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Maybe treating housing as an investment was a mistake

goodreason.substack.com

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Re: Maybe treating housing as an investment was a mistake

#901

Post by pandaman »

Muromec wrote: post #165
dfxm12 wrote: post #58

Earlier quoted context omitted.

What sucks is a lot of young renters with steady jobs can afford to pay off a mortgage month to month, but they just can't afford that down payment (especially the 20% needed so as to not need to get mortgage insurance)! I was in that position for a while. Every time it seemed like I could afford to put that money down, the housing prices went up! It took a handful of years of renting cheap places (with roommates), l…

And here at the bottom of the see, there is no down payment (financing up to 100%), but young renters still can't get the a mortage of the same monthly amount as they pay rent, because of regulatory reasons -- mortage ceiling is defined as something like 5x gross yearly salary. Somehow it's fine to pay half the salary in rent, but not fine if it's financing the mortage.

>Somehow it's fine to pay half the salary in rent, but not fine if it's financing the mortage.

Where is it fine to rent for half of the salary? Last time I rented a couple years ago, the corporate landlord wanted to see either a paystub exceeding 4x rent for the same period or a bank statement for the funds exceeding 3x total rent. This varies, of course, but the standard used to be the 40x rule (rent not exceeding 30% of income before tax).

Re: Maybe treating housing as an investment was a mistake

#902

Post by [deleted] »

cronix wrote: post #803
narrator wrote: post #706

Earlier quoted context omitted.

[flagged]

> The reason that I think the Bay Area and other tech hubs are so expensive is that asians with PHDs who fly in for their $500k/year machine learning tech job want to live around other asians. They do not want to live in rural Utah where you can get a nice house for $200k and remote work, but there are no asians around and there's probably more discrimination. You can probably safely extrapolate that to all races who…

[deleted]

Re: Maybe treating housing as an investment was a mistake

#903

Post by KptMarchewa »

avmich wrote: post #793
vel0city wrote: post #738

Earlier quoted context omitted.

Ever thought about maybe not living in California? You don't need to be on the West Coast to have a tech job.

This is the thought which comes around often. The problem is, for an intellectual, it's important to live in an environment rich with mental talent. Bay Area is the intellectual capital of the world, and while Einstein could maintain his patent clerkship and have famous physicists visit him in Bern ( http://norvig.com/performance-review.html ) for the lesser minds in another era settling on another place is a loss.

It's a VC capital of the world, which has weak correlation with intellect.

Re: Maybe treating housing as an investment was a mistake

#904

Post by [deleted] »

cronix wrote: post #803
narrator wrote: post #706

Earlier quoted context omitted.

[flagged]

> The reason that I think the Bay Area and other tech hubs are so expensive is that asians with PHDs who fly in for their $500k/year machine learning tech job want to live around other asians. They do not want to live in rural Utah where you can get a nice house for $200k and remote work, but there are no asians around and there's probably more discrimination. You can probably safely extrapolate that to all races who…

[deleted]

Re: Maybe treating housing as an investment was a mistake

#906

Post by bdangubic »

bumby wrote: post #872
petsfed wrote: post #707

Earlier quoted context omitted.

Great, if only there were adequate jobs in those places, so we could all own homes without needing $300K annual family income. The dissonance comes from the fact that a lot of hackernews readers make apparently high incomes, but the cost of living in their areas keeps them squarely working class. The best example I can give is in the Bay Area. I lucked out with $2850/month to rent a 1400 square foot house in San Lean…

Don’t you think the amount of remote work has changed that? I think part of the problem is the presumed loss aversion of moving from a $300k salary to, say, a $175k one that is remote but allows for a better standard of living (particularly for families).

You say this as if getting a fully remote job that pays $175k is easy to come by… I’d guess that most people making $300k in high-priced areas would take this paycut to $175k every day of the week and twice on sunday if they were offered

Re: Maybe treating housing as an investment was a mistake

#907

Post by brewdad »

findthewords wrote: post #794
kitsunesoba wrote: post #162

Earlier quoted context omitted.

I too went for a down payment below 20% (somewhere closer to 5%) because saving up a full 20% would've been daunting to say the least, and as such pay PMI. Still a better deal than renting by a large margin, and the feeling that the cash being put into payments is going towards owning something rather than being set aflame is nice. That said I agree with the sibling comments that 20% down payments shouldn't be as out…

We can take a look at the St. Louis Fed "Fred" database take a look at historical affordability of 20 % down payment. Let's divide two numbers, a and b to get a ratio of yearly median wage divided by median house price, from 1980 to 2023. [1] a) Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over b) Median Sales Price of Houses Sold for the United States We see that the a…

Ok, but in 1980, you needed that 20% down payment because mortgage rates were approaching 20%.

Re: Maybe treating housing as an investment was a mistake

#909

Post by zbrozek »

nickelcitymario wrote: post #314

I may be wrong, but it seems to me like this is a simple supply/demand issue. Increase the supply. Yes, that's detrimental to those who already have homes (like me). But if I were a dispassionate judge-of-the-world, and I were weighing these two groups needs, I'd err on the side of supporting those without homes over those who have them. Also, increase the supply of SMALL homes. Why is every new house a McMansion? Wh…

They're all huge because getting anything built at all is a Herculean lift, so to make it worth your while it's going to be big and expensive. Blame red tape.

Re: Maybe treating housing as an investment was a mistake

#910

Post by smalley »

spacedcowboy wrote: post #206
codegeek wrote: post #48

Earlier quoted context omitted.

You will be surprised how much good plumbers make in the USA. You probably used a bad example. Source: I know my trusted plumber makes well over six figures a year and he cannot take all calls. I asked him once if he has problems generating leads and he smiled saying "I have too much business that I turn people away". He is a "master plumber" which these days is not easy to get certified for in many states. He told m…

The thing is that top-end software engineers in a FAANG company (the equivalent of a master-plumber / master-electriction / etc.) are either pushing towards 7 figures or have already got there - in total comp, not in wages, but still. I'm an ICT5 at Apple (not the best-paying, but hey, less layoffs) and I reported ~$750k last year. There are ICT levels going up to 9...

Wow, I feel like you must have a pretty unique specialization because you are doing incredibly well for ICT5 (Congrats!) There are ICT levels above 6 but I feel like in practice those are very rare and you could easily spend decades working and not make it above ICT6 in many divisions.
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