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Hugh,
Americans staying put?
My wife and I have been actively searching for a second property in the Redoubt area. 2 months ago we looked at a place close to Lake Cocolala, in Idaho, We didnt even get a chance to make an offer, it was snatched up the next day.
The following week we looked at another place in a small unincorporated town also in the panhandle.. it needed work, but with a shop, and 1500 sq ft home on it we were pretty excited to put an offer in. even tho we were in second position, we put earnest money down on it anyway, just in case.. that too was bought up.. Our realtor phoned us the following Saturday to tell us he is listing a property the following Monday, and that we really need to come look at it.. we dropped everything and raced over to look at it. it was perfect, we put earnest money down, and called our lender… we are in the process of closing on it, But in the short time between receiving earnest money, getting it appraised and getting financed, there were people willing to put earnest money down behind us.
The market, at least in Idaho is on fire. the problem is the underwriters are under a lot of scrutiny and not so eager to sign off ,even with 20% down, and 800 credit scores, and the payment amounting to less that 15% of our monthly net. My experience has been just the opposite. people are looking to move.
The article states very clearly that the economy is stagnant. Upward mobility is hindered because people don’t have the resources to sell a home, pay commissions, and buy a home even of the same size in a better market on the expectation that the home value will rise and their wages will also rise over time. In my own situation, I could not sell my house, and buy a similar house in the same area. I have had a 9% increase in wages over the last 10 years. It would take me over 20 years to overcome the lost equity from sales commissions, the increased mortgage balance, and the increased taxes on another house. My raises do not even cover the increased employee contribution to my health insurance. So yes, I’m trapped, and I will stay in this house until I retire, (or get laid-off, riffed, or downsized) and move to a much more affordable area with lower taxes.