Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

How Many Years of Life Does That House Cost?

nation.maps.arcgis.com

Post reply on HN
Print view View original

181–190 of 350 posts

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

#181

Post by deathanatos »

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.

My friend bought a townhouse; ~10x my salary.

This is part of what the graphic is trying to demonstrate: there is a significant and material difference in trying to purchase a home between your market, and the one I'm in.

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

#182

Post by ddeck »

Retric wrote: post #154
sbenitoj wrote: post #29

Earlier quoted context omitted.

You also have to factor in the opportunity cost of what you could've done with that down payment (e.g. What would a $100k downpayment invested for 30 years in the stock market be worth vs how much is that worth in your home in 30 years?) The NYT has a buy vs rent calculator that helps make some of these decisions: https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...

The real opportunity cost is not living somewhere else. Run the math and SF is best avoided.

That's true in the US. In other areas, leaving the city might not be a realistic option.

Consider Hong Kong as an (extreme) example, where leaving the city means emigrating to another country with another language etc. (yes, HK is technically a Special Administrative Region of China, but can be considered standalone in this respect).

The median apartment price/income ratio here is 18, compared to a US average of 3.9 (the highest cities in the linked article are 13) [1].

These ratios also don't consider what you actually get. The average size of new apartments sold this year in HK was 610 square feet at an average price of US$1.8m and one new development offers apartments the size of Tesla Model X for ~US$500,000 [0].

If you want to go larger, the per square foot cost goes up. At the extreme end, consider a 4000 square foot townhouse that costs US$21,190/square foot [2].

A more ridiculous example is perhaps the sale of a car park earlier this year for US$600,000.

For reference, the median household income is ~US$38k. [1]

Unfortunately those with the most housing affordability issues are those that are least capable of leaving.

[0] https://www.bloomberg.com/news/features/2017-06-14/you-can-b...

[1] http://www.demographia.com/dhi.pdf

[2]http://time.com/4752342/worlds-most-expensive-house-square-f...

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

#183

Post by chaostheory »

surfmike wrote: post #165
Retric wrote: post #154

Earlier quoted context omitted.

The real opportunity cost is not living somewhere else. Run the math and SF is best avoided.

Depends of course. Despite the high cost, many live here because their salary is multiple times higher than they could get elsewhere.

It's not just the salary. It's also the opportunities to do things as in for the SF Bay Area we can go to wine country one weekend, go snow boarding another, sail, surf, hike; there's a lot of stuff to do here. I'm sure people can say the same for the NY metro and other similar places.

I've lived in cheaper but boring places. The financial tradeoff is fair.

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

#184

Post by buildbot »

gozur88 wrote: post #180
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.

I have very little sympathy for the 40% or so of the population who could save for retirement but don't.

Citations for that number? Why don’t they save for retirement? Can someone on minimum wage with a family save for retirement?

Does someone who makes bad choices deserve to be homeless and destitute later in life?

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

#185

Post by jaranha »

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…

The visualizations were great and I think his point was to drive home how long it would take to own a home in the optimal case. In reality you should take his metric and multiply it times 6 or 7 minimally. You're still going to have to pay at least the sale price of the house if you intend to own it free and clear. Also, since banks in the US don't create mortgages for longer than a 40-year term (I believe that's the max), if your value in his metric is greater than 5, and using my 6-7 multiplier, then you're never going to own a home in that location.

That being said, a better metric might be the time to save up for a down payment that brings the mortgage and fees into a reasonable range for your salary. However, that calculation is much more complicated.

Edit: I live in SF and I accept that I will never own a home free and clear here, unless I get exceptionally lucky. My plan is to get a mortgage in SF and eventually sell the place and use the equity to buy in a more affordable market.

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

#186

Post by gozur88 »

buildbot wrote: post #184
gozur88 wrote: post #180

Earlier quoted context omitted.

I have very little sympathy for the 40% or so of the population who could save for retirement but don't.

Citations for that number? Why don’t they save for retirement? Can someone on minimum wage with a family save for retirement? Does someone who makes bad choices deserve to be homeless and destitute later in life?

>Does someone who makes bad choices deserve to be homeless and destitute later in life?

The rest of us don't deserve to pay for their bad choices.

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

#187

Post by kelnos »

zaroth wrote: post #42
sbenitoj wrote: post #32

Earlier quoted context omitted.

Ha, well in non-major cities you're right, but all the major cities cost an arm and a leg for the most part!

Well the only way to drive down price is to either increase supply or decrease demand. So make cities shitier and denser. Is this a case where a small increase in supply would decrease the price significantly? I doubt it. So, is there some reason we (as a nation) need to double population density of our largest cities? With the huge advances we are likely to see in autonomous zero-emission delivery infrastructure and…

> Well the only way to drive down price is to either increase supply or decrease demand. So make cities shitier and denser.

That's just, like, your opinion, man. I prefer living in denser environments.

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

#188

Post by kelnos »

dfrey wrote: post #7

Cool visualization, but kind of a useless statistic. The question that matters is: How many years will it take me to pay off my mortgage after my expenses (food, transportation, housing maintenance, utilities, taxes) are taken into account? It doesn't matter how cheap a house is if you can't save any money.

Mortgages tend to have fixed durations, and the amount you'd want to overpay to pay it off earlier depends on so many personal factors that you can't really generalize it in a map like this.

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

#189

Post by Retric »

uiri wrote: post #173
Retric wrote: post #144

Earlier quoted context omitted.

No, the math is very different from a Ponzi scheme. Pensions are awesome if you don't have kids. Consider if you have a 5% chance to die at or before 65 who get's the money? Well what if you could get together with 10,000 people and split it with those who live. Now your investments are boosted by those who die and there is no downside as who cares what happens after you die. Unfortunately, such schemes are illegal u…

I agree that private pensions are not necessarily Ponzi schemes. It is possible that they are operated that way. It is also possible that they are operated like an actual investment fund. Without looking at the books, it is difficult to tell. However, social security and other government funded pensions are Ponzi schemes. The money you pay in is given to people who are retired at that time. The money you get out is p…

Social Security is running a ~$2.79 trillion dollar 'surplus' as they have collected more than they have paid out. Which means they have not been paying out 1:1 with money paid in.

It's also not just a pension fund as you can receive benefits well before 62. Death of spouse with under age children or permanent disability.

Now, this does not mean it's a great or even a good investment. But, the trade off of safety vs returns is not actually that bad assuming you live longer than average.

PS: Another way of looking at it is there are no 100% safe approaches to investing 10's of trillions of dollars. Your stuck leveraging GDP growth which is only slightly better than inflation and frankly that's what SS does.

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

#190

Post by averagewall »

AustinG08 wrote: post #21
autokad wrote: post #9

Earlier quoted context omitted.

how many years will it take to pay off your mortgage? thats done for you, about 15 or 30. how does other factors like food/transportation/taxes factor in? though not always, but they tend to go hand in hand no? the cost of real estate is factored into much of what we buy / spend money.

It is honestly worth your while to pay off your mortgage as soon as humanly possible.

Besides investing in something with a better rate like others have said, you can also buy a boat and enjoy it while you're young then pay for it later when your salary is higher - even if it only grew to match inflation, that cancels out part of the mortgage interest.
Post reply on HN