yes, but in many desirable areas a significant portion of buyers are cash only buyers whose monthly payment is $0 (other than property taxes).
Intuitively, I would say the number all cash buyers is a pretty small number in every market. Especially in a low interest rate environment. Most people with the means to pay cash for a property would likely be savvy enough to understand that that they would be better off getting a jumbo mortgage at 3.25% and deploying that capital at a higher rate elsewhere.
IIRC San Francisco all-cash buyers were accounting for 25% of transactions a couple years ago.
There is no bubble in technology looks at TSLA $650
The bubble is in assets. Anything that any slight bit of profit growth or good publicity will go up higher as people and HFT bots are looking to get the best return possible.
In late 1980s Melbourne, Australia my dad and his best friend were accountants and bought their houses for ~$40,000AUD, ~3 times their annual income. According to the best friend, this was considered a lot to pay for a home. In 2020, those houses are around ~$1.8-2M, so ~22.5-25 times the annual income of someone that has their job today. In Melbourne and Sydney generally, housing is 10 and ~13x annual income. Above…
In the late 1980s Australian interest rates were 17% so the repayments required were much higher on the same level of debt. However, your point in general stands that houses in Australia are much more expensive than they were 30 years ago. But a better metric is the proportion of income required to pay for a house. It's also worth noting for Australians and Americans that these housing cost issues are a global issues…
You could've just saved the 3x income and paid cash if you wanted. Today, it's a much longer path to use frugality to build up the pile of cash needed to buy a home outright.
Cross-reference with school quality and you’ve got a map I’ve wanted for some time. Difficulty: it’ll be less useful the more people have access to it :-/
Over 8x seems to be a CA thing mostly (one tile in Oregon bordering CA). Wonder if we can thank prop 13 for that? (Frozen property tax that constrains supply and encourages ani-development stance by removing the tax consequences of appreciating property)
Prop 13 just removes property tax consequences driving transactions, not housing price concerns of anti-development / anti-density owners. IF you drive those owners out via property tax increases, you have new owners just as concerned with the same anti-density drivers, maybe even more because they're in even greater debt at a higher price and can less absorb a feared price decrease.
New owners want to get the most out of their purchase. This means multifamily buildings.
In late 1980s Melbourne, Australia my dad and his best friend were accountants and bought their houses for ~$40,000AUD, ~3 times their annual income. According to the best friend, this was considered a lot to pay for a home. In 2020, those houses are around ~$1.8-2M, so ~22.5-25 times the annual income of someone that has their job today. In Melbourne and Sydney generally, housing is 10 and ~13x annual income. Above…
You picked the wrong Melbourne. The one in Florida is a far better deal. Median household income is $40,000, and the median house is just $150,000. The house is 3.75 times the income. Of course, it is even lower for the typical people here on Hacker News.
I almost don't want to buy property as a protest to the horrible policies we have regarding basic necessities. Why should property owners be entitled to a major portion of my productivity/success? I'll rent the cheapest apartment I can find until the next housing crash or we have some sensible policy put through that negates the investment aspect of housing.
Is property ownership a basic necessity though? Or is its prevalence as an ideal a product of a burgeoning middle class through the last century? I understand it's not even so common (or common as a goal) now in continental Europe, they think it's some silly English thing to care so much about home ownership.
It's not a basic necessity, but it does give you a lot of financial security, physical security and a sense of permanence in your community, especially when paired with other trends like gentrification. I've got retired friends that rent and have lived in my area since they were children but their pensions/funds aren't keeping up with rent prices and moving out to the country to die is a real possibility. Owning a property would have buffered them against this change. For people starting families today increasing rent prices is taking up more of their salaries, a mortgage goes down relative to inflation, and when you buy a property you can factor in things like which schools your children will go to. A home owner of any age will be able to weather negative events like unemployment or debilitating illness a lot better.
This map looks more like the result of a highschool project, not Harvard published data. I wish they would have linked the specific sources and labeled more on the map.
Without looking at their data, I can vouch that this sort of data may be prohibitive to access. The players involved don’t see data as something to be given out freely IME. It’s probably provided in a technically difficult to parse way-just to add insult to injury. Enough so that the simplicity of the presentation is remarkable.