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How Many Years of Life Does That House Cost?

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

#121

Post by e5an »

FLUX-YOU wrote: post #87
rconti wrote: post #58

Earlier quoted context omitted.

(Full disclosure: Bay Area homeowner here) I can stomach the idea of renting for the rest of my working life. My renting life was good, had more cash to spare, good landlords, etc. What terrifies me is the idea that I'd have to keep paying rent when I retire.

Real estate probably won't be a part of the post-scarcity economy, otherwise I'd bet on just buying a home in 30 years while forgetting what a mortgage was for.

'post-scarcity economy'

Hahahaha. Ha.

There's going to be plenty of scarcity to go around for the rest of our lives. And unless you're already in the top 1%, or unless you believe full-on socialism will ever catch on in a country run by and for the benefit of capitalists and corporatists, you can personally expect to see a lot more of it once everything worth doing has been automated.

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

#122

Post by shostack »

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…

Often missing from discussions of lower CoL areas is risk from different job markets. This is harder to factor in, but since not everyone can work remotely, you need to consider job market liquidity.

If there is a recession can you easily find another job? Do you have a decent selection of local employers to ensure sufficient competition in terms of wages and benefits? Etc.

Living in a high CoL area seems to correlate with a healthier job market.

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

#123

Post by hajile »

With houses getting larger every year, it's crazy to assume anything less than a couple years is possible. An average house is 2.6K square feet and is going to take at least a man-year of time to complete. Materials are about 80% of total labor costs.

Those places with super-low housing costs require some combination of:

1. below average wages for construction workers

2. low standard for building materials

3. surplus of materials to drive down costs

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

#124

Post by meric »

JumpCrisscross wrote: post #116
njarboe wrote: post #102

Earlier quoted context omitted.

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 unqu…

Well, the trend is now removing bankruptcy on certain forms of debt as an option, replacing it with cancelling it after X years. This is student debt.

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

#125

Post by throwaway688 »

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…

You can sublet and pay people in cash for a lot less than the official renting price. This is particularly true in places with high real estate prices like LA, NY, NJ and SF where there is rent control. Thus it incentivizes long-term tenants to sublet for a sub-market price.

You can't really buy a house in such a fashion though.

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

#126

Post by vonmoltke »

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.

We couldn't find a decent place in New Jersey that would take our Labrador. Even the place we have now had to be talked into letting us have one of my cats. :|

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

#127

Post by pmorici »

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…

I don't think the point of this was to compare rent vs buy. It was to give information for people who want to own a home where the cheapest place to do so is.

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

#128

Post by Animats »

Nice visualization.

I've mentioned the median house price to median income ratio many times before, usually in the context of "how close are we to the bubble collapsing". Around 4:1 is about as high as it gets before something gives. It would be nice to see that map over time.

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

#129

Post by bitxbitxbitcoin »

elihu wrote: post #117

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, wi…

Add in some gambling and I think you're onto something :).

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

#130

Post by austincheney »

shostack wrote: post #122
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…

Often missing from discussions of lower CoL areas is risk from different job markets. This is harder to factor in, but since not everyone can work remotely, you need to consider job market liquidity. If there is a recession can you easily find another job? Do you have a decent selection of local employers to ensure sufficient competition in terms of wages and benefits? Etc. Living in a high CoL area seems to correlat…

The best bet for low risk, high employment, and CoL - https://en.wikipedia.org/wiki/Plano%2C_Texas#Economy

It costs much more than where I live, but it is still incredibly cheap compared to west coast.

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