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by us-merul149 days ago |
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upvoteby annodomini2019149 days ago|
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Out of curiosity I looked for the house that couple is selling. Believe it's this: https://www.zillow.com/homedetails/30206-Telluride-Ln-Evergr... Notice the price history. 83k in '97, which is about 170k now. Being sold for a 10x profit. Sigh.
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upvoteby fvrghl149 days ago|
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If you had invested the 83k in the S&P500, you'd be slightly ahead I think if you include maintenance and property taxes.

https://www.in2013dollars.com/us/stocks/s-p-500/1997?amount=...

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upvoteby bobbiechen149 days ago|
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If you count the S&P 500, you should also count 20+ years of rent, right?
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upvoteby munksbeer149 days ago|
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What about if you had 8k as a deposit only, so you either invest in S&P500 and rent instead, or put the deposit on a house and repay the mortgage? That's the more equivalent scenario.
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upvoteby annodomini2019149 days ago|
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You don't get to live in the S&P500. Also don't really get the point of this response. Both just prove assets are wildly out of reach for young people now compared to then.
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upvoteby myvoiceismypass148 days ago|
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Most people are putting up 5-20% of the purchase price, so closer to ~16k -> ~225k after 28 years.
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upvoteby kmeisthax149 days ago|
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There's a couple of factors that make selling at a profit but below "market value" unattractive to people who should be putting their housing back on the market:

1. $83k is not the total cost of ownership; it's just the loan balance. Just looking at a home mortgage calculator, the out-of-pocket costs of buying an $83k home at the historical interest rate of 1997, which was about 7.6%, is about $363k[0].

2. Homelessness is a crime in most states, so housing becomes a natural short position that everyone has to cover, just like taxes.

Outside of estate sales, it is very rare for a home seller to not also be a home buyer. The monetary value of the home is, for them, a way to accelerate and account for what would otherwise be a barter transaction. So if you're expecting to have to buy a home for a million dollars, and you've already spent $350k on the loan, then $1.2 million means you'd be about $150k in the negative, not counting closing costs and moving costs, compared to doing nothing. The $1.3m asking price is close to break even for people who aren't planning on dying anytime soon.

[0] I used this calculator: https://www.calculator.net/mortgage-calculator.html?chousepr...

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