Real Estate Crash thread

[AdironRider]

I'll freely admit I am talking about starting salaries, assuming the concept that they are going to grow as they progress in their careers. For a young family starting out, the dream is still attainable and will only get better as they age and their salaries improve. That frankly, is how it is supposed to be.

Somewhere along the line though, buying a starter condo and maybe driving a used car became untenable to the community in pretty much any town, let alone ski country, and that is part of the problem. I can post links to 20+ properties for sale in Teton Valley right now that a couple of teachers starting out could afford no problem, but yet many are saying that is impossible. Sure they aren't going to be the nicest homes in the hood, but that is how life has gone on for generations and now that just won't do.

Affordable housing has always involved compromise, but in all aspects of life almost no one is willing to do that anymore.

[Supermoon]

I'll freely admit I am talking about starting salaries, assuming the concept that they are going to grow as they progress in their careers. For a young family starting out, the dream is still attainable and will only get better as they age and their salaries improve. That frankly, is how it is supposed to be.

Somewhere along the line though, buying a starter condo and maybe driving a used car became untenable to the community in pretty much any town, let alone ski country, and that is part of the problem. I can post links to 20+ properties for sale in Teton Valley right now that a couple of teachers starting out could afford no problem, but yet many are saying that is impossible. Sure they aren't going to be the nicest homes in the hood, but that is how life has gone on for generations and now that just won't do.

You are just totally ignoring the reality of most people graduating into these careers right now. Just getting a masters is most likely going to mean you leave schools with a six figure student loan, at best. God forbid you have any medical debt or CC debt from trying to survive during school. Yeah maybe you squeak by on $150k household but you aren't ever going to get ahead or have any stability. Want to have kids? Where's the $3k per month child care bill going to come from? What if your kid has medical needs? Sure your salary "grows" as you get more experienced, but does it keep up with not only inflation, but also the accelerating costs of things like housing, insurance, and groceries? God forbid you want to travel or send your kid to college. What you did in 1985, or even 2005, is not the reality anymore.

If you think these jobs should exist, they should make a wage that lets people have a life worth living.

[goldenboy]

My above musings are not a new idea; us maggots have been indoctrinated by the concept for 35 years:

Yeah, but Rasta Stevie left Telluride a long time ago and it is pretty much a place for the super affluent, with a handful of characters still left, but leaving every year, is it not? At least the lucky ones get to cash out if they bought a home 20, 30, 40 years ago. (I'm with you, I'm just saying the character of mountain towns has been slowly eroding for a long time).

AR, you are so far out of your element with what teachers get paid and can afford in a mountain town. Teachers don't make shit where I live, even if they do work summers. CO remains in 49th place as far as teacher's salaries, and many mountain districts actually pay less than the front range ones, despite the higher cost of living.

[altasnob]

AR's right. The perceived unaffordability in these mountain towns isn't actually that bad, relatively speaking. You can always drive until you qualify. That's why I see housing prices in these markets to continue to explode exponentially into the foreseeable future. But these communities are not planning for that growth. So eventually, traffic will become so miserable that the quality of life suffers, and these communities are no longer so attractive. Only then will housing prices stabilize.

[yeahman]

That's called age discrimination. They let you get away with crap like that in race to the bottom places like Montana.

You're naive. It happens everywhere. Dirty little secret of public education. They don't care about hiring the best teachers, just the cheapest teachers. Saw a lot of that in Washington when I was teaching high school there. In fact it helped me get my first job in WA, and I know for a fact I was hired over a very experienced teacher who also interviewed for the position. But that's just one of many examples I could cite.

[neckdeep]

AR's right. The perceived unaffordability in these mountain towns isn't actually that bad, relatively speaking. You can always drive until you qualify. That's why I see housing prices in these markets to continue to explode exponentially into the foreseeable future. But these communities are not planning for that growth. So eventually, traffic will become so miserable that the quality of life suffers, and these communities are no longer so attractive. Only then will housing prices stabilize.

Ha. You are talking about quality of life issues as if someone actually lives full time in most of those houses. The average home price in Jackson is $7M, the majority of sales are cash and many of those homes are vacant the majority of the year.

It's not a town anymore. It's a storage facility for real estate investors.

[Conundrum]

You are just totally ignoring the reality of most people graduating into these careers right now. Just getting a masters is most likely going to mean you leave schools with a six figure student loan, at best.

Once again, I'm somewhere in the middle on this. The state university in my town is showing about $10k/year for full cost in-state tuition/fees/books/supplies with no scholarships or grants (plenty available-average a 3.7 or higher and it's auto $2,500/yr for four). Same cost for masters. So an in-state masters degree for $60k. Sure, room and board and other expenses in school but man, am I the only one who worked through college and during the summers, drove a shitty car, and had roommates to help pay for things?

Yeah, you're really going to have to want to live in a mountain town and sacrifice but saying teachers can't obtain advanced degrees unless they spend over $100k is a stretch. Maybe other states have far higher in-state tuition but we were talking about the ID side of the pass.

Not every teacher needs to go to a private liberal arts college.

[zion zig zag]

Just getting a masters is most likely going to mean you leave schools with a six figure student loan, at best.

I agree with mountain towns being fucked for public service/low end workers but, this part makes me bristle.

If you leave school with 6 figures of debt there was some serious financial irresponsibility taking place. Go to a state school, have roommates, work 30 hours a week, etc.

[AdironRider]

Yeah, but Rasta Stevie left Telluride a long time ago and it is pretty much a place for the super affluent, with a handful of characters still left, but leaving every year, is it not? At least the lucky ones get to cash out if they bought a home 20, 30, 40 years ago. (I'm with you, I'm just saying the character of mountain towns has been slowly eroding for a long time).

AR, you are so far out of your element with what teachers get paid and can afford in a mountain town. Teachers don't make shit where I live, even if they do work summers. CO remains in 49th place as far as teacher's salaries, and many mountain districts actually pay less than the front range ones, despite the higher cost of living.

Did you read the payscale I posted for Jackson?

Crested Butte is indeed one of the worst ski towns IMO for wages vs housing costs though, so I will give you that. I do think my point still stands that in almost all areas (note almost), someone starting out can live within a reasonable commuting distance to their job and work up from there. That is life. You don't automatically get to start out on third base.

[oldnew_guy]

Adiron, wasn't some of the reason you left WY because the schools and medical system sucked/were understaffed?

[Mazderati]

Unless you automatically start out on third base.

[Supermoon]

Once again, I'm somewhere in the middle on this. The state university in my town is showing about $10k/year for full cost in-state tuition/fees/books/supplies with no scholarships or grants (plenty available-average a 3.7 or higher and it's auto $2,500/yr for four). Same cost for masters. So an in-state masters degree for $60k. Sure, room and board and other expenses in school but man, am I the only one who worked through college and during the summers, drove a shitty car, and had roommates to help pay for things?

Yeah, you're really going to have to want to live in a mountain town and sacrifice but saying teachers can't obtain advanced degrees unless they spend over $100k is a stretch. Maybe other states have far higher in-state tuition but we were talking about the ID side of the pass.

Not every teacher needs to go to a private liberal arts college.

I agree with mountain towns being fucked for public service/low end workers but, this part makes me bristle.

If you leave school with 6 figures of debt there was some serious financial irresponsibility taking place. Go to a state school, have roommates, work 30 hours a week, etc.

For sure. There are definitely ways to not graduate with a ton of debt, but they are 1) really tough years, and 2) rely on kids who can't legally buy a drink or rent a car to make sound financial decisions that will affect them ten or twenty years down the road. I don't know about you, but I couldn't think past my next midterm or how I was going to get my paper done and also get that powder day in when I was in college. My wife worked her way through college and regrets missing out on a lot of the college lifestyle stuff that is also important like building relationships, navigating new peer groups, finding interests and hobbies, etc, all so she could work for $5.15 an hour stuffing envelopes 40 hours a week.

We aren't setting people up for success is all I'm trying to say, and lots of people from earlier generations had it a lot easier and don't seem to understand that.

[skaredshtles]

<snip>
We aren't setting people up for success is all I'm trying to say, and lots of people from earlier generations had it a lot easier and don't seem to understand that.

nOnSeNsE! It wAs aLl mY HaRd wOrK AnD BoOtStRaPs tHaT GoT Me hErE!

[Mazderati]

Mush like the tuition forgiveness threads and any number of others, people that had to break their balls want others to do the same.

[I Skied Bandini Mountain]

What is a reasonable commute? Let's say from November through March when it's snowing sideways.

2+ hours each way of trying not to die just to punch a clock sure sucks a lot of joy out of life, BTDT.

[AdironRider]

Mush like the tuition forgiveness threads and any number of others, people that had to break their balls want others to do the same.

You cannot absolve life from any and all hardship.

[altasnob]

I do think my point still stands that in almost all areas (note almost), someone starting out can live within a reasonable commuting distance to their job and work up from there.

I think the problem with your premise is you assume teachers, cops, nurses, and fire fighters are the lowest wage workers that are necessary for a community. In reality, all these jobs pay well (as they should). But what about all the service workers, the cleaners, the non-college educated, ect? These workers are also necessary for a community and make way less than a first year teacher. How far away from Jackson do they need to drive in from to survive? I guess they can all live in Idaho Falls and drive in daily but at some point, the infrastructure can't handle this.

[Mofro261]

I'll freely admit I am talking about starting salaries, assuming the concept that they are going to grow as they progress in their careers. For a young family starting out, the dream is still attainable and will only get better as they age and their salaries improve. That frankly, is how it is supposed to be.

Somewhere along the line though, buying a starter condo and maybe driving a used car became untenable to the community in pretty much any town, let alone ski country, and that is part of the problem. I can post links to 20+ properties for sale in Teton Valley right now that a couple of teachers starting out could afford no problem, but yet many are saying that is impossible. Sure they aren't going to be the nicest homes in the hood, but that is how life has gone on for generations and now that just won't do.

Affordable housing has always involved compromise, but in all aspects of life almost no one is willing to do that anymore.

For most people, it used to be that 25-35% of your monthly income was the cap for affordable housing costs. If people are exceeding that 35% by a significant margin... 40-50+%, then affordability is being eroded.

Let's say we've got 2 incomes at 150,000 combined, and let's say they are fortunate and also have 100K for a down payment and only 1K in car/loan/credit cards/month between them because they have used cars and went to state schools. How much house can they buy/borrow and remain in the affordability bracket with 6.5-7% rates? Does the top end stop at 500K, 550K, 600K?

Just truly curious what the price points are on the 20+ houses you could list in Teton Valley right now, it seems that inventory of <500K houses that are not being bought as tear downs are scarce almost anywhere these days.

[AdironRider]

For sure. There are definitely ways to not graduate with a ton of debt, but they are 1) really tough years, and 2) rely on kids who can't legally buy a drink or rent a car to make sound financial decisions that will affect them ten or twenty years down the road. I don't know about you, but I couldn't think past my next midterm or how I was going to get my paper done and also get that powder day in when I was in college. My wife worked her way through college and regrets missing out on a lot of the college lifestyle stuff that is also important like building relationships, navigating new peer groups, finding interests and hobbies, etc, all so she could work for $5.15 an hour stuffing envelopes 40 hours a week.

We aren't setting people up for success is all I'm trying to say, and lots of people from earlier generations had it a lot easier and don't seem to understand that.

Says the guy who doesn't work and just drives around the country on an adventure bike watching baseball games.

Honestly, I can't take you seriously on this argument.

[spanky]

We figuring housing affordability on gross wages now?

I’m pretty sure most mortgage lenders use a debt to income ratio for determining ability to afford a loan. The income portion in that ratio is gross income.

https://www.wellsfargo.com/goals-cre...-income-ratio/

[AdironRider]

I think the problem with your premise is you assume teachers, cops, nurses, and fire fighters are the lowest wage workers that are necessary for a community. In reality, all these jobs pay well (as they should). But what about all the service workers, the cleaners, ect? These workers are also necessary for a community and make way less than a first year teacher. How far away from Jackson do they need to drive in from to survive?

Further than the teachers. That is the reality when you don't have a skillset worth paying more.

I really can't stand the mentality that everyone must get to live the high life regardless of their own decision making. Get a better degree, learn a better skill, do something to improve your lot in life because the world isn't going to hold your hand the entire way. This mindset that everyone should be able to live in a ski town (or beach town, or anytown USA) without having at least some responsibility to make things happen for themselves is unsustainable thinking as a society.

[AdironRider]

For most people, it used to be that 25-35% of your monthly income was the cap for affordable housing costs. If people are exceeding that 35% by a significant margin... 40-50+%, then affordability is being eroded.

Let's say we've got 2 incomes at 150,000 combined, and let's say they are fortunate and also have 100K for a down payment and only 1K in car/loan/credit cards/month between them because they have used cars and went to state schools. How much house can they buy/borrow and remain in the affordability bracket with 6.5-7% rates? Does the top end stop at 500K, 550K, 600K?

Just truly curious what the price points are on the 20+ houses you could list in Teton Valley right now, it seems that inventory of <500K houses that are not being bought as tear downs are scarce almost anywhere these days.

A 150k gross couple in Idaho is going to net out to almost 10k a month post tax. 500k house at 6.5% and the Teton Valley ID property tax rate is probably going to run around 4k per month with a 10% down payment at 6.5%. That number jumps to 4.5k per month at 3% down and 7%. Those numbers include property tax and insurance. You are telling me they can't get by on almost 6k for everything else?

[Supermoon]

Says the guy who doesn't work and just drives around the country on an adventure bike watching baseball games.

Honestly, I can't take you seriously on this argument.

Well, that's not really true at all, but yeah, I have worked hard, came from a privileged upbringing, and have been really lucky along the way which has afforded me a bit of financial stability now that I am 40 years old. I'm still one big medical bill away from being totally fucked, though. Just like everyone else. So that's nice.

[North]

am I the only one who worked through college and during the summers, drove a shitty car, and had roommates to help pay for things?

Nah man you're not. Not even close. Comparing notes, that was/is the typical process for my peer group (primarily middle to upper middle class white kids that went to college and got science/engineering degrees). It's not special or particularly impactful on your ability to own a home in any desirable location.

The notion that individual anecdotes about choices made and pennies saved 10+ yrs ago are relevant to today's challenges (that are supported by actual studies and data sets larger than 10) is mind blowing. But carry on with the boomer shit.

[Ted Striker]

Again, this is based just on my experience in BTV so it may vary. I would absolutely get factual errors corrected because it will impact not only this but also future adjustments. For us the city reassessed all properties at the same time so they used “overall comps” to set the algorithms for determining value of all properties. They didn’t compare each house to a set of comps.

...Comps didn’t play a role, just size, beds, baths, lot, and condition that he plugged into his computer.

Going back to challenging prop tax, I did a little research, and apparently our assessor's office does use actual market comps specific to each property - and you can even request them. Looking at some of my neighbors' valuations, it looks more like they just throw darts at a board with random numbers. The thing that jumps out the most is the differences in lot value. Single lots i.e. in the 4000-8000 sqft range are $40-45/ft, but 10,000-plus sqft double lots are valued at ~$25. And that holds true even if the house is on one side and the other is vacant & buildable. Regressive much?