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Stop LYING About The Housing Market
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- čas přidán 10. 05. 2023
- Stop telling me the sky is falling. Real estate is the best long term investment. Period. If you are planning your fixer upper renovation, watch My 13 Renovating Tips to Help Save You Money 👉🏼 • 13 Renovating Tips to ...
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Join me LIVE here on CZcams on Tuesday at 5pm EST. I’ll be shopping for a fixer upper and showing you the tips and tricks you need to know to purchase a home with good bones. Cheers
Omg, cant wait to watch this. Im a real estate broker since 2005 and plan to be a full time RE Investor. I love being a student of the game, ty❤
Bummer
Sounds fun
EST or EDT? Did Canada stop Daylight Saving Time? EST = GMT-5 and EDT = GMT-4
@@tracystidbit you're the cancer ! Stop ruining Canada !
According to National Association of Realtors data, Shiller's NSA Existing Home Sale Index and FHFA's NSA Existing Home Sale data the median home prices are different:
Jan 1960 - $19,256 ($198,369 CPI adjusted)
Jan 1970 - $24,002 ($191,657 CPI adjusted)
Jan 1980 - $55,074 ($213,667 CPI adjusted)
Jan 1990 - $97,024 ($229,871 CPI adjusted)
Feb 2000 - $131,328 ($233,449 CPI adjusted)
Jan 2020 - $268,125 ($313,717 CPI adjusted)
Jan 2022 - $356,405 ($382,631 CPI adjusted)
Which shows less than doubling every decade and less than quadrupling every other decade. Until 2020, house prices barely beat inflation.
Your numbers claim to have median home prices beating inflation. What is the source for your numbers?
Good point, they are very different! Also, in that data, the jump from 2020 to 2022 is absolutely ridiculous. Really wonder what 2030 is going to look like.
How do you pay for a million dollar home? How do you own that when wages don't exist to cover that? It took me 20 years and a college degree to make more dollars, not buying power, just raw dollars, than I did 20 years ago in a general labor job. At some point, you can't pay for it. Today, with a degree, over a decade of experience, promotions into management, today I do not have as much buying power as I did 25 years ago in a general labor job in a factory. I still don't have as much buying power. 25 years ago, my general labor job could buy and completely pay off a hiuse in 7 years with just excess income. I can't do that now, not even close. It doesn't matter how the market changes if people have no money.
Exactly this. It would be funny for the video to cover incomes...plus, history is no predictor of the future, the U.S. was way stronger back then than now, you could bet on the U.S., which I would argue you can't anymore.
The thing Jeff said is to buy a house as fast as you can before it gets to a million dollars, and he's right. I work as a machinist in a factory for 26$/hour and bought my first house in 2013 and sold it for a profit in 2021, then I bought my current house for 320K, I think the seller's realtor underestimated the value of this house because it is now worth 800K. So it is possible to have a million dollar home if you move before it's worth that much. You can also get 3 other people you trust to join you and buy something like a quadruplex in which everyone occupies a unit that you can rent at some point and then buy your first real single family house. It's not easy but it can be done, I know it works because that's what I did.
@@dansmith5012 I'd agree I'd house pricing wasn't wildly off mark. You bought a house at the best time possible in recent decades in 2013. And you sold that house at a time when housing prices were starting to skyrocket. You had very good timing.
The problem I'm bringing up has more to do with being able to afford a mortgage when home prices are astronomical. We can talk about homes costing a million dollars, and if you're sitting on that, great. But who could afford to buy it from you? The person able to afford it needs to be making $200,000/yr. The median US income is $80,000 (household). That income can comfortably afford a $300,000 home with a little spending money. Anything north of $400,000 becomes a burden. A million dollar home is only possible for less than 10% of the population. It's a supply and demand problem. It's like saying $150,000 cars are going to be the norm in 10 years. Who would ever be able to afford one? Unless wages drastically increase too, consumers will simply not have the money to ever support such a market. It doesn't matter if realtors demand it. There will be no one lining up to buy. Even right now people are diving into mortgages they really can't afford. I know two people who recently purchased houses with less income than myself for houses at twicethe price I'd ever pay. I know I'd be perceptually broke for 30 years buying the same house. Sure, the house price will go up. But, I'm also cash poor for 30 years, including retirement savings. The house becomes that, but I also wasted a massive amount in interest and taxes. So, am I forgoing $2,000,000 in retirement savings for a $300,000 net gain on the house after accounting for all losses?
Exactly. How many people have over $6500 a month right now for *JUST THE MORTGAGE* (not including food, transportation, utilities, taxes, etc etc etc). Homeowners definitely have massive blindspots regarding price. I'll invest in everything but real estate until the insanity ends.
@@strugglinghustler If you wait you are certain to be a renter for life, not that its something bad in itself. Maybe you look in the wrong place if you have to put 6500$ a month for a house, try a house in the 200-300K range like a fixer-upper more in a rural area. Something else you might want to try is to split the bill, try to get 3 other people you trust that would like to buy a quadruplex in which each of you would occupy a unit or rent it which would help you pay for another property.
In 2019 my parents tried to discourage us from buying a house for 195,000, 2 years and 30,000 later we sold it for 340,000.
I think the takeaway from that should be “that is not remotely sustainable” and what is unsustainable will not be sustained. People flat out cannot afford housing now, it will come down because who will buy if everyone is broke buying food, fuel and electricity and student loans coming back into the picture soon. Extreme long term yeah but next 3-5 years looks like consumers are generally tapped out as wages lag very significantly behind costs.
I sold my house at Dec 2019 for 370,000 and the new home owner resold it for 550,000 in June 2021.
@@reformedchinesecommunist yeah but there are people that are profiting huge off of everyone else's losses those are the ones that will buy it
@@reformedchinesecommunist They are building and selling houses like crazy in my city. I don't what jobs these people have to afford $400k to $500k
so you got lucky on timing... I don't get your point
Buying a house during a real estate bubble is foolishness if you are going into 30 years of debt on something that may lose value in the next 5 years. High interest rates also make homes less affordable when the prices are above the norm.
I'm just exhausted from watching shacks go for 200k and making 20 dollars an hour. Sure you could compare what we're seeing to the 80s interest but in comparison housing was MUCH CHEAPER. We're right now dealing with 500k houses and 6% interest, plus corporations and landlords grabbing every single house that should be for young people. It's going to come to a very ugly head, and currently the birthrate is going down because of this.
The biggest problem I've seen from "crashbros listeners" is they are waiting for some perfect moment. They sit on the sidelines, waiting for 40% price drops on turn-key ready homes which never happen. They snub older homes because they are "only 8ft ceilings" and aren't fully updated. Then get mad when flippers buy & sell the same homes for a huge markup within a couple of months. Or even worse, rent them out for life. Interest Rate drops during a recession won't help their case, it'll only fuel prepared buyers with cash like 2020/2021.
I guess they've never tried to get dust webs out of the corners of a room with ceilings higher than 8'. It's a real pain in the a$$. Ha ha.
That’s why I buy a house whenever I have enough money saved, regardless of market conditions. About 10 years ago bought a short sale house in bad neighborhood of Oakland for $200,000. It’s all I could afford at the time. Could’ve waited for “better” market conditions but didn’t. Sold that same house last year for $800,000.
Even when that "perfect moment" that they've been waiting for comes they'll find some other excuse to not buy
@@typorter-pp6lh hell yeah, thats what its all about
We don't really make Huge profits. Don't believe everything you see on television. We make a reasonable profit, and every market and bank dictates the amount of money we can actually sell the house for.
Interesting perspective, but I’m very skeptical of how far this can go, we can’t support infinite growth.
exactly.. this guy is assuming the country prints and loans fake paper dollars to infinity.. the national debt is reaching a breaking point.. plus the dollar is turning into toilet paper like venezuela.. people will be spending their money on necessities instead of living house broke to their deathbeds
Why not? We live in an inflationary environment
@@movingtomaryland because we have limited resources. Beyond all the fiscal inflation is still real tangible resources that have a limited supply. You can only extrapolate so far with your infinite growth matched with infinite inflation till there’s nothing left to buy it all with.
Home buying surged during the pandemic and when rates were low. Most of those in the know now caution that there should be a correction.
The government wont stop borrowing and we will always pay for it. The rich will strive the poor Will suffer thats why there is a gap
Values in my area (south east Florida) are now 100-300 percent higher vs just 2 years ago. The amount of flippers and investors buying homes is breathtaking.
What you are saying is that these values will sustain and go up?
A home that a waiter bought 2 year ago is something a doctor can’t afford.
Y2k was a real issue. It was one of the most successful campaigns because people actually fixed stuff in time.
It was an incredible amount of work that took place, even then some systems were still affected.
Not something to brush off lightly.
yep learned about it in my computer science class, it took everyone to go in and rewrite code to fix the issue. It's interesting to read on cause like programming languages had to be changed.
Real example of how the hard work of thousands of people to prevent catastrophe, gets remembered as “it’s wasn’t really a big deal”.
Nobody remembers the Titanics that don’t sink
Such a great point, people really do think it much ado about nothing, but the concept of the calender rolling over was never thought about in the libraries that people wrote in the 60s and 70s because they assumed everyone would upgrade, but all those old libraries stayed in place because they worked. But here we are still using systems with Fortran, C and even B(!), obviously with updated libraries and such.
WTF? Y2K was a total scam. 😂😅
I don't disagree with anything said in the video but you also have to look at the rate wages have gone up during that same timespan to get a picture as to why fewer people are buying homes. Many people i know aren't getting side hustles/ a second job to afford nice things, they are getting them to survive.
They need to practice DIY skills and get $100 plus per hour.
he did mention how bad wages are and why he says you have a few years left to get a junk house to fix cause they don't plan to change mortage laws to make it easier
Houses are not selling where I live. High interest loans make it tough to sell. I think its in bubble territory anyway. In fact, everything is in bubble. Ever since the advent of QE.
Great video! For 2023, it’s hard to nail down specific predictions for the housing market is because it’s not yet clear how quickly or how much the Federal Reserve can bring down inflation and borrowing costs without tanking buyer demand for everything from homes to cars.
There is no greater freedom than handing back the key to a airbnb apartment knowing someone else has to maintain it. If you enjoy renovating and decorating then perhaps home ownership is for you. For me, property is another way we get tied down.
I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!
You are right! I’ve diversified my 450K portfolio across various market with the aid of an investment coach, I have been able to generate a little bit above $830k in net profit across high dividend yield stocks, ETF and bonds.
@@edward.abraham Do you mind sharing info on the adviser who assisted you?
@@Kim.beneteau “Julia Ann finnicum” is the coach that guides me, She has years of financial market experience, you can use something else but for me her strategy works hence my result. She provides entry and exit point for the securities I focus on.
The issue isn't that housing will give you returns in the long term. The issue is; if you can't survive a probable upcoming housing recession, you will be f... if you don't have job security or income security and the bubble burst, you will lose the house right after you lose your job... just like the 2008 crash... That's the main issue... If you have income security all you have to do is ride the storm and you will be fine, but if that's not your case, you will be far worse.
Housing market is fucked, in ontario at least. Bought my medium size house for 170k 11 years ago. Just sold it for 620k. Sure as hell wasn't a first time home buyer who bought my house. Young people are screwed unless a crash comes quick.
Soon, only homeowners will be able to be homeowners, renters will have no shot at making the jump.
Looking at home prices alone doesn’t give the full picture. You need to look at how long it takes a family with median income to pay off a median priced house. That skyrocketed and it can’t keep going up. Something has got to give.
Believe it or not, the Chinese are buying property in Chicago and bought my 4 unit in 2017
But he is a home owner and he does not care! So his message for people 20 years from now is to buy 50 years ago and everything will be fine! Just like he did! Everyone can do it!
We purchased a severely neglected 1980’s ranch in 2018 for $105K. I demo’d it to the studs, built open span, and replaced everything (roof, windows, flooring, electrical, you name it). I performed 90% of the upgrades with an investment of $75K on top of purchase price. It recently appraised above $375K.
Bravo!
2018 material and renovation costs have doubled now. Labor is insane you’d pay over 100k easy most likely now
We purchased an 1980 16.54 acres farm, fir 25,000 cash. Fixed the house ourselves, no mortgage
@@deandremason2457 housing market is much higher now, as well though
Housing is only a hedge against inflation when wage growth is the same. Wages have fallen far behind. The Fed is taking money out of the system. Current home owners are being hurt due to current economic conditions because taxes, homeowners insurance, and utilities are increasing dramatically. Not to mention the cost to buy everything to live. The average family will not be able to sustain this.
Housing market outpaced wages, that's the problem. Us younger folks(21) are screwed.
I want to add, something like housing, NEVER should be for profit, morally wrong.
Jeff just a simple question. Has the household income been proportionate with the housing prices in the last 5 years?
It hasn’t been since 1970. Doesn’t matter, inflation will continue to rise over the long term which means real estate is guaranteed to as well.
Recent evidence shows that it's nearly irrelevant as we've become a society of haves and have nots and with increasing income inequality the haves are buying the majority of homes. I'm seeing this dynamic myself. I'm able to purchase another house in July because I have rental properties generating $8k/month in passive income to supplement my $80k construction business. That passive income is leverage and allows for cash flow snowballing
Yep, I'm against stupid too! And I'm with ya on everything else you said. But I would caution against buying a house unless you can actually afford one. Being house poor is a miserable existence, just to ultimately lose it to the bank. Even though I got a great deal on my home because it was a bank owned foreclosure, I saw the records from the previous owners, I saw what they did to get into that position of being house poor. It's better to put no money into your house then it is to be stuck in a second mortgage. I would say live within your means, but that is getting next to impossible with the increasing income gap and inflation, not to mention the worthless dollar. But yeah, property and gold are about as sure as the next sun rise. Cheers and good luck everybody 🍻.
People get lost in using words they can't afford.
Couldn't have seen this videoat a better time. JUST closed on my new home yesterday. Leaving Illinois' high taxes for NW Indiana in a newly reno'd gem AND my appraisal came in higher than the purchase price. Instant equity 😁. Wife and i are paying off our first mortgage (amazing rate so we're renting instead of selling). The future is bright. Also, my credit used to be
Good for you. Great discussion IMO
Bought a multi family in 2022 just outside of Boston. It was a lot of work (1930s house) but now we rented out one unit and our mortgage is next to nothing. Can’t wait to see what we will have in 10 years!
way ahead of the curve. Cheers!
Interesting video. Nice rant. I encourage you to look at the graph showing Canadian vs US house prices, compared to disposable income in each country. US house prices are SO MUCH lower than those in Canada. I like housing as an investment, generally, but I believe there’s a bubble in Canada, and it’s going to burst.
My wife and I (25 and 26 years old) just got our first house in April. Your how to's have been absolutely essential, thank you for what you do!
We first entered the housing market in 1979 for just under $45K. Sold in 85 for $67 & paid $81K for a custom built new home. It was on a lot with twice the square footage + a two car garage. Today homes like ours in our neighborhood are listing & selling quickly for $800K.That seems fantastic, but it puts home ownership out of reach of starter homes. Here’s my question: Where do the first time buyers find the funds for a mortgage let alone pay to fix up that money pit they could barely afford due to Bank of Canada interest rate hikes!
I can see only speak for my situation but my first home was a rental my father owned. I rented from him and then my wife and I formally began a legal rent to own arrangement with him after we got married. We paid $30k and sold it for $80k 2 years later after a bunch of hard work. We bought a $180k mortgaged house with the profits and then COVID allowed us to sell that one for $230k 18 months later. Now we have a $300k house at 28 and 25. I certainly had help in the beginning and hopefully I can do the same for my children.
I bought a rundown triplex shortly after college. Got a co-sign from my parents for the mortgage, and put 20% down of the money I saved living at home til I was 23. I have since renovated and lived in the basement of the triplex for 5 years. Went on to buy a starter home after that with a HELOC from the triplex. Sold that house 5 years later for a profit of 300K and used that as a deposit on a home by the lake. It's all about making very careful decisions with your money.
So far the answer is parents help
I think the answer is your parents must help you or you need to start a hustle business and sell courses. Smile a lot. That sells to people. Without financially devouring others, it’s not realistic to compare the path to homeownership of today with yesteryear. The adults took what they could and did not think twice about monetary policies that would rob future generations of the same opportunities they had.
@@mikeodonnell11 a small loan of 1 million dollars .. lol
You forgot one thing..when enough people can't afford these houses..they don't buy. Your not considering wages growth vs home value.. flawed argument
Why is a more expensive house a good thing?
Sure I could sell my house for 4x what I bought it for, but all the other houses also cost 4x more; and now I need 4x the downpayment to move in to one of them.
More expensive house means more expensive property taxes.
More expensive house doesn't mean better house either. The house that was built in the 70s for 50k is not somehow magically better now that it costs 500k. Even if people did put a hundred thousand or more into renovating it it's still got old bones, there's some stuff that can't be fixed without a complete knockdown-rebuild.
More expensive houses mean only people who already have money will be able to get them, increasing the wealth gap.
A more expensive house means you can borrow more against it, but that also means more risk.
A more expensive house is more expensive to insure properly.
So really, I'm honestly asking: What is the benefit of my home's value going up?
@@dropndeal I make a million dollars an hour now, but it costs 1 million and 1 to live.
How does that help?
A more expensive house is not better for anyone but landlords who can charge more rent.
House prices all go up then when you sell your house to get a new one it's at best a wash, but more likely due to the higher down payment needed and the bigger loan it's actually harder to get that new house.
Leaving the house to your kids? Better hope it's paid off, or that they can afford the mortgage. Even if it is paid off that's higher property taxes and insurance.
So I ask again: How is it better, or in your terms 'more profitable' for houses to get more expensive?
Currently in the process of buying my first house, 1971 2b condo that hasn't been updated. Been binge watching everything and can't wait to close and get in there and fix some stuff up before I move in. Most likely the single bathroom, don't want to reno that while living in it! Thanks for all the great content.
Housing is still booming where I live. I worked 3 jobs and packed a lunch every day for many years for 20% down. I pay 200-300 extra per month toward the mortgage and have 400-450k equity in my home. My hands shook for many years paying my bills but I can see the light at the end of the tunnel. You do what you need to if you want it enough.
My personal experience has me terrified to buy in this market. I had to sell my first house in 2020 to move out of state for work. That home was purchased in 07 when I was 23 years old. Paid 170k in 07, sold for 200k in 2020. I was fortunate to have a good job through the 08 nightmare and never missed a payment. Fixed rate mortgage with a refi around 2015. Ended up in a rental after the move due to the insane house prices. I'm still in that rental... I figured I would wait for the bubble to pop but the home prices keep going up. I've got 70k sitting in the bank for a deposit but I'm terrified to buy at the top of the market again. I barely got out from underneath my first house after 13 years. I can't help but feel like I am screwed no mater what I do. Getting really tired of living out of a rental but buying now feels reckless and irresponsible.
Start looking now. You should look at comps and offer 7-8% below a fair comp price. Prices are not coming down more than 10%. There's too many investors who will start buying again if prices go down a lot. There are a few metro areas with lots of new construction that might come down a little more than 10%, but most of the USA metros are already built up and not much more new homes coming in where jobs are at.
@@tomsettles6873 You gave "realtor" advice and never asked where he lives. That's dumb to say "Prices are not coming down more than 10%" since they are already down by 18% in Boise since may 2022!!
This is a perfect rebuttal to this ridiculous "realtor" video!! You bought in 07 (peak of the market) for 170k and sold in 2020 before the bubble hit. That is just a 1%/year growth for 13 years!!!
Barely sold it for what you bought it for after 13 years of payments (which were NO DOUBT more than renting would have been).
Sorry....that was a bad time to buy and a bad time to sell..... which of course disproves this silly hype-video.
@@stevebaughman1163 national average my man. But you're right in emphasizing looking at local markets. And Boise is still massively overpriced for the median income in that area. Boise will probably come down another 10-15%. We looked there last year and surprised how few high paying jobs they have vs. the large population growth. Everybody must have remote job.
@@stevebaughman1163 Yep, where is this doubling every 10 years? Happens to some people but not to all.
Both parents have to work now and with both incomes they still can't afford day care if anyone is available to provide it.
I have recently seen four amazing homes that were built in 1910. They were renovated. Sold for $500k each. They are beautiful!!!
can't argue with good bones. Cheers!
We are already in a big crash, Inflation is a catastrophe. This CPI report is a colossal failure. To bring the housing market to a halt, the FED will have to pull all the stops. The unfortunate issue is that other markets are being decimated. If you want to stay green, you have to rely on a lot of diversification. Currently up 14% and being careful. Still a better deal than leaving it in a savings or checking account yielding 0-1 percent interest.
Whichever firm you select, make sure you get your insurance from a reputable financial adviser, such as ''BRIDGET MARY TUROW" who has dedicated her career to financial planning. Because they will assist you in escalating, navigating better, and completing the task in a safer manner.
I want to build a diversified portfolio based on my personal income. I am easily triggered/highly emotional, which could be detrimental to my portfolio. I hope I am a patient and systematic person. day trading is not for everyone and multiyear holding is not for everyone. I know my strengths that's why I need proper guidance to be able to venture.
@@helenoliver4838 I have saved myself from all the hassle that chaotic market causes. These days the best way to come into the market space is by reading, studying, being patient, and seeking guidance when necessary, due to my line of work I can’t handle my portfolio so I just copy the trades of my FA. I saw her on Bloomberg business news. It’s been smooth since then.
@@greenquake11931 how can I reach this person because I am in need of a better investment approach.
@@helenoliver4838 'BRIDGET MARY TUROW"
As someone who makes a good chunk less than 100k, and isn't a home owner, I hope you can understand why I'm not excited about this like home owners are lol. I've lived in the same area my whole life and houses are about $500k minimum unless i want to live in a tree stump, and I have a whole community here I'd be heartbroken to be forced to leave just bc of the market.
Sharon, You are right. It is not a good time to buy! But realtors will ALWAYS tell you that it is.
yeah but you are a woman. Just marry a man with a house
@@brucewayne3892 Are you offering? Otherwise, I'd tell you to marry a woman with a brain so you could understand how stupid that comment is, but she'd take one look at it and refuse you lol.
I had to move. The homes where I live start above a million. Well above actually. So I bought elsewhere and I’ll deal with it. Rents won’t stay this low either. Decisions were made 🤷🏼♂️
this is exactly how I feel in the amazing neighborhood I currently live in. Taxes might be the only thing to force me out.
Jeff, add another column in there for household income & calculate the ratio of house vs wages. You'll find house prices are a greater multiple these days (much more expensive). Now consider demographics have changed dramatically in the last 50 years with a much greater percentage of 2 income households. That's a big reason why prices have continued to rise faster than wages, households have more disposable income and are willing to pay more for nicer homes. If you expect the current trends to continue, better have 2 wives (no thanks) or 3 kids with jobs and take their lunch money at gunpoint. Add some high interest rates, unemployment, inflation, and a dash of recession and the numbers are unworkable without a 200 year mortgage. An adjustment has to happen at some point. I may seem mean but I've always enjoyed your videos, even this one.
prices cannot go up for every but they can go up far longer than is logical. I bought my first place is 2013, after renting it. I thought prices were crazy then because by all historical measures they were. 30k down, monthly costs far less then rent and rents have doubled since then. Sold it a few years ago making 320k profit after costs. That said, will the gal who bought from us 100k down 500k purchase price see similar gains? i doubt it. The problem is ya gotta live somewhere.
We got a fixer upper in 2022. $180,000. Homes on my block selling in the $300,000. We continue to work on our home , paying cash on upgrades. We have a comfortable mortgage and will continue upgrading on a slow and steady pace
this gave me some reassurance. I close on my first house in a few weeks and have felt uneasy due to everything going on.
This is absolutely correct. The only thing I might add is - don't rush this, make sure you are in a stable financial position before buying a house. Be ready for the inevitable maintenance expenses, even if you DIY.
I bought investment 4 unit building that i knew it needed it repairs but didn't know it needed repairs all at once.
Ha.. I got a 1940 built farm cottage in 2018.. I'm basically replacing all the mechanicals added central hvac and it is what it is.. I'm not going to lose anything.. I got this old thing dirt cheap for cash on almost an acer and a half
You Frank, are basically printing money!!!! Cheers!
I bought me a 1950 on 2 lots..last year for 45k ... Plan was to resell..but these old houses are pretty sturdy and comfortable once you put a lil money into em
Love your rant! I feel exactly the same way!!! BTW.....I hope you get your own show one day!
Cheers I already have a show on then largest platform in then world. Cheers CZcams!
Housing market is insane out here in New York…homes are going for $340,000 up to $500,000 and it’s very hard to get a home. My husband and I was trying to find something that was less and we could go past $350,000…we kept getting beat out and sellers asking prices were ridiculous but people would could afford it overpaid…, you have LLC buying the homes so they could rent, flippers…a average family couldn’t get anything. Lucky for us after a year and a half of looking we got lucky with a family would was selling and we got to meet them…I think our meeting them and having a good interaction with them..they liked us enough to take our offer…it was tough but I’m glad we got a home…tho I’m will never be in love with living in Jersey..it’s nice to know we have something for our son to grow up in.
The home we got is not too bad but it does need some fixing. We already upgraded the old fence they had in the back. Then I want to have the old deck ripped down the fixed next. Little by little we making changes…
But your right..government’s greed is our suffering and when they mess up , we pay for it and get nothing much in return…
Love this so much!!! I love your level headed perspective!! Thank you!!!!
"It only hurts you if you are not [a homeowner]" So it only hurts most people, especially the younger people, those who don't already have wealth?
I'm with Adam Smith on this: landlords suck.
Did people need to get loans for those $20,000 houses? Not generally. The loan on my 250k house is going to cost 250k-ish.
The reason Y2k was a nothing-burger is because people in IT spent billions of dollars, and millions of hours making sure it wasn't. Crisis response is a damned if you do and damned if you don't business. If you do your job well people will wonder if all that work/money was worth it, and eventually if the issue was really that bad to begin with. If you don't do your job well people die, or at least suffer.
"Different dollar value, but that's still 4x" Really? It's just that simple? An increase in cost from 1 to 4 dollars is a heck of a lot harder to swallow than an increase of 100,000,000,000 to 110,000,000,000 and that's 40 times smaller. That's a nearly exponential growth in house prices, meanwhile average wages adjusted for inflation have DECREASED since the 1960s.
Wanna know how to cut house prices to a quarter of what they are now: Stop treating them as commodities and stop letting people and corporations own dozens, hundreds, or even thousands of them to rent out. Sure, gram and gramps can still rent out their summer home to support their retirement, but Blackrock, China, et al buying up entire neighborhoods to rent out? That needs to stop.
I have another mini-rant/question as to why a more expensive house is good for me, but for now I digress. Love most of your content, thanks for making it.
Ugh, I hate this saying but it really fits in this case: Okay boomer.
Yeah think Jeff missed the mark entirely in his conclusions for many of the reasons you listed.
This isn’t sustainable system that can grow without limits and anyone not buying a house in the next couple years is just screwed unless there is some type of correction.
It also misses the point on what happens to that house that started out at 400k and is now 1.2 million when we go to retire in 25 years?
It was supposed to let us retire in comfort but now you need to give it to your kids? They probably wouldn’t even be able to pay the taxes for such a huge transfer of wealth.
We need a lot more homes and they need to be affordable.
why should i get exicted about the idea of buying a 1960 house for 350k with over 100k of renovation needed. people are just crazy now they think we all make 100$ an hour.
He gives advice in the video. Fixer uppers aren't so bad all the time. Mine has been great.
Depends where you live, I guess. Lots of places with cheaper and better houses than that.
Nice things don't happen over night. You live in it and improve things as you go. Memories are created and you learn to appreciate things through patience and hard work. Your investment will pay off over time. Instant gratification doesn't really go with long term housing.
let me say this. as a homeowner doing renovations you make a 300% return on all improvements. hire a handyman and find out they charge 120 per hour. rare skills pay. Cheers!
The answer is in the video.
The best part apart a 1985 house is a 1985 lot! My fruit and vegetable garden saves me $2500 a year, which I spend on renos!
Wow!!!!
I sold my house in Ontario last March just before the correction. I’m in the process of completing by new home in Nova Scotia with lots left over for a new project. Thank god I jumped in when I did.
In your opinion... what's the best year/s houses were constructed in?
Excellent information. Unless you’re purchasing 100% with cash, there is no bad time to buy a house. You’re either going to get a low interest rate and pay top dollar, OR, you pay a high interest rate with a lower price tag.
either way you are much farter ahead buying instead of renting.
@@stevehansen7895 Wait until the interest is 12% or higher. I think you’ll have a new perspective on what “high” interest rates are. And housing prices, at least in my area, have been dropping for the past 6-9 months. But I think the point is, housing investment is still good, especially in the long game. Buy when you can, and you can always refinance when the rates go down enough to justify it. But the home value will always trend upward.
Back In NJ in the 1970s I bought my first house for 55K, the same yr a new family car and a new PU truck for my work. If I did it today, the total cost just for a new truck would be as much as l spent for everything, back then. I feel for the young buyers today. If you can build, do it or invest in a fix-it flip-it.
In the 1940s, the average new family was not living in, nor purchasing 3000 to 4000 sq. ft. homes, where every child had their own bedroom and en-suite bathroom. The homes available then were not priced at 10 to 15 times their annual income. I agree home ownership should still be the goal, but people need to get back to necessity and not go for the biggest most lavish house they can just barely afford. More than 30% of Canadian mortgages are now at amortizations of greater than 30 years....That has not happened before in Canadian history, and when I last spoke with a realtor in Saskatoon at an open house back in 2021, I was told that most buyers, had just 5% down.....scary stuff!!
Getting your own property is priority one in life for financial security. If i were young, i would buy a home that needed to be renovated.
Absolutely.
without a doubt the greatest leg up the economy has to offer.
Here in the States houses that need renovation were as expensive as new construction. I'm not sure if it finally settled down, but when I was needing to buy a house because every AH skyrocketed the rent or were no places to rent, the for-sale houses falling apart and asking ridiculous prices.
It's a nice argument you make - renovate an older home, save money on the purchase, giving the home-buyer a foundation to work from - however I will tell you from experience today that those older homes needing renovation and updating are selling for as much, or very nearly so, what a newer house is. I am talking about sub million dollar properties.
The inventory is low - and we can talk about why that is - but for the prospective buyer, choice is very limited, competition is super high, prices are ridiculous for what you get. I am in my 60s, have owned over a dozen properties over the years and just sold my second house to consolidate. I have always upgraded and renovated every property I've owned. I am not without historical perspective and am pretty clear on how it goes with real estate. I believe there will be another "correction" just like what we saw in 2007 - 2008, and rightly so.
People will pay ridiculous amounts for desirable properties, driving the prices up for everyone.
The market is misrepresented by real estate agencies and banks holding foreclosures, the buyer is always pushed to extend beyond their budget, financial institutions still enable unsuitable spending, credit is treated as capitol. It's a house of cards - no pun intended.
I'm not complaining, just offering a little perspective. I agree with what you say as far as real estate being a great long-term investment. getting into the game while you are young and earning is key. Pay attention, keep your boundaries, spend with intelligence, don't allow your emotions to run your decisions.
Don't wait. First time home buyers get good assistance from financial and government institutions. Almost like free money.
...Almost
Good luck everybody. We're going to need it.
It should not be downplayed how much work went into preventing Y2K. Its not very well known but it was a massive effort by a lot of people to make that transition smooth.
indeed
I also wanted to say this
There's a lot of buying opportunities in inner city areas. It's not ideal, but it can be affordable way to live and fix to resell later
I’m at the tail end of a total renovation. Have no fear!!!
That is not how you compare house prices. If you search for home prices adjusted for inflation, the home prices stay relatively the same until 2000-2010 when they spike, then comes down and spikes up in the 2020.
@@dropndeal is not as easy as showing that prices have gone up, you also need to take into consideration wages. If house prices doubled, but wages also doubled, you can say you have a balanced market.
My wife and I recently bought a 1600 sqft 3 bed 1 bath 1935 home for $330k in Massachusetts. We put $40k into it, I did all the demo, hired professionals for the install of everything, “permits were pulled” added a second bathroom, made the whole house modern, removed lots of led paint, replaced doors, replaced sliding door. Only thing we have not touched is the kitchen. Even without the kitchen being remodeled, I feel like we gained a lot of value on the house already. At first I thought it was a bad idea buying a house for $330k, it was 3 years of putting in offers, I first had a budget of $280k but that became unrealistic year after year. Thankfully my job gave me a promotion and we were able to get a house for $330k and it’s everything I could ask for. Location is amazing too, all old people who keep to themselves. It’s great! And 15 seconds away from my job.
I started doing doordash on the side after work and putting all that money into an account to save up for a new kitchen.
If treasuries aren't touching 6% housing is gonna be fine. 100% agree the skills you teach on this channel are a return multiplier, love your channel.
based. you get it
Half the housing built before 1975. Ours was built in 1898, out of concrete blocks. It looks nice and isn't going anywhere. We have a nice newer addition, also. It's really nice; we're very happy with it. We are definitely investing in it though; new roof, painting a couple rooms per year, adding electrical and fixing plumbing, keeps me in shape.
I've been looking at trying to buy some rough property just because I enjoy doing this stuff so much. Have fun and make bank...win/win. I don't have licenses, so I can't really do most of it 'professionally' in my area, but I'm allowed to do most on my own properties. I just regret not learning these skills in my 20s.
Of all the financial people I watch on CZcams. I just learned the most from a contractor in one simple video. Well done and thank you
houses depreciate and the property appreciates get back to renovating vids
i agree this is nothing to stress over. I am roughly the same age as you, and i think you might agree with me on this. I work in finance in the automotive industry and see it all. When i graduated college in 1988 people who got degrees would graduate owing roughly 50k in student loans and houses were roughly 100k and they would get a job starting around the 50k income. The problem now that i am seeing is kids graduating and they owe roughly 200k in student loans and they get a job making 50k. The problem now is that houses cost 350 to 450 in rochester ny and taxes on those houses are roughly 14k a year. Its almost impossible for a young adult to get out of school get a decent job and make a house payment of roughly 4k a month with taxes included , car payment of roughly 500 a month , utilities of 300 a month, cell phone 100 a month , cable and internet of 150 a month, food around 500 a month. then try to raise a family. Housing should not be in that price range and schooling should be reconstructed because kids nowadays have no shot with this..
But he is a home owner and does not care! The haves only care for what the havenots have given them.
I have been following your home reno videos forever! I had no idea how intellectually smart you are until I watched this one. You are right on the money! Well done. Excellent insights, I'm going to make my teenage kids watch this one. You made some powerful concepts simple and clear. The number of people on this planet is only getting larger and yet inhabitable land is scare.
Economist here. Histotically, housing is similar to a baseline stock market index when it comes to investing. Flipping houses and day trading are dangerous since short term fluctuations are the norm, while longer term ot pretty much is always sound.
That said, nominal increases in housing values are pointless if not weighed by an inflation factor. Historically, housing value does beat inflation, but the true value isnt doubling every decade. Still grnetally worth it with all costs considered.
Thanks for sharing this information. Considering the global economic climate real estate does seem to be one of the best ways to protect and build wealth.
Cheers. tried tested and true for over 100 years.
Real estate is a tangible asset and limited resource. My research in my home country showed that at a minimum it tracks inflation unless it was in a very undesired community. Add that factor to a market like Canada that has a housing shortage and prices will grow at a faster rate rate than inflation. What you witnessed the last 2.5 yrs is not accident with house prices. It’s the result of “printing” money between 2020-2022 now layer that on top of what I mean mentioned and viola the recipe for exponential price movement. Increase rates to remove the excess cash and prices will pullback but only for a time because inflation is the norm.
I’m 48. The ONLY reason why I was able to get a “nice” home recently was because I sold my parents’ home after they passed away. They bought their home for $16k when I was 1-year-old. I live in Los Angeles, Ca. So, you can imagine how much of a down payment I was able to make on our current residence, during the pandemic while everyone was too scared to out-bid me. I learned my lesson after being too scared to purchase back in 2008.
8:00 we had serial killers before 2000's LOL
You can become a millionaire with the right property investments. I achieved this without an inheritance, getting divorced when my dgt was 2 so a single parent, and I'm a registered nurse who started as a 3 year diploma RN (80% of college paid for by the hospital I worked at while I was a phlebotomist) then completed my BSN when I was in my early 50s. The answer is starting with a rental property. The first property I purchased was a 4-family. I lived there for free while the tenants paid the mortgage. I would move up into nicer properties over time. My first home after my divorce was a rehab. I sold that home and with the profits purchased 20 acres, another 4 family, and bought a house in a lake community with great schools and a mortgage. 25 years later prices accelerate and I sell everything at the peak except for the 20 acres. Just built with 80% down on a property valued at about 800K. I will be 100% debt free in about 3 years. If I hadn't sat on the land for almost 25 years I would have been priced out at this point because the location is highly desirable and outside of the city. This takes sacrifices and planning. Rarely do I vacation, I had to learn how to do many of my own repairs and remodeling (still into DIY and why I'm subscribed to your channel), and I worked all of the time. I was also willing to make career changes when it was uncomfortable. I became a pharmaceutical rep after agency nursing to always max my income. My daughter is a millennial and her friends have given up hope regarding home ownership. Learn skills, buy some books, get a rehab multi-family and live in it for free while you manage the property. Live beneath your means and choose careers that give you flexibility and stability. I'm at a point of encouraging young people to say screw college. Go into a trade and learn how to be a real craftsman. It can be done!! Every evening I sit on my screened porch and watch amazing sunsets and after all of the hard work and sacrifice I can honestly say it was worth it. The 20 acres consist of 2 lots that are next to each other. I can sell the other lot which would pay off my small mortgage or I can hang onto it and sell later if I choose. However, my small mortgage is at 2.8% interest so hanging onto the land and letting it appreciate only makes sense. You can't time peaks and valleys in markets but you can get really close if you pay close attention. Just remember, I started with nothing as a phlebotomist.
What do you think happens when the gap between homes and pay get too large where most people can't even afford the median home.
One of the best CZcams videos of all time. Thanks, again.
One word, “WORD!!”✊🏼
Great job, Jeff.
you speak the truth. I'm going to make nearly 100% gan I'm pirt shir plus all the business pirks and right offs that come with it. But I'm not selling it right away. I'm going to milk it for what it's worth till I get bored of it. Only need one home to pay for the rest of my living expenses. For life if I like.
I pan to do several home's till I expand. 5$ is one heck of a deal for a membership might as well say its free.❤
Idk the value of my home is all ready 10k over what I pad cuz thay raised my taxes. And saw the estimated worth. I bet they knew what I'm doing.
Right offs are the best part
Guess what happens if you spend to much money on your business. Like half And your house hold income is let's say 50,000 we'll your tax reports will say you pad too much taxes. What???? O and you're owned money cuz you qualify for tax credits. 😂
Just bought a little bungalow, so glad I watched this because I’ve been scarred about the purchase. Going to keep renting my place now (in city) and renovate (slowly) my new little bungalow far in the country.
Idk. Unless you want to live in the ghetto. Where I bought a house so I could build equity. A decent entry level home in an okay area went from $150,000-$300,00. Wages certainly haven’t risen proportionally. The houses around me have increased maybe $20,000. So it’s great if you already own a house in a good market. *edit* northeast Ohio since 2019
Sorry my friend, housing isn't becoming worth more ,your money is just worth less. It might looking like you're making a profit but you're really not if you count the increased taxation based on price or income increase. On top of that wages aren't keeping on track with cost increases.
As someone who bought an older home needing some TLC, really appreciate this video. The cost of my basement reno hurts a lot less after watching! Also appreciate the positivity, YT is no exception when it comes to promoting sensationalist doom and gloom content.
The housing market will continue to go up despite temporary falls. We bought our house in 2010 for $210,000 and now it is estimated value at $575,000. It's crazy that some people think that the housing market is going to fall back to 2010. Good Luck with that! Next week, we will be adding an ADU to our house to create a rental property income.
As long as our economy is built on compound interest housing will outperform chaos. Cheers!
The median household income is $70k right now and required income to buy a $390k house is $110k with great credit, $125k with mediocre credit. We've rarely seen such an unaffordable home market. I believe home prices will come down another 8-10% and best time to buy will probably be end of summer/fall 2023. We have made offers on two houses in last 6 months and sellers were unwilling to come down at all. One of the homes is still for sale, and the other was sold at a 9% discount from asking price after 4 months on the market. What we really need is for buyers to stop paying asking price and realtors to look out for their clients instead of seeking the max commission. The realtor we used on the first house was trying to tell us to offer full price because it would sell within two weeks. We looked at comps and it was obviously 15% over a fair price.
Thank you for this video. It’s good to see hard work will pay off. Bought a duplex last year and did renovations.
Stressed about the market. Homes in my area are crazy (mid-Van Island). $500k+ for a 40-yr old, 1000 sq ft, home with all kinds of gross (ie carpet on the walls). My home was built in 1980. I’m going to attempt my own renos, but I’m worried about what’s behind the drywall, the plumbing, electrical, the roof, the foundation. I built a paper towel holder in gr 8 woodworking and got a C+ so we will see how my projects go. New homes here are $900k+, hard pass. The rental market is even scarier. There are no great jobs here, but the prices rise because of big city retirees moving in and investors buying rentals. I’m just so glad I got in the market when I did 15 years ago. I could not afford to buy my house if it were listed today, despite my income tripling over that time. I’m not sure if I should renovate, add an addition, or add a floor (don’t know if the foundation can take that-cinder block). My son will never be able to afford to buy here, unless I use the equity in my place. I’m worried for his generation.
Do yourself a favour, move away. Everything you said says the area sucks for people to live in. High prices, low wages, competition you can’t complete with.
I wish I could. I’m in a small town of 35k and already 4-5 hrs drive away from a major city. Moving to a more remote location brings more challenges, less work opportunities, higher cost of living, possibly more snow. We need someone to start building actual affordable housing, rental and purchase. Everything being built here is labelled ‘luxury’ to attract the wealthy retired and cityfolk. Meanwhile ‘downtown’ we have major homeless and mental health/addiction problems. Late stage capitalism 😢
@@flatoutmad You have major homelessness in a town of 35K 4-5hrs away from a major city?
I bought a home in San Diego East Country in 2000 and sold it in 2019. Made over 200% on that home and sold it for over 300% but I had done a lot of remodeling between 2004-2015. Then I purchased a home with my daughter the end of 2019 in Northern WA and it’s already worth double what we paid. She still lives there but I moved and
I bought a home in Northern Idaho the beginning of 2020. It’s already worth $100,000 more than I paid. I always only pay the required down payment and will make additional payments when possible. No one can tell me real estate is a bad investment. I bought my first home in 1973 and I was paying a 17% interest rate. The interest rates are like a yo-yo but real estate will always go up. Sometimes you just need to give it a little more time.
always invest in yourself. you have to live somewhere!
I am very excited about the market. In fact I own 2 houses and rent out one of them. Key words: do it yourself (oh yeah), do it right, don't be afraid to work hard at it, be patient! Love your content. Sue from Montreal ❤
Housing prices here in the suburbs outside San Francisco are already almost back to the peak price point last year before interest rates started going up. This is even with thousands of jobs being lost in tech. I’m old enough to remember when houses now selling for $1.4 million were worth $300,000!
I can remember a 4 bedroom 2 bath for $25,000...in 2050 I would suggest the same house my father bought will be worth $ 2,000,000
That’s literally EXACTLY what I am doing right now in Canada. And honestly this thing is becoming a freaking GEM! It’s a gold mine! I doubt that it will end up being a 100k project. Maybe 50-60 at most. But it’s all worth it compared to living in an apartment
I'm sold on DIYing. But I see it as a saving method, and not an investment. I get to live in a prettier house, that look way more expensive than I paid for and without paying a contractor big money for it. but it's not with the intent to sell it. Everyone can't want to mutiply the worth of their house eightfold and hope to sell it to someone... who's going to buy it? And where are you going to live next if everything is so expensive?
Buying my first house--closing next Monday! Got a good deal for the area, and will be a wiser fanancial decision for me and my family than continuing to rent. Thanks to your videos, I'm confident in taking on a lot of the work myself to remodel, both to fit our needa and to increase potential re-sale value.
Your home will not appraise in the near future and you may experience times when you are “under water” on your mortgage but always try to remember that homes will always appraise for more 10-15 years after you purchase. Focus on the the long term.
@@mauriciogonzalez6302 Well, if you have to sell to buy another home, they are all riding the same curve, so its best to sell/buy in a dip because your mortgage will be less.
@@NightFlight1973 You do realize that the home you sell in order to buy a new one will also be less??? There's really no "best" time to buy or sell. It all depends on your individual needs. One can argue that the best time to buy would have been when rate are low. It all depends though.
@@mauriciogonzalez6302 Do the math. Smaller dollar amounts are better to deal with. I would rather buy and sell lower, since mortgages are handled in percentage.
How is anything in a market where rates are 7% considered a "good deal"? Did you buy the house cash?
Right on. Remember also that the Sq footage, upgraded amenities of the Median house are so different today from years ago. Median homes in the 50's were around 900 - 1000 Sq ft, 1 bathroom. Today it's 2310 sq ft. 2+ bathrooms. There have been Hugh improvements in Insulation, Central Heat and AIR CONDITIONING. Air conditioning in the 50's was sleeping on the screened in porch. More expansive electrical systems. More outlets, laundry rooms, garages etc. The median house comparison is comparing apple juice to champagne.
I really appreciate the positivity and a different outlook from someone with experience
I am worried for the kids being able to keep the house they buy with the Fed's raising interest rates that may lead to lay offs and property taxes rising considerably. One will buy their first home soon, and the other feels stuck in the home he has.
What is wrong with the one he has?
Im worried more about inheritance tax, it may takes half off from my current assets when I left to my children.
I bought a house last year and was blessed by my lender, who honored the interest rate he quoted me the year prior. Since my home purchase, I've already gained nearly 20k in value.
Glad you're happy about your potential $20k profit on resale in a year. The catch is unless you'd go back to renting, you'd never see that profit on your bank account for very long because you'd spend that profit on your next house (That and some, because of fees, taxes, moving expenses, etc...). Chances are you'd get an even smaller house for your money if you were to sell your house for a $20k profit now. Also keep in mind if you put 20% down, you're leveraged 5x. Meaning if you sell for +10%, you'll make +50%. If you sell for -10%, you'll make -50%. Hopefully you like your house enough to keep it forever. In which case potential profit and loss is irrelevant.
'Bought'
'Lender'
???
@@xavytex
Umm he’s probably not going to sell the house, he’s just saying he’s already earned 20k for when he does go sell one day
@@a22024
Yes. Bought a house by getting a mortgage from a lender… just like 99.9% of all Americans
That’s very lucky! You have a great lender!
many, including myself, do not want to sell as we are sitting on interest rates at or below 3%.
Such an interesting video, this mirrors what is happening here in Australia. I live in a 60 year-old house and I’m enjoying renovating it. Channels like yours have given me the confidence to try things myself.
proves why i subscribed to you years ago. i tell younger people this all the time. esp about the "why would i have kids" thing. they see so much negativity but they need to realize life is better than ever!
Building a Sprinter camper van -like a tiny house- working in a apartment parking lot, in your opinion, should I buy a platic “fold up” work table or saw horses ? After solar and electric - a ceiling with plenty of wood cutting sanding and painting. One day, a garage in my future! 😴
The fact that my property value is going up really doesn't help me. Because like you said you have to live somewhere. And if I were to sell it, whatever house I would buy would also cost more. In the meantime, my property taxes and home owners insurance continues to go up. Others I know are getting excited about their property values increasing only because that is the only way they have any equity in their home and this will allow them to refinance it so they can finance their keeping up with the "Joneses" lifestyle.
Great perspective Jeff. I have the same chat to my daughter and she did not pull trigger.
our kids our screwed.
not if you act now and DIY a house every 5 years until retirement. Gauranteed to triple your portfolio by investing in yourself.
Bought a house 2 years ago and DIY'd the Kitchen and one of the Bathrooms thanks to your videos. But I am going to have to help my kids buy a house in 20+ years because the average will be over a million, and I do not see the "average" 20 something being able to afford a house like my parents were.
All that to say, Thank you for the videos, I have really added a TON of value to my home because of you and your team.
@@HomeRenoVisionDIY So our kids are entirely financially dependent on us until we can retire at 60-70 with no hope of owning their own property?
And even then there is a question of inheritance laws as the government may very well want a cut of that profit at some point.
And even if we never see an Estate Tax here in Canada there is a question of the next generation could even afford to pay the property taxes, insurance, upkeep on homes that will cost upwards of a million bucks????
Sounds like we are setting the next generation up for failure and will only continue to push new potential home owners out of the market.
A great aunt in Dayton, Ohio. Her home was worth so little in 2010 that she couldn't sell it for enough to pay for 3 months of rent in an apartment building. Her house was large and in excellent condition along with her yard. She was alone and wanted a less cumbersome place to stay.
Too bad she didn't hold on to it and rent it out.
One major issue you are leaving out here is the size of the houses comparably, every ten to twenty years, as well as the amenities in these houses and of course, all of the market factors that are mandating price increases, like cost of materials, scarcity or availability of materials when building as well as new build permits and availability of houses on the market. Also, the fact that a majority of people didn't buy houses in the 40's/50's as compared to renting homes, and as we have gone on in time, population has grown.