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(ABC7 Los Angeles)   ♪ To dream the impossible dream... To find an assumable loan... To find a down payment and borrow... And to buy an affordable home... ♪   (abc7.com) divider line
    More: Repeat, Real estate, home prices, interest rates, affordable housing crisis, mortgage rates, Harvard University's annual State, Federal Reserve, rising rates of evictions  
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633 clicks; posted to Business » on 26 Jun 2022 at 5:50 PM (7 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



26 Comments     (+0 »)
View Voting Results: Smartest and Funniest
 
TWX
2022-06-26 6:01:41 PM  
Heh.  Learned from my dad recently that their first home in this city in the late seventies was through an assumable loan.  I guess that was a thing at one point, take over the loan and the mortgaged property, and obviously any equity in the property unless one paid the seller some cash.

Interest rates were horrible, but the cash-price was less than a mid-market automobile today.
 
2022-06-26 6:33:42 PM  
There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.
 
2022-06-26 6:34:22 PM  
Only 4 million?

I'd say at least 40 million, if not actually closer to 100.

Some people don't mind rent so they can be temporary, most people do not want to rent and want to actually build equity and have a place they know they can stay forever if need be.

/only skimmed the article
 
2022-06-26 6:47:14 PM  

kdawg7736: There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.


Yup, but it needs to be an incentive to build affordable homes.
They are still building mcmansions, but we need 1500 sq ft 2-3 bedroom shiat for 175k
Starter homes
 
2022-06-26 6:50:11 PM  

OhioUGrad: Only 4 million?

I'd say at least 40 million, if not actually closer to 100.

Some people don't mind rent so they can be temporary, most people do not want to rent and want to actually build equity and have a place they know they can stay forever if need be.

/only skimmed the article


It's 4 million more than previously.
 
2022-06-26 6:56:51 PM  

Holy Carp: kdawg7736: There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.

Yup, but it needs to be an incentive to build affordable homes.
They are still building mcmansions, but we need 1500 sq ft 2-3 bedroom shiat for 175k
Starter homes


The problem will be getting contractors, developers and HOAs to go along with that idea.  Contractors won't be happy a out build homes 30-40% smaller and throwing the same finishes in fir less money.  And no developer/HOA wants to pitch themselves as "your first house".
It might work where I live but it was pretty much the first suburbs in the area.  A lot of post-war to 1965 house, 1000-1300 sqft.  Mine doesn't even have central A/C so if money weren't an issue I'm sure they wouldn't mind ripping down the blocks like mine with 4 houses and rebuilding it with 3.
 
2022-06-26 7:06:07 PM  

Ken VeryBigLiar: Holy Carp: kdawg7736: There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.

Yup, but it needs to be an incentive to build affordable homes.
They are still building mcmansions, but we need 1500 sq ft 2-3 bedroom shiat for 175k
Starter homes

The problem will be getting contractors, developers and HOAs to go along with that idea.  Contractors won't be happy a out build homes 30-40% smaller and throwing the same finishes in fir less money.  And no developer/HOA wants to pitch themselves as "your first house".
It might work where I live but it was pretty much the first suburbs in the area.  A lot of post-war to 1965 house, 1000-1300 sqft.  Mine doesn't even have central A/C so if money weren't an issue I'm sure they wouldn't mind ripping down the blocks like mine with 4 houses and rebuilding it with 3.


Profit margins being the same, the developers make thousands and thousands more on a $450,000 house on a $80,000 lot than they do with a $150,000 house on a $40,000 lot.

It's just business to them.

Only affordable housing mandates will fix that.
 
2022-06-26 7:06:22 PM  

Ken VeryBigLiar: The problem will be getting contractors, developers and HOAs to go along with that idea.  Contractors won't be happy a out build homes 30-40% smaller and throwing the same finishes in fir less money.  And no developer/HOA wants to pitch themselves as "your first house".


One more to the list.... cities themselves.  A thousand affordable small houses sounds like 2,000 more cars needing roads, 3,000 more kids needing classrooms, 50,000 gallons more sewage capacity and 5-6 more police calls per day.

They'd much rather have 250 McMansion ranchettes with high property values and well-earning DINKs.
 
Xai
2022-06-26 7:37:46 PM  
*laughs in UK prices*

While everyone likes to look at the highest prices, what matters are the lowest prices.

Searching for homes within 50 miles of london nets you this gem, a 1 bedroom flat above someone else's garage space for a cool quarter million.

Fark user imageView Full Size
Same search, 50 miles from down town NYC nets you this gem for around half the price and 3x the bedrooms - plus you even get a garage!

Fark user imageView Full Size
 
2022-06-26 8:01:30 PM  

Holy Carp: kdawg7736: There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.

Yup, but it needs to be an incentive to build affordable homes.
They are still building mcmansions, but we need 1500 sq ft 2-3 bedroom shiat for 175k
Starter homes


It's classic NIMBY.

In a desirable town everyone who owns property already paid a premium for it. And their property represents a huge percentage of their net worth.

They don't want any real change.

If you build houses like theirs, you are creating additional supply. That reduces the value of their home. Nobody wants to miss out on money.

If you build cheap housing, it's even worse. Not only are you making more supply, can hurt their property value, they also freak out because lower income houses are always associated with things like... Larger families, higher crime rates, lower property taxes, etc etc etc.

Any town in the USA, the section with 400k houses will have fewer kids than the section with $200k houses. They will pay less property taxes, and have higher crime rates. 99% of the time.

More kids means more students. And schools are virtually always the biggest property tax item. And cheap houses mean less income per student.

Now you can either raise property taxes, which will hurt their home value and their wallets, or just overcrowd/underfund the schools... Which also hurts property values.

Most places have zoning laws. A lot of builders/investors would gladly pump out cheap condos. The sale value to building cost is great...but people fight hard to prevent multifamily residential zoning for all of the reasons they fight cheap housing proposals, only x5.

But when it comes to building detached homes, there is more profit to be had spending extra on materials and approaching McMansion status. So that's what they do.

And the existing folks who don't want anything new are the least likely to object over fancy houses. They aren't associated with the bad things, and everyone knows they will pay more than their fair share of taxes.

And that's why most places have tons of new large houses, with whatever HGTV thing is trending.

At the same time, we have tons and tons of small towns that are literally dying as their residents die off with their kids moving to bigger/more desirable locations to fight over the same already desirable locations.

Ironically, where I live, they did build a bunch of starter family homes and a bunch of the people in the first block of houses for together and raised a stink to try and block the second half of the approved houses from being built. They argued that the infrastructure wasn't good enough/they needed stop lights and additional lanes on one particular street and that additional homes would hurt the local school district.
 
2022-06-26 8:10:28 PM  
Here in PSL, a 896 square foot 2/1/1 house built in '88 on a 0.24 acre lot goes for $298,000. And it not even a CBS.

https://www.realtor.com/realestateandhomes-detail/3822-SW-Crary-St_Port-Saint-Lucie_FL_34953_M60522-43727?ex=2943927871

Such a deal.
 
2022-06-26 8:20:14 PM  

Xai: *laughs in UK prices*

While everyone likes to look at the highest prices, what matters are the lowest prices.

Searching for homes within 50 miles of london nets you this gem, a 1 bedroom flat above someone else's garage space for a cool quarter million.

[Fark user image 789x656]Same search, 50 miles from down town NYC nets you this gem for around half the price and 3x the bedrooms - plus you even get a garage!

[Fark user image 850x810]


West Milford, New Jersey?  Gem?  I can assure you, sir, that 'West Milford, New Jersey' and 'gem' do not belong together.
 
Xai
2022-06-26 8:34:05 PM  

Fissile: Xai: *laughs in UK prices*

While everyone likes to look at the highest prices, what matters are the lowest prices.

Searching for homes within 50 miles of london nets you this gem, a 1 bedroom flat above someone else's garage space for a cool quarter million.

[Fark user image 789x656]Same search, 50 miles from down town NYC nets you this gem for around half the price and 3x the bedrooms - plus you even get a garage!

[Fark user image 850x810]

West Milford, New Jersey?  Gem?  I can assure you, sir, that 'West Milford, New Jersey' and 'gem' do not belong together.


I'd prefer the house with actual land rather than being in the air in a single bedroom above a garage
 
2022-06-26 8:52:31 PM  

OhioUGrad: Only 4 million?

I'd say at least 40 million, if not actually closer to 100.

Some people don't mind rent so they can be temporary, most people do not want to rent and want to actually build equity and have a place they know they can stay forever if need be.

/only skimmed the article


Historical norms for the past 80 years or so have been 65% home ownership.
So we have had a very steady 35% of renters for decades.  It has not deviated by more than 5% since post WWII.
The main obstacle in home ownership is the lack of single payer health care, extreme cost of higher education, and the cost of public K-12 education, which are connected.  This forces cities to restrict building to single bedroom condo towers or mansions to boost tax revenue and decrease school enrollment.
A good example is Boston where enrollment declined 35% between 1995 and 2015 due to these practices.  San Francisco and Berkeley have weaponized zoning to keep affordable housing out as well.
It's almost as if racism has a profoundly negative impact on society.
 
2022-06-26 8:57:17 PM  
We were told we could go to college and we'd get such a great paying job that the loans wouldn't matter. We'd get a house and a partner and maybe some pets and kids and it'd all be great.

It's time for society to hold up their end of the bargain.
 
2022-06-26 9:01:23 PM  

Xai: Fissile: Xai: *laughs in UK prices*

While everyone likes to look at the highest prices, what matters are the lowest prices.

Searching for homes within 50 miles of london nets you this gem, a 1 bedroom flat above someone else's garage space for a cool quarter million.

[Fark user image 789x656]Same search, 50 miles from down town NYC nets you this gem for around half the price and 3x the bedrooms - plus you even get a garage!

[Fark user image 850x810]

West Milford, New Jersey?  Gem?  I can assure you, sir, that 'West Milford, New Jersey' and 'gem' do not belong together.

I'd prefer the house with actual land rather than being in the air in a single bedroom above a garage


Got to West Milford, NJ and you get a actual land, right next to actual land owned by a raging Trumpanzee.  West Milford is Northern New Jersey's very own little piece of Derpistan.
 
2022-06-26 9:36:43 PM  

baronbloodbath: Ken VeryBigLiar: Holy Carp: kdawg7736: There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.

Yup, but it needs to be an incentive to build affordable homes.
They are still building mcmansions, but we need 1500 sq ft 2-3 bedroom shiat for 175k
Starter homes

The problem will be getting contractors, developers and HOAs to go along with that idea.  Contractors won't be happy a out build homes 30-40% smaller and throwing the same finishes in fir less money.  And no developer/HOA wants to pitch themselves as "your first house".
It might work where I live but it was pretty much the first suburbs in the area.  A lot of post-war to 1965 house, 1000-1300 sqft.  Mine doesn't even have central A/C so if money weren't an issue I'm sure they wouldn't mind ripping down the blocks like mine with 4 houses and rebuilding it with 3.

Profit margins being the same, the developers make thousands and thousands more on a $450,000 house on a $80,000 lot than they do with a $150,000 house on a $40,000 lot.

It's just business to them.

Only affordable housing mandates will fix that.


The actual construction cost is basically the same. Fixtures/finishes and land costs are the variables. But it's way more profitable to churn out 5000 square foot tract houses than 2000 square foot ones. Townhouses and McMansions, nothing in between is worth it.
 
2022-06-26 9:36:49 PM  

austerity101: We were told we could go to college and we'd get such a great paying job that the loans wouldn't matter. We'd get a house and a partner and maybe some pets and kids and it'd all be great.

It's time for society to hold up their end of the bargain.


Who the fark told you that shiat?

That's not a generational thing, that's you listening to dumbasses
 
2022-06-26 10:02:21 PM  
Remember that the asking price is just a start, it will get overbid by a feeding frenzy of buyers who will gladly turn down a pre-purchase inspection to get a whiff.  At least that's what it's like north of Boston.  My brother-in-law sold his place in Orlando, only got 250K, and had to pay 560K for a place here in his hometown.  No inspection and 70K over asking - and he wasn't the highest bidder, supposedly.  The fact that he was ready to drop the inspection to accelerate the deal was the deciding factor for the seller.  My BIL got lucky, the house is in good shape.  But how do the banks allow this shiat with a property they, at the end of the day, they own?
 
2022-06-27 1:36:22 AM  
Fissile:

West Milford, New Jersey?  Gem?  I can assure you, sir, that 'West Milford, New Jersey' and 'gem' do not belong together.

Plus, if you work in NYC, that's easily a 2-hour commute given how bad traffic can be, and almost $20 a day in tolls.
 
2022-06-27 2:05:05 AM  

OhioUGrad: Only 4 million?

I'd say at least 40 million, if not actually closer to 100.

Some people don't mind rent so they can be temporary, most people do not want to rent and want to actually build equity and have a place they know they can stay forever if need be.

/only skimmed the article


Unless they're like me and did the math and realized that - at least where I live now - the cost of taxes, interest, upkeep, utilities my landlord is currently including in rent and the rest of it add up to far more than I would spend renting and even if I sold at a profit (no guarantee here), I'd lose money unless the market REALLY improved and I was ready to sell at peak.

It probably works for some people.  But the math doesn't work out for me to own a home.
 
2022-06-27 7:35:35 AM  

Holy Carp: kdawg7736: There really needs to be more incentives to build homes as well, which would increase supply and the dream would become more of a reality.

Yup, but it needs to be an incentive to build affordable homes.
They are still building mcmansions, but we need 1500 sq ft 2-3 bedroom shiat for 175k
Starter homes


The only way you're getting that is in townhouses and condos. The cheap land has all been used for housing anywhere that's desirable. What's left are floodplains, parks, green space, and places nobody wants to life because the best you can hope for is a shiatty 50 grand a year job with the county.

If you build further out from major metro job centers, you need commuting highways or rail. If you bring it closer in and infill with single family homes, you are basically going to have to subsidize it because the costs don't make sense.

Townhouses are probably the best case scenario, but you're not going to get those built for 175k. 50 year old townhouses are more expensive than that.
 
2022-06-27 9:01:40 AM  

Benevolent Misanthrope: OhioUGrad: Only 4 million?

I'd say at least 40 million, if not actually closer to 100.

Some people don't mind rent so they can be temporary, most people do not want to rent and want to actually build equity and have a place they know they can stay forever if need be.

/only skimmed the article

Unless they're like me and did the math and realized that - at least where I live now - the cost of taxes, interest, upkeep, utilities my landlord is currently including in rent and the rest of it add up to far more than I would spend renting and even if I sold at a profit (no guarantee here), I'd lose money unless the market REALLY improved and I was ready to sell at peak.

It probably works for some people.  But the math doesn't work out for me to own a home.


They used to say that if you planned on staying at a place somewhere in the 5-7 years range or more it made sense to buy, otherwise it made sense to rent.  I got lucky with the timing, I bought my house in 2017 and it's already appreciated over 50% which would easily cover the transaction and maintenance costs.
 
2022-06-27 9:03:34 AM  
motherjones.comView Full Size


/looking forward to the updated numbers
 
2022-06-27 10:28:16 AM  

johnny_vegas: [motherjones.com image 850x423]

/looking forward to the updated numbers


Fark user imageView Full Size


A bit more granularity here, but it looks like the home ownership rate has been trending up overall for the past half decade, and rental vacancies have been trending down since early 2010.

For all the talk of investors bidding up housing, rentals aren't being created fast enough to keep up with demand, and the percentage of homes that are owner occupied is creeping up.

Fark user imageView Full Size


There's a longer range view. In retrospect, the mid 90's started a massive Abe ration where any schmuck with two dimes to run together could get a mortgage, and it took from 2006 to 2016 for that to fully unwind. Still, even those big swings are only between 62 and 69%. Home ownership is basically in the same range of achievability as always been in living memory.

Of course, go back to the pre-FDR days of 50% down and balloon payments and now looks like a dream.
 
2022-06-27 10:52:08 AM  

Sum Dum Gai: Fissile:

West Milford, New Jersey?  Gem?  I can assure you, sir, that 'West Milford, New Jersey' and 'gem' do not belong together.

Plus, if you work in NYC, that's easily a 2-hour commute given how bad traffic can be, and almost $20 a day in tolls.


Yup.   I've lived in Jersey only 10 miles from the GWB.  Average commute to downtown was about an hour, and that was in good weather with no major construction or accidents.
 
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