How much is your local "Trump at the Pump Tax?"

Sounds pretty big even now.

Issac is in Gunnison, Colorado which is the town that services Crested Butte right up the street. My brother has a place there he uses as a base to get away from Texas heat and for occasional skiing. The trick there or in any resort area is to get into the real estate market when you are young. It always seems expensive at first and rentals are almost always less initially.

What you don't want to do is rent a place for 30 years only to realize you have just paid off the owner's mortgage.

 

Filling up last night, $5.89 for midgrade at my chosen store (about a dime or two above other stations closer to the port).

 

Ah. That's a whole different kind of crazy.

In the great lakes region since the 1990s, that would be the approximate size of a lot of two storey colonials, often with only a two car garage. Lots of really stupid houses since then will be twice that.

If you go back to 19th century neighborhoods the house will have very high ceilings and a lot of ornate woodwork, but the square footage will be modest by current standards, and those people were dealing with coal for a boiler.

 

A single-story two-bedroom house from the 50's with a garage.

The ones with nice counter tops and such are in the several millions, if not tens of millions.

The cheapest I can find is a condo built in the 70's in not great condition with no yard, no storage and two car spaces for about $300,000. I've thought about it, but the payments would be considerably more than what I'm paying now in rent, and I have a yard here. Who knows, maybe for taking care of my parents I'll eventually inherit their house. Or I've thought about moving to somewhere south-of-the-boarder when I can't afford it here anymore.

Yes, you remember correctly. We are the next town down from the ski town by about 30 miles, so we have more of the 2 million and cheaper houses instead of the 5 or 10 million houses. The farther away you go the cheaper housing gets but the more you have to commute over treacherous mountain passes which can get a bit hairy in the winter. Right now I'm close enough I can bike or even walk to work, stores, schools, etc.

Also every house, condo and other that I've looked at I've also looked at the sale's history and everything is double the price it was before COVID, so remote workers and people who decided to retire and move to the mountains during the pandemic is another reason housing is so expensive.

I had the opportunity to buy homes before the pandemic and didn't jump on them. About 10 years ago you could find duplexes, modular homes and other such housing that came with the land it sat on for as little as $60,000 with many at $100,000 or under. I can think of 4 of such opportunities I didn't jump on right off the top of my head. It's amazing how much prices jumped during COVID.

 

That's true here as well. That's part of the reason I don't think we have an intuitive sense of inflation in the last several years. If cars, homes and food double over six years, that doesn't indicate a doubling in value of those things, but how much less our dollars are worth.

I get that we are all supposed to buy a house, but I remember my days of living in apartments fondly. When I married, I tried to stay in our apartment, but she had a quasi-hormonal drive for a house. Now I get to be my own landscaper and pay real estate tax for the privilege.

 

...always looked at a home as a way to fix cost and provide security.

not so much fixated on the biggest or best but on a secure place to stay that is paid off and removes the angst of where am I going to live.

..on the other side of home ownership are the individuals who want no part of a commitment to a home nor the associated taxes and upkeep and are free to move and change locations at the drop of a hat.......don't think one lifestyle is any better than the other just what suits you.

in my age group now many transition to retirement communities or patio homes and wonder why they waited so long to do it...can understand the attraction but am not drawn to that style living.

Home ownership can have its own challenges ......think of aging heating/cooling system that fails - you had better be ready to come up with $10,000 to $ 20,000 if a complete new system is required - major appliances don't last forever and can easily run into thousands of dollars apiece to replace - home ownership is not the end of the rainbow by any means..

 

Yet? I'm beginning to understand the draw of places built without stairs and goof wheelchair accessibility.

The lack of children gives them a sad quality. What I realized after moving to a place with lots of young children is the vitality and joy the kids impart to the neighborhood. Having little kids may be the hardest part of life but also the best. It's nice to see daily even when it is other people.

 

The no taxes or repair cost fallacy when renting.

Renters are paying for all costs in their rent and any mortgage that may be on the property. Sometimes an investor might be upside down for the first few years and markets do periodically correct, but the medium to long game is always positive cash flow for the owners combined with a depreciation expense that shows only on paper to save income taxes. These days landlords typically have positive cash flow after the first year.

Sure there may be a capital gains tax after they sell and make a lot of money but even then they can roll the gain into another property and avoid that rather low tax.

Mobility issue for homeowners? Not really. Generally it is easy as they sell and then have no problem buying the next one, often tailored for current needs or desires.

 

That's the main reason I want to buy a house. I guess I thought prices were going to stay the same or something along those lines. Then COVID hit and I realized that the price to live somewhere could grow faster than I could get raises.

That's the catch 22 here at the moment. Renting is expensive, but typically way cheaper than buying. It's like $2,000 for a 2 bedroom if you rent, but more like $4,000 for 30-year fixed mortgage payments if you buy that same place. I keep thinking about those old condos that pop up on the market every once in a while that would have a monthly mortgage payment of around $2,000 to $2,500.

 

I can't tell you what to do, but I offer a warning.

Condos look like a smart half step between an apartment and owning one's own home. The reality is often that they bring cost and downsides of living in an apartment and financial liabilities of owning a home, plus the adversary of a condo association that can be run in ways that don't benefit owner occupants. Instead of choosing when you will perform major maintenance, the same condo board that set fees too low and kept an inadequate reserve can have the maintenance done and issue an assessment against your share.

One large tower condo near my old place had a boy fall off a balcony. That turned into a suit against the association and fees quadrupling to pay the judgment. Condo boards are typically populated by ethically flexible investors and karens looking for something to do.

 

Thank you! And that's the thing. I don't want to live in a condo either.

• No yard at all. Not even a patch of grass with a couple of flowers in it.
• No storage.
• The monthly payment alone would be more than what I'm paying in rent now on a much better property.
• Neighbors above and below and to the sides with paper-thin walls.
• Electric resistance heating. that's $$$ in the winter.
• The unknowns of the maintenance fees and such.
• HOA restrictions. No amateur radio antennas. No checking your oil level in your parking spot.
• It looks like it's taking months/years to sell these, so I wonder if they're overpriced as it is.

But that's all I can afford and can get a loan for unless I move away from my parents that need me right now.

I wouldn't mind the 1950's house or even smaller. 1,100 sqft is exactly twice the square footage of the place I'm at now. And seeing how I'm considering a condo that house would be a major upgrade from current expectations. Too bad a house like that around here, even a fixer-upper, would be about twice what I can afford and get a loan for.

 

certainly understand the trends to bigger and bigger homes...but an individual is free to ignore that......
we had our home built and could have gone in any direction we wanted as far as size...our build = one of the smallest houses in the area at 1500 sq ft -because we wanted it that way - lower energy cost because of its energy efficiency and small size - no stairs no second story- could not imagine shouldering the energy cost of a two story home - steps to climb to get to bed or upstairs- cleaning task and upkeep for a huge home - I'll take a pass.

...for someone else a two or three story home may = utopia

side note: because of a homes smaller size =lower cost - in a nice area these become very easy homes to sell for an inflated price.

...many times larger homes because of their cost and upkeep and enormous energy costs appeal to a smaller demographic and can end up being somewhat more difficult product to sale.

 

Maybe 25 years ago I had to sell a condo in a pianist's estate. The maintenance fees were $1250 monthly.

No one wanted it. We had someone who was willing to pay just the maintenance fee live there for a couple of years before we could sell it.

When I was looking at places back then, $600 a month for 30 years bought $100,000. A $300k condo with a $600 maintenance fee is really a $400k purchase,...or at least that's how I approached it.

 

Location, Location, Location!

Stay AWAY from water.
Snow is frozen water.....

NO.
You don't.
All the disadvantages of a single family detached home AND all the disadvantages of an apartment.

@ 'No amateur radio antennas'....
You can, but you have to navigate a higher noise floor and deal with antennae limitations.
You're "probably' not a credit card HAM - so you're going to have to 'science' your way into a more optimum setup.
Cheap, Easy, Quick.
-pick one or MAYBE two.......

Works that way with a lot of things.
HOUSES even.

 

. It is always that way - at first. Of course you would end up with a bigger space which would partially justify the short term pain. Today we have relatively high interest rates which make payments high. The mortgage payment can include PMI insurance as well unless you are a veteran or can put 20% down.

My first house was $65k, new and a 3/2/2. Interest was well over 13%. I was a veteran so it was zero down and no PMI. But renting a similar older house in a closer in neighborhood was half the mortgage payment.

The only real options besides jumping in now in a resort town is to save money for a down payment to get past PMI requirements, "hope" for a market correction in real estate (not likely in Gunnison even if most of the country does correct), wait for lower interest rates or move to a non resort small town with decent employment options.

 

Interest rates are actually low.
Maybe even too low.

For many of us, perhaps most of us, those early houses we reminisce about were bought with money costing more than the current 6.5%.......

Of course.....OTHER things are not cheap!
Taxes HOA/Condo fees and insurance, for example.

 

Yep; my first house was 8.75% and I made sure there was no HOA or other garbage monthly dues. This was in the very expensive left coast state, less than $100K; in a middle class neighborhood; several blocks away from the "bad neighborhoods". My starter home and ticket to an asset that keeps up with inflation, while providing tax write-offs. You can't say that about a new car.....

 

That's why they call it REAL estate.....