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The cost of housing

March 22, 2013

It's ridiculous how much it costs to own a home these days. The cornerstone of our economy and one of the most important economic indicators is way off the charts....

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(44)

mikekerstetter

Mar-22-13 4:06 AM

Hosing prices are set, primarily by what people are willing to pay for them. If they are selling at the price asked, I don't see the problem.

It seems the writer wants housing prices to be socialized.

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Premier

Mar-22-13 5:13 AM

Sounds like another wealth redistribution plan. Or could it be "I can afford this house but I really want and deserve that one"?

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Don521

Mar-22-13 5:27 AM

Things are no different now than they have ever been. The same could have been said 150 years ago but the fact is, it is competition that keeps us going.

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eriklatranyi

Mar-22-13 6:10 AM

The writer also wants employment to be socialized.

We have a glut of unemployed Americans. Why pay you more when you can be replaced easily?

Supply meets demand.

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wwhickok

Mar-22-13 6:12 AM

Mike, I partly disagree with you. The prices for housing here in Williamsport began to rise when the Gas Industries came rolling into town, because rather than landlords sticking with their current tenants, they realized they could make a considerable amount more money and rent to the Gas Industry. Situations like this have put people out of their homes, literally; It happened in the trailer park in Jersey Shore, when the owner decided to sell to the Gas Industry, it's happened to multi renters who have been evicted or disallowed to renew a lease so that a landlord could rent to Gas workers. I'm not saying a landlord shouldn't be allowed to do what they want with their property, but it's impossible these days to find affordable housing in Williamsport unless you make a significant wage. Each year that goes by we pay more taxes and make less money, yet all the prices go up. It's not just about the housing costs, you can't limit it to that. It's the price of gasoline, or a gallon

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wwhickok

Mar-22-13 6:14 AM

-continued-

of milk. It's called inflation and unfortunately it'll always be part of America. The housing costs will never go back down. They'll only go up. Whether we like it or not if you can't afford the housing in the area, it ultimately forces you to go somewhere that you can.

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idiottwo

Mar-22-13 6:36 AM

you lost me on blaming employers who low ball employee wages. Maybe you should become more informed. Though I imagine there are a few businesses as such, the vast majority in our area are not booming, in fact many have taken huge revenue hits and are struggling to survive over the last several years. The cost of housing and rentals has gone up here due to the demand impact given the NG exploration and works coming into the area.

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wwhickok

Mar-22-13 7:00 AM

idiottwo, I agree 100% with your comments on employee wages. I genuinely believe that most businesses in this area pay what they can afford to pay and still bring in profit. What this city needs is businesses that can afford to pay more but when the city isn't booming thats a very difficult task to accomplish.

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rick424

Mar-22-13 7:52 AM

Maybe all those hotels and restaurants will bring up the wages in the area. I am assuming those are the jobs the gas industry promised years ago and the mayor said we would be the energy capital of Pennsylvania. But yet rents went up. If the people already live here and the industry promised jobs why did the rents go up? Did the hotels pay living wages and I missed something?

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eriklatranyi

Mar-22-13 7:58 AM

There are many jobs in the gas industry now located in Williamsport.

One only has to see the transformation on Lycoming Creek Road, and from the Lycoming Mall to Hughesville to see the reality.

If that is not enough, go to Sheetz or Turkey Hill at 6 am to see the hundreds of gas workers buying their morning coffee.

Only the most die-hard denier says there are no jobs.

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wwhickok

Mar-22-13 8:00 AM

Part of it is that a lot of the initial 'onslaught' of Gas Industry employees came from out of state, Arkansas, Texas, etc and they needed housing. The other part of that is, that they didn't leave, and that's fine but what it did was increase the demand for a supply that was already very limited, hence the hotels and restaurants. There is TONS of money to be made off the gas industry, as an employee or as the owner of a Hotel or restaurant. Here's the major catch; most of these gas industries are not actually doing work in THIS area, many of them are travelling out of state to Virginia and/or Ohio and doing work. So the 'hotel revenue' and so on isn't actually being created here. Only the increase in the demand for housing is. There are obviously some exceptions to the rule of Industries working out of state despite being located in Williamsport, there are water stations set up and they're doing some drilling in various areas in the 'country sides' of Lycoming County.

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wwhickok

Mar-22-13 8:06 AM

Williamsport is an ideal location for where some of these Industries are travelling (Ohio, NY, etc) hence the reason so many of them have migrated to Williamsport, it's arguably dead central in the midst of the NG Supply. Also, for those saying "don't say there isn't any jobs, there's tons of gas line jobs" that is true to an extent; I know from personal experience that unless you have the extra money to pay for training, it is very difficult to even get hired by a gas line. They're not as desperate for people now first of all. Realistically speaking the Gas Industry is the only 'significantly paying' industry in the area. I mean, many of their employees bring home checks of $1200+ a week. In their defense, they do very hard work and dangerous work, it's not like they're standing around doing nothing.

There are other decently paying jobs, Wire Rope, some of the medical claims offices in the area, etc. But they are few and far between.

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rick424

Mar-22-13 8:08 AM

"If that is not enough, go to Sheetz or Turkey Hill at 6 am to see the hundreds of gas workers buying their morning coffee."

And just how much does that cashier make serving those workers from out of state? I have seen it first hand at the the Halls A plus a few years ago. What a pain, so much so the locals stop going there, at least that is what they told me and I stopped going. From the looks of things business there dropped off but I no longer go there. Not a denier erik but I feel the area was duped and there are a handful of people that made out. The bulk of the residents did not see a benefit. In fact maybe the opposite as prices increased.

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MrShaman

Mar-22-13 8:23 AM

"The housing costs will never go back down. They'll only go up." - wwhickok

*

LOL!!!!!! Yeah...that was the assumption that created credit default swaps!!!

*

See:

Money, Power and Wall Street | FRONTLINE | PBS

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wwhickok

Mar-22-13 8:58 AM

Shaman you jackwagon, it's not an assumption, it's the same way as gasoline that used to be in the $1.00+ range, it'll never hit that again. Housing is the same way it'll fluctuate up and down but it will never go back down to what it used to be. It's simple economics.

See: Get a friggin' clue.

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1approver1

Mar-22-13 10:19 AM

This has been an interesting string of comments. I grew up in Wmspt and left in 1978 after 2 yrs @ WACC. I live near DC, with a gov't job since 1990, which I work*****hard at. I've been blessed with relative job security, a loving wife, one child in college (paid for, not borrowed), the other in the Marines (and certainly proud of her), don't look for handouts, donates to reputable charities 'till it hurts', etc... What saddens me is the city I left behind. Maybe it existed then, but I just don't remember the hardships and strife that folks seem to be experiencing. Are housing costs high here? Yes, certainly, but the sad fact is what was stated before - the market is going to charge, and get, what the demand is.

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CMReeder

Mar-22-13 10:22 AM

Wages have been stagnant for a long time. That does not explain the problem as stated in the letter.

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ToTEXASfromPA

Mar-22-13 11:28 AM

This letter does express a frustration with the paycheck being squeezed but there are other factors like high taxes, increased medical costs, increased energy costs, increased food costs, etc. I sense the author is picking on housing because it has impacted him the most; however, the reasons he provides are confusing.

Historically, housing prices have risen because of the liberal lending policies that allow people to buy a home with no or little down-payment. The borrowers take a loan based on future wage potential and are will willing to pay a lot of cumulative interest over the next 20 or 30 years. If higher down payments (like 50%) or shorter terms of loans like 10 years were normal, then housing price would be lower.

You can buy a home that fits into your budget; no one is forcing you to buy a bigger, more expensive one. Some people are into materialism and feel like they need all the modern conveniences and decor that drive up costs.

Cont>>>

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ToTEXASfromPA

Mar-22-13 11:29 AM

Cont>>>

The real estate agents educate the seller to the fair market value and encourage them to get top dollar. This does provide an upward market force but ultimately, the seller of the home is the one that determines what they are willing to sell the house go for and the buyer willingly agrees. It is a mutually agreed upon value.

You can rent instead of buying. This has it's advantages in that you don't have your money tied up and you can be more mobile. You can even move to areas with higher paying jobs. You can move to a larger place easier if your family grows or your income rises.

Finally, there is another option called go build your own. Maybe you can buy some property and then move a mobile home onto it. As you live there, start constructing your own home. You can make it as large or small as you like or even make it future expandable. Work on it in the evenings and on weekends. It might take years but if you are in it for the long haul instead of instan

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ToTEXASfromPA

Mar-22-13 11:30 AM

Cont>>>

It might take years but if you are in it for the long haul instead of instant gratification, you will get there.

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enigma

Mar-22-13 11:41 AM

Another writer who knows nothing about economics. Employers don't control wages. The market controls wages, and right now the job market is terrible. Realtors do not control housing prices, the market controls housing prices. All of this works great until government interferes and then everything goes haywire. All it would take to fix everything is for government to get out of the way.

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mikekerstetter

Mar-22-13 11:59 AM

wwhickok-"Mike, I partly disagree with you. The prices for housing here in Williamsport began to rise when the Gas Industries came rolling into town, because rather than landlords sticking with their current tenants, they realized they could make a considerable amount more money and rent to the Gas Industry."

So you really are agreeing with me. Prices are set by what someone is willing to pay.

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wwhickok

Mar-22-13 1:08 PM

I agree with the point of your original comment but what I 'disagreed with' is limiting it just to what "people are willing to pay". It's not that simple, there's a difference between being willing and having no alternative and for many in Williamsport and the surrounding areas, we have no alternative because if we had our way we'd be paying much less, so it's not a matter of willingness. Local Wages/Economic Inflation/Supply vs Demand is what sets housing costs. There is a much smaller supply than there is a demand within the city of Williamsport. The citizens, unless they want to be homeless, have no alternative but to pay the prices even if it means they have to struggle.

As for Texas' comments about buying a house, I don't think buying a house is the issue here. Frankly, if you have the credit to buy a house it's smarter to do so. The mortgages on many houses are comparable to rent prices. Might as well own a house if you can, rather than rent.

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wwhickok

Mar-22-13 1:09 PM

Enigma, spot on!

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eriklatranyi

Mar-22-13 2:33 PM

Rick424:

The gas drilling has slowed die to a glut on the market. That glut was created in 2 years and from a tiny fraction of the possible wells.

We are not accustomed to an industry based on a commodity. In Texas, the have lived through the boom-bust of oil prices. It is not a steady industry.

But, then what is a steady industry? Manufacturing goes up and down with the economy. Electronics are incredibly volatile.

There is no magic industry that always expands......except government.

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