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>> The housing affordability crisis isn’t a crisis if you own a home you bought in 1980 It isn't a crisis for them now. It was a crisis for them in 1980, someo
by rufus_foreman 1y ago
>> The housing affordability crisis isn’t a crisis if you own a home you bought in 1980
It isn't a crisis for them now. It was a crisis for them in 1980, someone buying a home in 1980 would have had an interest rate of around 14% on their mortgage.
- barchar 1y agoMaybe it'll become a crisis as they (or their estates) all go to sell the homes at once :).
- brailsafe 1y agoYes but that was a temporary response to inflation caused by multiple back to back recessions in that time. Those interest rates eventually cooled off, and salaries caught up. I met an old timer a few days ago with a beautiful garden, who bought their house in Vancouver, BC for $24,000 in 1972. Checking the tax assessment data now, the land underneath the house is worth $1.6m, while the building is assessed at $40k. Based on recent sales nearby, his property is realistically worth (on the market, maybe with some renos) 100x what he originally borrowed to buy it in absolute dollar amounts, about 20x accounting for inflation, or about 2x a conservative compounding investment. The guy was pleasant to chat with, and sympathized, because he knew his son-in-law who's probably my age won't be able to set up even close to the same sort of shelter without some very high incomes coming in, and he can see the future not looking so great for people in his life. But that's a modest, old, not that nice detached home. If I were to shoot for a small ~800sq ft 2 bdr condo built in the last 20 years, it would be require $120k down, $20k just in transfer taxes, and $7k a month to service the debt. Yes, 1980 sucked, money lost a huge amount of value relatively speaking, but what are we talking about here.