2024 Macro single family home prices prediction

[gfh77665]

Not sure how accurate this is, but it is pretty clear your salary to the house price ratio was a lot more favorable than today.

View attachment 196156

I worked soley in the pertochemical industry, but close enough. We average 100K today, 120K with overtime. In 2-3 years, two people could definitely pay off a 250K house, if living on one income of the two.

 

[gfh77665]

No wonder they're so cheap, the taxes are $8,238 and $7559. Almost $700 in tax per month

I was waiting on that. Texas just passed massive property tax relief. Going to basically cut it in half. And we have NO income tax. Look at total tax load, don't cherry pick things. If you still think I am wrong, explain the blue Cal and NY exodos into red TX and Fl.

 

[goingplacesanddoingstuff]

No man, that's just more excuses. 22% of homes went to big investment companies, oops more excuses. We're clearly not working hard enough...

Yeah if only I worked harder, that $300k+ I made last year would have been more. Shame on me for being a lazy millennial.

 

[KrisZ]

Yeah if only I worked harder, that $300k+ I made last year would have been more. Shame on me for being a lazy millennial.

Oh come on, we all know you spent it all on fancy phones and starbucks lattes

 

[SC Maintenance]

You aren’t paying attention, then. Only one graph was an index, and it has been calculated the same way for decades, so the implication that it was designed to make today’s situation look a certain way is incorrect. The reality is that house payments are currently at record highs compared with incomes.

The other two graphs were simply ratios of two metrics. Pretty simple.

If this is the case, then there is no basis for poo-pooing those faced with the unique challenges of buying homes today.


A single-family home, also known as a single-family detached home, is a free-standing residential building designed to be occupied by a single household. It is defined in opposition to a multi-family residential dwelling and typically includes two key elements: "single-family," meaning the building is usually occupied by just one household, and "detached," meaning it is completely separated by open space except for its own garage or shed.

The U.S. Census Bureau's definition of a single-family home may also include certain attached dwellings, such as townhouses, as long as they are separated by a ground-to-roof wall and have their own private utilities.

These types of home offer privacy, space, and the ownership of both the building and the land it sits on, making it suitable for those seeking a standalone residence with no shared walls or utilities.


Italian real estate prices have more to do with this:

View attachment 196136


The housing affordability index is a measure of the degree to which a typical family can afford housing. It compares the median income of a region to the income needed to qualify for a mortgage on a median-priced home.

A value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home, assuming a 20 percent down payment. An index above 100 signifies that such a family has more than enough income to qualify for a mortgage.

Conversely, an index below 100 indicates that the typical family does not have enough income to qualify for a mortgage on a typical home. The HAI is used as an overall indication of the cost of living in an area, with a higher index indicating greater affordability

Your analytics don't answer the question I asked - what is the right number? Is it 3.5 like 1984, or 4, or 6 like now, or 1?

You show 3 charts. 2 start in 2000, one in 1984. How do our charts accommodate the fact that in the past the average square footage was much smaller, and the average household size was much larger. It would seem to me that if your going to use a ratio of price / average household income - then you need to adjust for both the size of the house and size of the household.

For example in 1984 the average square foot per person in the household was 657 ft2 per person. In 2014 - the nearest I can find data for, it was 1047 ft^2 per person.

So shouldn't you multiply the household income by 1047/657 = 1.67 times, to accommodate for the space per person?

How do you then account for the fact that in 1984 the average home mortgage rage was 14%, and now it is 7%. So in 1984, the price per $1,000 borrowed on a 30 year fixed was $12 per month, and now its $7 per month = or 1.71 times more.

So, if I figure all this number, the equivalent price / household income from 1984 would be 3.5 from your chart above x 1.67 x 1.71 = 9.99. So the adjusted affordability in 1984 was 9.99, and now its 6, when accounting for home size and number of people and interest rates?

I am not saying my numbers are right any more than your numbers are, but my point is you can't use 2 data points in a vacuum.

Assuming we come to some consensus on what the number should be, and all the variables that should be considered - then how do we solve our issue? Are we supposed to mandate somehow housing prices?

As I mentioned, my interest is only macro-economic. I would be happy for housing prices to come down. I don't think they should be treated as a risk asset - from a macro economic perspective. I just don't know how we get there from here without communism.

The Size of a Home the Year You Were Born

In 1940, 20.2% of U.S. homes were overcrowded, according to the Census Bureau. By 2000, that figure had fallen to just 5.7%. For many reasons, Americans today have more room than ever before. The 20th century was a period of economic growth and prosperity for the American consumer. With GDP per...

247wallst.com

 

[ls1mike]

Lobbyist have won their fight to zone almost all residential property as stick built only. When I got divorced I found out real quick that a doublewide (which was what I really wanted) or a modular was going to require me to live out in a few select areas littered with 10-30 year old trailers. And those lots that already had well and septic were running 20-40k

That sucks. I am in a stick built, but I have recently seen some very nice manufactured homes go up in my area. It should be allowed as an option.

 

[goingplacesanddoingstuff]

You show 3 charts. 2 start in 2000, one in 1984. How do our charts accommodate the fact that in the past the average square footage was much smaller, and the average household size was much larger. It would seem to me that if you’re going to use a ratio of price / average household income - then you need to adjust for both the size of the house and size of the household.

Not average, median. Household size is factored in since it’s household income.

For example in 1984 the average square foot per person in the household was 657 ft2 per person. In 2014 - the nearest I can find data for, it was 1047 ft^2 per person. Households have continues to shrink. Let’s be conservative and use 1100 ft^2 per person in 2023.

So shouldn't you multiply the household income by 1047/657 = 1.67 times, to accommodate for the space per person?

I would say it’s space per household earner that matters. People had more children in the past.

What you’re really suggesting is that median earners should not be able to purchase median homes.

How do you then account for the fact that in 1984 the average home mortgage rage was 14%, and now it is 7%. So in 1984, the price per $1,000 borrowed on a 30 year fixed was $12 per month, and now it’s $7 per month = or 1.71 times more.

HAI already accounts for rate by focusing on monthly payment. The balance of rate, purchase price, other expenses lead to higher adjusted monthly payments today than in previous times.

Assuming we come to some consensus on what the number should be, and all the variables that should be considered - then how do we solve our issue? Are we supposed to mandate somehow housing prices?

This gets too political, but I personally think returning some more manufacturing to the US, revising the Jones act, revising incentives for higher education toward trades and more useful professions, wise investment in more infrastructure and technologies, and better zoning laws to allow for denser types of houses could go a long way. Not to mention a more rational spending and fed policy.

 

[SC Maintenance]

Not average, median. Household size is factored in since it’s household income.

Household size is not factored in. Its space per person - not factored.

I would say it’s space per household earner that matters. People had more children in the past.

Children are exceptionally expensive to raise. The fact people had more children in the past is an argument against your thesis current house prices are too high.

What you’re really suggesting is that median earners should not be able to purchase median homes.

I am not suggesting anything. You seem to suggest the median earner should be able to purchase the median house. This seems reasonable. The issue I can see however is the median house has gotten much larger, with fewer people living in it - so comparing to past states is apples to oranges.

The other piece missing is how much of a median persons income should go to housing?

HAI already accounts for rate by focusing on monthly payment. The balance of rate, purchase price, other expenses lead to higher adjusted monthly payments today than in previous times.

No, those charts go back only to 2000. Go back to 1980 - see what you get there. On interest rates alone its likely similar to today. Selective data harvest. Look at a longer chart.

This gets too political, but I personally think returning some more manufacturing to the US, revising the Jones act, revising incentives for higher education toward trades and more useful professions, wise investment in more infrastructure and technologies, and better zoning laws to allow for denser types of houses could go a long way. Not to mention a more rational spending and fed policy.

I could agree with much of that. However much will raise the cost of housing, not lower it.

Fed policy was extremely tight in the 1980's - which gave you high housing monthly payments. The only times monthly payments were cheap were during ZIRP - which lead to the current state.

Manufacturing has been coming back for a decade - I go from automated factory to automated factory daily. They don't need many blue collar workers. Some electricians / machine mechanics, and people to load bins. Robots build things now, not people.

Better zoning would be beneficial - the issue is they don't want to build high density in the city. They want to build high density in the good suburban neighborhoods - because that is where the good schools are. However as soon as you have high density the schools get over full and degrade. Hate to say it, but its true.

 

[andrew_j]

Awww, that's too bad.

I grew up dirt poor. In the 70's, I was in elementary school, living in a trailer park in Alabama on the north side of Montgomery. I raked pine straw in the winter and mowed the little trailer lot yards for $3 each in the summer. Looked for empty Co-cola bottles your parents threw out of their new car on the side of the road; I'd take them to the grocery store on Saturday when my mother went and cash them in for the deposit, go next door to the drug store or Service Merchandise and buy matchbox cars, fishing lures or something else.

I was raised that I needed to get an education; one that would allow me to obtain a "good" job, that had health insurance, benefits, etc. I also knew that I was poor; my friends at school didn't live like we did. All those people that say they didn't know they were poor growing up, weren't really poor. You d**** well when you are if you have half a brain.

I knew I didn't want to live like I grew up. I wanted all the stuff my friends had. I knew I had to work to get it. Work like a dog. And I did. I'm 52 and I have put in my time. We live in a nice, large home on 10+ acres in an area that will soon be another bustling, over-crowded, over-developed suburb of Atlanta. We won't be here, we will be living in another area that doesn't have street lights either.

If you want something, go to work, make some money and go buy it. If you want some land, figure out how to make the money to buy it. Start now. Yes, you are correct, it's not going to get any cheaper and they don't make any more of it.

When you do, please don't come in here screaming, whining and crying like a little ***** about the property taxes. Those are being collected to pay for stuff for people that don't want to get off their butt and go to work.

I'm not seeing a booming number of people that are out there giving it their best to kill it. I'm seeing a GROWING number of the population that is more interested in face piercings, face, neck and highly visible arm/hand tattoos, going to retail establishments in pajamas, haven't run a comb or brush through their hair, haven't shaved in a month and quite frankly, don't care. These people aren't trying to better themselves. They are just wanting to exist on whatever is handed to them. Their biggest effort is put into ordering from GrubHub, loading up on Redbull, lottery tickets, weed and frozen dinners.

Time to move if you don’t want to see that population. My area has very little of that because they cannot afford to live here.

 

[Exit32]

I grew up in a "Deck House". It was epic! While dated now, in the late 60's and 1970's, it was glorious, open and spacious. Extremely well made. In retirement, I'll prob have to build a house, as prices are insane. I sure wish this kind of "prefab" house was still available.

Ours looked exactly like this, inside and out, without the carport:

Small world. I own -- and reside in -- a "Deck House" in Massachusetts. My wife and I chose Deck House (the company) to design, fabricate, and build our home in 1985. Almost 40 years later, we continue to enjoy the generous windows, vaulted cedar ceilings, and spacious layout of our home.

BTW, Deck House is still in business and continues to design and build beautiful homes. Check out deckhouse.com to see their current portfolio.

 

[Hillbilly Deluxe]

Time to move if you don’t want to see that population. My area has very little of that because they cannot afford to live here.

It’s not time to move until the developers are lined up in my driveway. We got a few more years, the timespan will depend on how low interest rates get during the next cycle of “improving the economy”

I have a pretty firm grip on what’s going on around here, I have the ability to keep up with inquiries into re-zoning, I am connected to construction and I know what this area will become- a mirror of the north Atlanta suburbs.

 

[nickaluch]

That’s the equivalent of $118k these days. So your house was 1.18x your annual income. $624 monthly payment at 3.5% down and 10.5% interest rate. That’s 15.6% of your gross monthly income.

If a laboratory technician made $118k today and bought a $450k house, that’s 3.81x your annual income. And a $3,994 monthly mortgage payment, or 40.6% of the gross monthly income.

It isn’t even comparable. And I doubt a laboratory technician makes that much. Salary.com says that job now pays $71,769. Which would make that $3,994 mortgage payment 66.78% of one’s gross income. Take out taxes and health insurance, how is one supposed to eat? Let alone pay car insurance, gas, household expenses, or contribute to retirement?

Get your hustle on and bring in more money. Roll up your sleeves and provide for the family that's what you do.

 

[KrisZ]

That’s the equivalent of $118k these days. So your house was 1.18x your annual income. $624 monthly payment at 3.5% down and 10.5% interest rate. That’s 15.6% of your gross monthly income.

If a laboratory technician made $118k today and bought a $450k house, that’s 3.81x your annual income. And a $3,994 monthly mortgage payment, or 40.6% of the gross monthly income.

It isn’t even comparable. And I doubt a laboratory technician makes that much. Salary.com says that job now pays $71,769. Which would make that $3,994 mortgage payment 66.78% of one’s gross income. Take out taxes and health insurance, how is one supposed to eat? Let alone pay car insurance, gas, household expenses, or contribute to retirement?

Get your hustle on and bring in more money. Roll up your sleeves and provide for the family that's what you do.

Exactly! Stop making excuses and just start making more money, it's that simple.

Talk about a sheltered way of thinking. Always thinking you had it the worst and that the new generations are just spoiled brats, all of them.

 

[LubeDaddy]

We are currently looking in the PHX metro area. Prices are nuts; so much so that we're rethinking our plans and looking into alternatives. I built the last two houses where we live in IN; contracted some work and did some myself. I didn't want to do that out here, but it may have to happen that way.

Jeez, seems like all the places previously deemed as “cost friendly” are shooting up in price.

 

[14Accent]

Jeez, seems like all the places previously deemed as “cost friendly” are shooting up in price.

100% a fact. I sold my home in North Minneapolis last summer for $245k, a $100k increase over what I paid for it in 2014. I did nothing to the property but live in it, and it needed a good bit of elbow grease when I sold it.

The whole reason I bought the place back then was because it was the only affordable neighborhood at the time for a first time buyer. I got a first time home buyer grant from the state to help with my down payment, got an FHA 30 year at 4.125% for the rest. I wrote a check for a little over $600 at closing. I never would have guessed I'd make the kind of profit I did in less than a decade.

The neighborhood improved VERY little in those 10 years, btw.

 

[gfh77665]

That’s the equivalent of $118k these days. So your house was 1.18x your annual income. $624 monthly payment at 3.5% down and 10.5% interest rate. That’s 15.6% of your gross monthly income.

If a laboratory technician made $118k today and bought a $450k house, that’s 3.81x your annual income. And a $3,994 monthly mortgage payment, or 40.6% of the gross monthly income.

It isn’t even comparable. And I doubt a laboratory technician makes that much. Salary.com says that job now pays $71,769. Which would make that $3,994 mortgage payment 66.78% of one’s gross income. Take out taxes and health insurance, how is one supposed to eat? Let alone pay car insurance, gas, household expenses, or contribute to retirement?

Look at my earlier posts, I said my wife and I lived on one income, and saved 100% of our second income.

The actual house I bought, BTW, is worth about 220K today. No where near the "$450K" you described. Here is one less than a block away. Mine was similar.

7318 Pine Shadows Ln, Baytown, TX 77521 - HAR.com

For Sale: 7318 Pine Shadows Ln, Baytown, TX 77521 ∙ $209,900 ∙ 0.21 Acres Lot ∙ 1,349 Sqft, 3 beds, 2 full baths, Single-Family ∙ View more.

www.har.com

 

[AZjeff]

GON, addressing your opening comments on the Prescott/Prescott Valley RE market as we live there. Prescott Valley average RE selling price was $440k and time on market as of 11/23 was listed from 43 to 57 days depending on the source. We can confirm the time on market in our development, one nearby was 76 days before the sale pending sign went up. The property you reference for $899k is obviously at the higher end of the market and probably not representative of the overall situation. I don't really understand what you mean by $899k base price and $1.3m closing price, I can't believe a property bid up $400k over listing price. Do you mean it was optioned up to $1.3m?

Our property value increased 90% from when we bought 5/18 to the high point then dropped 10% then stabilized. Arizona RE affordability depends on where the buyer is coming from. Still dirt cheap if coming from Cali, (hear it all the time) not so much if coming from other areas.

 

[Hillbilly Deluxe]

Ironically, this morning, I saw a report that Goldman-Saxxx has predicted a 25% decline in home prices in 2024 for:

Phoenix
Austin
San Jose
San Diego

 

[alarmguy]

That sucks. I am in a stick built, but I have recently seen some very nice manufactured homes go up in my area. It should be allowed as an option.

I suspect but could be wrong, words are getting mixed up here.
Manufactured home can be considered mobile home, delivered on wheels to a site.
Modular Home is in essence a stick built home, sometimes quality can and does exceed on site stick built homes. It is brought to the site in pieces and bolted together on a poured foundation.

What Are Modular Vs. Manufactured Homes?

Modular and manufactured homes are both factory-built, but there are important differences between them. Learn all about modular and manufactured homes here.

www.rocketmortgage.com

 

[SC Maintenance]

I suspect but could be wrong, words are getting mixed up here.
Manufactured home can be considered mobile home, delivered on wheels to a site.
Modular Home is in essence a stick built home, sometimes quality can and does exceed on site stick built homes. It is brought to the site in pieces and bolted together on a poured foundation.

What Are Modular Vs. Manufactured Homes?

Modular and manufactured homes are both factory-built, but there are important differences between them. Learn all about modular and manufactured homes here.

www.rocketmortgage.com

I would take one of these factory built ones over a lot of shoddy local construction I have seen. Problem is everyone wants custom.

Its to a degree like the Sears homes of the past - many of which still stand.

Sears Archives, History

Sears has opened the doors to its vast archival collection and invited the public to peek inside. More than 100 years of stories, product and brand histories, photographs, catalog images and more are now available online.

www.searsarchives.com