote:
Originally Posted by barbarus View Post
Taken from an article quoting NAR figures.

"From 2000 to 2006, median family income rose almost 14 percent, to $57,612.
Over the same period, the median-priced existing home increased about 50 percent, to $221,900. By other indicators, the increase was even greater.

Of course incomes here are three or four times higher, but most Americans really do fall into the range quoted in the article.

Either incomes double or houses fall by 50%.
As several have suggested, if you're a homeowner, this is somewhat irrelevant because you have a (leveraged, most likely) asset that is appreciating with home prices. But as others have said, if you're just entering the market it's going to be more difficult. Must be something to this rumor about generations that can't expect to do better than their parents - maybe we're there.

I'm sure many here would agree that it's a good thing we're not 20 somethings anymore. My parents had it better (in retirement) than I ever will with a COLA pension and almost free retiree healthcare, but I will probably be more comfortable in the years ahead than the generations that will follow. Too bad, but nothing (reasonable) I can do about it that I know of.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 60% equity funds / 35% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 03-06-2008, 08:03 PM   #25
Thinks s/he gets paid by the post
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 2,951
Quote:
Originally Posted by haha View Post
John Hussman, an economist and manager of Hussman Funds showed that incomes and house payments are in proportion, not incomes and house prices. So lower interest rates allow people to buy a more expensive house relative to their incomes. Likewise liberal mortgage terms of the recent boom allowed stretching to get more house.

We are the monthly payment society. People would buy cyanide if the payments were low enough.

Ha
ding ding ding!

People don't care about the price, they care about the payment (unfortunately). Cheap credit is part of what pumped the prices up, and homes are bigger and fancier. You could see combinations of unconventional financing for people hungary for housing, but the easiest one is 40yr or more mortgage terms. Im looking for signs of seller financing too, and Ive found one or two.
__________________
jazz4cash is offline   Reply With Quote
Old 03-06-2008, 10:12 PM   #26
Thinks s/he gets paid by the post
ladelfina's Avatar
 
Join Date: Oct 2005
Posts: 2,713
I read somewhere that car financing was casually extending itself to 6, 8, or even 10 years! When I bought a car 48 months was extreme. I know some cars are a little more durable than before.. but, still!
__________________
ladelfina is offline   Reply With Quote
Old 03-07-2008, 04:06 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
This was a bit of a bubble. Some people are left holding the bag. Yes, they overpaid. Some will walk away from the loan. Others (probably most) will eat the 25 - 50k loss.

Those who took the equity in a HELOC and spent the money have some unsecured credit. They got by lucky... they got the loan at a low price.

I lost money in the tech bubble... My bad, my loss.

House prices are probably a bit over done. Things will get back to normal. Those paper loses today will narrow in the next year or so.... big gains in the value of houses.
__________________
chinaco is offline   Reply With Quote
Old 03-07-2008, 10:22 PM   #28
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
Here's some thoughts I've had on the whole thing (in my inexpert opinion) not necessarily in any particular order.

* The bubble is deflating & house values have dropped a bit (more so in some places than others) - there will be a higher than average rate of foreclosures over the next year that will assist in dropping values, but things will settle down in that regard sooner than we think - and after a 5% to 20% decline (depending on the area) house prices will flatten out for a few years at least - & maybe 5 or 10.

* There will not be as many buyers in the market as there were due to:
A. lenders are already tightening up on who they will loan to & on what terms; &
B. The economy - some folks are starting to hurt & this will continue

* New home construction has already started slowing and will continue to slow due to A & B above + increased materials costs (due to oil prices, the dollar, & inflation in general) making it harder to for new construction to compete with the prices of existing homes whose prices will remain relatively flat. A few large new home builders will go out of business & more than a few will drastically scale back the size of their business & will focus more on building subdivisions with smaller homes. The slowdown in new construction will cause an additional drag on the US economy.

*Middle class Americans will tend to live in smaller homes in the future than has been the trend in the past 25 years toward more sq ft. due to a variety of reasons - but fuel/electricity costs being one of the biggies.

* I'm guessing we may also see at least a small boom in the the demand for residantial rental properties over at least the next few years as people will tend to be renters longer before they buy than in the past.

* As to the future of interest rates (which I think are being artificially held down right now)- well, I'd like to hear anyone's thoughts on that......
__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Old 03-07-2008, 10:44 PM   #29
Dryer sheet wannabe
 
Join Date: Sep 2006
Location: Southern Cal
Posts: 13
Here in SoCal I think we are one of those "other" places - we have a ways to go before we are out of the housing mess.

Every day I see small 1970's fixer-uppers come on the market at $500-600k in relatively crappy locations. Still stupid prices.

Quote:
Originally Posted by Texarkandy View Post
Here's some thoughts I've had on the whole thing (in my inexpert opinion) not necessarily in any particular order.

* The bubble is deflating & house values have dropped a bit (more so in some places than others) - there will be a higher than average rate of foreclosures over the next year that will assist in dropping values, but things will settle down in that regard sooner than we think - and after a 5% to 20% decline (depending on the area) house prices will flatten out for a few years at least - & maybe 5 or 10.

* There will not be as many buyers in the market as there were due to:
A. lenders are already tightening up on who they will loan to & on what terms; &
B. The economy - some folks are starting to hurt & this will continue

* New home construction has already started slowing and will continue to slow due to A & B above + increased materials costs (due to oil prices, the dollar, & inflation in general) making it harder to for new construction to compete with the prices of existing homes whose prices will remain relatively flat. A few large new home builders will go out of business & more than a few will drastically scale back the size of their business & will focus more on building subdivisions with smaller homes. The slowdown in new construction will cause an additional drag on the US economy.

*Middle class Americans will tend to live in smaller homes in the future than has been the trend in the past 25 years toward more sq ft. due to a variety of reasons - but fuel/electricity costs being one of the biggies.

* I'm guessing we may also see at least a small boom in the the demand for residantial rental properties over at least the next few years as people will tend to be renters longer before they buy than in the past.

* As to the future of interest rates (which I think are being artificially held down right now)- well, I'd like to hear anyone's thoughts on that......
__________________
DanteAlighieri is offline   Reply With Quote
Old 03-07-2008, 11:07 PM   #30
Full time employment: Posting here.
Retire Soon's Avatar
 
Join Date: Nov 2005
Posts: 655
Quote:
Originally Posted by al_bundy View Post
don't forget that in california in the last few years between 50% and 75% of all new mortgages every year have been ARM's, I/O, negative ammortization and all the other revolutionary financial products. so that figure means people are probably paying 50% of income based on teaser rates. let's see what happens to home prices when most mortgages in california are your plain 30 year fixed
You've raised a very valid point. The days of no qualification easy-money financing are history. Escrows simply are not successful with money being unavailable.
__________________
Retire Soon is offline   Reply With Quote
Old 03-07-2008, 11:32 PM   #31
Thinks s/he gets paid by the post
packrat44's Avatar
 
Join Date: Jun 2007
Location: near Canadian border and near Mexican border
Posts: 1,142
Quote:
Originally Posted by Want2retire View Post
That's good because I REALLY want a two-car garage, and don't have any garage at all. Not even a carport. But I do have a driveway.

My next house will have a two-car garage, but it's good to know I won't die for lack of one in the meantime.
I have the house for you. Five car garage (2 bays are 40' deep; 3rd bay is 22' deep) plus 1 carport; house has about 2,700 SF - only $235K.
__________________
Pigs get fat, hogs get slaughtered. That's my story and I am sticking to it.
packrat44 is offline   Reply With Quote
Old 03-07-2008, 11:41 PM   #32
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Quote:
Originally Posted by packrat44 View Post
I have the house for you. Five car garage (2 bays are 40' deep; 3rd bay is 22' deep) plus 1 carport; house has about 2,700 SF - only $235K.
Wow! A 5 car garage! Sounds like a dream house.

Let's see. One car parked in the middle. The ends of the deep bays can be a workshop. My lawnmower and so on can take up an area on one side. The rest can all be storage! Sounds good to me.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-08-2008, 12:05 AM   #33
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
Quote:
Originally Posted by Want2retire View Post
Wow! A 5 car garage! Sounds like a dream house.

Let's see. One car parked in the middle. The ends of the deep bays can be a workshop. My lawnmower and so on can take up an area on one side. The rest can all be storage! Sounds good to me.
OK - here ya go Want2retire:
(Since this has become a "House for Sale" thread)

22 y/o, 4 bdrm 3.5 bath 14x25 rec-room, 3400 sq ft - 2 car garage w/large tool/storage room, 3 acres, 3 y/o gunite saltwater pool, large wraparound rear deck overlooking private wooded area, lots of upgrades, end of cul-de-sac on low-traffic street, quiet area close to major hospital & lots of new shopping with new upscale homes nearby, great local school district, etc etc etc

Texarkana, TX - the second fastest growing small metro area in the US for two years running (per Forbes) - 70 miles from Shreveport & 150 from DFW.

& I'll build you an additional 2 car garage for 5 or 10K extra (depends on how fancy u want it.)

(Oh, & Texas A&M has already broken ground on a brand new 4 year University being built from the ground up about a mile & a half away - Ross Perot reportedly agreed to fund the engineering school if they would put it here)

340K (negotiable)
__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Old 03-08-2008, 12:12 AM   #34
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Well now, Texarkandy, what would I do with 3400 square feet? There's only one of me, y'know. I'd get lost going from my bedroom to the kitchen, to make coffee in the morning! Sorry, no dice.

Actually Packrat's house is too big for me, too. I just liked daydreaming about having a 5-car garage. I'm garage-deprived!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-08-2008, 12:29 AM   #35
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
OK - I'm sure I can find a way to convert some of the house into garage
__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Old 03-08-2008, 02:16 AM   #36
Thinks s/he gets paid by the post
packrat44's Avatar
 
Join Date: Jun 2007
Location: near Canadian border and near Mexican border
Posts: 1,142
Quote:
Originally Posted by Want2retire View Post
Wow! A 5 car garage! Sounds like a dream house.

Let's see. One car parked in the middle. The ends of the deep bays can be a workshop. My lawnmower and so on can take up an area on one side. The rest can all be storage! Sounds good to me.
Actually there is workshop besides the 5 bays. It is a room (17.5' x 13') that is in front of the 22' bay. I use it for rebuilding engines; working on motorcycles; etc. DW does her crafts such as stain glass; etc. Equiped with 220v for welder and large air compressor.
__________________
Pigs get fat, hogs get slaughtered. That's my story and I am sticking to it.
packrat44 is offline   Reply With Quote
Old 03-08-2008, 08:03 AM   #37
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,936
Quote:
Originally Posted by packrat44 View Post
Actually there is workshop besides the 5 bays. It is a room (17.5' x 13') that is in front of the 22' bay. I use it for rebuilding engines; working on motorcycles; etc. DW does her crafts such as stain glass; etc. Equiped with 220v for welder and large air compressor.
**DROOL!!** Who needs a house with a garage that big?

Gee, I dreamed about your garage all night without even knowing about the workshop. Can it be that your garage is actually TOO big for me? Wow - - I think it actually might be. Sounds like a wonderful family house, though!
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 03-08-2008, 10:42 AM   #38
Thinks s/he gets paid by the post
packrat44's Avatar
 
Join Date: Jun 2007
Location: near Canadian border and near Mexican border
Posts: 1,142
Quote:
Originally Posted by Want2retire View Post
**DROOL!!** Who needs a house with a garage that big?

Gee, I dreamed about your garage all night without even knowing about the workshop. Can it be that your garage is actually TOO big for me? Wow - - I think it actually might be. Sounds like a wonderful family house, though!
A garage can never be too big for a Gear Head who likes hot rods. I built this first house when I was still a bachelor. We are going to move to our second house which has a 1,150 SF garage and will soon have a shop about 3,200 SF. The house is smaller at about 1,600 SF.

If the garage/shop is large enough and well equipped with tools, it will keep the hushband from hanging around in the house bothering the DW.
__________________
Pigs get fat, hogs get slaughtered. That's my story and I am sticking to it.
packrat44 is offline   Reply With Quote
Old 03-08-2008, 10:59 AM   #39
Thinks s/he gets paid by the post
 
Join Date: Oct 2006
Posts: 3,820
Quote:
Originally Posted by Texarkandy View Post
Here's some thoughts I've had on the whole thing (in my inexpert opinion) not necessarily in any particular order.

* The bubble is deflating & house values have dropped a bit (more so in some places than others) - there will be a higher than average rate of foreclosures over the next year that will assist in dropping values, but things will settle down in that regard sooner than we think - and after a 5% to 20% decline (depending on the area) house prices will flatten out for a few years at least - & maybe 5 or 10.

* There will not be as many buyers in the market as there were due to:
A. lenders are already tightening up on who they will loan to & on what terms; &
B. The economy - some folks are starting to hurt & this will continue

* New home construction has already started slowing and will continue to slow due to A & B above + increased materials costs (due to oil prices, the dollar, & inflation in general) making it harder to for new construction to compete with the prices of existing homes whose prices will remain relatively flat. A few large new home builders will go out of business & more than a few will drastically scale back the size of their business & will focus more on building subdivisions with smaller homes. The slowdown in new construction will cause an additional drag on the US economy.

*Middle class Americans will tend to live in smaller homes in the future than has been the trend in the past 25 years toward more sq ft. due to a variety of reasons - but fuel/electricity costs being one of the biggies.

* I'm guessing we may also see at least a small boom in the the demand for residantial rental properties over at least the next few years as people will tend to be renters longer before they buy than in the past.

* As to the future of interest rates (which I think are being artificially held down right now)- well, I'd like to hear anyone's thoughts on that......
This looks pretty realistic to me.

I'm wondering about the "smaller homes in the future". We've seen a continuous increase in average square feet in new construction over the last 60 years. Is that going to stop?

I can argue that median wages for males have been about flat for the last 30 years (CPI adjusted) so the increase should have stopped before now. However, we've had more two income families, so more earners to pay for the house, and women's hourly earnings have been going up. So that has supported the increase.

Also, new single-family houses are bought by high income people, and high earners have had significant gains.

But, sooner or later, the growth in women's hours has to stop. Also, the high income people need to re-sell to lower income people, and that puts downward pressure on resale prices. Maybe it's getting harder to make the case for bigger and bigger houses. Then there's heating costs and gasoline costs you mention (higher gasoline prices make it more expensive to build on big new lots further out). If the trend is going to change, we should see it in the next few years.
__________________
Independent is offline   Reply With Quote
Old 03-08-2008, 11:13 AM   #40
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
my in-laws who are going to retire in 10 years or so have already started looking to sell the house which is around 2500 sq ft and buy a cheaper apartment. they said they are tired of doing the work to maintain it
__________________

__________________
al_bundy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What if House Prices Fall by 30% Worldwide? camberiu FIRE and Money 26 02-07-2008 12:52 PM
The Great Fall of China... IBWino FIRE and Money 8 01-05-2008 08:14 AM
House prices to drop much lower: Greenspan retire@40 FIRE and Money 82 10-05-2007 09:58 PM
house keeping prices bright eyed Other topics 39 07-13-2007 09:15 PM
house prices and education? sgeeeee FIRE and Money 0 09-05-2004 12:50 PM

 

 
All times are GMT -6. The time now is 11:36 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.