First-time home buying hits lowest level in nearly three decades

[steve2470]

http://www.latimes.com/business/realestate/la-fi-few-first-time-homebuyers-20141103-story.html

First-time home buyers aren’t buying homes like they used to.

The share of houses bought by first-time owners is at its lowest level in nearly three decades and down sharply from 2013, according to a new survey out Monday from the National Assn. of Realtors.

Just 33% of home purchases this year have been by first-time buyers, the trade group said, down from 38% last year and well below the long-term average of 40%, the trade group said.

Would-be buyers are struggling with higher prices, tight lending procedures and a still-unsteady job market, said NAR chief economist Lawrence Yun. Their absence, however, is slowing the overall recovery. NAR is predicting home sales will fall this year for the first time since 2010.

[PasadenaTrudy]

1. I will never own a home...

I figure at 50, childfree, what's the point? I would love to rent a little home someday, outside of CA of course.

[Warpy]

4. Think trailer

Those things beat the hell out of apartment living.

I did buy a shabby fixer in a bad part of town but it was as a hedge against rapidly rising rents. It worked out really well within two years and when my parents died, I was able to pay it off.

It's still shabby and the neighborhood still sucks but it's mine.

[PasadenaTrudy]

9. I love my apt....

but then my brother and I own the bldg. Five apts, two commercial spaces. I know first hand what a pain in the ass ownership is, that's why IF we ever sell this place, I would just rent. If we sell, we will get reamed by taxes - - like 30-40% or so. Capital Gains taxes I guess. Our parents passed the place down to us, we have no one to pass it on to. We shall see. Neither of us wants to own homes or condos. He rents down in $$$$ Laguna Beach, CA.

[NickB79]

31. Trailers in northern climates suck for heating, though

My mom lives in a trailer. By all accounts, it's a fairly nice trailer, newer (late 90's?), good features, well-done inside. The trailer park is even pretty respectable, good neighbors, lots of kids.

And it's insulated like a cardboard box.

Her heating bills are crazy every year; I spend less to heat my 1800 sq. ft house with propane than she does to heat a 2BR/2Bath trailer with natural gas. Last winter I don't think her furnace ever stopped running (at least not when we were over to visit).

I'd take an apartment over a trailer any day up here.

[Warpy]

34. You have to pay attention to zone when you buy

because trailers are insulated by zone. Mine was quite cozy and it gets damned cold here in the high desert, especially at night, and I'm talking runs of near or below zero cold. Because I was on city gas, it was cheap to heat. Propane, alas, is expensive no matter what you're heating.

She might want to check her furnace, clean the ducts and replace the filter.

[tabbycat31]

41. I'll never own either

And the fixing up just does not appeal to me period. I'd rather deal with rising rents than fixing everything that goes wrong.

[PasadenaTrudy]

49. Exactly

I just don't have any interest in maintaining a yard or a house. I have better things to do with my time.

[scarystuffyo]

12. I rented for a long time and it's most assuredly less stressful most of the time

The thing that made me buy a home was twice when I felt settled in the home I was renting
the owners both times placed it for sale. I don't for a minute blame either of them but it sucked
being called by the agent every time when it was okay to bring people in and packing
up again everything I owned to move another place.

I finally just decided to buy my own home.

[PasadenaTrudy]

15. I don't make enough money

to buy in the first place. I make less than $40K a year. My boyfriend works two teaching jobs and doesn't have credit. It's just as well. You have to have cash on hand too to fix things. Yuck.

[scarystuffyo]

17. I read your post after

Yeah, CA prices can be insane , here where I live with that income you could buy a 2 or 3 bedroom home.
It would be tight but it would be do able.

[PasadenaTrudy]

18. I'd have to move

out of state. But by the time I do, I may need to live in an assisted living type place. I'm not getting any younger

[PasadenaTrudy]

20. Just to give you a laugh...

here's a small home for sale in my city...

https://www.redfin.com/CA/South-Pasadena/2100-Pine-St-91030/home/7008760

[steve2470]

21. incredible nt

[PasadenaTrudy]

32. Lol, here's another, a recent sale

cute house...but..

https://www.redfin.com/CA/South-Pasadena/1122-Stratford-Ave-91030/home/7006735

[steve2470]

35. even more incredible

https://www.redfin.com/FL/Orlando/335-N-Hyer-Ave-32803/home/46634276

In my old zip code, you can get this for a little less money. More space.


For one thousand more than your first example, in my old zip code you can get this:

https://www.redfin.com/FL/Orlando/636-Hillcrest-St-32803/home/46595647

More room. Both properties are close to downtown Orlando, in case you work there or just want to hang out there. There's a lot to do
these days in downtown Orlando.

[PasadenaTrudy]

37. Such a difference

in price per sq ft! I look at property online a lot in my favorite state, NM, and just shake my head at how much you can get for the money there.. I don't go to the beach anyways!

[scarystuffyo]

24. That's crazy

This is what $700,000 could buy you here

http://www.zillow.com/homedetails/266-Cosey-Beach-Ave-C-East-Haven-CT-06512/57908808_zpid/

[PasadenaTrudy]

25. This is why I hate it here

Something is really wrong with reality AND real estate in CA. It's not the be-all, end-all. There are other nice places. Guess we have the jobs, but still!

[n2doc]

44. No way would I buy waterfront now

Storms are getting worse. So is insurance.

[Travis_0004]

28. That house probably would not sell for 175k here.

[PasadenaTrudy]

29. I believe it

Things are so dysfunctional here. A studio apt goes for over $1K easily now.

[Adsos Letter]

38. My daughter and son-in-law live in Los Gatos

they pay $2,300 per month for 550 sq. ft. in a sub-divided Victorian.

My other daughter and son-in-law live in La Jolla; $4,500 for 1,000 sq. ft.

Granted, both areas are high dollar areas, and quite lovely, but still...

[n2doc]

45. San Francisco....

http://blog.sfgate.com/ontheblock/2014/10/30/a-330-sq-ft-former-earthquake-cottage-in-telegraph-hill-sells-for-765k/

[PasadenaTrudy]

48. SF is the craziest

Tech yuppie dreamland now...

[AngryAmish]

43. I would love to own one of the tiny homes that are gaining in popularity.

Not exactly my lifestyle with a family but I often dream of a tiny house. Just seems cozy I guess.

[The Velveteen Ocelot]

2. Asked a friend who is a real estate agent about this -

He thinks it's for a few reasons: The foreclosure and short sales have been mostly used up; the pent-up demand for houses has been somewhat satisfied now that the economy has started to recover; and (most worrisome) a lot of younger people just can't afford to buy houses because they are buried in student loans and can't find good jobs.

[steve2470]

3. I think your last point is very important

Until we solve that problem as a society, homebuying is going to suffer, a lot.

[Warpy]

5. I think it's the last factor more than the first two

The foreclosures and short sales appealed more to investors. House buying families didn't want the insecurity of waiting 3 months to see if they had managed to bid the right amount on a short sale and they didn't want the disaster that often existed in a foreclosed house.

I think there is a tremendous amount of demand out there and that house buying will explode as soon as wages are raised to a livable level, with or without student debt to pay off. The student debt will only ensure that both spouses have to go out to work, hoping doting grandparents come through when the baby sitters flake out.

Either wages will rise or all those CDOs issued on "sure thing" student loan debt will cause another banking bubble to burst and we'll be at Square One again.

[SoCalDem]

36. DTI is a killer for a lot of people

(debt-to-income) ratio..

When almost all of your anticipated income is being eaten by monthly bills like car payments, student loans, credit card payments, most cannot qualify...

add that to multiple jobs over a few years' time, and you have little chance of qualifying for a loan.


Parents/grand parents are no longer able to "loan" that all-important down payment that many younger people lack.

[tridim]

6. I think they saw everyone get screwed during Bush's sub-prime/recession disaster.

I get screwed enough that I don't really have any desire to own another mortgaged home. So many middle men cashed in on my misery, it was just unreal.

Building my own tiny house seems very attractive and possible within a few years. Other than that, I'm pretty much out of the traditional market forever.

[PasadenaTrudy]

7. CA is crazy as ever...

In SoCal and the SF Bay area, you would need a six-figure down payment in the really decent areas. Most people don't have that!

[steve2470]

8. yep, that's why I didn't move to CA nt

[PasadenaTrudy]

11. I'm just here by default

I was born here and luckily inherited a rental bldg. I would never move here from out of state. I would someday like to get out of CA though, I'm sick of the traffic and crowds.

[madville]

10. People ask to rent my house all the time

And I have before when I was out if town for a year working. I'm home on weekends now so don't want to rent it out but the rental market inventory is nonexistent around here, on the other hand though I probably would have a hard time selling it if I wanted to.

[hobbit709]

13. Inability to pay hits highest level in 30 years.

[Marrah_G]

14. who has the money to buy a home these days?

Wages suck and home prices are absurd.

[PasadenaTrudy]

16. And money to fix things,

pay property taxes, etc...

[Skeeter Barnes]

27. You have it right. The problem is low wages.

Jobs around here pay the same shit wage they did 20 - 30 years ago but everything costs more these days. Who's got money for a house? I sure don't, probably not ever, no matter how hard I work.

And people on here wonder, "well, it must be the student loan debt". No, it's working class jobs just don't pay worth a shit.

[Gidney N Cloyd]

19. First-time buyers need modest, more affordable "starter homes." We're not building those anymore.

We build McMansions now. And a lot of the time wherever there were small, inexpensive homes they became 'tear downs' to make way for bigger houses, especially in neighborhoods in close-in suburbs. Young, new buyers don't need granite counter-tops and bathroom spas. They need a cozy place they can eventually outgrow and build some equity in in the meantime.

And one other problem, those people looking to sell one of those small starter homes got it in their heads during the housing boom before the '08-ish bust that their properties were worth a lot of $$$, they might have even borrowed against it, and now they're renting instead of selling while waiting for the market to rise again.

[steve2470]

22. good post ! nt

[PasadenaTrudy]

23. In my town

a starter home can easily go for $800K.

[Gidney N Cloyd]

26. Pasadena's media household income is $67,920, almost the same as my town near Chicago.

Yet Pasadena's median house is 10x the median income while here it's 4x. That's nutz.

[PasadenaTrudy]

30. I'm in

the city of South Pasadena, a small city of 24k people. A very pricey small city.

[Gidney N Cloyd]

33. Well, let's face it, not all towns are where you look for starter homes.

Around here you'd historically look in my town or the other inner 'burbs. You wouldn't look for one in Glencoe. But regionally there have to be places to find them.

[raccoon]

46. Well said! People have come to expect a lot more house now. WHen I was a kid, I knew

families that had three or four kids, 3 bedrooms and 1 bathroom. that's what my family had too.
And we didn't think of them as being poor.

[CK_John]

39. IMO, it's the new life style, temp labor and no job security. Under 30's are living out of a go bag.

You have to be able to move in the middle of the night and start work by lunch time 10 states away. They are the new nomads, no time for kids, friends, just first name only relationships.

It's make being old feel good.

[PasadenaTrudy]

40. Yeah..

I'm glad I'm 50, and not 20 or 30.

[Warren Stupidity]

42. In the boston metro area starter homes are around 400K.

Kind of makes it difficult for "first time homebuyers" to buy anything.

[kelliekat44]

47. Owning a home is not what it used to be in many respects.

It used to be a safe haven for the family. A base for folks to come home to to be supported, comforted and helped. With so many homes now being included in those God awful "associations" it really does not offer the freedom and security it once did. It's your home but you can't paint it the color you want, you can't add to it or landscape the way you want, limited parking and association fees. That's one type of new home and one reason buying one is not so attractive.

Then, there are the McMansions that some families bought together and found out that utilities and taxes were more than they ALL bargained for. Not to mention the shoddy building materials, the landfills over which the homes were built and the fact that most are located in suburban or rural areas and traffic is a nightmare.

Then there are the gated communities...who can afford that for starting out?

And, thanks to the Bush admin. and the GOP good paying jobs are mostly gone or out of the country so young folks can't afford to buy new homes. They rent instead but rent is threatening to make it so that multiple families will have to rent together.

Greed is a bitch and so is vulture capitalism...the ugly dragon head is turning around and burning its own tail.