beyond sticker shock

[Dave in Olympia]

I bought my home five years ago for $265,000. 1100 square feet, built in 1988, nicely updated. I bought at 3% interest rate. The online sites now estimate it at $450,000-ish. With the rates now over 7%, I certainly wouldn't be able to afford to buy it today.

[imwjl]

Originally Posted by edcmat-l1

There are several things that are ridiculously more expensive than they were just a few years ago.

Real estate
Plywood
Many food items. Have you seen the price of a bag of potato chips recently?

How about BEEF for goodness sakes. We have always eaten a lot of fish. It used to be more expensive than beef (generally speaking). Now, not so much.

High food prices are more complicated than just demand. I see and know much of it from my spot in a grocery store chain.

Weather and seasons have a lot of impact. Some high prices for meat are because there are some very concentrated big players and processors and their competition is smaller players that cannot be low cost.

The shrinkflation is a problem and so is concentration. A week from tomorrow our 107 year old small chain will become part of one of the "small" ($10 billion firm) players still able to compete against WalMart, Amazon and Kroger.

There are more than just the urban food deserts many discuss. Lots of people live where a few giants and convenience or dollar stores dominate. Some dollar stores are in the new for their wide spread scan scams but giants get away with it too. Paying a $ few hundred million in fines is a bargain if you can still net $ billion.

Huge swaths of the country do not have the additional parts or things associated with weights and measures regulations that test if prices ring as advertised. That "freedom" means poorly trained and paid staff nor local inspection are there to watch that your advertised price is what you pay.

Not all is bad for some higher prices. Wages have grown for a lot of first line and transportation workers. This started pre-pandemic but even our small chain pays staff much more than a while ago. Our distribution firms have had to compensate drivers better.

I don't like high prices but I remember 35+ years ago when I was a graveyard shift truck driver. A lot of it was rotten. Now I'm happy knowing those drivers who come to our docks between 9 PM and 5 AM are compensated better.

[Mandobart]

Originally Posted by Neil K Walk

Meanwhile, that college tuition is looming. Has anyone noted that tuition has pretty much increased 10x in the last 25 years? I'm pretty sure he's not going to be independent for quite some time.

Originally Posted by K20C

Tuition is nuts! When I started college in 1971, it was $9/hr. When I started Law School a few years later, a private school was $90/hr. When I graduated, it was $300/hr. Thank goodness our daughter graduated college a few years ago before it went truly insane.

Originally Posted by imwjl

Tuition is painful for sure and we sure feel it with a pair of 20 year olds and 22 year old starting grad school.

I'm still calling the tuition worth it, and the land grant or similar schools a bargain. Our kids had more prestigious choices but their engineering and health sciences schools within the public ivy's campus rank among the best. I can't think of another way families like us could have otherwise helped our kids get such a good foundation .

The best investment we ever made was using Washington state’s GET (Guaranteed Education Tuition) program to pay for their college while they were in grade school.

By the time they entered college tuition had risen several hundred percent. But we already paid, so they got their degrees debt-free.

Unless I was smart/lucky enough to have bought stock in Apple, Microsoft, etc. instead, there is no better way I know of to pay for your kid’s school - with the usual common sense caveats that they actually go to school, etc. If they don’t go to college, tech training, etc. you get your money back but not at the atmospheric interest rate of tuition increase.

It’s guaranteed to pay the equivalent of four years at UW, the state’s most expensive public college/university, at whatever the tuition rate is when they go. If they attend a private or out of state school they still get the money but it may not go as far there.

[jpd]

"I think the dot-com bubble, and prior housing bubble are going to pale in comparison when this one bursts." Fazool

There are many new factors taking over the bubble this time. The biggest change in my direct experience is how multiple family members are buying homes together. My neighborhood is being over run by multiple cars per house along with multi-generational families in those houses.

[Jim Owen]

Originally Posted by imwjl

Tuition is painful for sure and we sure feel it with a pair of 20 year olds and 22 year old starting grad school.



I'm still calling the tuition worth it, and the land grant or similar schools a bargain. Our kids had more prestigious choices but their engineering and health sciences schools within the public ivy's campus rank among the best. I can't think of another way families like us could have otherwise helped our kids get such a good foundation.



3 weeks ago at Phi Beta Kappa induction I saw a grandfather with his walker in tears for his granddaughter's achievement and praising the state university system for letting a truck driver like him able help make his granddaughter's achievement possible. The family sitting next to us had a similar story. He was a factory worker with first child in family history a college grad, and she's got med school next.



The prices are indeed high but it doesn't seem as messed up as insurance and health care.

Agreed. My BA and MA came from a land-grant uni. My doctorate came from a pretty decent state university (that Mr Jefferson built). The tuition I paid was a bargain.

I taught for 40+ years at several different types of institutions. The last 28 were at a regional state uni that had access as part of its mission. I appreciated those graduations more than when I was at the Research 1 institutions. Many of my students were the first members of their whole families to walk across the stage. The first time I saw what a difference it made, I cried.

I didn’t cry at my own graduation. In fact, I didn’t attend my BA graduation as it didn’t seem that big a deal to me or my folks.

[rokdog49]

Where I live, an 1100 square foot home, in town with two bedrooms, 1-1/2 bath, unattached one car garage, completely remodeled on the inside… $145,000. Most homes are selling for around $140/ Sq. ft.
You folks just live in the wrong places.

[imwjl]

Originally Posted by Jim Owen

Agreed. My BA and MA came from a land-grant uni. My doctorate came from a pretty decent state university (that Mr Jefferson built). The tuition I paid was a bargain.

I taught for 40+ years at several different types of institutions. The last 28 were at a regional state uni that had access as part of its mission. I appreciated those graduations more than when I was at the Research 1 institutions. Many of my students were the first members of their whole families to walk across the stage. The first time I saw what a difference it made, I cried.

I didn’t cry at my own graduation. In fact, I didn’t attend my BA graduation as it didn’t seem that big a deal to me or my folks.

The Phi Beta Kappa induction was obviously the top, still represented tremendous amounts of work, but now this metro area with 80,000 students has had end of finals and grad weekend for the rest of the kids and 30,000 from the technical college. For sure we have problems in the system but reading the news and knowing kids are moving to choosing majors wisely really struck me. We can't think the world is so bad. This county just kept its since 1848 tradition of putting a good foundation under the young people.

I didn't even go to my graduation but have a lot of respect for the institution now that I couldn't really grasp then. Beyond all the personal benefit, it is a huge driver of general prosperity. Huge amounts of varying good jobs, and it grows business.

Originally Posted by rokdog49

Where I live, an 1100 square foot home, in town with two bedrooms, 1-1/2 bath, unattached one car garage, completely remodeled on the inside… $145,000. Most homes are selling for around $140/ Sq. ft.
You folks just live in the wrong places.

It is wonderful that you have what seems good in a place like that.

I'd say no for most folks. I came from a town more like that and our cabin is in an area sort of depressed outside of recreation. Both those places and many are tougher prospects for most of the population to get good jobs. Especially ones with benefits beyond wages. One exception is often tied to Jim Owen and my point. Where our state has the tech school system and university system campus spread out has more prosperous and better quality of life smaller less expensive places.

Now at retirement age I see much of this stuff as age old gripes. Where we had GM plant now a razed site, the 1960s-70s gripes where it made homes expensive too.

All this stuff will remain tough. We're not yet with UBI or robots doing most of our work.

[GoPappy]

Originally Posted by K20C

Tuition is nuts! When I started college in 1971, it was $9/hr. When I started Law School a few years later, a private school was $90/hr. When I graduated, it was $300/hr. Thank goodness our daughter graduated college a few years ago before it went truly insane.

I had almost exactly the same experience. I started college in 1970 at $9/hr. The next year they raised it to $11/hr and we were outraged! Ha! Think of that: $165 for a full schedule of 15 credit hours for an entire semester and we thought we were being ripped off.

[leew3]

Back to the OP observation, even where we live (same town as Rokdog) housing prices are high relative to where it was several years ago. Our home that was 20% below what we paid for it during the 2008 housing crash is now theoretically valued at 60% more than we paid for it. Bear in mind that we had the foresight to buy at the height of the last real estate boom in 2005

Friends have suggested having a realtor stop by to let us know what our house is worth. My somewhat cynical son, a real estate attorney, said that 'once you have a realtor in your house it's hard to get rid of that smell' I assume that his harsh assessment is founded on hard earned experience!

[12FanMan]

I wonder if the seller((s) are/were giving you a bunch of hogwash to make you think you'd better jump on it or you'd lose it. They may have had no bids at all.

[rllink]

Originally Posted by Jim Owen

Agreed. My BA and MA came from a land-grant uni. My doctorate came from a pretty decent state university (that Mr Jefferson built). The tuition I paid was a bargain.

I taught for 40+ years at several different types of institutions. The last 28 were at a regional state uni that had access as part of its mission. I appreciated those graduations more than when I was at the Research 1 institutions. Many of my students were the first members of their whole families to walk across the stage. The first time I saw what a difference it made, I cried.

I didn’t cry at my own graduation. In fact, I didn’t attend my BA graduation as it didn’t seem that big a deal to me or my folks.

Mine was a big deal. I was the first in my family ever to graduate from college. My dad and most of my uncles didn't graduate from high school. Anyway, it was a whole weekend party. I bought extra tickets for family to the graduation from other graduates who weren't going to attend. Anyway, it was crazy.

I went to college on the GI bill, much of it part time while I worked full time. I tell people I was on the seven and a half year plan to get a four year degree. That was the late seventies and the GI bill paid for tuition, books, and beer. My wife worked her way through under grad and I foot the bill for her grad school. She also got a stipend as a TA.

My daughter went to college and graduated in 2006. She worked at the rec center on campus, which paid a wage, but also brought her tuition down. She got some scholarships. We helped out. She graduated with about ten grand in loans. We just paid those off for her so that she got a clean start.

My son went to a private university on a full ride academic scholarship. He graduated in 2009. He worked part time. His housing and incidentals ended up being about the same as my daughter's, he had about eight grand in loans.

So me, my wife, and my two kids all graduated from college with little or no debt. Maybe things have changed dramatically since my son graduated, but at least for my kids, there were ways to bring tuition and college costs down if one put in some homework.

[Jim Owen]

Originally Posted by rllink

Mine was a big deal. I was the first in my family ever to graduate from college. My dad and most of my uncles didn't graduate from high school. Anyway, it was a whole weekend party. I bought extra tickets for family to the graduation from other graduates who weren't going to attend. Anyway, it was crazy.

I went to college on the GI bill, much of it part time while I worked full time. I tell people I was on the seven and a half year plan to get a four year degree. That was the late seventies and the GI bill paid for tuition, books, and beer. My wife worked her way through under grad and I foot the bill for her grad school. She also got a stipend as a TA.

My daughter went to college and graduated in 2006. She worked at the rec center on campus, which paid a wage, but also brought her tuition down. She got some scholarships. We helped out. She graduated with about ten grand in loans. We just paid those off for her so that she got a clean start.

My son went to a private university on a full ride academic scholarship. He graduated in 2009. He worked part time. His housing and incidentals ended up being about the same as my daughter's, he had about eight grand in loans.

So me, my wife, and my two kids all graduated from college with little or no debt. Maybe things have changed dramatically since my son graduated, but at least for my kids, there were ways to bring tuition and college costs down if one put in some homework.

Congrats to you for starting a positive tradition! And for getting your kids through without the debt crush.

The GI bill changed our country. My dad came back from the service when Germany surrendered and enrolled with his bunk mate at U of Chicago. When that got too windy, he headed to UNC and became the first in his family to graduate from college.

I should have gone to my graduation. I didn’t see how important it was at the time. I do now.

[815C]

I feel for young people - or anyone - trying to buy their first home. Almost impossible.

The first house we bought was in Nashville in 1985. It was a 1,200 square foot house. We paid $75k for it and sold it 7 years later for $85k. That same house recently sold for $1,300,000

[Murphy Slaw]

I bought a house in Mesa Az. in 1978 for 30,000. I looked that house up on Zillow the other day and it last sold for 225,000.

That's just stupid.

It's a cinder block house in a residential neighborhood and has nothing special.

Almost 10 times, just like a pack of cigarettes that was 50 cents and a gallon of gas that was 50 cents and a loave of bread that I once recall (although this was the 60's) costing a dime.

The value of a dollar is the problem.

The more they print, the less they're worth.

[imwjl]

Originally Posted by Murphy Slaw

I bought a house in Mesa Az. in 1978 for 30,000. I looked that house up on Zillow the other day and it last sold for 225,000.

That's just stupid.

It's a cinder block house in a residential neighborhood and has nothing special.

Almost 10 times, just like a pack of cigarettes that was 50 cents and a gallon of gas that was 50 cents and a loave of bread that I once recall (although this was the 60's) costing a dime.

The value of a dollar is the problem.

The more they print, the less they're worth.

Using inflation calculators helps me keep things in perspective but we're also a very much changed country and economy from my raised in boomer times. We have what I think of the good/bad, or good/broken economies. Some decades ago I did not need the skills and training where I feel fortunate to have attained.

Now if you have skills where the whole world pays a living wage it is not so bad even when something has a cost beyond what an inflation calculator will show. At this time we also have much more richness from choice and availability. In 1978 that Subaru you posted would have been a fantasy luxury+ vehicle. It's rather mean or median now.

This week our small grocery chain is making around 7500 price and tag changes among the 10s of thousands of items in each store. Good Housekeeping says stores had around 4000 items in 1974, industry data says they had about just the subset we'll change this week. This richness from choice compounds or influences our perceptions and costs.

We also have some new problems such as the shrinkflation. That's not driven by small chains like us. That's an unfortunate problem from a few very large players maybe too concentrated on both the supply side and the retailing.

Our stores still have real bakers and butchers. We have to pay them as much as 100% more than some retailers pay staff to not just have their skill, but so they can afford to live within 30 minutes of work.