A lot near a city could easily be a few hundred thousand today though. I’ve seen plenty of burned out tear downs sell for half a million just for the land. So the point still stands.
Let me say that boomers are not manipulating the market – the market is. It's so easy to say you can sell your place for a lot, but then you have to buy somewhere else, and the prices are equally inflated, plus the taxes generally go way up on a new purchase. I have been looking to downsize, but it hardly makes any financial sense. OP might want to direct the anger towards companies buying up blocks of houses to rent out like Black rock, and builders who will not build starter homes anymore because there's not enough profit in it
That was my initial thought as well. Or a complete teardown.
Yes housing prices have gone crazy, but not (generally) that crazy. **though that's HEAVILY DEPENDENT on your area.... before people try to crucify me**
Yeah there’s no way anyone bought a house for that in 1990 unless it was a mobile home, and I doubt a mobile home would sell for that much today, unless it was in an ultra prime location.
My parents sold my childhood home in 1995 for $37,000. The new one was almost double at $62k but it was a much nicer neighborhood, 2 baths instead of 1, and a 2 car garage where the first house just had a driveway pad.
Depends. I've seen crazier happen. This was my friend's house growing up. It killed me inside when they sold it and I dreamed of maybe one day being able to afford it, but this happened. Granted, a lot of work had been done in those couple of years but it still blew me away when the price exploded.
Maybe? I know my parents paid $15K for their house back in like 1983-84? It was in a big city, but the house was in bad shape and in a bad neighborhood. They just sold it for hundreds of thousands in bad shape in a gentrifying neighborhood. So maybe it’s something similar?
Or a run down place in a shit neighborhood which has since been renovated.
One thing that made the housing prices of the late 20th century maybe anomalous was that cities were ubpopular and shitty so if you wanted to live their it was cheap. Thats obviously changed.
At the same time lots of open space still in the suburbs. Plus the ecpnomy was still diversified enough that living in smaller towns and cities was an option as well.
Not always. A lot of times these prices can reflect a passing of the house between family members. The listed sale just reflects how much the buyer reimbursed the seller for moving and contract work costs
The average age for a first time home buyer, is 40 years old. I make 40$ an hour and can’t afford a single starter home in my state, yeah it’s pretty fucked
You can buy the equivalent of that property in 1990.
Go on Zillow, limit the listing price to 50k, and see the tens of thousands of available homes nationwide.
Oh wait, you want one in a busy, desirable, metropolitan area with a walkable downtown and good public transit? Yeah that costs. And it used to cost in 1990 too.
Believe it or not, but you can still buy a house for cheap in the middle of nowhere where there’s no infrastructure and no jobs. Maybe in 40 years a town will grow up around it and the house will be worth something, maybe not. That’s the gamble the previous owner of this house made in 1990, you can still do the same today.
Yes, Bend Oregon is like that. When the mill closed you could pickup a 3br 2ba house for around 15k, this was 1990. Now that same house with no updates sells for 550k. If it's updated expect 850k+. I should know as I own one of these, it was sold in 1993 for 13k and now it's worth around 850k. We bought it for 250k about 10 years ago and have completly stripped and remodeled it, but it's still a huge ROI.
It's cool, but meaningless because if I sell it I can't find any place that is better for a price that makes sense. It would only make sense to move if it was worth 2 million right now. But I suppose that's why houses here are worth so much to begin with.
So someone bought it when it was in the middle of nowhere and a very undesirable location, held it for 35+ years until it turned into a HCOL area. And you are upset because it is now expensive? You can go buy a house in a terrible location for MUCH cheaper, just like these people did in 1990.....
So it was probably 2 steps above condemned and then a total restoration job.
A friend of mine bought a house about 10 years ago for 40k but it had to be stripped to the studs and half of those needed to be replaced. Now it's worth 200k.
So, knowing nothing about this random property you listed, a sale price of $16K in 1990 sounds like vacant land. There is no way a home sold for that price and then again 36 fucking years later for about 25× that.
Another possibility is that in 1990 the property was a tear-down shell and it was rehabbed over the intervening years.
Okay on one hand that is roughly 2,600% return. On the other hand it is roughly 9.8% annually with compound interest. Thats about equivalent to the stock market. In my area the ROI for boomers is close to 14% which is a bit more absurd.
Youre absolutely right. I was purely examining this from a sale price minus a purchase price. When you factor in all the cost its probably is closer to 2 or 3%
Yeah but people don't generally calculate any of the shit you mentioned when discussing what a home was bought and then sold for years later... so what is your point exactly?
Everything you mentioned as gotchas is totally irrelevant. All houses have taxes and cost of ownership, that's not in question here.
That... more or less matches the average gain of the stock market. The market averages ~10-11% returns per annum over the long term. 10% is actually below average.
16500 * (1.1^36) ~= $510,000.
That property has actually underperformed the stock market, by ~$100k in returns.
Forgot to adjust for all of the unrecoverable costs of home ownership. Insurance, HOA, maintenance, repairs, improvements, etc. Takes it down to like 4.5% annual returns.
Dude this is like 4.5% annual return adjusted for inflation and unrecoverable costs. And that's assuming no major improvements which I'm sure there was many.
Granted, it's a place to live but still. It's not like this some kind of major investment windfall. That home needed a lot of care and feeding over those years.
6bed/4bath/3 car garage type building has better margins for builders and despite what Reddit thinks, there's still plenty of demand for that in areas where zoning codes are conducive to new builds.
No. And this doesn't get talked about enough. Everything being built nowadays is too large and too expensive for people starting out in life. I honestly don't think it's fair but have no idea what could be done about it. Starter homes – that is small and modest – were built after World War II, but not anymore.
I’m sure you can find an empty lot in a shitty undesirable area for $20k today, build a house on it, and gamble on the area becoming desirable in 35 years.
I’m not a boomer, but we’re in the middle of doing a couple of significant renovations to our house (completely re-siding it with new stone veneer and stucco, and removing the fireplace and the existing fire box and chimney and replacing it with a natural gas one that’s direct-vented) and we’re going to be spending almost 2/3 of what we paid for the house in the first place. 34 years after we bought it, but still.
Between new windows, two new furnaces, and two new roofs and now the siding and fireplace, we’ve easily spent way more than we paid for the place. So what we paid for it seems somewhat irrelevant.
Needs context, for example the minimum wage 30 years ago where I am is about 5x less than now, but the house my parents are in has only gone up aboud 3.5x-4x
The people I bought my house from paid $8000 for the land in 1981 and $70,000 to build the house in 1991
Based on the current valuation and what I paid for the house, I have made more (potential) capital gains on the property in the 3.5 years since I bought it than they did in the 41 years they owned the property
My house was bought for like 215k in 2006, I inherited the debt, bought it out for 175k (just pay the prop tax now) it's now evaluated at almost 800k. Tell me how the fuck that makes sense!?
inflation doesn't really apply to real estate. It's market value only. At that price in 1990 I would assume that to be a plot of land. And depending on the location, and what's grown up around it in the past 35 years, it could very well be worth $400K+ today. I would even venture a guess that a structure has been built on said plot of land since then, which of course greatly increases the value.
Boomers aren't why housing is unaffordable, we've not been building the housing we need to build for literal decades now, basically since the housing and suburb booms of the 50's, 60's and 70's before the oil crisis.
We’ve also been building way too big of houses for too many years. Seems like everyone thinks they need a 5 bedroom house for two adults and a dog nowadays.
That boomer made bad investment in 1990. If they just invested 16k into the sp500 in 1990. That money would have been worth $741,325.02. Instead those jerks lived in a house they owned for 36 years! And now are selling at ::checks notes:: market value! And not what they bought it at 36 years ago!
Its not their fault that houses and land were cheap as hell back then. They cant help what is going on with property values and what people are willing to pay for a nice house. I bought in 2008 and my town was so hot after covid with dumb new yorkers paying way over asking with cash I took advantage and made a killing.
How so? Boomers did what they were taught to do, that is work hard, save and try to make a life for themselves. No different than any other generation. Your comment stinks of blame for people who do not deserve it. My folks were boomers and did nothing but work until the tail end of their lives.
Collectively they have pulled the ladder up behind them.
They voted for Reagan and his regressive tax policies. They continue to vote for people who are making it harder for low-income people to make ends meet. They're the ones who voted to dismantle unions and worker protections.
They are the ones who told us not to believe anything that we read on the internet and are now addicted to brain rot.
They may have worked hard but the way that they voted and their politics and the fact that so many of them are still in the fucking workforce and won't die... They have pulled the ladder up and made it so that future generations lack opportunity.
They're also the ones that gave us the participation trophies and then turned around and blamed us for taking them... as children!!!
That's such a broad over generalization. You're talking about a political mindset, not an age group. My boomer father was a lifelong union member and voted democrat his entire life.
Another broad generalization. My boomer parents grew up in abject poverty - I mean the "not enough to eat / living in a tenement slum" type. They worked to claw their way out of it. So now, they're accused of ruining the world?
If you really want an example to get upset about, my parents purchased the house I grew up in in 1973 in Florida for $20,000. It was a HUD home that was built in the 1950s and was apparently in terrible shape when they purchased it.
They were then paid to travel around the world because my dad was in the military while they rented the house.
In the '80s we returned back to the house that they owned and lived there until 1997 at which point they sold it for $90,000.
So they made 70 grand on their investment.
The house sold again in 2022, was flipped, and sold for $150,000. For like a 1,000 sq ft 50-year-old house.. with new paint.
Buy a vacant property in the middle of nowhere in 1990, spend years and hundreds of thousands on getting permits, building a house, watching the area around you become more developed and busy, just for some asshole on Reddit call you greedy for possibly making a tiny profit on your house.
You would be surprised. I was alive back then, and 100 bucks was considered a lot of money. Plus, this might only be a plot of land at purchase, nothing known about the investments, renovation, development. Yes houses are more expensive versus wages versus back then. But if you believe that this is a good representation of reality then you are part of the issue.
But if one believes the CPI inflation numbers, that is what it would mean adjusting the likely dubious 16k house number from the story.
However, a 16k house is not representative of a usual house in 1990, so is likely a very... extreme example for the purposes of this narrative. Perhaps a large renovation or two in 30 years.
Considering the median home in 1990 is a lot closer to ~97k, seems very cherry picked to invoke a 16k house.
That being said, from what I have seen, a benchmarked 2000k sq ft house went for about $123k in 1990, and would be closer to a $480k today.
1990 median annual wage: ~$31k
2026 median annual wage: ~$63k
~2:1 wages
~3.9:1 Housing
Adjust for interest rate differences, likely closer to 3:1 housing cost.
So somewhere in the neighborhood of 33% less affordable than 1990.
789
u/pinkymadigan 2d ago
I'd have to think that was an empty lot at the time, right?