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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?

#131

Post by user5994461 »

icedchai wrote: post #118
readhn wrote: post #59

Earlier quoted context omitted.

"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.

Of course it's easy to buy when properties are only twice your salary and can be fully paid off in a couple of years.

You were just lucky to leave when properties were cheap and interest were high.

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

#132

Post by jowiar »

hajile wrote: post #123

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…

Or a preexisting supply of houses. It may not mean low costs that will last forever, but it will hold prices down in the short run.

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

#133

Post by tunetine »

shados wrote: post #56
rconti wrote: post #47

Earlier quoted context omitted.

And of course the NYTimes calculator also factors in home prices appreciation. This is not really academic; it's fairly important. In cheaper housing markets with limited growth, it might be cheaper to rent because the expected cost of a major repair (and return on that investment) are both so low. Of course, you can't ever recognize the value of your house unless you sell it and move somewhere cheaper (or buy a 2nd…

Reverse mortgages are an option too, especially around retirement. I didn't do too much research and I'm sure on paper it's a scam, but with no kids and no one to really give the house to beyond charity when my wife and I kick the bucket, I am considering making my place part of my retirement plan. Or just sell it to pay rent for the rest of your life. Either way it's a pretty big boon.

Sell it and rent. The bank won't even come close to the true value of the home for a reverse mortgage.

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

#134

Post by fergie »

losteric wrote: post #25
pjc50 wrote: post #10

Earlier quoted context omitted.

> bought a house big enough for a family to live comfortably that I could reasonably afford in my late 20s. Well, we'd all love to do that, but where? (That was a rhetorical question, I personally moved to Edinburgh and bought an affordable family house in my late 30s) I remember a website tracking London affordability that pointed out that in some years price appreciation made it literally impossible to save for a h…

Nowhere! If you're in SF, move out to the east bay Besides that, hope residents use legislation to balance out the market... progressive taxes in aesthetically pleasing areas, education/public transportation in economically competitive areas, condos/up-zoning in popular urban areas.

Is Oakland OK or is it really sketchy? Getting mixed messages.

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

#135

Post by timr »

JumpCrisscross wrote: post #113
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 red…

Land value does not stay constant as density is increased. It goes up.

Sellers are not dumb. If land is the limiting factor, increasing the density of the buildings on the land by 10x will increase the value of the land by 10x as well.

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

#136

Post by danans »

20after4 wrote: post #111
jankotek wrote: post #80

Earlier quoted context omitted.

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…

> I live in the white zone

What is the white zone?

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

#137

Post by user5994461 »

switch007 wrote: post #108
BoorishBears wrote: post #82

Earlier quoted context omitted.

>You don't need to sell your house for a profit (although we all would love to). Had you rented like @magic_beans wants you to, you might have lost 100% of that money and every year your rental price may go up, you might not be allowed to have pets, you can't make improvements you want; you can lose a lot of control with renting. For the record, my apartment is pet friendly, you're allowed to paint the apartment, I'v…

> ...a top quality gym, yoga studio, apartment owned cafe, etc.). It's funny how different things are in different countries. I've read a few US rent-vs-buy articles and they often mention these uber cool apartment blocks. I think they're extremely rare and/or so expensive nobody's heard of them in the UK (outside of small, prestigious areas of London). Here, a majority of the flats are in blocks with just the accomm…

I think people just don't care about where they live and how much they pay. I am constantly amazed at how many people pay a fortune for tiny rooms and 3-6 flatmates.

There are lots of places with concierge in London and a few with parking or gym. If you really want one, you'll get one. There is no notable price difference.

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

#138

Post by JumpCrisscross »

timr wrote: post #135
JumpCrisscross wrote: post #113

Earlier quoted context omitted.

> 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 red…

Land value does not stay constant as density is increased. It goes up. Sellers are not dumb. If land is the limiting factor, increasing the density of the buildings on the land by 10x will increase the value of the land by 10x as well.

> Land value does not stay constant as density is increased. It goes up.

True. But when you measure the price elasticity of land you find that density doesn't increase land value as fast as it creates space.

This occurs independently of the value of the new units. Consider a town with three occupied units: one for $5,000, one for $4,000 and one for $3,000. A new unit is built for $6,000. A simple example would involve everyone trading up, thereby leaving an unoccupied $3,000 unit on the market, but let's be more realistic. The person in the $5,000 unit doesn't budge, so the $6,000 unit gets discounted to $5,500. Our top-tier renter moves, leaving their $5,000 unit open. This must now compete for the other two renters, and so on, and so forth.

New renters will enter the market, but there is scant evidence that people move to cities to move into specific units. Instead, people choose and city and then find a place. New units more-efficiently use limitedly-available land. The other benefits from density, e.g. environmental efficiency, faster exchange of ideas and the resulting productivity boost, et cetera, are just cherries on top.

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

#139

Post by danans »

zaroth wrote: post #27
sbenitoj wrote: post #23

This is an awesome site, visually depicting how unaffordable housing has become in so many parts of the US. It's truly amazing how much the Fed (with perpetually low interest rates) and local restrictions on building (making it more expensive or impossible to build) have increased the cost of home ownership over the past 60 years. Anyone who's seriously considering purchasing a home should read The Housing Trap by Pa…

That's funny, my takeaway was that the vast majority of the US has incredibly affordable housing. But I suppose if your call center employees simply must be living in downtown S.F. the answer must be that we just need lax zoning and higher density!

> But I suppose if your call center employees simply must be living in downtown S.F. the answer must be that we just need lax zoning and higher density!

The call center employees living en masse in SF is a very far fetched claim that requires strong evidence here, along with the implication that they are what necessitates higher density.

This framing is insensitive to both call center workers who likely could never afford to live in SF and those who are paying the price of anti development NIMBYism in the Bay Area housing market.

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

#140

Post by PoachedSausage »

pcsanwald wrote: post #104
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.

Most people I know that don't have white collar jobs don't have any expectation they will ever be able to retire. I'd be very surprised if the majority of americans were in a position to be able to retire.

I'm in my thirties and work for a government funded research organisation doing work on a particle accelerator. I don't expect or want to retire, but then 'retirement' means different things. I would definitely want to retire if I worked as a brick layer.

Pensions are a Ponzi scheme, don't fall for it.

http://www.bbc.co.uk/news/business-41204209

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