Is it still possible to afford a home?

[Nocturnal]

I have a question about the current state of real estate and the ?housing bubble.?

Basically, as it stands, houses in most places are not affordable for most families. Most homes that start out at around $200k is more than likely in shambles and possibly in a dangerous neighborhood where no one wants their children to live and grow up in.

So, if the ?housing bubble? never pops, and home prices continue to rise, what will become of the people who can only really afford those $200k homes? Will they have to settle for homes in the ghetto or rent for the rest of their lives?

Some claim the bubble will be popping soon, others say there is no bubble. What is your take on this situation and what are your thoughts and feelings towards it?

I?m guessing here, but tell me if I?m wrong. As it stands you?d probably need a doctorate degree in your field or career in order to comfortably afford a home in the USA these days unless you?d like to live in the ghetto, win the lottery, or have some type of inheritance.

Feel free to discuss.

 

[iamwiz82]

In 99% of the US the real estate market isn't run up so high. Shocking that there is life outside of California and NYC, eh?

 

[daweeze02]

all i can say is I am moving out of florida because it is getting way too $$$ to live here, moving to VA And yes people have been saying the bubble is going to pop for months but I have yet to see it, I mean the house I bought last year for 135k is worth 210k now maybe even more, and I would never pay that for my house, but there will always be someone moving to Florida who will think its a great deal.

 

[RagingBITCH]

Do you not have a clue what you're talking about? How are houses not affordable for most families? And you need to realize the cost of housing depends a great deal on the area that you live in. Affordability depends on down payment and length/monthly cost of your mortgage. A $200K house here in Dallas gets you a brand new 2-story house, or a nice 1 floor 4/5 bedroom house. The "ghetto" around here starts at $50K. My parents live in a 27 year old house that still has it's original carpet and is valued around $85K.

To say one has to be a PhD to afford a house is the stupidest fvcking thing I've ever read.

 

[Nocturnal]

Originally posted by: RagingBITCH
Do you not have a clue what you're talking about? How are houses not affordable for most families? And you need to realize the cost of housing depends a great deal on the area that you live in. Affordability depends on down payment and length/monthly cost of your mortgage. A $200K house here in Dallas gets you a brand new 2-story house, or a nice 1 floor 4/5 bedroom house. The "ghetto" around here starts at $50K. My parents live in a 27 year old house that still has it's original carpet and is valued around $85K.

To say one has to be a PhD to afford a house is the stupidest fvcking thing I've ever read.

Hey, like I said, correct me if I'm wrong. I am just asking what your thoughts and opinions are on this situation. I am asking if it takes a PhD in order to afford a decent house in a decent neighborhood. I'm glad that in some states it isn't this way.

 

[SpiderX]

It's not just the US. I'm moving to Calgary, Alberta in 3 months and apparently starter homes there are in the 300k range. While my girlfriend and I could afford a house with our combined income, we don't know if we'll be there long enough to bother.

With that being said, it would be scary for a one income family to even think about moving there. There is just no way to comfortably afford that. Your best bet these days is to live in a suburb or even more rural area. Although even those aren't cheap these days.

 

[compuwiz1]

lol
The ghetto around here starts at about $200k

 

[notfred]

I plan on inheriting my parent's house by the beach when my dad finally decides to move to Montana and hide from the government. The $3000/mo mortgage paymentson anything half-decent around here are too much for me, and will be for a while.

 

[Passions]

ROFL 200k!!! Where do you live? Kentucky???

They don't sell such beaters here in Cali. Homes start around $600k.

LOL!!! THANKS!

 

[vi edit]

Move out of the big markets (East Cost, West Coast, Chicago, Phoenix, Denver, ect) and into the smaller markets and housing is VERY affordable.

You can get into a 2000 sq/ft 4 BR home in Omaha, NE for around $175k. You can get into a 1500 sq/ft 3BR for under $130k. It's a metro area of around 500k people.

It gets even cheaper when you get into even smaller markets of around 100k-200k people. You just give up some ammenities and weather.

The US is incredibly affordable once you move out of the big cities and into the other 80% of the US.

 

[SarcasticDwarf]

Originally posted by: daweeze02
all i can say is I am moving out of florida because it is getting way too $$$ to live here, moving to VA And yes people have been saying the bubble is going to pop for months but I have yet to see it, I mean the house I bought last year for 135k is worth 210k now maybe even more, and I would never pay that for my house, but there will always be someone moving to Florida who will think its a great deal.

It has not popped, but it is in a bit of a transition phase right now. From what I have seen the housing inventories are growing because houses are not selling. Note also that housing prices have not dropped. This would seem to indicate that people are trying to sell them for more than they are actually worth.

 

[Nocturnal]

Originally posted by: notfred
I plan on inheriting my parent's house by the beach when my dad finally decides to move to Montana and hide from the government. The $3000/mo mortgage paymentson anything half-decent around here are too much for me, and will be for a while.

Tyler,

Do you feel as a computer programmer that your degree is adequate to purchase a home on your income? I am not asking for your yearly wages just your opinion on if you think your CS degree would let you afford a home in a decent area.

 

[SarcasticDwarf]

Originally posted by: vi_edit
Move out of the big markets (East Cost, West Coast, Chicago, Phoenix, Denver, ect) and into the smaller markets and housing is VERY affordable.

You can get into a 2000 sq/ft 4 BR home in Omaha, NE for around $175k. You can get into a 1500 sq/ft 3BR for under $130k. It's a metro area of around 500k people.

It gets even cheaper when you get into even smaller markets of around 100k-200k people. You just give up some ammenities and weather.

The US is incredibly affordable once you move out of the big cities and into the other 80% of the US.

Exactly. The trick to this is of course finding a good job. Due to the lower population and employer density, it is harder to find a job in a single area.

 

[Vic]

There will be a bubble in those markets that are clearly overvalued, while prices will continue to steadily appreciate in those markets that are not. Unfortunately, my market (Portland, OR) is one of those which has been affected by Californian stupidity, so we are already seeing a slight downturn, but I believe it will be mild, with more or less stagnant prices for the next decade or so (as opposed to a "bubble" or collapse of values).

 

[Vic]

Originally posted by: Passions
ROFL 200k!!! Where do you live? Kentucky???

They don't sell such beaters here in Cali. Homes start around $600k.

LOL!!! THANKS!

Which is why your overvalued market will be among the hardest hit. Didn't you learn when you went through this before ~15 years ago?

 

[mrchan]

The bubble is (slowly) popping in CA.... You get can a brand new 1400 sq. ft 3 bed 2.5 bath house in the low $300k range less than 10 mins from downtown Sacramento. If you're interested, send me a PM

 

[Queasy]

Housing is pretty cheap for illegal aliens.

 

[BlueWeasel]

While many think it sucks living in the rural South (in my case, Mississippi), the housing prices and cost of living relative to other parts of the country make it worth it. My wife and I bought a 2200 SF, 3 bedroom, 2 bath house in a great neighborhood last year for $135K.

This is in a town with a population of 40,000, and I'd think there would be plenty of opportunity for someone with a CS degree. My sister-in-law has a CS degree and she works locally.

 

[theknight571]

I don't know about housing bubbles..but I can tell you that our house has depreciated in value over the past 4 years.

We refinanced 4 years ago... last month we went to take out some more equity for some fixups... the appraisal (sp?) came back 20K less than it did 4 years ago.

Now the question is did we get a "crooked" appraisal before... or did the "market" really drop that much?

Needless to say... we're putting off the fixup's for now.

 

[gigapet]

nope not possible no one is buying homes anymore, trailer parks only.

 

[notfred]

Originally posted by: Nocturnal

Originally posted by: notfred
I plan on inheriting my parent's house by the beach when my dad finally decides to move to Montana and hide from the government. The $3000/mo mortgage paymentson anything half-decent around here are too much for me, and will be for a while.

Tyler,

Do you feel as a computer programmer that your degree is adequate to purchase a home on your income? I am not asking for your yearly wages just your opinion on if you think your CS degree would let you afford a home in a decent area.

I wont actually have a degree until December. My current non-degree-having wage isn't enough money to buy a house in Northern California. I do feel that in a few years, with my degree and some more experience, that I'll be able to afford a house, as I think earning $75k+ as a software developer in Northern California shouldn't be that tough for me to do.

A statistic I saw yesterday says the average salary (not starting pay, but average overall) for software engineers in california is $90k. That's not bad. If I can make that, and marry a woman who makes even half that, We'd have an annual income of $135k. Spend 1/3 of that on housing, and that's a $3750/mo mortgage payment. A lot of lenders (in CA, anyway) will let you base your monthly payment on up to half your income now, and they're also offering 40 year mortgages, which would let me buy something nicer.

In the $4000/month range, I could buy something like this which I realize is absolutely unimpressive as a house, but it's in one of my favorite small cities anywhere. I'd rather live in Los Gatos in an average house than a fancy house in Omaha, NE.

And I have a fairly high amount of confidence in my ability to earn a decent living. I cureently make more than pretty much everyone I know in my age bracket without a degree. I'm sure the degree will help, and I've never had problems with doing well at job interviews.

 

[kranky]

The reason you don't see prices dropping is sellers have started offering huge "rebates" upon closing. So if you want $400K for a home, and you can only get $350K for it, you sell it for $400K with a $50K cash rebate. That way, on paper, the prices stay high.

But that's pure manipulation, and if you factor in the rebates, there are areas where the prices are dropping. People I know who are in touch with the real estate markets in CA and FL confirm that there is a huge rush for the exit in certain areas. I recently read of a new development in Sacramento where the builder cut prices by 25% to move the rest of the homes. How would you like to be the person who, a month earlier, bought a home on that street at full price?

It is impossible to sustain markets where people with decent jobs can only qualify for a mortgage if they take an interest-only ARM. When people can rent a home for half of the mortgage payment, it's obvious that prices are too high. Why are people still buying in those markets? Because they think they have to buy now before prices go up even more. That's a recipe for disaster. And when the crap hits the fan, a lot of people are going to be financially devastated.

Look on craigslist in the markets with superheated housing - San Diego, Sacramento, S Florida - and see how many ads there are from people desperate to sell.

Where I live (Pittsburgh), we have one of the most affordable housing markets anywhere, and I'm glad for that. I'm less than two years away from having our home paid for.

 

[vi edit]

My wife and I will have a combined household income of over 130k living in a very nice neighborhood and in an excellent school district.

Here's what we can get for around $360k. Keep in mind that this place has a 1600 sq/ft basement on top of the finished 2600 sq/ft and is also on almost 2 acres of ground.

http://www.maloofrealty.com/listings/resview.asp?rc=1072247

The crime is non-existant and you are only about 15 minutes from the downtown area of city that is 125k people.

Not bad. There's some advantages of putting up with the 4 seasons of midwest weather.

 

[nakedfrog]

I live in a nice older neighborhood in a small town, and bought a 3 bedroom, ~1600 square foot house with a decent sized yard for $77k. So I can't empathize with you.

 

[puffff]

The people who are like 'OMG YOU'RE STILL LIVING WITH YOUR PARENTS!! LOSER!!' are the ones that will find housing unaffordable.