[NemesisX]

Originally Posted by dreamingat30fps

I don't know about Ferraris, but the average car price in 1970 according to Google was around $23k in todays money. Average car today is around $36k. So it has gone up, but also a lot more tech and what not in cars.

I also wonder how much of that higher average is just because people choose to buy more expensive cars. I mean around here BMWs and Mercedes are like corollas. Was everyone in 1970 driving around in BMWs and Mercedes?

Good points. Wonder if we can find data for the median car.

Another way to think about it is if you want a basic A to B car with air conditioning, good gas mileage, low (relative) maintenance costs, and good reliability, how much would such a car cost in 1970 versus right now?

Right now I'm basically describing a used Honda Civic or Toyota Corolla.

It's hard to do this comparison directly because suppose the typical Econo-box that I'm describing lasted, on average, 100,000 miles before becoming prohibitively expensive to fix (and therefore unusable).

Now suppose a 2010 Honda Civic can last till 175,000 miles. It's reasonable then to compare a used 2010 Honda Civic with 75,000 miles to a brand new Econo-box of the 1970s.

[ASAP]

Originally Posted by dreamingat30fps

According to my Google search it was average.

"In 1970 the average new car cost around 3,542 dollars, and a gallon of gas went for 36. cents."

If I run that through an inflation calculator to 2020 it says "23,405.41".

Obviously not a scientific study

ok inflation adjusted that makes sense...

but think about the sole fact that median us income is still around 50k and average transaction price is close to 36k... that seems nuts to me considering w corona; we just saw most people dont have more than 2 mo ths of savings

[dreamingat30fps]

Originally Posted by NemesisX

Good points. Wonder if we can find data for the median car.

Another way to think about it is if you want a basic A to B car with air conditioning, good gas mileage, low (relative) maintenance costs, and good reliability, how much would such a car cost in 1970 versus right now?

Right now I'm basically describing a used Honda Civic or Toyota Corolla.

It's hard to do this comparison directly because suppose the typical Econo-box that I'm describing lasted, on average, 100,000 miles before becoming prohibitively expensive to fix (and therefore unusable).

Now suppose a 2010 Honda Civic can last till 175,000 miles. It's reasonable then to compare a used 2010 Honda Civic with 75,000 miles to a brand new Econo-box of the 1970s.

This site lists car prices from 1970. Of course I have no idea what the Honda Civic equivalent is from that list.

http://www.thepeoplehistory.com/70scars.html

I bought my corolla new for like $17-$18k and honestly for a "regular" car I couldn't ask for more. Even has more advanced safety features like lane keep assist, adaptive cruise, blind spot monitoring etc.

[dreamingat30fps]

Originally Posted by ASAP

ok inflation adjusted that makes sense...

but think about the sole fact that median us income is still around 50k and average transaction price is close to 36k... that seems nuts to me considering w corona; we just saw most people dont have more than 2 mo ths of savings

Yeah what I find most surprising is how much people made back then. I would also be curious what the average job was back then vs now.

[GenXer]

I'm not surprised by the TINY HOME movement. If I weren't so set on having elbow room and a small piece of property to hangout when I'm outside, I would even consider one.

It would look great next to my BMW

[Denis S]

Maybe - the reason is this?
https://usdebtclock.org/

[RickFLM4]

Originally Posted by ASAP

You just said something very telling... demand needs to be driven down in major metro areas like Miami.

How can that happen? I can think of 2 things off the top of my head-

1) More people need to have the ability to wfh... if I think of the downtown metro area; I imagine many would not live there if their job didn't force them to. The us govt needs to incentivize this to companies with some sort of tax credits etc. This would limit congestion in general as well. Thats a country wide problem tho not just Miami alone...

2) Put in legislation in very congested areas that limits people purchasing strictly to invest... i.e... if you own more than one condo in this area; you need to physically live in one... not just purchase to rent or if you rent; you can only rent for a max number of years before you are forced to sell or have to move in yourself.

There will always be demand near the water and nightlife, at least until the flooding gets to the point no one wants to be there. That will push up prices in those areas regardless of WFH.

Tax incentives for WFH will be portrayed as corporate welfare with no one to pay for it. Low-wage workers who have no choice but to go to a service job see no financial benefit while corporations receive tax benefits. I can hear Pelosi now. Then there’s people like me who already WFH wondering why we aren’t seeing some benefit. Ultimately, if WFH goes anywhere it will be because companies have other cost savings (like rent and lower salaries by telling people they don’t need to commute) and can make it work. Tax incentives alone won’t force the issue.

As far as limiting purchasers, doubtful that would happen, but if it does it would reduce new development / supply of the same quality if developers can’t sell at prices they want.

[ASAP]

Originally Posted by RickFLM4

There will always be demand near the water and nightlife, at least until the flooding gets to the point no one wants to be there. That will push up prices in those areas regardless of WFH.

Tax incentives for WFH will be portrayed as corporate welfare with no one to pay for it. Low-wage workers who have no choice but to go to a service job see no financial benefit while corporations receive tax benefits. I can hear Pelosi now. Then there’s people like me who already WFH wondering why we aren’t seeing some benefit. Ultimately, if WFH goes anywhere it will be because companies have other cost savings (like rent and lower salaries by telling people they don’t need to commute) and can make it work. Tax incentives alone won’t force the issue.

As far as limiting purchasers, doubtful that would happen, but if it does it would reduce new development / supply of the same quality if developers can’t sell at prices they want.

Dude, did you really use the words corporate welfare? If the last 3 months, havent proved that we love in a corporate welfare state; I don't know what will.

I would argue this would give Pelosi secondary swinging points related to the liberal environmental agenda which goes along with reducing emissions and lowering dependence on foreign oil due to lowered demand... my plan at least attempts to resolve numerous issues that will work for everyone... how one could argue that is beyond me.

[RickFLM4]

Originally Posted by ASAP

Dude, did you really use the words corporate welfare? If the last 3 months, havent proved that we love in a corporate welfare state; I don't know what will.

I would argue this would give Pelosi secondary swinging points related to the liberal environmental agenda which goes along with reducing emissions and lowering dependence on foreign oil due to lowered demand... my plan at least attempts to resolve numerous issues that will work for everyone... how one could argue that is beyond me.

Good luck with your plan. Sounds like you are confident everyone will be on board.

[zx10guy]

Originally Posted by ASAP

You just said something very telling... demand needs to be driven down in major metro areas like Miami.

How can that happen? I can think of 2 things off the top of my head-

1) More people need to have the ability to wfh... if I think of the downtown metro area; I imagine many would not live there if their job didn't force them to. The us govt needs to incentivize this to companies with some sort of tax credits etc. This would limit congestion in general as well. Thats a country wide problem tho not just Miami alone...

2) Put in legislation in very congested areas that limits people purchasing strictly to invest... i.e... if you own more than one condo in this area; you need to physically live in one... not just purchase to rent or if you rent; you can only rent for a max number of years before you are forced to sell or have to move in yourself.

On your #2 point, that's hardly going to affect anything. In the DC area, you see people get into flipping which your proposal does zero for. What should happen in all congested areas is zero additional housing units until there is an infrastructure plan that includes proper transportation before any of those units are started. This whole area did the we'll let the builders and developers run crazy and maybe someone else later will do the hard work and deal with the transportation. Instead we get study/commission after study/commission talking about what could be done without any action and this has been for decades.

[ASAP]

Originally Posted by zx10guy

On your #2 point, that's hardly going to affect anything. In the DC area, you see people get into flipping which your proposal does zero for. What should happen in all congested areas is zero additional housing units until there is an infrastructure plan that includes proper transportation before any of those units are started. This whole area did the we'll let the builders and developers run crazy and maybe someone else later will do the hard work and deal with the transportation. Instead we get study/commission after study/commission talking about what could be done without any action and this has been for decades.

I agree with you on that point albeit I think my point would do wonders for an area like Miami. A lot of the condos are foreign owned... i don't see people living outside of the area wanting to flip left and right... thats a massive nuisance and for a person out of country having to manage renters etc etc, it becomes a headache. All else aside, this would consistently free up inventory and you would have more on sale in the open market. This by default would have to affect prices.

[spazzyfry123]

GenXer what is your housing situation? Are you looking? Already own? Looking to sell? Just making observations on the market?

I’d be more interested in comparing $/ft vs local median household income to that of earlier times. I find it ridiculous when comments are made that someone is financially unstable if you cannot afford housing making $55k/year. That number is significantly different from southern California or NYC vs middle of nowhere Iowa. We make more than that and I still think it’s nuts what you get for your money. Although we may not be looking to max out our pre-approval like most

In my area, a nice home in a nice area comes out to about $190-$200/ft, but the median is closer to $140/ft. I’ll tell you, you do NOT want to live in this town at that price. Median household income is about $50k.

[eluded]

Originally Posted by GenXer

https://www.russellsage.org/sites/al...20Earnings.pdf

https://www.census.gov/library/publi...mo/p60-78.html

[mecheng77]

Originally Posted by GenXer

Less than 38M people, plenty of land and an average home price is still $504K ? That's just awful.

Originally Posted by GenXer

Less than 38M people, plenty of land and an average home price is still $504K ? That's just awful.

Yup but everyone wants to live in the southern part where we "only" get 4 months of cold winter. The northern areas of land are basically exploited for their resources

I predict with a Dem govt the borders will open, new immigrants will flood in and house prices will sky rocket. There are not many free countries in the world. We are seeing that here in Canada, the ones from Asia are flush with cash making Vancouver the most expensive housing market in North America

My advice, see if covid helps push pricing down, it might a little bit and then buy. If you can buy more than one house that is always smart

[F32Fleet]

#1 Size. In 1970 avg size was 1500 sq ft vs 2600 sqft in 2017.

#2 Rising household incomes as more wives remain in the workforce.

#3 Suburban expansion allowed larger house per lot.

#4 Monetary policy from The Federal Reserve artificially reduces the cost of money by lowering mortgage rates. People can spend more money on a house rather than interest. It also encourages large investors (ex REITS) to buy real estate and forces the public to invest in equities which drive up stock prices (See #5)

#5 Fiscal policy: Local/State tax policy (Prop 13), Capital Gains Taxes.

#6 Globalization. Buyers are competing against an international pool. This pool by being larger will have more individuals willing to pay whatever price. In addition the international pool values multi-generational households and combines* their wealth in order to outbid domestic buyers.

*Ex Chinese buyers on West Coast will place large down payments on real estate. The down payments are provided via "gifts" from "relatives" living in Mainland China. It's not uncommon to see gifts totaling $100k-$300k. Of course this is how US dollars come back and are re-invested in the US economy. Not necessarily a bad thing.

[MJBO]

Originally Posted by Denis S

Maybe - the reason is this?
https://usdebtclock.org/

The numbers are simply staggering. In what universe is it possible to get that debt number back to zero, or even stop it climbing considering how fast it looks to be rising.

$205k of debt per taxpayer, or $77k for every citizen regardless of whether they pay taxes. Wow.

[chassis]

Two factors: supply and demand

Supply:
- increased supply of financing or credit. Low interest rates and relatively loose terms mean consumers can “afford” high prices
- decreased slack in housing inventory. Said another way, the housing market is tight because new home construction has not kept up with population growth.

Demand:
- babies keep being born every year. This combined with immigration and subtracting out the death rate, means more people need places to live.

These three forces create upward support on house prices. The forces described above can be supported with publicly available data, should one care do so.

[Chihuahua]

Originally Posted by zx10guy

I did a search on MLS for homes for sale in Alexandria, VA. It's in the suburbs of DC. The cheapest home listed currently is a 1 bedroom 1 bath condo at 707 sf for $149,900.

Wait until Amazon moves in, you'll be putting a '1' in front of that 149,900. Housing prices in the entire DC metro area have been out of control for a long time.

Got out of NoVA in 2006, best move I ever made.

[RickFLM4]

Originally Posted by MJBO

The numbers are simply staggering. In what universe is it possible to get that debt number back to zero, or even stop it climbing considering how fast it looks to be rising.

$205k of debt per taxpayer, or $77k for every citizen regardless of whether they pay taxes. Wow.

Starts with hard choices to make it stop rising.

[zx10guy]

Originally Posted by Chihuahua

Wait until Amazon moves in, you'll be putting a '1' in front of that 149,900. Housing prices in the entire DC metro area have been out of control for a long time.

Got out of NoVA in 2006, best move I ever made.

Already made a mention of this in post #3 in this thread.

It's out of control because of the stability of the employment market here. Again Fortune 1. Add to that, biotech/pharmaceuticals in MD and IT in the VA area, you have a mix of why people are flocking here.

I'm one of the few that can say I'm a native in the area. Born in DC. I've seen this area go through all the changes. I have said to people that when I got my license to drive as a teenager, I could drive around I495 and never touch my brake once. Good luck going a few feet on I495 before having to touch your brake. For many reasons, I can't move out of the area. Would love to relocate to my second home in Delaware but that's not possible. Every time I go out there to get away reminds me of how stressful and crazy it is being in the DC Metro area.

[chassis]

The US Federal Reserve just released a lot of fresh data relating to the original post. I don't see prices going down, rather I see them flat to rising in certain markets.

[GenXer]

Originally Posted by spazzyfry123

GenXer what is your housing situation? Are you looking? Already own? Looking to sell? Just making observations on the market?

I’d be more interested in comparing $/ft vs local median household income to that of earlier times. I find it ridiculous when comments are made that someone is financially unstable if you cannot afford housing making $55k/year. That number is significantly different from southern California or NYC vs middle of nowhere Iowa. We make more than that and I still think it’s nuts what you get for your money. Although we may not be looking to max out our pre-approval like most

In my area, a nice home in a nice area comes out to about $190-$200/ft, but the median is closer to $140/ft. I’ll tell you, you do NOT want to live in this town at that price. Median household income is about $50k.

I purchased my home 4 years ago. It's affordable but it's a bit cramped. Mine was at $150/ft which is decent for a brand new house. I just wish it had a bit more land. I wouldn't mind living in a more rural area.