wait a little bit longer until they can afford a long-term home rather than a "starter home."

We waited until we were in our mid-late 30's , and we have no intention of selling until we retire, and even then not a certainty.

I owned my previous home for 30 years, and am almost 10 years in my current home. It's home. I'm not interested in moving.

My partner and I bought a home in April, and this is our forever home, barring anything unforeseen.

We also waited a long time to buy, too. I'm 37 and he's 44.

Even though it is spurred by bad economic conditions which are likely to get even worse.

For years people were sold as much house as they could possibly afford (and then some) and many are now wise to that game. The very real threat of foreclosure has made many realign their thinking and buying but the main upside of this is that more people are going to be willing to invest their time and energy into the community they live in and stop thinking that they can just buy into a "nicer place" to live.

To paraphrase Gandhi: Be the change you wish to see in your neighborhood.

The previous trend is part of what caused those bad economic conditions. The current trend, if it actually becomes a trend and continues, could go a long way toward improving those economic conditions.

is that the birth rate is declining and declining fastest among middle income people. Wages have not kept pace with cost of living increases. So the old models of buying a house on 30 year terms and being able to get out of it with some equity in the first 5 to 10 years is now in jeopardy because values are stagnant to declining. It worked when values were increasing but there is no guarantee that that will happen.

The days of graphs which go up and to the right are numbered. Stagnant home prices, low birth rates and a standard of living which has been declining since 1979, and is now accelerating, is NOT going to improve economic conditions. The trend cited in the OP is a reaction to the trends, not a driver.

Maybe there are plenty of people like us who moved into a sizable house and are wondering what in the hell for.

There are a ton of people who purchased their dream home during the big bust--prior to the 2008 housing implosion from hell. Many were all talked into buying more house than they could afford by the real-estate agents; and cajoled into the "creative financing" offered by the banks. There were signs outside of McMansions for sale that said, "You can buy this house today and pay only $1,000 per month!"

The suburbs are littered with people who followed this playbook. I think many are on the edge of financial ruin, living paycheck to paycheck.

We didn't go all out and buy the huge house, but we purchased a very nice house. We didn't fall for any of the creative financing, and when we told our real-estate agent that we wanted a conventional, fixed-rate mortgage--she looked at us like we were foolish ingrates.

I long to chuck it all and move into a condo and to say, "To hell with it all."

that's what we did.

In 1996 we went from a four bedroom, 2 1/2 bath home to a one bedroom, one bath used-to-be-a-hunting-cabin home.

It was some close quarters for a couple of years until we added another (master) bedroom and bath in 1999, with downstairs rec room. In 2005 we added a sun porch to the back deck.

So we downsized, then added on just enough to be comfortable without having wasted space.

If someone wanted to buy this house, it wouldn't be a huge deal to turn the basement rec room into a third bedroom, and even add a toilet compartment because there's plumbing that was put in to accommodate the hot tub that was there for a few years.

then I have to wonder at the attitude many homebuyers have concerning relatively minor cosmetic issues with the homes out there.

Maybe it's just that I see the idiots on shows like "House Hunters" walking through perfectly nice homes and complaining that the kitchen doesn't have all stainless steel appliances, or the floors aren't hardwood, or the counters aren't granite or marble or whatever.

WTF?

Or that homes have to be "staged" because homebuyers are too stupid/unimaginative to see past the present homeowner's furnishings.

They want everything to be PERFECT.

When we were trying to sell our home in 2010, we were also out looking, and nearly every house we saw I was already making changes in my head. And even some of the minor stuff, like 1970s decorated kitchen in an otherwise really nice house didn't make a difference to me. In fact, I thought it was kind of cool

Maybe I'm not discriminating enough in my tastes.

But whatever.

People who really want a home for the long term need to stop acting like spoiled little brats when it comes to minor things that can be changed at some point.

Factor in the changes with the price in your mind when looking. Be prepared to offer dollars off on the back end to satisfy an otherwise good buyer. Remember the cardinal rule of selling - it costs dollars to sit and usually sitting does not help your price. Take the first reasonable offer which comes along.

Any improvements to the home are going to have to come out the owners' pocket directly--if a bathroom needs a $10,000 renovation, the new owner would have to find $10,000 cash to pay for it. On the other hand, if the bathroom doesn't need renovation but costs $11k more, they only have to find a fraction of that cost in cash for the downpayment, with the rest rolled into the mortgage.

Finding a place to be a "forever home" instead of a "starter home" means people will be pickier. Instead of "it's just a starter, it doesn't need to be perfect" the question is "can I see us living here for the next 25 years?"

(Backstory: I grew up building houses. The family has been doing construction since the 1400s - at least. The records get sparse before that)

There's tons and tons of buyers who just can't "see" how a house will look after a few minor changes. We're talking changes as minor as paint. They just can't get past the house that is currently there and see what the house could be with some very minor tweaks.

And it's not their fault. Most people have not gone through enough remodels to do that.

Residential real estate as an ATM was just a momentary blip on the economic radar. It was fueled by many things and I'm glad it's gone. People should never look at residential real estate as anything but shelter and any ROI should be seen as unexpected and a bonus.

bought our commercial/residential property in 1963 for a song ( it needed lots of love), and its been in the family ever since. We never used it as an ATM, jeez, the idea never occurred to us. We intend to hold on to it as it provides shelter and income. Sure, it would be nice to live in a house with a yard, but I think a small apt. is really all I could handle now that I'm getting older. So, buy and hold is my suggestion

What changed everything was when companies started transferring people all around, and when so many boomers all at once needed affordable housing. There was no place to build affordable housing except suburbia.. Most suburban homes built then were small starter houses & people kept on moving up and up and up..and further out..

Interstate highways made it possible (and probable) for housing to keep spreading out, and there was always a newer shinier suburb with better schools & bigger houses & of course the bubble popped..it always does.

People who were burned will behave themselves...for a while.. until the next bubble

college in town (she will be living at home) and rent a small apartment. Will house the kids/grandkids in a motel if they visit or all go someplace fun when we are together. Much cheaper than a house when you consider taxes, insurance, and maintenance. I have pushed the numbers. Getting the wife to agree may be a challenge. I have always maintained a mortgage that was about 1x my annual salary or less (current mortgage interest rate is so low I am not seeing paying it off until we sell the house). Told my kids to not consider a mortgage for anything more than 1.5x their annual salary.

It's now back to being thought of to as what it always really was - a second mortgage - and that isn't something very many people want these days.