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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?

#251

Post by dis-sys »

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…

The real problem of HK's home affordability is the land release/auction system. It is a highly corrupted system controlled entirely by the local elites and major real estate developers backed by big banks. They managed to push average joes to the very limit when 90%+ of the land in HK is used for reserves/parks under the name of environmental protection.

What is worse, this cancer got exported to mainland China in the 1990s and it was systematically rolled out for all major cities there. $1.8m buys you an 80sqm new apartment in Shanghai in an below average location, when the median household income in Shanghai is definitely lower than US$20k.

It is lucky to be living in HK as there are still public housing options. In cities like Shanghai and Beijing, using the national household median income figure, a Chinese peasant needs to start saving the deposit from the Ming Dynasty (1368–1644) to be able to afford an average apartment there.

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

#252

Post by discordance »

Mz wrote: post #242
adrianN wrote: post #231

Earlier quoted context omitted.

Wow, I wouldn't even know how to spend that much. If I made that much I'd retire after two or three years.

Maybe. Or maybe not. I read a great article at some point that advised people who wanted to be writers to just go do that while they were young and poor and not wait until they had saved up money to finance it. Because the reality is that once you have the fancy high paid job and the fancy house, car and clothes that not only go with it but are essentially required, the amount you thought you needed changes. For cert…

Golden handcuffs

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

#253

Post by peterburkimsher »

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…

I would really like to see similar graphics for Europe, Asia, Australia, and Canada. I don't know where to get the data though, and I don't think I could make such a beautiful visualisation as he did.

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

#254

Post by Eiriksmal »

srj wrote: post #66
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.

I think people generally maintain the homes they own to a higher standard than the ones they rent out. It's not equal in home ownership vs renting. The place I rent has the cheapest appliances possible, paint mostly chipped off on the steps, the flooring is from the 80s, etc. If you look down a street where I live (Boston area) you can likely guess which units are rentals and which are owned.

I thought that, too... until it was time for me to buy a house. Then I discovered most home owners are just as miserly as landlords. Hacky, quick DIY fixes? Check. Cheapest possible repair/replacement option chosen every time? Check. Obvious concern for only things that "increase resale value" over things substantially more important to the house's long term well-being? Check.

I can't tell you how many houses I looked at with peeling, worn roof shingles, but a bangin' dishwasher and stove.

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

#255

Post by ghaff »

panic wrote: post #235

Why is California such an outlier? Is it solely due to Prop. 13, or are there other factors?

A lot comes down to "perfect storm." At least many parts of California have a long history of controlling growth for a variety of reasons including environmental concerns and people wanting to preserve existing character.

Proposition 13 likely plays at least some role.

People like living in California. For the most part, it's just about the perfect climate whether your idea of a perfect climate is better satisfied by SoCal or NoCal. Lots of natural and other recreation activities of all sorts.

Finally, it's been a job growth magnet across a lot of different areas, most recently in certain types of tech. And, with respect to the Bay Area specifically, much of that growth has been relatively sudden on the scale that sort of thing normally happens.

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

#256

Post by isostatic »

myth_drannon wrote: post #120
dagw wrote: post #89

Earlier quoted context omitted.

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

In the Uk you'd be looking at replacing a roof after about 100 years, costs about £6k ($8k), not exactly a major cost.

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

#257

Post by timr »

JumpCrisscross wrote: post #138
timr wrote: post #135

Earlier quoted context omitted.

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 involv…

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

[citation needed]

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

#258

Post by isostatic »

FLUX-YOU wrote: post #71
sliverstorm wrote: post #44

Earlier quoted context omitted.

It's not like you avoid these expenses by renting. They're just rolled into your rent. You get to avoid thinking about them, of course. Although there is an economies-of-scale advantage to maintenance on multi-family dwellings.

The property group takes on risk if something like a roof needs replacing unless they just keep a lot of cash sitting around for just such a thing. They may also have access to better loans but I have no idea for sure. I don't want to keep a pile of cash around waiting for housing emergencies (personal emergencies are a different thing), and I certainly don't want to sell stocks to fix a roof if my roof fails during…

What is it with US roofs? Are they really all terrible, you're the third person in about 10 posts to be scared about massive costs to replace a roof.

setting aside trees, fires etc it hadn't even occurred to me that a roof may need replacing, aside from maybe the occasional tile.

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

#259

Post by dilemma »

jhall1468 wrote: post #224
meric wrote: post #124

Earlier quoted context omitted.

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.

It is new.

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

#260

Post by PoachedSausage »

Retric wrote: post #144
PoachedSausage wrote: post #140

Earlier quoted context omitted.

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

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…

Yes, pensions can be awesome. One of my colleagues is retiring soon with a very nice final salary pension the likes of which will not be seen by anyone starting now.

Most pensions also will not be enough to cover long term care costs if you are unlucky enough to get some form of dementia.

Pensions as a concept were a great idea when life expectancy was shorter and most people could mostly look after themselves in old age.

I don't think they can survive large numbers of people living until 90 -100 with dementia and needing 24h care. Lets hope the Ai/robotics gamble pays out.

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