Boomers cant afford they houses. boo hoo

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jdcyclone19

Well-Known Member
Apr 14, 2017
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Iowa
Just for fun I went and looked at assessed and current market values from my old starter home in Ankeny. The current market value is $180,000 and this is for a 970 square foot home! The current owner has picked up $43,000 in equity for a freakin starter home in less than 7 years, don't try to tell me this is n't going to be a problem.

I bought a starter home 6 years ago in that area. paid 120K for 920sqft ranch. Now my assessed value is 169K (was 118K when I bought).... Crazy (did finish my basement but that was 12K). Still my assessed if you subtract finished basement, is $155K and could easily sell for $180K. We thought about buying a bigger house a year ago but with our current equity, but when we did some calculations and analysis, were further ahead keeping our current house and finishing the basement.
 
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Bobber

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Apr 12, 2006
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Hudson, Iowa

It's all about supply and demand. Reminds me of a ponzi scheme somewhat as long as you have new fools coming in willing to pay it works, but when you don't it all goes to heck. But hey it's a free country and if people want to blow money, go right ahead.

My mother in law is going through this right now. She's 68, recently inherited some money and is blowing it on adding on to her folks old farm house. Never mind the grand kids are almost grown and probably won't be coming back to visit near as often. It doesn't appear to make any financial sense and we've shared that with her, but hey she's going to do what she wants!

The whole where you live debate is somewhat amusing to me. California people are going to say California of course and most other people will vote for where they are at.

We have some friends who are thinking of moving back to Iowa from California. Their home is worth a lot more relatively speaking so if they get it sold, will be able to buy a lot more home here and probably have some spare change. Here's the thing; most of their net worth is wrapped up in that home. They don't have a lot outside of that.

Our situation is different and our net worth is structured much differently. Buying a relatively inexpensive home in the midwest allowed me to pay it off quickly, invest in other things and have a much broader range of investments than these friends. The incremental costs to invest in the stock market also seem much more reasonable to me relative to real estate...

We travel to places like California, Hawaii, Florida, Arizona when we want and always enjoy visiting, but never enough to want to live there(other than perhaps staying a month or two in the winter when we get older.)

Last thought. Nothing wrong with renting. My brother is an engineer and has done that his entire life and is wealthy. I chose to own, but that's because it's relatively reasonable to do so here.
 
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ClonesFTW

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Nov 13, 2013
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I work with several engineers and they are smart... in engineering. Most of them aren't very good at selling their designs, explaining processes to non-engineers, and using empathetic langauge to work with others. The ones who have those skills are the boss.

This. Many people I know in IT/engineering would embarrass themselves trying to sell their product or service to an outside vendor. There is always a need for those fluent in salesmanship, no matter the degree (if any) you hold.
 

Sigmapolis

Minister of Economy
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This. Many people I know in IT/engineering would embarrass themselves trying to sell their product or service to an outside vendor. There is always a need for those fluent in salesmanship, no matter the degree (if any) you hold.

Sure as heck worked for me as a lowly software salesman. Commission is fun.
 

2forISU

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Oct 8, 2008
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Yeah as an average
The risk has to be pretty high in this industry, correct? I would assume the default rate is high and might be tied to the high-interest rates. I'm not well versed in these lending firms but would be curious to see some #'s.
 

2forISU

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Oct 8, 2008
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Just for fun I went and looked at assessed and current market values from my old starter home in Ankeny. The current market value is $180,000 and this is for a 970 square foot home! The current owner has picked up $43,000 in equity for a freakin starter home in less than 7 years, don't try to tell me this is n't going to be a problem.
Might seem crazy but that's pretty reasonable compared to either coast. The owner next to our house in Philly bought their home in 2010 for $425K and sold it for a shade over $900K a couple of weeks ago.
 

DurangoCy

Well-Known Member
Jul 5, 2010
6,373
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Durango, CO
Just for fun I went and looked at assessed and current market values from my old starter home in Ankeny. The current market value is $180,000 and this is for a 970 square foot home! The current owner has picked up $43,000 in equity for a freakin starter home in less than 7 years, don't try to tell me this is n't going to be a problem.

4% increase per year, sounds about right.
 

SoapyCy

Well-Known Member
Oct 10, 2012
20,023
9,760
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grundy center
It's all about supply and demand. Reminds me of a ponzi scheme somewhat as long as you have new fools coming in willing to pay it works, but when you don't it all goes to heck. But hey it's a free country and if people want to blow money, go right ahead.

The problem is people need a place to live. Aside from moving to the middle of nowhere, there isn't an option to not buy into the ponzi scheme.
 

throwittoblythe

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Aug 7, 2006
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Minneapolis, MN
Spouse is an engineer and likes what he does but has ZERO desire to go into management - people or project wise. He prefers acting as a team lead or technical expert. Works well for him but obviously then you need other people who do want those roles that rely on the soft skills.

I'm one of those soft skill people. I went to ISU for both bachelors and masters in engineering. Spent my first 8 years doing hard calculations/design work, but quickly made my way up to leading teams where I was doing less design and more management. I abandoned the design side altogether a few years ago and now do BD for a construction company.

My biggest asset is that I can speak to both designers and builders and know what the hell they are talking about. I'm more of a translator than anything else. Ask the average engineer to write a proposal and it's laughable what they come up with. Being in this role, I get the impression some of my coworkers don't see any value in what I do because they don't understand it ("he's not a project manager!"). But they sure like it when those new projects keep rolling in the door.
 

3TrueFans

Just a Happily Married Man
Sep 10, 2009
59,132
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Ames
I'm one of those soft skill people. I went to ISU for both bachelors and masters in engineering. Spent my first 8 years doing hard calculations/design work, but quickly made my way up to leading teams where I was doing less design and more management. I abandoned the design side altogether a few years ago and now do BD for a construction company.

My biggest asset is that I can speak to both designers and builders and know what the hell they are talking about. I'm more of a translator than anything else. Ask the average engineer to write a proposal and it's laughable what they come up with. Being in this role, I get the impression some of my coworkers don't see any value in what I do because they don't understand it ("he's not a project manager!"). But they sure like it when those new projects keep rolling in the door.
 

capitalcityguy

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Jun 14, 2007
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Des Moines
Somebody missed the memo.

saupload_US-median-new-home-sale-prices-vs-median-household-income-annual-1999-thru-2016-monthly-200012-thru-201801.png


The median home is as overpriced relative to median income now as it was in ~2005.


I know....we'll never learn.
 

capitalcityguy

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Jun 14, 2007
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Des Moines
This goes hand in hand with the reverse mortgages that were so popular some years ago. Can't believe people didn't really find out what happens in those things, and say "Yeah, right."

Hard knocks Rule #1: If it sounds too good to be true, it is.

Maybe, but it really goes hand-in-hand with the relaxing of credit. Too many special interests involved that profit from getting as many people in houses (regardless if they can afford them) as possible.
 
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capitalcityguy

Well-Known Member
Jun 14, 2007
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Des Moines
It's all about supply and demand. Reminds me of a ponzi scheme somewhat as long as you have new fools coming in willing to pay it works, but when you don't it all goes to heck. But hey it's a free country and if people want to blow money, go right ahead.

Truth!

What we have found is that the underlying financing mechanisms of the suburban era — our post-World War II pattern of development — operates like a classic Ponzi scheme, with ever-increasing rates of growth necessary to sustain long-term liabilities.
.
https://www.strongtowns.org/the-growth-ponzi-scheme
 

BillBrasky4Cy

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Dec 10, 2013
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Might seem crazy but that's pretty reasonable compared to either coast. The owner next to our house in Philly bought their home in 2010 for $425K and sold it for a shade over $900K a couple of weeks ago.

Yeah I get that, I lived in coastal VA for a few years. You also have to look at everything in scale though...
 

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