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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?

#221

Post by c22 »

CoryG89 wrote: post #200
c22 wrote: post #198

Earlier quoted context omitted.

Everyone I know in my age group with a house got help with their down payment from parents. Either in the form of low/no interest casual loans or just substantial gifts. It's possible this money wouldn't have been available to them for speculation in the stock market.

Some of us don't have parents who have more money than we do.

Neither do all of my friends. All that's required is having parents that want to help you get a house.

For instance my girlfriend makes twice the money her parents ever did. She still couldn't have afforded the full down payment on her house without a 4% loan from her mother as they were entering retirement. This arrangement ends up being beneficial to all parties.

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

#222

Post by jhall1468 »

hueving wrote: post #218
chaostheory wrote: post #183

Earlier quoted context omitted.

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.

>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. You can do all of those same things just living an hour east of SF.

True with those examples. I live 20 minutes out of Seattle. I have hundreds of restaurants, every movie in theaters, hundreds of dance clubs/bars/social clubs within a 20 minute drive.

I can't get a well-paying job, or access to any of the above without being close to the city.

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

#223

Post by zaroth »

maxerickson wrote: post #57
zaroth wrote: post #51

Earlier quoted context omitted.

No, I understand exactly and I think we are in violent agreement. One cannot afford to live in the Bay Area on anything near minimum wage. So fuck "The Real Bay Area" and live just about anywhere else in the continental US.

Median wage is 2-3x the minimum wage. So housing affordability on minimum wage in most of the US is closer to California at median wage than it is to most of the US at median wage.

TFA shows that in well over 50% of the land mass of the continental US, houses can be bought for 1 year of median wages.

Living on minimum wage is hard anywhere. The question is -- is it OK if there is 5-10% of the continental US where it's impossible to live on minimum wage? I think that yes that's probably OK...

Is it OK that for some [relatively small number of] cities, that median wage feels like minimum wage? Why is that a problem when people have the choice to live there or not?

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

#224

Post by jhall1468 »

meric wrote: post #124
JumpCrisscross wrote: post #116

Earlier quoted context omitted.

> 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.

That isn't new and it only applies to very specific cases: student debt is one of a very short lists of debt that aren't cancelable via bankruptcy.

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

#225

Post by 0xbear »

ianai wrote: post #60
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…

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 know a dude who makes $800k/yr and still lives paycheck to paycheck. Lack of savings is not necessarily caused by lower income. People tend to shovel money out the door as quickly as it comes in.

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

#227

Post by zaroth »

ddeck wrote: post #182
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.

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…

Seems like solid evidence that you can't simply "densify" your way out of high prices? Bloomberg says the reason is developers trying to cover the cost of land. Something doesn't add up...

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

#228

Post by ternaryoperator »

JKCalhoun wrote: post #110
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…

He mentions a county in Texas as the most affordable — and yet Texas has relatively high property taxes (higher than California). So there's that. And the more expensive homes will also be an income tap when you retire and sell the house (hint: anyone in the magenta can retire, sell and live out their lives anywhere in the green).

>Texas has relatively high property taxes (higher than California)

Compared with most other states, California has lower property tax rate. Since Prop 13 passed in the 70s, the tax rate has been fixed at 1% of assessed value (with maximum yearly increments on the assessed value capped at 2%).

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

#229

Post by icedchai »

deathanatos wrote: post #181
icedchai wrote: post #118

Earlier quoted context omitted.

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.

Have you considered moving somewhere more affordable?

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

#230

Post by smallnamespace »

zaroth wrote: post #227
ddeck wrote: post #182

Earlier quoted context omitted.

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…

Seems like solid evidence that you can't simply "densify" your way out of high prices? Bloomberg says the reason is developers trying to cover the cost of land. Something doesn't add up...

Actually HK has plenty of buildable land in the New Territories and elsewhere, but the real estate tycoons that run the whole show obviously aren't going to allow competition without first getting their cut.
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