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Patty Leon: Real estate prices unreal these days
Patty Leon new

My brother placed one of his rental properties on the market this past Thursday. It was under contract by Sunday afternoon and sold for $15,000 above asking price on a full cash offer.

I am happy for my brother. This will definitely help his family pay down some debt, make upgrades to their home, fix up his other property rental and build some savings.

But it was also another jaw-dropping example of how much real estate prices have increased. Mom and I often get letters in the mail from people who ask if we want to sell our house. Sure, it would be great to make a nice profit, with the market being what it is today. But if we sold the house, where would we be able to buy another AFFORDABLE home? Everything around us has nearly doubled, and not just in one state, but in many states across the U.S.

With the middle class nearly evaporated, how does the next generation become homeowners when the price of a one-bedroom home, in some places, tops $100,000?

That is crazy! When we lived in Miami, I loved the two-story house we once lived in that was close to Calle Ocho (S.W. 8 Street in Miami, in the heart of Little Havana). It had a grand entrance with granite columns on the front porch, and rooms that had large Spanish arches. The master bedroom was downstairs, and my brother and I had palatial rooms upstairs, along with a huge bathroom.

We moved into that house when I was 4 years old. It had four bedrooms, three bathrooms and nearly 3,000 square feet. My mom said they bought it for $23,000. We lived there for about four years, and Mom says they sold it for $65,000. We moved because that area had taken a turn for the worse. Crime was increasing, places looked run down. But that area has since been revitalized. It is close to the heart of the downtown business center, easily accessible to I-95 and other main highways and a short drive from Miami Beach. Out of curiosity, I looked up our old house on Zillow. It has a current estimated value of $645,000–$845,000. WHAT?

We moved to a home in a newer section of Metro-Dade County called Sunset Place. Mom said they bought that house for around $35,000, and we lived there for about two decades. It was also big — not quite as big as the other, but still three bedrooms, two baths and 2,773 square feet. It was near a new emerging area named Kendall, close to the big Dadeland Mall, where there were better schools and bigger yards.

Today, that house is worth anywhere from $553,000 to $650,000.

What middle-class person can afford that?

My parents then moved to Country Walk. What my dad bought was the partial remains of one of the many homes that Hurricane Andrew had destroyed. The previous owner had settled with the insurance company but didn’t want to rebuild there. My dad paid $15,000 for the lot and built a new home himself. Around that same time, I bought my own townhome in the other section of Country Walk. These were newly built, also after the storm. I paid $65,000 for a two-bedroom, one-bath unit back in 1994.

When I decided to move to Georgia in 2006, my parents decided to move to Chattanooga that same year so they could be closer to my brother, who had been living in Tennessee since Andrew blew through Miami. This was just before the real estate bubble burst in 2008. I sold my townhome for $189,000. Mom and dad sold their house for $280,000 — and it’s now worth about $640,000.

CRAZY! Who can afford that these days?

And as housing prices climb, so does rent! People complain about Generation Z and Generation Alpha who live in their parents’ homes until they inherit them. Well, who the heck can blame them, with prices being as ridiculous as they are?

By the time they are a bit older, that house will be paid off. It is a lot easier to make gradual updates and improvements and stay put than to apply for a mortgage you may not be able to afford.

Until the next housing bubble bursts, they totally have the right idea.

Patty Leon is senior editor of the Coastal Courier.

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