Unaffordable Housing is a GOOD THING

They've been saying homes are unaffordable for over 30 years. Will they finally be right in 2024, or it just the same lie being told to a new generation of buyers? Watch this video as we examine how home prices have consistently increased in value for the last several decades and why high home prices should be viewed as a good thing.
Charles Lewis is a REALTOR® in the Austin area and helps people buy and sell houses all over the Austin metro area. Schedule a no-obligation phone call to find out how he can help you accomplish your real estate goals: bit.ly/ATXPhone
Charles Lewis
Keller Williams Realty
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[@xdcksgmd37]

I don’t think your median price increase stats show the reality many of us are living in. Price increase in my market went up 100% in one year and haven’t come back down. The $200k houses I was planning to buy at the start of covid went up to $300k and then up to $400-500k. Open houses were mobbed with existing home owners downsizing, and real estate investors looking for more business. FHA loans couldn’t be used because no one allowed inspections. Many houses sold for the increased price had major problems requiring addition money to fix. New home owners trying to start families in my area were bullied out of the market, expecting to pay the price for the home 10 years from now, today. Mortgage rate went from $1600/mo to $2800/month to $3600-4300/mo. After 5 years of promotions and raises, I’m worse off now than before.

[@SFSCharles]

Your description happened all over the country. The prices went to unsustainable levels during the pandemic and the high interest rates drove prices lower, but payments went up. The chart I used was national median sales prices and it did reflect the pullback than happened after the higher rates. As an example, up 70%, corrected by 20%, still means the price is 50% higher than when it started.

[@xdcksgmd37]

Do you have any advice about tax assessed value vs sale Patrice? In my market, the sale price is still $150-200k above the tax assessed price and to me it shows how overvalued the property is. I worry that I will stretch my budget to afford an inflated price, be stuck with 30 year mortgage at inflated cost, and then taxes will jump up and ruin me

[@SFSCharles]

@@xdcksgmd37 I just saw this comment. I don’t know the specifics of your area, but history says there is nearly a 100% chance real estate values will increase over time. (With the exception of negative net migration trends like we’ve seen in Detroit over the previous 30 or so years.) In other words, it might seem expensive now, but more than likely, the current price will seem cheap in 20 or 30 years.

[@chadpublic904]

That’s assuming the stock market survives the future. Also, this doesn’t work for the general health and wellbeing of the general population because you need to raise kids to keep consistent population numbers and those kids need safe and structured environments and taking root in a neighborhood with a house used to be that way of doing it. I think our country has been greed first for so long that this will finally end because it just isn’t reasonably sustainable.

[@SFSCharles]

It’s unfortunate that you’ve been taught to think that way.

[@botboy6977]

I live in a house that I couldn’t afford today. Had it built in 2001! If your talking 3500-5000 mortgage a month u would have to make six figures to make it.

[@agandy95]

You’re leaving out incomes and how they are not keeping up, you’re also leaving out the fact that hedge funds have snaped up so many houses it has created an artificial shortage. Small landlords are not the problem.

[@SFSCharles]

I appreciate you adding valuable insights to the conversation.

[@paxundpeace9970]

Small landlords are those selling to those hedgefunds anyway because doomers told them nobody is buying.

[@jeffpiatt3879]

Buying a small home, just outside of a growing city, and learning to live with the commute or working from home is the best bet for a lot of young people to get a house in todays market. These outlying areas often show much more price growth as their respective cities grow. Crime is usualy lower and the people in these areas are often nicer to deal with. If you are hard up for money, eating out in restaurants, going to entertainment venues, etc. should be at the bottom of your list for requirements.

[@SFSCharles]

That's some solid advice for young people looking to get into the housing market!

[@knottheory79220]

While I appreciate the point being made here, telling people the solution is to get lucky picking the next thing that goes on a tear in the market and appreciates greatly to be able to afford housing is an absolutely wild take. Also, the wealth that older people have is not going to their heirs, it's going to end of life care. Nursing homes have incredible costs and most people's estates are drained by their medical costs in their last couple of years of life. The tax man then takes a decent chunk of what's left, if anything. Most people have to sell their homes at the end of their life to pay medical bills. There's also the basic problem of most people not being only children. Even if you stand to inherit your parents $1 million net worth, you're actually inheriting a half or a third of that. Still nothing to sneeze at, but it may not be enough to get over the cost hurdle. Don't get me wrong, I want the free market to set prices because even if things are too expensive for me personally that price is information that tells me "This is not for you" and tells me what I need to actually be thinking about. I just don't see how the average person isn't priced out of the market in most cities where people actually live. FWIW my solution to the housing crisis is to rent until I'm 60 then move somewhere I can afford housing. That does mean I have a lower quality of life ahead of me than prior generations since I will spend my working years and middle age in roach infested shoeboxes, but I'll survive. Most people in the world don't even have that. But it's amazing how much cheaper it gets when you go 2 hours away from a major city.

[@SFSCharles]

Thank you for sharing such a thoughtful perspective! It's always refreshing to hear someone address the complexities of these issues with nuance. Your insights are valuable to the discussion!

[@paxundpeace9970]

Real incomes are much lower for the majority of people then in the 1990s. In addition house prices have risen 2 or even 3 folds since the early 2000s. Only the upper 40% of households can afford to save up or are likely to have large amounts of assets or cash. In addition rates are much higher then in the past 15 years. Land cost are much higher many places on the west coast have reached growth bundaries that will not allow for more land to used for housing construction.

[@SFSCharles]

Thank you for sharing such a detailed perspective! It's important to have these discussions and raise awareness about the challenges so many are facing in today's economy.

[@dontyouhaveacomrade1585]

They were right. 2008. We haven’t lived it down. Landlord.

[@SFSCharles]

Thanks for watching and sharing your thoughts.

[@dontyouhaveacomrade1585]

@@SFSCharles Tell me. Do you enjoy real estate hoarding?

[@SFSCharles]

@@dontyouhaveacomrade1585 I don't know what that means.

[@dontyouhaveacomrade1585]

@@SFSCharles I believe you.

[@SFSCharles]

@@dontyouhaveacomrade1585 I would imagine it has something to do with someone who blames their financial situation on another person who owns multiple rental properties. I think it goes something like, “prices would be lower and housing would be affordable if there weren’t so many other people out there with more income and resources than I have.”