Posted on 05/30/2017 10:04:24 AM PDT by Thalean
In 1973 the median household income was $9,265...
Consider that the median sales price of a new home in January, 1973, was only $29,900—3.2 times the median household income. In other words, if the median family saved up every penny earned, and put it towards a new home, it would take just over three years to buy a brand new house.
This held relatively steady for the next decade. In 1985, new home prices crept up a little, to 3.7 times the median household income.
It was during the 1990s and 2000s that home prices began to skyrocket towards where they are today.
In January 2017 the median sales price for a new home was $317,400, which is 5.6 times the median household income of $56,516.
All told, houses are 73% more expensive today, in real terms, than they were in 1973...
The US Census started tracking the median lot size (in square feet) for new home construction in 1976. During that year, the average lot was 10,125 square feet. In 2015, it’s only 8,600—the smallest on record.
So not only are houses getting more expensive, but we’re getting less land as well.
In the interest of fairness, I’ll also point out that the median new home is larger, in terms of square footage, than older homes as well—so it’s not a total loss.
(Excerpt) Read more at nationaleconomicseditorial.com ...
Builders are subdividing lots that used to have one home and replacing them with 4 or more.
In 1973 working Americans were still able to do that on one income. Just try that today.
On the other hand, the price of an iPhone in 1973 was... infinity. There was no such thing, and Steve Jobs was a senior in high school.
Today, a brand new iPhone 7 will cost you about $600.
Ditto for an MRI, a GPS fix on where you are, or a Google Earth view of anywhere.
In 1973, you were totally at the mercy of Walter Cronkite and the other crypto-lefties of the MSM. The price of a session on Free Republic was infinity.
Informative post
How bad is it? Ponder this.
What many Americans are paying in 4, 5 or 6 months in monthly mortgage payments today, equals the full price, or total cost of what their parents paid for their homes in the 1960s.
Buying a primary residence house as an investment is stupid. You want a place you like and that fits your needs. Anything else is doomed to disappoint.
Large amounts of land are fallow, to be polite, due to a plague of environmental laws, regs, ad nauseam.
Said laws, regs are almost all based on falsified data and faulty premises.
Four generations of commies in agencies and academis did it.
Not true. 1960's dollars are not worth the same amount as 2017 dollars.
Just down the street from me a smaller house on a smaller lot sold within a week of listing. Asking price was $565K.
I bought my place in 2002 for $265K.
Yes, I agree.
The house I grew up in — very nice neighborhood, across the street from the elementary school I went to — cost my parents $17,500 in 1966. It last sold for $108K (about 10 years ago), an increase of almost 520% over 40 years.
On the other hand, that's a compound growth rate of only 4% over the same time period, which is in line with (actually less than) inflation.
I’m not talking about even half acre lots.
Neighborhoods are being torn fown and rebuilt vertically at the direction of city councils to increase density and tax appraisals.
We bought a house in eastern MA in the late 70s for $74,000——it sold last year for $900,000.00.
(Only one bathroom had been added.)
.
Mother and Daddy bought a house with 40 acres in 1961 for $6000. The frame house was basically solid but we remodeled it a bit. Daddy, and his 3 Sons did all the work.
The land was beautiful, rolling hills with hardwood forest. There was also a nice concrete block dairy barn included. He got a VA loan and the payment was really small.
They sold timber a few years later and only the pines which were not that numerous for $12,000.
When they decided to retire and move back to their old home area, they made a killing on the sale. I did think they overpaid for their new place tho. I think they knew they were, but it was where they wanted to live and they didn’t want to wait.
Here, they have changed the setback laws to the point that my lot, house built in 1960, corner, would now have THREE houses on it!.................
What upsets me is farm land bought to do the same. :-(
Excellent point. And school districts with voracious appetites for tax dollars. It is not at all uncommon to see school referendums of $50 to $100 million dollars for new, bigger, more grand school buildings with all the trimmings such as natatoriums, impressive performing art stages, athletic fields. All on the property tax role, and sold as a mere X cents per assessed thousand... which translates into an annual bump of $500 or more in property taxes per year. And they always want more, always, because it’s for the children.
Blame urban crowding and cheap money.
Cheap money is not normal and is the cause of a whole bunch of problems we have now.
Normal interest rates for houses are 6 to 7%. That is what we lived with for ages. 3% is rediculous for the risk involved.
Buy your car for cash, out of pocket change.
Learn to maintain it yourself.
(It’s great to have rich friends who trade up often.)
Your house payment = one week’s take home pay.
Learn to maintain it yourself.
Plow every dime in, and don’t fix a dang thing until the house is paid for.
Can’t afford the area? Move
Taxes too high? Move
That “high-paying” job is only paying the taxes and all that required maintenance.
Anything else and you’re blowing smoke up your wah-zooo.
Live abundantly within your means.
Give generously with your heart.
Everyone else can go to H.E. double toothpick.
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