Join me LIVE here on TH-cam 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
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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!
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.
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.
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
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 🍻.
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.
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.
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.
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
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
@@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.
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.
@@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.
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.
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.
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
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
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.
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.
@@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 🤷🏼♂️
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.
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.
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.
@@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.
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.
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.
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.
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.
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.
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.
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.
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!
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.
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 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…
Fairly sure people WANT to buy a house. The problem is exactly what you said...wage stagnation. You can check the figures but in the US it went something like this: median median percentage income house of income 1940 $956 $2938 3x 1950 $3300 $7354 2.2x 1960 $5600 $11900 2.13x 1970 $9870 $17000 1.72x 1980 $21020 $47200 2.25x 1990 $29943 $79100 2.64x 2000 $42148 $119600 2.84x 2020 $70784 $428000 6.05x Seems like its a mess and people that want houses wont be able to afford them.
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.
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.
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
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
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.
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 understand being your own contractor and making that money back when you sell. However, the pricing argument is just bad. The fact that you think inflation is good just shows the lack of understanding. Not going into the details about why inflation is bad outside of housing and how that affects the amount of money you have left over for housing. To get a real sense of housing prices, you have to compare them to the price of other stuff. Essentially, you have to adjust it for inflation. Over a long period of time, you basically break even. You loose purchasing power during some parts of the market cycle and gain purchasing power on other parts of the cycle. It makes perfect sense for people to try to time when they want to sell. For people like you who can spend your whole time working on homes because of how productive you are, it makes sense to keep doing it during a housing downturn. However, most home owners are not as productive when fixing up their house as they are when doing whatever work they specialize in.
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.
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.
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!!
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.
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.
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!
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!
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 ❤
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.
A lot of these homeowners are smoking 🪨 thinking a 750sq/ft 2 bed 1 bath is worth $200,000 with 1 acre and renovations needed. Especially with the average income being $40,000. This market is getting ridiculous, it will absolutely not double unless wages are increased since right now regular people cannot get into a home. This is a manufactured bubble right now due to big companies buying massive amounts of homes to turn into rentals. This is just 💩 that every real estate agent is spewing to sell more homes just to increase prices not mentioning These are not regular people buying most of these homes.
Also there was no mention about how the pandemic caused a %46 increase in prices alone. This is a recession that hasn’t taken full effect. I see industries today liquidating assets to keep their workers but that likely won’t last
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.
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?
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.
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.
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.
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.
Purchased in 2019- we’re sitting on at least 300k in equity right now- up at least 200k from our initial purchase price. The previous owners redid all the majors and reno’d the place - I fine tuned it turning the place into a beautiful property. In addition to the interior upgrades - we did a complete landscape overhaul which is behond gorgeous. I also built a low rise deck during the pandemic. Housing is a safe bet if you can afford it but you MUST be a diy’er. W/ wages not rising w/ the rate of inflation I would think things may begin to plateau but every dollar payed toward principal is a dollar earned!
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.
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!
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
Finally something in the long term, I'm 28 and was waiting for this response! Home prices will not drop like they used too! I know there are potholes in the market but prices will continue to rise to the point the lower and middle class are pushed into renting because they can't afford housing especially since job pay cannot keep up. In my area more Apartments & Duplex's are being built than single family homes! Don't support it, rent will eventually rise and dry out any savings you might have left and in the end you might not be able to afford it!
Love your diy videos. Made a big improvement on my land with your help! Take your analysis to the next level: 1. Debt to income ratio throughout history 2. Income to House cost throughout history I think you will notice how inflation is slowly strangling out the opportunities for those who haven't invested in real estate. Which is why young generations feel hopeless.
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.
I closed my home in July of 2020 during the pandemic at 3.625% of 230k at a 30 year fixed term. Built in 2004. Not even 3 years full years later the estimate shows up at 313k on zillow. 80k+ of growth! I owe only 198k now. Crazy how the value grew.
Wow! I have been one who is frightened for all of the markets including the housing market and have thought about selling for 2-3 years now. Finally, I have a pod in my driveway and my plan was to rent for a year or 2. As I’m fixing up the house to sell it, I’m loving it more and teetering in my decision-I believe after seeing your video and comments, I will now stay and enjoy my work as I continue to grow equity and value. My interest rate is 2.75. So it’s another reason to stay. Also, I looked up the median home price for 2012 since you skipped that year and it was $210K! Doubled in 2022! So it’s hot in Florida! Oh well. PS I love your videos and you helped me to diy an entire fireplace wall including the drywall and finishing. Awesome! It turned out amazing! Thank you!
You've ignored that wages kept up with housing prices (inflation) prior to 1980s. You also didn't have investors and foreigners taking homes off of the market.
My wife and i bought our first home in 2020, which turned out to be great timing. We are looking to move to TN next summer and rent out our current home in FL. Very excited about the real-estate market, but I find myself watching 2024 market crash videos lately that make me feel maybe we should wait to move. But this video makes me feel like timing the market is not the best decision. Thanks for your perspective
"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.
This is all kind of irrelevant when you don’t make enough to even break into market. Median house price means nothing without looking at average salaries. There is a divergent pattern
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.
I appreciate the video and the diy. But wholeheartedly disagree on your conclusions. Home prices will go down in the short term and long term it’s tbd. But totally agree. Government printing money is killing the middle class.
I bought a home built in 1986 and have been using your channel for inspiration. I have completed a bunch of projects because of your videos and my house is looking new and refreshed! Still a lot of work to be done, but I am more confident than ever thanks to you. Also, love the tax rant at the end, I think we all are feeling that. If you are here and don't own a home yet, do it. Work as hard as you can, save as much as you can to get a home. It is so worth it. Don't listen to people saying "it's more expensive" because of maintenance. They don't know what they're talking about, or are trying to mislead you. Yeah, you gotta do maintenance every now and then, but maintenance just means upgrades, cheap ones if you DIY. I never felt more free than when I was handed those keys.
Im old enough to remember 1982 when the mortgage rate was 16% ,today its around 7%. The housing market isnt our biggest problem. Its our governments doing far more evil things that we all should be concerned with.
Here in Florida the home owners insurance rates are going through the roof, I went from paying $1,000 a year to over $6,000 a year. But I'm fortunate because I been in construction for about 20 years now so I'm able to do most the renovations at my home, and I think it's a great thing for people like you showing people that they can do it themselves as well. Keep up the great work 👍
Housing is falling like a brick on the west coast. But, they still cost the same on a 30 year because of the rates. Doesn't matter what they cost if no new buyers can buy them. Most are being bought up by corporations, not families. Also, I like how you only start on the 1940s because it doesn't work it you go back further.
What is spectacular is that wages we're for the most part frozen and inflation was very low in the last 15 to 20 years so, to compare to the past makes no sens if young families can't buy the entry level homes, you may compare so that it suits you but it does nothing to help young families buy homes.
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.
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?
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Join me LIVE here on TH-cam 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 !
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 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 $500k
so you got lucky on timing... I don't get your point
How do you pay for a million dollar home? How do you own that when wages don't exist to cover that? It took me 20 years and a college degree to make more dollars, not buying power, just raw dollars, than I did 20 years ago in a general labor job. At some point, you can't pay for it. Today, with a degree, over a decade of experience, promotions into management, today I do not have as much buying power as I did 25 years ago in a general labor job in a factory. I still don't have as much buying power. 25 years ago, my general labor job could buy and completely pay off a hiuse in 7 years with just excess income. I can't do that now, not even close. It doesn't matter how the market changes if people have no money.
Exactly this. It would be funny for the video to cover incomes...plus, history is no predictor of the future, the U.S. was way stronger back then than now, you could bet on the U.S., which I would argue you can't anymore.
The thing Jeff said is to buy a house as fast as you can before it gets to a million dollars, and he's right. I work as a machinist in a factory for 26$/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.
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.
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.
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.
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. 😂😅
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.
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 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 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.
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!
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.
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
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.
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
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!
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.
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
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
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.
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.
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.
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
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
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.
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.
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.
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.
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.
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.
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.
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.
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.
this gave me some reassurance. I close on my first house in a few weeks and have felt uneasy due to everything going on.
Of all the financial people I watch on TH-cam. I just learned the most from a contractor in one simple video. Well done and thank you
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.
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.
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.
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!
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.
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.
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!!!!
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…
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
Fairly sure people WANT to buy a house. The problem is exactly what you said...wage stagnation. You can check the figures but in the US it went something like this:
median median percentage
income house of income
1940 $956 $2938 3x
1950 $3300 $7354 2.2x
1960 $5600 $11900 2.13x
1970 $9870 $17000 1.72x
1980 $21020 $47200 2.25x
1990 $29943 $79100 2.64x
2000 $42148 $119600 2.84x
2020 $70784 $428000 6.05x
Seems like its a mess and people that want houses wont be able to afford them.
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.
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’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.
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 TH-cam!
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
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
Love this so much!!! I love your level headed perspective!! Thank you!!!!
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 understand being your own contractor and making that money back when you sell. However, the pricing argument is just bad. The fact that you think inflation is good just shows the lack of understanding. Not going into the details about why inflation is bad outside of housing and how that affects the amount of money you have left over for housing. To get a real sense of housing prices, you have to compare them to the price of other stuff. Essentially, you have to adjust it for inflation. Over a long period of time, you basically break even. You loose purchasing power during some parts of the market cycle and gain purchasing power on other parts of the cycle. It makes perfect sense for people to try to time when they want to sell. For people like you who can spend your whole time working on homes because of how productive you are, it makes sense to keep doing it during a housing downturn. However, most home owners are not as productive when fixing up their house as they are when doing whatever work they specialize in.
I’m at the tail end of a total renovation. Have no fear!!!
Wow this was really good. > As a Canadian loved your last min of the video...stop taxing me
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.
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.
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!!
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.
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.
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!
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 ❤
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?
In your opinion... what's the best year/s houses were constructed in?
A lot of these homeowners are smoking 🪨 thinking a 750sq/ft 2 bed 1 bath is worth $200,000 with 1 acre and renovations needed. Especially with the average income being $40,000. This market is getting ridiculous, it will absolutely not double unless wages are increased since right now regular people cannot get into a home. This is a manufactured bubble right now due to big companies buying massive amounts of homes to turn into rentals. This is just 💩 that every real estate agent is spewing to sell more homes just to increase prices not mentioning These are not regular people buying most of these homes.
Also there was no mention about how the pandemic caused a %46 increase in prices alone. This is a recession that hasn’t taken full effect. I see industries today liquidating assets to keep their workers but that likely won’t last
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.
One of the best TH-cam videos of all time. Thanks, again.
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?
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.
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.
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!
Purchased in 2019- we’re sitting on at least 300k in equity right now- up at least 200k from our initial purchase price. The previous owners redid all the majors and reno’d the place - I fine tuned it turning the place into a beautiful property. In addition to the interior upgrades - we did a complete landscape overhaul which is behond gorgeous. I also built a low rise deck during the pandemic. Housing is a safe bet if you can afford it but you MUST be a diy’er. W/ wages not rising w/ the rate of inflation I would think things may begin to plateau but every dollar payed toward principal is a dollar earned!
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.
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
Finally something in the long term, I'm 28 and was waiting for this response! Home prices will not drop like they used too! I know there are potholes in the market but prices will continue to rise to the point the lower and middle class are pushed into renting because they can't afford housing especially since job pay cannot keep up. In my area more Apartments & Duplex's are being built than single family homes! Don't support it, rent will eventually rise and dry out any savings you might have left and in the end you might not be able to afford it!
Love your diy videos. Made a big improvement on my land with your help!
Take your analysis to the next level:
1. Debt to income ratio throughout history
2. Income to House cost throughout history
I think you will notice how inflation is slowly strangling out the opportunities for those who haven't invested in real estate. Which is why young generations feel hopeless.
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.
I closed my home in July of 2020 during the pandemic at 3.625% of 230k at a 30 year fixed term. Built in 2004. Not even 3 years full years later the estimate shows up at 313k on zillow. 80k+ of growth! I owe only 198k now. Crazy how the value grew.
I’m 56 and me and my wife bought our first house in Dec. of 2021 just before interest rates started going up. We got in just in time. Great video.
Me and my wife bought a house less than 10 years and it officially doubled this year. Great video 👍🏾👍🏾
Wow! I have been one who is frightened for all of the markets including the housing market and have thought about selling for 2-3 years now. Finally, I have a pod in my driveway and my plan was to rent for a year or 2. As I’m fixing up the house to sell it, I’m loving it more and teetering in my decision-I believe after seeing your video and comments, I will now stay and enjoy my work as I continue to grow equity and value. My interest rate is 2.75. So it’s another reason to stay. Also, I looked up the median home price for 2012 since you skipped that year and it was $210K! Doubled in 2022! So it’s hot in Florida! Oh well.
PS I love your videos and you helped me to diy an entire fireplace wall including the drywall and finishing. Awesome! It turned out amazing!
Thank you!
One word, “WORD!!”✊🏼
Great job, Jeff.
You've ignored that wages kept up with housing prices (inflation) prior to 1980s. You also didn't have investors and foreigners taking homes off of the market.
This guy ignores all these facts.
My wife and i bought our first home in 2020, which turned out to be great timing. We are looking to move to TN next summer and rent out our current home in FL. Very excited about the real-estate market, but I find myself watching 2024 market crash videos lately that make me feel maybe we should wait to move. But this video makes me feel like timing the market is not the best decision. Thanks for your perspective
"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.
This is all kind of irrelevant when you don’t make enough to even break into market. Median house price means nothing without looking at average salaries. There is a divergent pattern
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.
I appreciate the video and the diy. But wholeheartedly disagree on your conclusions. Home prices will go down in the short term and long term it’s tbd.
But totally agree. Government printing money is killing the middle class.
I bought a home built in 1986 and have been using your channel for inspiration. I have completed a bunch of projects because of your videos and my house is looking new and refreshed! Still a lot of work to be done, but I am more confident than ever thanks to you. Also, love the tax rant at the end, I think we all are feeling that.
If you are here and don't own a home yet, do it. Work as hard as you can, save as much as you can to get a home. It is so worth it. Don't listen to people saying "it's more expensive" because of maintenance. They don't know what they're talking about, or are trying to mislead you. Yeah, you gotta do maintenance every now and then, but maintenance just means upgrades, cheap ones if you DIY. I never felt more free than when I was handed those keys.
Im old enough to remember 1982 when the mortgage rate was 16% ,today its around 7%. The housing market isnt our biggest problem. Its our governments doing far more evil things that we all should be concerned with.
Here in Florida the home owners insurance rates are going through the roof, I went from paying $1,000 a year to over $6,000 a year. But I'm fortunate because I been in construction for about 20 years now so I'm able to do most the renovations at my home, and I think it's a great thing for people like you showing people that they can do it themselves as well. Keep up the great work 👍
Cheers!
I remember 2008 very well and a lot of friends and family get destroyed
Housing is falling like a brick on the west coast. But, they still cost the same on a 30 year because of the rates. Doesn't matter what they cost if no new buyers can buy them. Most are being bought up by corporations, not families.
Also, I like how you only start on the 1940s because it doesn't work it you go back further.
What is spectacular is that wages we're for the most part frozen and inflation was very low in the last 15 to 20 years so, to compare to the past makes no sens if young families can't buy the entry level homes, you may compare so that it suits you but it does nothing to help young families buy homes.
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.
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?