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Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

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Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#91

Post by forapurpose »

baddox wrote: post #37
lkrubner wrote: post #20

From previous: " In nations in the West, an important limiting factor is the ability to get one’s own apartment. That is, the ratio of average male wage to average rent. In the USA, the happiest year for this ratio was 1958, when people were spending 22% of their income on rent, on average. Not by coincidence, this was the peak year of the Baby Boom. In some sense, it was the best year in history to be a young white…

In pretty much every analysis involving housing costs, I try to mention that percentage of income spent on housing is not a great metric. A better metric is absolute income minus housing costs. All else being equal, I would gladly earn $1 million per year and spend 75% of it on rent, because that remaining 25% would be a heck of a lot of money. I doubt this metric would significantly change the conclusions of this ar…

> percentage of income spent on housing is not a great metric. A better metric is absolute income minus housing costs. / All else being equal, I would gladly earn $1 million per year and spend 75% of it on rent, because that remaining 25% would be a heck of a lot of money.

It makes sense, but that doesn't make it true. Is your argument based on your personal beliefs, or is it based on actual outcomes in the economy?

As someone once pointed out, if 'makes sense' was a reliable indicator of the truth, we would have had accurate physics in 5,000 BC.

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#92

Post by toomuchtodo »

ceras wrote: post #74
toasterlovin wrote: post #49

Earlier quoted context omitted.

This stage of the demographic transition is a huge problem, IMO. The more I think about it, the more it seems like a ratchet (as in, it only moves in one direction): Basically, two incomes are useful, so both people in a relationship pursue careers. Now they have more money to compete on the housing market. This seems like a good move, so others follow suit. At first this is largely a win for people who pursue this r…

There's a book somewhat related to this idea called The Two Income Trap. I haven't read it yet, but recently read a good book review of it[0] that discusses the extra competition created by two-income households and tries to vet the book's evidence. It also discusses the related problem that comes from treating "good school districts" as a positional good, causing a negative externality of over-competition and consum…

It’s a great book, written by (now Senator) Elizabeth Warren (from the great state of Massachusetts).

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#93

Post by Karishma1234 »

I think this is a wonderful way to tackle climate change. Higher housing if leads to lower birth rates then it might be good for planet.

I wonder if there is analysis been done as to what birth rates we need to achieve to ensure the planet is fit to live for our kids.

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#94

Post by BeetleB »

manfredo wrote: post #88
JumpCrisscross wrote: post #45

Earlier quoted context omitted.

> I would gladly earn $1 million per year and spend 75% of it on rent No, you wouldn’t. As income goes higher, long-distance transportation becomes (a) more comfortable and (b) smaller as a fraction of income. De-camping to Washington State and commuting to San Francisco doesn’t make sense at $200,000; it does at $1 or 2 million.

I'm not sure I follow. Assuming the $1 million is post tax, it equates to $250,000 post tax and nearly entirely disposable income. Compared to, say, someone making $200,00 post tax and spending only 25% of that on rent it is strictly better. The point that the above commenter is making is that if the percentage of income spent on rent is higher, but the purchasing power adjusted income is higher it can cancel out. I'…

Is it better?

Consider what happens if you lose that job. How much money do you need saved up to live the next 6 months in both scenarios?

If I pay $750K/yr, I need $325K saved up to pay rent for 6 months. That will take me 1.3 years of saving to get to that threshold (assuming I pay for nothing else - food, etc).

If I pay $50K/yr, I need $25K saved up to pay rent for 6 months. It will take me 4 months.

Depending on how long you live, etc, I suppose there is a point where the former is better. But not in the short term. That's assuming you're paying mortgage and not rent. What if this is pure rent?

Then you have to pay that much even in retirement. That means you have to save up a lot more in the first scenario before you can retire, and may have to work longer, despite the higher pay, and the higher savings.

Of course, you can always retire in a cheaper place, but that's a matter of preference. I would rather retire in the place I lived much of my life in - not in some strange city.

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#95

Post by knuththetruth »

jpttsn wrote: post #71
knuththetruth wrote: post #26

Earlier quoted context omitted.

>Wages have never been higher, and there have never been more people. Wages have essentially been flat for most workers since the 1970s[0] >This zero-sum Malthusian thinking is not only untrue, but following it collectively will make us much, MUCH poorer and worse off. I agree, but unless the US is willing to claw back wealth from the robber barons of our age, build a sustainable future with social services on par wi…

Have other countries solved the problem? Which ones?

The US solved the problem in the postwar period by taxing the wealthy at high rates, providing subsidized housing and education, and numerous other social democratic benefits to their population. This, combined with liberal immigration policies, resulted in tremendous growth.

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#96

Post by coding123 »

maxerickson wrote: post #50
ceejayoz wrote: post #47

Earlier quoted context omitted.

> No, you wouldn’t. I can say with absolute certainty that I'd be pretty damn happy with $250k post-rent income.

I think the dispute is more wether 75% rent is a likely choice in the million dollar scenario. (vs the contentment with remainder)

This entire thread is so strange to me, if you're spending $750000 per year renting, shouldn't you be buying $750,000 properties once a year instead?

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#97

Post by [deleted] »

toasterlovin wrote: post #49
pitt1980 wrote: post #32

Earlier quoted context omitted.

Considering the ratio of career gains that go to those working in a few expensive cities, even if this is largely selection effects, I'm not sure this paints a very rosy picture of the society we're creating. I'm reminded of how few heads of EU states are parents https://www.marketwatch.com/story/do-childless-leaders-mean-...

This stage of the demographic transition is a huge problem, IMO. The more I think about it, the more it seems like a ratchet (as in, it only moves in one direction): Basically, two incomes are useful, so both people in a relationship pursue careers. Now they have more money to compete on the housing market. This seems like a good move, so others follow suit. At first this is largely a win for people who pursue this r…

[deleted]

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#98

Post by paulddraper »

im3w1l wrote: post #76
paulddraper wrote: post #61

Earlier quoted context omitted.

Are apples and divorces plausibly related? Or was the professor simply drawing from an enormous number of metrics to find a spurious relationship (and report just that).

Well price of apples should approximately reflect general food affordability.

Hm...so economic hardship causes high apple prices and high divorce rates.

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#99

Post by DoreenMichele »

fooker wrote: post #35

I once attended a lecture by a well known statistics professor, who demonstrated a similar correlation between the price of a kg of apples and the rate of divorce in his country.

"An apple a day keeps the divorce lawyer away."

Re: Birth Rates Dropped Most in U.S. Counties Where Home Prices Grew Most

#100

Post by manfredo »

BeetleB wrote: post #94
manfredo wrote: post #88

Earlier quoted context omitted.

I'm not sure I follow. Assuming the $1 million is post tax, it equates to $250,000 post tax and nearly entirely disposable income. Compared to, say, someone making $200,00 post tax and spending only 25% of that on rent it is strictly better. The point that the above commenter is making is that if the percentage of income spent on rent is higher, but the purchasing power adjusted income is higher it can cancel out. I'…

Is it better? Consider what happens if you lose that job. How much money do you need saved up to live the next 6 months in both scenarios? If I pay $750K/yr, I need $325K saved up to pay rent for 6 months. That will take me 1.3 years of saving to get to that threshold (assuming I pay for nothing else - food, etc). If I pay $50K/yr, I need $25K saved up to pay rent for 6 months. It will take me 4 months. Depending on…

You're assuming that people would have to live in the same place after their employment ends (you do bring this up later, though). This definitely isn't the case for me; I've moved every single time I've changed jobs.

The point remains, in the first scenario the person has $250,000 worth of disposable income. In the latter it's only $150,00. The former is in a much better position to build up saving. Heck, even one year's worth of post-rent income in savings is enough to spend as much money as the average American annual income (~35k) for the next 7 years.

> Then you have to pay that much even in retirement. That means you have to save up a lot more in the first scenario before you can retire, and may have to work longer, despite the higher pay, and the higher savings. Of course, you can always retire in a cheaper place, but that's a matter of preference. I would rather retire in the place I lived much of my life in - not in some strange city.

Sure, but now you're talking about a drastically different scenario if the resident has concluded they will live the rest of their life in their apartment. In that scenario, optimizing for post-employment living is a more important factor. But until unless you've decided to retire in your current apartment, the first choice is strictly better.

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