Another consequence of rising college costs: Declining homeownership

Discussion in 'Off-Topic Discussions' started by decimon, Jul 13, 2017.

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  1. decimon

    decimon Active Member

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    Market Watch
    Jillian Berman
    July 13, 2017

    Over the past several years the cost of a college degree has shifted largely from state and local governments to students and families. That’s made young adults less likely to buy homes, a new study suggests.

    Between 2003 and 2009 the average per-person annual in-state tuition at public colleges rose $3,843 or 81%, according to research published Thursday by the Federal Reserve Bank of New York. That jump in college costs explains about $1,628 or 30% of the rise in the average student loan balances of 24-year-olds during that period. That increase in college costs and subsequent rise in student debt account for somewhere between 11% and 35% of the drop in homeownership rates for 28- to 30-year olds between 2007 and 2015, the study found.

    More... Another consequence of rising college costs: Declining homeownership - MarketWatch
     
  2. Abner

    Abner Active Member

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    That's interesting. It's seems like the price of houses right now are so high! At least where I live.
     
  3. decimon

    decimon Active Member

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    Very high in the bigger metro areas.
     
  4. Johann

    Johann Active Member

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    Indeed. Certainly true where I live, in the greater Toronto-Hamilton area. My son and his wife bought their third house (new) nine years ago. Its value has since doubled, or a bit more.

    His father (me) bought a 3-bedroom brick bungalow in a small city of 45,000, for $19,000 in 1972. That same house would cost oh - $400,000+ today. Too bad I sold it ages ago. :smile: Nowadays, when you take the suburbs into account, Toronto is more expensive than Paris, New York or Tokyo.

    Some interesting charts on Canadian housing prices here - and comparison with other countries.

    12 Charts About Canadian Housing That Will Make You Go WTF

    J.
     
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  5. decimon

    decimon Active Member

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    I don't think that can last. If the cost of living in your area is twice that of further west then employees will have to be paid more than employees further west and most non-employee expenses will also be higher. If an employer, you will eventually have to move your business to lower costs to stay competitive. Or go out of business.

    Large NYC financial companies have been moving their operations sections to lower cost areas of the country since at least the 1960s. Just the cost of floor space in NYC can be crippling.
     
  6. Abner

    Abner Active Member

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    Yeah, the housing prices are pretty crazy where i live too (Orange County CA). I bought 24 years ago, and my house has more than quadrupled what i paid for it in today's market!
     
  7. Johann

    Johann Active Member

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    I'd like to think it can't - but I just have to look at my old district in North London, England to see what might happen. Houses which sold for £550 when they were built (1930s) and under £2,500 (1950s) were £300,000 10 years ago and many are selling for £700,000+ today. There are perodic "deflations" during which many people are "under water" with their mortgages -- but it always comes back ... and then some.

    There's a saying around here: "keep driving until you qualify for a mortgage." I'm sure they'd say it around London, too - but who in England can afford to keep driving at their gas prices?

    J.
     
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  8. Johann

    Johann Active Member

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  9. decimon

    decimon Active Member

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    I believe that London has much restricted new housing and that drives up the cost of housing.
     
  10. heirophant

    heirophant Member

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    The house my family and I live in cost $360K in 1991 (a lot of money then), and probably would sell for upwards of $1,400K now. It's not an estate, just a 1950's middle-class house (with a view of SF Bay).

    Despite the bubble-territory prices there's currently a buyers feeding frenzy (I feel like I'm in one of those shark cages surrounded by great whites after they chum the water) and we get several unsolicited offers a month from agents representing mysterious buyers who are offering all cash, as-is sale etc. My next door neighbor took the money and moved out maybe six months ago and now his house has turned into an Air B&B short-term rental and I suspect that's what buyers want my house for. That's Silicon Valley.
     
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  11. decimon

    decimon Active Member

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