Summer of 2001 me and my grandparents visited relatives in the US. Our stay first took us to Virginia for a week, before we were driven half way across the continent to the bustling small town of Newton, IA.
Over the years ive thought about going back, but not got around to it. But i figured id look the place up recently. Googling Newton, IA i got a rundown on the place. The Maytag factory, lifeblood of the community, shut down in the 00s as they moved to mexico or some other shithole. This left the people of Newton to face the recession already reeling. According to a reddit post Newton is known for being a place with nothing to do, except smoke weed and/or cook meth.
So how is the place doing now, must be a good place to score a cheap home being both a small town and not in the best economy
Looking up the house i stayed at in 01 on Zillow, its not currently on the market. Last listed in 2012 at 139k. It has over the last 5 years gone from a estimated 150k to now pushing 240k.
And its the same for every current listing in Newton, IA in the same price range.
This one was estimated at 100k five years ago, just sold for 239k https://www.zillow.com/homedetails/407-W-8th-St-S-Newton-IA-50208/86981175_zpid/
Estimated at115k in 2020, sold for 215k https://www.zillow.com/homedetails/1015-W-3rd-St-S-Newton-IA-50208/86982395_zpid/
Sold for 75k in 2022, then 250k in 2024. Hell of a house flip it looks like. https://www.zillow.com/homedetails/706-1st-Ave-W-Newton-IA-50208/86981045_zpid/
Im glad im not looking for a house in Newton, Iowa.
It's bad, but remember to take inflation into account. That's worth keeping in mind as far as raw numbers go. But it also doesn't make anything better, especially if wages aren't keeping up with inflation...that can actually make it worse.
Inflation alone makes 2012 139k into ~195k in 2025.
Which is almost more depressing. Home value barely rose at all, actually, but the ability for many to actually acquire it simply skyrocketed out of reach.
It's the worst of both worlds. We're all getting fucked hard by the government.
Meh, the housing market crash brought homes to an actual market value after hyperinflation of value. That same boom cycle is now supposed to be in a bust stage again but it’s being intentionally suppressed (again), the overwhelming majority of that inflation occurred post COVID. We’re talking 50-100k price increases in 3-4 years on the average home. When you top that with the mass wage stagnation that started under O bummer along with infinity immigration and corps mass home buying you have home scarcity skyrocketing while the average stem job pays 60-75% of what it did in the 90s (adjusted for inflation). We’re currently in an economic chokehold worse than the “recession” and young millennials and older gen z are going to have the lowest birthrate in the country’s history (aside from immigrants who are still being paid to move here and have kids under Trump).
I haven't seen that level of price increase in 3-4 years. It's increased, but for the most part, only with inflation. The issue is that the prices are far too high, it's impossible to build cheaper homes below $150k, tons of supply is currently being syphoned off by immigration, renting, investments, and Vrbo (or similar).
I'm not sure it will be possible to stop the price collapse as it starts. Once people realize they won't be able to make money out of renting or investments, people will start selling. That will collapse housing prices, and probably take the bond market and global economy with it.
That's why I'm not really worried about anything with tariffs. You could, in theory, grow out of this shit-eating-situation... but you'll need literal gilded age levels of growth, and it would require millions of people getting back to work and being productive.
In west Michigan the average 200k home in 2019-20 is listing at 340-350k currently. The national average is at least a 50k jump in most areas, over 100k in the larger growing economies.
I think it might fetch something like 100k more than that if it was listed. Anything that sold in the last year or two that I looked at went 100k over Zillows estimate of just a few years ago.
It's wild to see how sudden the price/value estimate spikes though.
Ah, good point.
Yes, Newton is quite bad. Driven through there many, many times.
The Maytag factory was ultimately repurposed by Arcosa, a manufacturer of wind turbine towers. It employs only a fraction of the employees.
On the outskirts of town, a 7/8ths mile racetrack was constructed in the early 00's in the hope of boosting tourism. That mostly failed. While it does get a couple races a year, it has suffered financial issues basically from the start up to now.
There is really only one saving thing to say about Newton and that is at least they never built a mall to let die.
It isn't as bad as you say it is.
I see plenty of sold houses at less than $200k, and when I flip zillow to "for sale" I see smaller 2 bd 1 bath homes for sale at less than $150k. This is affordable on a $4k a month job.
This is not expensive. Look up my zip code, 98337, and take a gander at what expensive looks like.
Many of us say we wish for the single income factory worker to afford a home with a stay at home mom with the kids, like it is 1950 again, but you need to sit down and actually think about what that looked like, back then. Small 3 bd 1 bath house of about 1200 square feet, 1 car, 1 TV, no cell phone, cable, or internet, 1 landline telephone, kids got around on foot or on a bike. Parents didn't drive the kids to school, they walked, biked, or took a bus. AC in the house was a luxury. No one flew anywhere, it was the bus or the train. Eating out was a once a week treat, not an every day thing.
The middle class then lived a modest life, without many of the luxuries we take for granted now. Because of that, they lived a cheaper life, with far fewer bills.
Counterpoint, technological advances have made pricing almost negligible for most of those amenities. Internet is the same thing as TV now and you get it for less than a cable package. Cell phones? Bums have cell phones. TVs are cheap enough to give away. Meanwhile, in the 50s, people were shelling out $$$ for giant stereo cabinets.
Airlines are cheap enough to compare to busing, especially considering the opportunity cost of time. Speaking of busing, most kids still ride the bus where I live.
The modern budget killer is definitely eating out. It's an insane amount of money that the vast majority of people have no real need to spend. $5 a meal plus a few hours of time a week vs. $20-25 a meal.
I've seen people try to argue this, but I remember the house my Grandma/Grandpa had, and the houses my Great-Aunt/Uncles had back in the Appalachian hollas.
I'd take one of those houses in a goddamn heartbeat. But they don't make them anymore. I know. I've checked. If I could grab one of those, I'd either have to get stupidly lucky and move it to where I want, or build one myself.
I guess I'm going to have to build one myself.
Those kind of homes won't meet code in any urban area, or are grandfathered in, which his why you don't see their like in any urban area anywhere. You see them out in the sticks pretty much everywhere across the country, though, for the same reason: lack of building codes.
I tend to agree. I found a mortgage calculator online that seems to have a good estimate and it's looking like 150k with an 8,000 down-payment, 6.5% APY, will come to under $1,400 a month: https://www.mortgagecalculator.org/?q=Ap4SZ-3KX
(Also, the middle class then still got to have the benefit that the mean house was between 1-3 years of the mean income, it's much worse now).
I've often tried thinking about how to help people into homes, even with crummy jobs and incomes like, 35k a year.
It's doable, but it's only do-able through using homes as an investment, very careful spending habits, great saving habits, and swapping out a large cash savings with the use of a debt vehicle itself.
See, lenders care about using mortgages to create passive income. They want to keep you paying, and no one expects you to stay in the same home for 30 years. If you not only take care of your starter home, but take efforts to improve it, sell it, then add that cash to your loan product; the lender will refinance the mortgage you have on that starter home into a new one. You can keep this process going so that you can reliably live in a much more expensive house than you would think your 35k a year could afford, but you have to be very diligent.
Looking at people's credit scores... most are never that diligent.
I just bought a house for cash
Considering a 150k house will cost you 480k in a mortgage...
... good. We love you. Keep that up.
Everything in my neck of the woods is 7 figures if you want something larger than a townhouse, and even the townhouses are creeping up there.
My house more than doubled in "value" since 2016. I live West/South Central area in bumfucksville and I paid 89k at the ass end of 2015.
My house is now valued around 196k. I can say my wages most certainly didn't double since then, but not too far off. Still, any extra monetary burden that I didn't volunteer for sucks. Property taxes inflation, development, whatever, it's fucking me over just that bit extra.
Payments went up from 610 in 2016 to 1050 now. Not awful but I don't exactly live in a high wage area and I'm single.
It's not breaking me or anything but again it's irritating. I almost wish I wasn't a homeowner but renting can't be any better.
I think it might be important to understand the perspective here, specifically noting that gains in an industry are not the same as a good industry.
Right now, the housing industry is growing. That is because the spring and summer represent the highest growth period for housing, so sales and construction will be going up this year. I can also tell you that the market is finally beginning to recover since covid and the "Refi Boom" (Refinance Boom), which made a lot of lenders money, but wasn't capable of creating sustainable growth. A lot of companies have gone under, and more specifically: a lot of people have left mortgages and real estate, including many banks.
So, yes, you are going to see growth in the industry, particularly year over year, but there is a horrible foundation to the housing market.
As you say, OP, New Construction homes will not come in under $150k.
I was just talking to a co-worker out of Montana, and they were telling me that the housing market is badly inflated there to the point that the average is 450k... in fucking Montana.
My favorite thing is to look into houses that have experienced... sudden, unexpected, warming events... and look at their prices.
Here's this beauty in Detroit. "Lots of potential!"