Robbie said:The house right next door to me is for sale, should be less than 1800 for monthly mortgage + insurance.
Just saying!
This!!!!
from what I have seen and been told is that with the tightening of the mortgage market and people actually needing to have decent credit to get one many people now don’t qualify and that has put many people in to the renters market. Around my way a three bedroom house rents for 2,500 and up. Three bedroom apartments are a bit less but not by much.
In reply to dean1484 :
Well as I said back on page 2, my wife and I can’t get a mortgage. They made it more difficult to get one and we are stuck renting.
Hey SBF,
A good friend of mine works for the city in Matteson. He would probably know all the big landlords and would know who is good and who is an a-hole. Not sure if that helps but if so I'm happy to ask for you.
It’s really stupid right now. Starter home rentals going the price of a standard mortgage of a $250k + homes. It’s really mind boggling since most people can’t afford that anyway. I don’t even get how people can even afford it along with a new car payment too. I have a house one street over that has 4 generations living in the house. It’s nuts. HOA is actually bugging them constantly about the number of cars in their driveway and out on the street. 10 vehicles in all. Garage is not used since it was converted into a bedroom for the grandparents. It’s a strange sight to see the street and driveway empty during the day and then all piled up at night.
Robbie said:Hey SBF,
A good friend of mine works for the city in Matteson. He would probably know all the big landlords and would know who is good and who is an a-hole. Not sure if that helps but if so I'm happy to ask for you.
Man, thanks, but I don’t know if I want to go to Matteson. The South Subs is slowly turning into a Section 8 E36 M3 hole.
My wife has been trying to get us up to Homewood, which still has some dignity left in it, but we keep having issues with leasing companies needing your first born and your signature in blood.
Sine_Qua_Non said:It’s really stupid right now. Starter home rentals going the price of a standard mortgage of a $250k + homes. It’s really mind boggling since most people can’t afford that anyway. I don’t even get how people can even afford it along with a new car payment too. I have a house one street over that has 4 generations living in the house. It’s nuts. HOA is actually bugging them constantly about the number of cars in their driveway and out on the street. 10 vehicles in all. Garage is not used since it was converted into a bedroom for the grandparents. It’s a strange sight to see the street and driveway empty during the day and then all piled up at night.
Multi generational family homes are the norm in most of the world. America did it during the depression and immediately post WW2 until the post war tract house boom caught up with the need.
However for that to happen now incomes will simply have to grow. The problem isn’t at the high end, there is a plentiful supply of those. The problem is at the entry level.
<Off Topic bits removed by moderator>
In reply to frenchyd :
California’s population has actually been fairly flat for many years now.
Dig deeper though and the reality is very troubling…it has been a while since I’ve seen the statics but going from memory, the families moving out have a median income of something like 125K and the families moving in have a median income of something like 55K. Again, rough math but the difference is astronomical and the effect can only be devastating for the health of the state.
OK, in an effort to get this thread back on topic, I have removed the minimum wage discussion. Frenchyd, you have an e-mail, if you have questions about that please respond directly to me via e-mail or PM. Thank you.
I know quite a few people who had good careers in high-cost housing markets, bought a house, but with the near limitless growth potential of some prices in some markets, renting seemed like a better bet.
I think the only way we'll escape the current trend is either A) increasing taxes on non-primary residencies or B) government giving incentives for more remote work opportunities.
A) I see it the need in Flagstaff, as we have something like a ridiculous secondary home supply. That's not even counting homes used as rentals. Thats merely, non-rental, non-primary homes. Craziness. It's like every other house in some neighborhoods is empty most of the time.
B) The movement of people is generally away from areas with high housing supply. The Mid-West in particular is losing population in droves, not only because it's flat and boring, but because the wages arent keeping up with the rest of the country...because the cost of living is super cheap. Well, those areas need to up wages to attract people to otherwise boring, flat, uninteresting places. I think a good investment would be in Mid-Western cities like Kansas City, Omaha, Dubuque, whatever, not only for potential rentals, but also for businesses to get at least somewhat cheaper employees.
In reply to nutherjrfan :
In what part of town? I grew up in Takoma Park MD.
Do you think places like LA could benefit from low income properties? Not projects but affordable residence for people who make less than 50k (what LA considered low income) a year. Apparently people who aren't poor but don't make enough in LA to afford to live there are spending 70% of their income on just living space.
I cant see how that helps the economy.
It might. But it would suck to make $55,000. Or live there and get a raise to $55,000. You of course would need create some sort of regressive scale. Then you still might end up with a bunch of over $55,000 (or whatever) people living there eventually. I suspect there would also be plenty who can pretend to make under 55 with undeclared income. Maybe not a big issue, but it still screws those that don’t have any hidden income.
That of course is the issue with any artificial rules like that, there are always cheats and it almost encourages it, which of course screws the honest people. Unintended consequences.
Maybe the cheats are not a big deal, I don’t know.
Fixing the housing costs? That horse is essentially already out of the barn, you have to wait for inflation to re-level it. How to keep it from going on? Something to discourage the flipping that I think had a lot do do with driving the prices up would likely help.
Easy financing is also a clear source of the price rise, as it has done with college costs. When everyone has easy access to a lot of “money” (financing) for something, prices will always rise to whatever “pain”level that is.. It’s just simple competition.
pheller said:
I think a good investment would be in Mid-Western cities like Kansas City, Omaha, Dubuque, whatever, not only for potential rentals, but also for businesses to get at least somewhat cheaper employees.
This is a big reason why places like Indianapolis, Columbus, and Nashville made Amazon's HQ2 finalist list. Paying an employee $100k to live in Seattle/San Fran/Chicago/NYC/Boston/LA isn't enough of a draw for top talent. These smart potential employees know that their quality of life would be lower than if they were to make that money in an area with lower cost of living. There are jobs in the Midwest that pay well enough to maintain a high quality of life, even if the salary might be lower than what it could be in bigger cities. Smart people choose to live where they can have the highest quality of life. Smart companies that need to make things to survive require large facilities, and it makes a lot more sense to build those facilities in regions where land is cheap, and they can ship/receive their products easily. The Midwest has quite a bit of overlap in that regard. It's why the bulk of the manufacturing in this country occurs in 'Fly Over Country' and the people involved in that manufacturing generally have a pretty high quality of life. According to this article, average income in Indiana is $44,806. Median income for manufacturing employees in Indiana is $72,256.
Yes, but there is also a reason there are a bunch of much more expensive places on the HQ2 list, and most news outlet analysis articles are suggesting one of the more expensive cities will come out as the winner. Amazon is very tech heavy and wants a large pool of experienced tech workers to pull from.
It will be interesting to see what happens though.
I do think some Midwest cities are good investments for rentals. Most of the people I've met with very high profit margin rentals own them in very cheap areas that are not on the coast. For example, Flint, MI you can buy a house for $30k. Even using the 2% rule, you would only have to set the rent a $600/month to make a *very* solid profit. And its easy to exceed that.
In reply to ProDarwin :
Yes, big cities have advantages like larger talent pools, but they also have more strained infrastructure, more competition for workers and Amazon wouldn't be able to tailor the city around themselves in the same way that they could in a smaller city . We've already got an HQ2 thread, so I won't derail this one too much more. You're right that it will be interesting to see where they end up though.
My overall point is that people can choose where they live. It makes a lot of sense to me for people to choose to live where they can have the highest Quality of Life. If you're a finance guy, that might be NYC. If you're an engineer, that might be some place in Fly Over Country. If you're a boat captain, you'll want to be near the water and if you're a techie Silly Valley is where it's at. If you're a low wage earner, those jobs are the same pretty much everywhere, so you might as well live someplace that's cheap to give yourself a higher QoL. Living someplace expensive, and complaining about how it's difficult to make ends meet is not the only option. If you're struggling to survive in a big city, then move someplace cheaper and enjoy the lower cost of living.
In reply to AngryCorvair :
21st and Shepard NE. It's not on the market. Near Bunker Hill Rd.
Higher quality of life is relative. For some, a high quality of life is living someplace with secluded, empty expanses of land, with rugged terrain, long, ardous hikes, lots of MTB trails (as in, more than 50 miles worth) or living near a coast or other large body of water. For my wife, she loves a good view, mountains, lakes, canyons, they feed her soul. Flat land is depressing for some.
I mean, many people, just like my wife and I, are calling Flagstaff (and places like it) home, because we don't need a huge house, new cars, etc. We like this place for its outdoor activities. Unfortunately, others try to capitalize on that, they don't want to live here, but they buy up property because they know young people do. Young people are a good source of rental income, because they are often spending Mommy and Daddy's money or putting it on school loans.
Personally, I'd like to see the rate of Non-Primary residencies go down, and the taxes for Non-Primaries go up (rentals not withstanding.) I don't think rental control works, and I don't think taxes on rental units works either (just makes them more expensive), but the least we could do is get people to poop or get off the pot, ie, make them rent their vacation home, or just sell it.
In reply to pheller :
As a Michigander who has been spending a lot of time on Zillow looking at AZ real estate, I think I see your problem. 
Seriously though, AZ prices do seem quite inflated. I think the limited access to utilities (or water in general) and somewhat limited space due to federal lands also factors heavily into that though.
Yep. The mountain towns of AZ are almost always surrounded by national forest, making building expensive. However, Show Low is similar to Flagstaff in that regard, but it's prices aren't as inflated because they don't have a college.
Prescott butts up against some nice national forest, but it also has some wide open expanses of old prairie that currently being developed into about 300k new homes. Prescott will likely be the next largest metropolitan area in AZ after Phoenix and Tucson.
pheller said:Yep. The mountain towns of AZ are almost always surrounded by national forest, making building expensive. However, Show Low is similar to Flagstaff in that regard, but it's prices aren't as inflated because they don't have a college.
Semantics time: Flagstaff real estate isn't inflated because of the college. Housing prices are higher, but they're not inflated because of that--unless you expect the college population to decrease drastically soon.
I don't call my house price inflated because it is near a good school; the good school is what holds the value up. It is the one thing you can't change--location, location, location. People want to live near colleges, schools, transit, etc. That isn't inflation, that is just desirability.
Fair enough. I guess you can't "inflate" something that technically won't "deflate." Housing prices will always be more expensive here, although added supply would help.
In reply to SyntheticBlinkerFluid :
I honestly look at what some of the rents go for in this country and think that why won't some folks buy an small rv and get a 24 hour gym membership. That way, they could save a fortune on rent and have a place to take a shower.
In reply to chada75 :
RV lots can be expensive unless you want to be around the worst of the worst
In reply to mtn :
Yep - I'm pretty sure the schools are what keeps the values in my area lower. People with money willing to bid up house prices don't really want to live here and have kids. Otherwise, the area has a lot going for it - easy highway access, commuter train into Philly, water access.
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