Are prices like this everywhere?

[5030]

One of my renter couples have been looking to buy a new home for themselves, I have no issue with it, they both are upstanding individuals, hold good jobs and go to work every every day but are finding out that they have to have 20% down to buy a new dwelling and they don't have 20% up front. On a 100K loan (which buys you a whipped out shack today), that is $20,000.00 down. Around here, homes are selling for around 250K average for a descent place, which in my view is inflated but it is what it is and sellers are getting it too. Been hinting around they want to buy the home they live in currently. Problem is, it's not for sale, it's rental income for me, just like my other 2. I'll sell them eventually, but not presently.

 

[2manyrocks]

Lack of affordability was at the root of the last bad downturn. People were so leveraged in 2008 that higher fuel prices and higher interest rates pushed them beyond what they could pay.

For all the talk about loans being so much more solid today, I've heard stories that many buyers were cash strapped after paying such high prices for their houses even if they were able to get in on the crazy low interest rate loans before rates started increasing in 2022.

Doesn't matter how much equity a borrower has in a property if they can't make the payments because the lender is going to foreclose if the payments aren't made. The argument is they will be able to sell and avoid a foreclosure. What if there are no buyers because everyone is cash strapped because of the high prices on everything it takes to live and nobody wants to buy into a declining real estate market?

 

[5030]

It really depends on the purpose of the mortgage. I refinanced last year and got a 2.75% mortgage. Maximum adjustment in 5 years is an additional 3%. But I don’t care because I will retire in the next 4 years and pay off the mortgage in full before it adjusts.

The worst thing you can do is pay off a mortgage (at least here) because here, we use the interest on them to offset our personal income tax liability. Now the farm is on a different income tax schedule and we write off everything on the farm tax return, from diesel fuel to equipment payments and interest paid. plus we depreciate the equipment. All 3 of my rentals are on a fixed 5.5% rate and it's all good with me. The farm has been paid off for years so the only liability is the RE taxes, some with our up north property.

In essence, you never own your property outright because if you don't pay your RE taxes. the taxing entity forecloses on your property (paid off or not) and sells it to satisfy the tax liability.

 

[MAX-24-Dean]

Passed the same Chevron this evening and premium now over $7

Chevron also closed the same of its 95 acre SF Bay Area world headquarters… beautiful campus in every way and modern up to date.

Decision was made to relocate to Texas as have many other top Bay Atea firms…

I have seen companies moving out of California because of taxes for over 30 years. One company that I helped move out of California in the 90's openly stated that it was taxes and the weak on crime attitude for thier move. Offered all thier employees jobs at new location and gave incentives to employees to relocate.

 

[5030]

Lack of affordability was at the root of the last bad downturn. People were so leveraged in 2008 that higher fuel prices and higher interest rates pushed them beyond what they could pay.

For all the talk about loans being so much more solid today, I've heard stories that many buyers were cash strapped after paying such high prices for their houses even if they were able to get in on the crazy low interest rate loans before rates started increasing in 2022.

Doesn't matter how much equity a borrower has in a property if they can't make the payments because the lender is going to foreclose if the payments aren't made. The argument is they will be able to sell and avoid a foreclosure. What if there are no buyers because everyone is cash strapped because of the high prices on everything it takes to live and nobody wants to buy into a declining real estate market?

Wish I could give you 20 likes for that. That covers it nicely and why the real estate market is heading for another bust, bigger than the last one. new houses going up near here, I suspect on speculation because people don't have the income to buy them in the first place and like cars and trucks today, the price is inflated to the point where the 'average Joe or Mike' cannot afford them.

 

[mjonesnh]

The auto repair shops around here are charging 100 bucks an hour and more.
Do the math.

Plumbers are $140!

Have a friend that has a shop behind his house, 75/hr. He has to turn down work as only a one man shop. New car dealership service 150/hr locally.

 

[5030]

Just keeping pace with inflation, nothing more.

 

[Engineer42]

Was pricing motor oil to change oil in wife's suburban. Seeing much higher costs, I thought I'd see what the dealer would charge for a service. I called and was quoted $109.95. I bought a filter for $7, and dexos 0w20 is $35 for 5 qts. So l'll figure $42 for 6 qts, + $7 for the filter, and round that to $50 to make it easy. It'll take about an hour to rotate the tires and change the oil. I'll pay me $25 an hour. So that's $75.00 So with that said, the dealer is running about 46.5% profit to cover overhead. Not forgetting that their material cost is lower than mine. And that tech isn't making $25.

I know they have to profit, but it's getting hard to fathom. I'll appreciate the satisfaction of doing it myself.

 

[5030]

You aren't paying for stuff like healthcare and workers comp either so do it yourself and be happy. I use Rotella 5-40 T6 on my wife's Suburban and always an OEM filter.

 

[ultrarunner]

Cost is a huge factor but just as important is the overall business environment of doing business…

I can cite many examples first hand but few seek to be where they are not wanted…

Price tied to exclusivity is one thing but high price without value can’t last in a free society.

The head of Chevron was again in the news to shame because of the water used at his personal residence… not this year but years back… along with other notables like the A’s manager, etc.

They pay for every drop at exorbitant tiered rates but having protestors show up at your home gives pause.

Elon and CA have had a parting of the ways… citing cost of doing business when alternative exist.

On a smaller scale dozens of companies I rely to run a hospital have relocated out of state… with more to follow… vacant retail is clear to see with transients setting up camps that require lengthy legal process just for the business to Evict… and that is what it is…

50 years ago you could order someone off your property with law enforcement assist a phone call away and today it’s often called a civil matter for the courts to decide…

Yes the costs keep riding for less… just look at downsized cartons at the grocery store…