We Can’t Afford Our Home Anymore!

[ShokWaveRider]

Although, it is said that home values increase on average about 3% a year, just not every year, with some years more others less. Someone here once posted about the 18 year RE cycle. There is a link somewhere. There are many, here is one.

https://www.propertygeek.net/article/the-18-year-property-cycle/

 

[Surewhitey]

I feel like we're hiding under a rock with the property tax fellows. They haven't raised ours since we bought 4 years ago...& actually went down $200 last year to 2022.

Zillow says $390k; about right surprisingly. I'd like to find something just over state border or on the lakes in AR that's drivable and 1/10 the taxes. That'd be a great compensation for visiting family on occasion.

The other side of the coin is Freakonomics did a story of Dallas that said the DFW metro is expected to be the 3rd largest (overtaking Chicago metro) in the near future, doubling the current 5 million. May be good for property values?

 

[conversationalphrase]

I think you may have seen a unicorn.

Our TX property taxes have increased every year over the last six and are up more than 20% from where they were in 2016.

Same here. Texas property tax rates are among the highest in the nation.

 

[ExFlyBoy5]

I bought our house around 1982 for $50k. It was the first house built on the street in 1955 and part of an estate that nobody seemed to want in the poor condition it was in. However I was much younger and willing to put in the sweat equity as I slowly made it habitable. It was also a couple of blocks from the ocean and a nice beach that was only easily accessible by the residents of the small town. In the past 10 years or so all the other houses were knocked down and replaced by McMansions so my house would now easily sell for $1.2 MM. Here is an illustration of what it is like.

Metro Atlanta is full of these. Older neighborhoods that we built in the 50s and 60s were 1200-1500 SF ranch homes on 3/4 acre lots. As more people crowd in, they will buy these houses and build atrocious 5,000+ SF McMansions taking up most of the lot but there are still the older ranch homes dotting the neighborhoods. It's the ugliest damn thing I have ever seen.

 

[ExFlyBoy5]

The other side of the coin is Freakonomics did a story of Dallas that said the DFW metro is expected to be the 3rd largest (overtaking Chicago metro) in the near future, doubling the current 5 million. May be good for property values?

I don't know. The last couple of times I was in the DFW area, the crazy spread seemed to be the result of MILES AND MILES of cubical farms, especially on the NW side of the area. With COVID significantly changing how w*rk is done (as in so much of it being done by WFH) I don't know how these farms will be filled. While I do know a lot of companies are moving to TX for the tax breaks, the huge growth of people might be tamped down a bit.

 

[MRG]

I empathize with the OP's dilemma. We purchased our home around 10 years ago for $85/sf and put another $65/sf into renovations. At the time, homes were selling for around $150/sf so we felt as though we came out even. We refinanced a few years later and were pleased to see the home valued around $170/sf.

Our home is in a resort area that has recently experienced a dramatic increase in home prices. For each of the past three years, home values have increase by more than 20%. At this point, even rundown homes are selling for $300/sf and the average sale price of homes in our zip code is now over $350/sf.

At this point we couldn't afford to buy a 1br apartment in our town for what we paid for our home.

+1
The restaurant workers in our resort area can't afford to live in the area. McDonalds has been paid 15 hourly before the pandemic started. I'm guessing this will not end well.

 

[ExFlyBoy5]

+1
The restaurant workers in our resort area can't afford to live in the area. McDonalds has been paid 15 hourly before the pandemic started. I'm guessing this will not end well.

We used to live in a pretty affluent area of NW metro Atlanta. There were several restaurants that couldn't stay in business because of the lack of workers and this was long before the pandemic, so I can't imagine what it's like now.

 

[MuirWannabe]

I’ve been looking for a 2nd home in Colorado for about a half year. Particularly outside of Breckinridge in the Blue Ridge or Alma area. Prices had been in the mid $400’s-mid $500’s per sqft. In the last month they’ve gone up to mid $700’s and even $800’s per sqft. It’s just amazing to me. Sure seems like a bubble. But it sure keeps expanding and I’m not getting any younger.

 

[FLSUnFIRE]

I love my present home (my "Dream Home") and wouldn't move if I was offered a billion dollars for it. How 'bout that? I know, pretty stupid, huh. But what would I do with that money? I already have enough to support the lifestyle to which I am accustomed.

My Dream Home is just a 1500 sf 2/2 brick house built in 1965 on a 50x120 lot, with a detached garage, in a convenient, quiet, and unpretentious neighborhood. It's not elegant or perfect. But it's the home I have always wanted, and not only that, the mind-boggling truth is that it's immediately next door to Frank's home, just 20 feet away. Mine's the one on the left. In the 7 years since I moved to this Dream Home, a simple dirt path gradually has been worn through the grass in the back yard, from his back door to mine.

Nothing could persuade me to abandon that wonderful feeling when I open my eyes each morning, and see my dream home all around me. And then, when F comes over a few minutes later with breakfast and coffee for me? I feel like I am in heaven.

In my view, my house is not just another investment. It's a framework for the rest of my life.

That sounds about perfect!

 

[FLSUnFIRE]

I bought our house around 1982 for $50k. It was the first house built on the street in 1955 and part of an estate that nobody seemed to want in the poor condition it was in. However I was much younger and willing to put in the sweat equity as I slowly made it habitable. It was also a couple of blocks from the ocean and a nice beach that was only easily accessible by the residents of the small town. In the past 10 years or so all the other houses were knocked down and replaced by McMansions so my house would now easily sell for $1.2 MM. Here is an illustration of what it is like.

I'm going to be similar... 2 story townhouse... 21 story tower going up 1 block SW of me; I'm watching the demo work for site prep now... Hotel behind on the same block with a few 5 over 1 apartment buildings nearby. Current plan across the street is either a 150,000 or 300,000 sq ft residential building. Looks like one may be set back from the street with a courtyard in between and the other has just the sidewalk set back (two proposals depending if we keep the Rays in town). Right behind will be a park with a neighborhood market/retail. Several years out so might change as the project develops and based off market demand. Construction wouldn't likely start till 2028. Really interesting watching the explosive growth all around me.

 

[ExFlyBoy5]

I'm going to be similar... 2 story townhouse... 21 story tower going up 1 block SW of me; I'm watching the demo work for site prep now... Hotel behind on the same block with a few 5 over 1 apartment buildings nearby. Current plan across the street is either a 150,000 or 300,000 sq ft residential building. Looks like one may be set back from the street with a courtyard in between and the other has just the sidewalk set back (two proposals depending if we keep the Rays in town). Right behind will be a park with a neighborhood market/retail. Several years out so might change as the project develops and based off market demand. Construction wouldn't likely start till 2028. Really interesting watching the explosive growth all around me.

I can only imagine the construction noise! In early 2020, DW and I stayed in downtown Atlanta for about a month. We were in a corporate condo on the 29th floor and it was miserable, even with the "sound proof" windows and doors. Between the metal plates on Peachtree Street banging every 4 seconds as cars blasted over them and the new Google building being built on the opposite side of the building, it was absolutely miserable.

 

[W2R]

That sounds about perfect!

It is, for me! For somebody else it might seem like just another house, but for me, it's my Dream Home.

 

[finnski1]

It is, for me! For somebody else it might seem like just another house, but for me, it's my Dream Home.

Nothing like that feeling. We too live in our dream home and have been here for 24 years already. We have zero reason and zero desire to leave. Priceless!

 

[ShokWaveRider]

I think it is all relative. We could more than afford all the homes we have purchased in the past if we purchased them now based on their current prices, even the ones in SoCal. I am sure most of us here could also. What I refuse to pay and would stop me is the dramatic increase in Real Estate Taxes the purchase would trigger.

Ongoing recurring expenses mean a lot more to us that an initial payment. If we were not homesteaded and had to purchase our current home the taxes would triple, and an additional $12k in taxes to the $6k we already pay is an absolute show stopper. This is why Hawaii is so attractive. Even though the cost of property is up there, Re-taxes are not, weather is great, Healthcare is above average on Oahu, what is there not to like.

 

[PatrickA5]

So where do the low wage workers live in the Bay area?

A few years ago while visiting SF, we got to talking to a waitress. She said she actually lives a couple hours inland. She and 5 other waitresses share rent in an apartment while in town working. I guess they make a decent enough wage to make this doable.

 

[Pointby2]

Home prices are skyrocketing in Reno. One of the reasons is because of all the California retirees who think Reno is cheap. We sold our 70 year old 1400 sq ft ranch for 400k in April. I bought a 2 bedroom condo for 211 which now sells for between 250-265. If I hadn’t bought immediately I would only be able to afford a 1 bedroom now.

We hoped to move back to Reno from Southern California. Reno is no longer cheap! A new home with comparable location/view/square footage was about the same or more expensive in Reno. We did our research, but we were still a bit shocked.

So we are staying. Taxes are higher but the weather is much better. It's 37 degrees in Reno today.

 

[FLSUnFIRE]

I can only imagine the construction noise! In early 2020, DW and I stayed in downtown Atlanta for about a month. We were in a corporate condo on the 29th floor and it was miserable, even with the "sound proof" windows and doors. Between the metal plates on Peachtree Street banging every 4 seconds as cars blasted over them and the new Google building being built on the opposite side of the building, it was absolutely miserable.

I don't think it will bother me too much. I've lived here 3 years now and am acclimated to the city sounds. Sirens at night (mostly private ambulances) are the most annoying. Fortunately, the city emergency vehicles usually just "chirp" at intersections at night. Pile driving will be noisy but once that's done it's just lots of beeping during the day. I'm up early so it won't disturb my sleep (BR is on the opposite side too). While the redevelopment will likely take a decade, only one lot is adjacent to me so I'll only have one next door. The hotel being built on my same block wasn't bad.



I'm waiting for an offer I cannot refuse to buy the rest of my block! (I won't hold my breath though)

 

[Teacher Terry]

Point, it will be 49 today by the time I walk the dogs). I read that houses in Reno are now more expensive than sacramento. I am a 4 seasons person with summer my least favorite. I am shocked that where you live is not more expensive than us. Everything here is getting expensive. Fortunately our property taxes are dirt cheap. Mine are 400/year on my condo. They were only 730 on the house.

 

[Live Free]

I know plenty of school teachers in the Atlanta suburbs that commute long distances because they can't afford housing near the more upscale suburbs/neighborhoods where the public schools are. I also know a few that have grouped together to rent a single family home. Housing prices are high and even though money is cheap to borrow, at least for now, it takes two incomes or more to afford these houses.

We have had issues with hiring contractors over the last year to do house upgrades. So my guess is people are flush with savings and because housing inventory is low, they are focusing on home upgrades. Also the pandemic has impacted supply chains, so that probably also adds to the backlog.

I think housing prices will become more stable and maybe even deflate if interest rates rise.

 

[Dog]

I love my present home (my "Dream Home") and wouldn't move if I was offered a billion dollars for it. How 'bout that? I know, pretty stupid, huh. But what would I do with that money? I already have enough to support the lifestyle to which I am accustomed.

My Dream Home is just a 1500 sf 2/2 brick house built in 1965 on a 50x120 lot, with a detached garage, in a convenient, quiet, and unpretentious neighborhood. It's not elegant or perfect. But it's the home I have always wanted, and not only that, the mind-boggling truth is that it's immediately next door to Frank's home, just 20 feet away. Mine's the one on the left. In the 7 years since I moved to this Dream Home, a simple dirt path gradually has been worn through the grass in the back yard, from his back door to mine.

Nothing could persuade me to abandon that wonderful feeling when I open my eyes each morning, and see my dream home all around me. And then, when F comes over a few minutes later with breakfast and coffee for me? I feel like I am in heaven.

In my view, my house is not just another investment. It's a framework for the rest of my life.

I so enjoy reading your posts about how happy you are in your dream home and with retirement. You certainly “got it right”!

 

[dm]

Prices have increased quite a bit down here in SW Florida. We bought our current home 2 years ago. We stayed in the same town, just moved from the golf coarse to a home on a saltwater canal. We would not pay the prices that the canal homes are going for today.

I have had 3 friends sell their homes due to the big jump in prices. 2 moved to lower cost areas and another moved off the water into a condo.

 

[CO-guy]

+1
The restaurant workers in our resort area can't afford to live in the area. McDonalds has been paid 15 hourly before the pandemic started. I'm guessing this will not end well.

Yep! It's a huge problem. McD's in our area is offering $19/hr plus a $5K signing bonus. Others are offering similar compensation and still have limited hours due to the labor shortage. The nearby Vail own ski resort is offering the same compensation and is struggling to keep lifts running due to serious labor shortages.

Like me, my better half is in education. With a Master's degree and several years in the position, their salary in K-12 is in the mid-$40s. For a starting teacher with a Bachelor's degree, the compensation is less than what the teenagers in their class makes working after school at Arby's. With the average selling price of a home in our town closing in on $500K, it's just not realistic to live on a teacher's salary anymore.

 

[CO-guy]

Just an update: Fast food and other large employers in our area of Colorado just raised their starting salaries to $20/hr. Many with signing/relocation bonuses and/or are offering additional $2-3/hr "back-pay" bonuses after 4 months along with a comparable pay raise. Even with those incentives, operations and hours are both limited due to lack of staff.

 

[dtbach]

I'm praying this seller's market lasts 3 more months as we are building a house and need the one we are in to pay for it. With my luck in real estate the market will tank in June which is when we want to sell.

 

[ceciledian]

I think you may have seen a unicorn.

Our TX property taxes have increased every year over the last six and are up more than 20% from where they were in 2016.

I agree. Last year our valuation went up when the county tinkered with our data - raised the building class and increased our land value. I e-filed a protest and got the total value a little lower but not the data. This May I will go in to protest in person now that Covid has waned.