How Many Years of Life Does That House Cost? • Hacker News Board

Re: How Many Years of Life Does That House Cost?

#111

Post by 20after4 » Fri, Sep 08, 2017, 10:24 PM UTC

jankotek wrote: post #80

lpolovets wrote: post #18

I liked the visualization and data, but I don't think it makes sense to compare home prices to wages w/o considering alternatives to home ownership. Home prices don't exit in a vacuum. That is, if a home is 10x the median salary, you can't really say "well, if I didn't buy a home I could work 10 years less." That's because the alternative to buying is renting, which is also expensive. So sure, a mortgage in SF is $6k…

There are more alternatives: work remotely, live in cubicle under table, live in a car...

What I do: Land a Silicon Valley tech job but work remotely from the Midwest. I make almost double the median income for my area and I live in the white zone. My employer can pay me 60-70% of the salary they would pay for someone in San Francisco to do my job and I still earn way above median for my area.

I could buy a really decent home here (Southern Missouri) for somewhere between 0.5 to 1.5 times my yearly salary. There are many factors affecting that price but there are some really decent houses at the low end of the price range. Extra bonus: property tax, income tax and sales tax are all relatively low. Unfortunately that doesn't apply to the entire region; some neighboring counties have ~8x higher property tax than where I live.

Re: How Many Years of Life Does That House Cost?

#112

Post by bufordsharkley » Fri, Sep 08, 2017, 10:25 PM UTC

It goes to show that it's not construction costs that account for variances in home prices, but rather something location based: land values.

Policies that will work to drive down land values (and utilize land values to fund public infrastructure instead of private land speculation) would be very useful in many overheated land markets.

Re: How Many Years of Life Does That House Cost?

#113

Post by JumpCrisscross » Fri, Sep 08, 2017, 10:29 PM UTC

bufordsharkley wrote: post #112

It goes to show that it's not construction costs that account for variances in home prices, but rather something location based: land values. Policies that will work to drive down land values (and utilize land values to fund public infrastructure instead of private land speculation) would be very useful in many overheated land markets.

> Policies that will work to drive down land values (and utilize land values to fund public infrastructure instead of private land speculation) would be very useful in many overheated land markets

Supply and demand. Allowing builders to build higher, thereby increasing density, amortizes the land's value across more living space. Turning land into parks is nice, for people and property values, but does nothing to reducing housing prices nor rents. (If anything, by yanking land supply off the market such policies could actually exacerbate the problem if carried out in a vacuum.)

Re: How Many Years of Life Does That House Cost?

#114

Post by tw1010 » Fri, Sep 08, 2017, 10:32 PM UTC

You guys may have this or that problem in the US, but the fact that you have people like this author who put so much effort into communicating the problems and who care this much, that makes me envious of you all. You'd be really hard pressed to find a good number of people in my country who cared as much about the welfare of the rest of the people.

Re: How Many Years of Life Does That House Cost?

#115

Post by kentt » Fri, Sep 08, 2017, 10:33 PM UTC

That was a lot of javascript for almost zero content. Is it just that people love reading that houses are expensive?

Re: How Many Years of Life Does That House Cost?

#116

Post by JumpCrisscross » Fri, Sep 08, 2017, 10:33 PM UTC

njarboe wrote: post #102

ianai wrote: post #60

Earlier quoted context omitted.

I think this highlights how expensive living is and how little income is. If we're going to have a "free economy" without an end of life safety net (i.e. Social security) then it has to be possible to work a lifetime and retire on savings made. But most indicators show little to no saving for most people. It sure seems something is deeply wrong.

There are most certainly many things deeply wrong. Most people have negative savings every year. They have more debt. If one has bought a house, then it is very easy to go into more debt every year, when house prices are rising. Then they fall. Since the beginning of written history (the first written records are records of debts) there are stories and parables about the evil of debt and the need for debt jubilees. A…

> Since the beginning of written history (the first written records are records of debts) there are stories and parables about the evil of debt and the need for debt jubilees. Also the idea that lending with interest is immoral is found through out time. Having such easy access to debt/credit from strangers seems not to work well over the long term for human societies.

I suppose shrimp and pork and beef are also unquestionably evil... Debt didn't historically work because property rights were poorly recorded. This meant enforcing one's debt involved mafia tactics. Modern debt is cleaner and subject to bankruptcy, a process that occurs on a case-by-case basis when it's needed, a far better solution than randomly cancelling debt every so many years.

Re: How Many Years of Life Does That House Cost?

#117

Post by elihu » Fri, Sep 08, 2017, 10:33 PM UTC

High-cost cities get their high property values via network effects -- it's the proximity of other people that makes the land valuable. I wonder if a good way to circumvent high home prices is to create new cities deliberately in rural land.

For instance, get a few thousand people to agree to buy a large plot of land in a sparsely populated area. All the early-adopters get a cheap plot of land to build a house on, with most of the lots left unclaimed and managed by a non-profit. As people move in, the value of the land rises and the non-profit generates revenue and pays for infrastructure by selling the remaining lots. In the end, the citizens and town are better off financially because collectively they only paid rural-land prices for high value urban real estate.

This would be more practical if it's near an existing town (for basic necessity, schooling, proximity to hospitals, etc..), and could perhaps be helped along by partnering with a university or large employer wishing to establish a new campus.

There's a lot of ways this could fail, but it seems at least plausible that it could work. There's a lot of mostly-empty land, especially in those west-coast purple areas shown on the map on the linked page.

Re: How Many Years of Life Does That House Cost?

#118

Post by icedchai » Fri, Sep 08, 2017, 10:35 PM UTC

readhn wrote: post #59

xvolter wrote: post #45

The data was very interesting, but there wasn't anything meaningful mentioned that came out of the data, other than possibly where you should look to move to if you have flexibility. I personally bought a house in my early twenties. At the time it was roughly 2.5x my income. I've been there a few years and went through some changes to my employment, I now earn more making it easier. Over the course of ownership, in t…

"my suggestion: Buy a house when you're in your 20s that is affordable." now folks just need a time machine. simple.

Folks just need to try and live below their means. This may not be practical for everyone, obviously.

I bought a town house condo right before I turned 25, worth roughly 2x my salary at the time. By age 31, I had paid it off entirely: a 15 year mortgage, done 8 years ahead of schedule.

Could I have done better if I invested that money? Probably. But I like being debt free. I also invested a ton anyway.

Re: How Many Years of Life Does That House Cost?

#119

Post by rifung » Fri, Sep 08, 2017, 10:38 PM UTC

srj wrote: post #67

rifung wrote: post #35

Earlier quoted context omitted.

> Do you want to have pets? At least in the competitive housing markets of San Jose and Seattle this is not much of an issue as every apartment I've visited allows pets and most even have accommodations for them as perks. I suppose there are limits though so maybe if you wanted to have 4 dogs that might not be allowed

I rented in Seattle with a pit bull that we adopted and it was challenging to find a place that would allow us.

Ah good point! I forgot that sometimes they don't allow some breeds of dogs as I have cats..

Re: How Many Years of Life Does That House Cost?

#120

Post by myth_drannon » Fri, Sep 08, 2017, 10:38 PM UTC

dagw wrote: post #89

bluedino wrote: post #33

Earlier quoted context omitted.

Don't forget the roof that needs replacing every 15 or 20 years. Appliances. Furnace. Plumbing. Septic tank. Water lines on your property. Tree removal. Re-decorating and re-modeling. Replacing windows.

If your roof needs replacing every 15 years then there is something seriously wrong with the structural integrity of your house.

Shingles roof is replaced every 15 years, if you have more expensive metal roof it's every 50 years