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CNBC breaks shocking news
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this post was submitted on 03 Dec 2023
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A boomer I know blames young people being in house debt because "they all buy houses with quarts and granite counters, hardwood floors and heated tile floor bathrooms. They skip the starter homes and go right to the forever homes".
He doesn't consider the fact that no one is building starter homes anymore. Everything has heated tile floors, granite counters and hardwood floors because the contractors are demolishing all the older "starter" homes to build luxury houses and 55+ only condos to sell to boomers who throw all their money at it. There's no profit in building starter homes anymore.
Around me all the 55+ condos are dirt cheap and price controlled, while the regular condos and sfh are 2-3x price. So, when the boomers want to downsize they can just sell their that the vigorously fought to keep zoned without density to a millennial for a huge profit and then buy a cheap condo (conveniently dense and conveniently 55+) and live off the rest of the proceeds. It’s as if the boomers get to use their kids future earnings as a piggy bank for their retirement. It’s the same story with offloading the climate change impacts of their gluttonous lifestyle to their kids as well. They really did pull up the ladder.
At least in our area, most of the starter homes were purchased and then completely redone internally to fancy up and then flipped. All of the homes went up about $100,000 at minimum because of people trying to profit off the housing market.
My first house, I bought in 2009 (so right during the crash). We offered full asking price, only to be told there was 3 higher cash offers, which I couldn't compete with as a mortgage (FHA) offer. The seller made living in the house for 1 year a condition of sale, and all the higher offers disappeared. Guarantee those were just flippers looking to make a profit, rather than homebuyers.
I think capital gains taxes should be sky high on real estate if owned for less than a year.
Like 90% tax on any profit from a sale owned less than one year.
Only problem, is that house flippers are also the only ones you can rehab old POS falling down shacks I to a saleable and occupiable house. So many houses near where I live have been rehabbed from a teardown into a usable house.
Maybe exempt if the purchase price was a certain amount below the average for the market.
Like if the price per sq. ft / acre of the house was 75% of market average when purchased it's exempt, that way the houses that really need to be repaired and fixed with get the attention they need to keep them in the market.
Then people can't just buy a house, slap a coat of paint on it and some new counters then sell for $100k over the purchased price 6 months later.
Ehhh, I disagree with this a bit. People are still putting LVP instead of hardwood in new builds, with granite instead of quartz countertops, and no fancy heated floors, and the cheapest carpet they can find at Home Depot. I feel like most new builds I see going up are more on the "starter home" side of things, but maybe it's an area specific thing.
The real problem though, is even these cheaper options still end up being unaffordable.
In my area that's how they do the flips. And those are still sold for 150% what they would've been sold for three years ago. To a landlord.
I was fortunate enough to buy a house this year and the options seemed to be:
The new starter homes seem to be townhomes, me and my wife considered buying one instead and the market for them was blistering as they were all that most people could afford that aren't shacks/fixer-uppers... and people buying those will usually have to pay steep HOA fees on top of the increased interest rates, which is less going into their equity.
No one is building starter homes and with investing being so more accessible, you might as well do that while living in a nice apartment and wait to buy a nicer house.
Where I live: double your numbers.
Ha, jokes on them. I moved to the countryside, and purchased a former starter home.
The joke on me is that it was 3/4 of a million dollars. I would have not been able to buy it at all if I didn't have the support of my SO, who works full time like me, and my brother AND his wife, who all had full time jobs at the time of purchase....
Six bedrooms, two bathrooms, nearly 2800 sq ft. At least 15 minutes from anywhere, and at least 30 minutes from mid sized cities, and an hour and a half from the nearest major metro area. It's quiet here... Like, weirdly quiet.