Home Price to Income Ratio • Hacker News Board

Re: Home Price to Income Ratio

#701

Post by kolbe » Thu, Sep 23, 2021, 5:32 PM UTC

nly wrote: post #687

kolbe wrote: post #648

Earlier quoted context omitted.

Only homeowners pay property taxes. Depending on your income and where you live, saving 50% is totally doable. And since you’re into fanatical scenarios where home prices go up 50-70%, you should also apply the appreciation of the stock market to your savings (usually double or triple real estate).

You're out of touch if you think most, or even typical people, can save 50% of their take home pay. > Only homeowners pay property taxes. I pay almost $300 USD/mo in local taxes (for local services) here in the UK. This amount is linked directly to the value and occupancy of the home that I rent from my landlord. > since you’re into fanatical scenarios where home prices go up 50-70% The fantasy that just happened? Th…

The US is not up 150% in the last 10 years. Look at real data, not clickfarm articles. From Sep 2011, it's up 85%.

https://fred.stlouisfed.org/series/csushpinsa

So, sure during the greatest bull run in home price history, prices have gone up significantly over 10 years. But it is fanatical to quote the largest bull run in history as a thing that will likely happen in the future.

And I said if you wanted to quote the fanatical scenario, then you needed to apply the equally fanatical scenario that your saving will appreciate with the market appreciation of said fanatical scenario. On Sep 1 2011, the SPY ETF adjusted for dividends was 92.69. Right now, it is 444. That's a 379% increase. 17% annually. That compares to the 6% annual appreciation of homes.

https://finance.yahoo.com/quote/SPY/history?period1=72826560...

Now, I don't know about the UK for property taxes. In the US, it's charged to the owner. Fine. But you can always choose to live inexpensively. I know people who earn six figures and spend $700/mo on rent because they live with roommates in unfashionable areas. These people save upwards of 75% of their take home. But if you insist it's impossible to save 50% of take home, then I don't know what to tell you. My friends must not exist.

But I'll give you some benefit of the doubt and assume 30% is the absolute most you can save. Then if you earn 100k and want to buy a 700k house, if you put away 30k each year, it will appreciate to 154k in 4 years. The house that increases at 6% will now be 833k, and you damn near have a down payment (18.5%) in 4 years.

This scales to any income, so don't tell me I'm out of touch with my income assumptions.

Re: Home Price to Income Ratio

#702

Post by throw123123123 » Fri, Sep 24, 2021, 5:30 AM UTC

imtringued wrote: post #601

conductr wrote: post #488

Earlier quoted context omitted.

> what I expect is actually happening here is people are anticipating high inflation That's why price to income is an interesting metric. High inflation without income rise just means people feel worse off and a correction will occur. Housing, along with many other things, are competing for people's wallet. Interestingly, covid is causing a labor shortage and income to rise at the low ends. I suspect stagnating in th…

At 5% or more interest more than half your money goes to the bank rather than the house. At 0% all your money goes to the house. You can call this inflation if you want but then you are ignoring that you are paying a million dollars for a less than million dollar house because of interest. The fact that spending and price are decoupled make the inflation idea stupid.

All your money goes to the house seller, remember that.

Re: Home Price to Income Ratio

#703

Post by France_is_bacon » Fri, Sep 24, 2021, 6:42 AM UTC

quantumBerry wrote: post #412

mikeryan wrote: post #408

Earlier quoted context omitted.

Raw land in most denser US urban areas is not cheap. There’s also huge incentives to build additional units. I’m Berkeley where I live it’s becoming more common to see developers buy a run down single family home and raze it and the city will allow you to build a 3 or 4 unit townhome in the space. Much of this forced by state laws, particularly if a unit or two is reserved for low income families.

The cheapest land on which you could build a yurt or small cabin (illegally) in Berkeley I found on realtor is 60k (it is pending sale). The cheapest house is well north of 200k. You could build your own yurt or cabin for only 10 grand. You're joking yourself if that isn't very cheap by comparison. [1] https://www.realtor.com/realestateandhomes-detail/55-Panoram...

Yeah, property that inexpensive in the SF Bay Area...unbuildable, unusable.

Re: Home Price to Income Ratio

#704

Post by exporectomy » Tue, Sep 28, 2021, 4:02 AM UTC

jackcosgrove wrote: post #347

somethoughts wrote: post #249

Earlier quoted context omitted.

Agree! It's also the densification of urban areas. Where once each occupant had a private office, now 5-6 SW engineers occupy the same office space footprint. That has implications for already dense urban office and associated housing needs.

The long-term trend in urban housing is diffusion, not densification. One hundred years ago a family of five lived in an apartment now occupied by a couple.

I was surprised to learn that the population (and density) of Manhattan was higher 100 years ago than it is today. It's been falling pretty steadily throughout the entire 1900s.