I Can’t Stop Thinking About Today’s Housing Market
Today’s housing market has been on my mind so much lately. I’ll admit that I don’t understand economics the way an economist does, although I’ve been listening to a whole lot of economists lately trying to understand it more. But I am at least smart enough to know that what’s happened over the last few years in the housing market doesn’t seem normal to me.
If you’ve followed my blog for a long while, you know that Matt and I bought our house back in 2013 for $80,000. At the time, it was about a 1500 square foot house (before we converted the garage into my studio, and not including the sunroom, which I don’t because that room has never been usable for actual living space, in my humble opinion). And our house sits on a one-acre lot within the city limits of Waco, Texas. Back in 2013 when we bought our house, the median sale price of a house in Waco was $127,900.
As you already know, our house needed a lot of work. But I could tell that the house had “good bones”, so to speak.
Sure, it needed some updating. But it didn’t need everything that I’ve done to it over the last 13 years. A person could have very easily bought this house, pulled up the old carpet, refinished the original hardwood floors (or even just cleaned them since they were in pretty good condition), taken down the old curtains, painted the walls, and called it good. Small upgrades like lighting could have been added over time.
Of course, we bought this house specifically because we could purchase it at a low price and then spend the bulk of our money customizing it to fit our needs and wants. But the majority of the money we’ve spent has been on wants, not needs. So we went above and beyond the basics of painting the walls and cleaning the original hardwood floors. But my point is that someone could have very easily turned this into a very decent house for a grand total of about $100,000 to $120,000. In other words, the total cost from the original to the finished, livable, comfortable house could have been in range with that median selling price in our city back in 2013.
But in the 13 years since we’ve bought our house, the houses around us have exploded in price. And it’s not like we live in an area of town where you’d expect to pay a lot for houses. We live in an old part of town where the houses are very hit and miss. You’ll see really nice (but still old), big houses on big lots with lots of mature trees, and then one or two streets over, you’ll see tiny houses in disrepair on small lots with very few trees. It’s your standard old part of town in small city America.
It was only about eight years after we bought our house that the house next door to us sold for $350,000. And that house was originally on the market for $450,000!! That price, for this area of town seemed insane to me. But it sold! And there was nothing particularly special about that house. It was a flip house, and the person who bought it and flipped it did a pretty basic fixup on the house before selling it for $350,000. The fact that a house could sell for that much on our street, right next door to us, still boggles my mind today. I get messages from people who follow my blog on a fairly regular basis who have visited Waco and have driven by our house just to see it in person. So those of you who have seen it in person know exactly what I mean about our area of town.
And then last week, I noticed that a house very close by (within walking distance) was on the market. So being the nosey person I am, I wrote down the address and looked it up on Realtor.com to see what the asking price for that house is. I nearly fell out of my chair when I saw that this house is on the market for $409,000!!!
I can’t even wrap my head around this. Yes, it’s a cute house. And yes, they’ve obviously fixed it up on the inside. Whover remodeled it did a fantastic job. It looks very nice on the inside, and it’s completely move in ready. But still, a house selling for that price on that street in Waco, Texas, just blows my mind. Just seven years ago, this house was listed for sale for $95,000, according to Zillow.
Like I said, Just 13 years ago, when we bought our house, the median sale price of houses in Waco, Texas, was $127,900. Today, the median price of a house in Waco, Texas, is $285,000. That’s a 135.2% increase in just 13 years. And since Waco is a low-income city (the median household income in Waco is lower than the national median household income), that means that most Wacoans are being priced out of the housing market in their own city. The fact that most Wacoans can now not even afford a house in my area of town — the area of town where one would normally expect a first-time homebuyer to be able to purchase a home — seems tragic to me. We don’t live in the suburbs. We don’t live in a nice, new housing addition. We’re in an old part of town within the city limits.
Anyway, obviously, I don’t have any answers because, again, I’m not an economist. I don’t know how to fix this. And obviously, no one else does, either. I just know that I feel incredibly sad for first-time homebuyers who are trying to get into a house in this market. And it’s not surprising that the median age for first-time homebuyers in the U,S is now 42. Something has gone terribly wrong over the last decade, and it just makes me sad.
What are home prices like in your area of the country? What were they back in 2013 (or a decade ago) compared to where they are now?
Addicted 2 Decorating is where I share my DIY and decorating journey as I remodel and decorate the 1948 fixer upper that my husband, Matt, and I bought in 2013. Matt has M.S. and is unable to do physical work, so I do the majority of the work on the house by myself. You can learn more about me here.
