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I recently moved back to the area from NorCal. Initially, 40% of my income was going to rent for a studio on the outskirts of Boulder. It's insane. Now I live w

I recently moved back to the area from NorCal. Initially, 40% of my income was going to rent for a studio on the outskirts of Boulder. It's insane. Now I live with my SO and thankfully that's down to around 15%. I can't even imagine finding a place to buy now.

dsfyu404ed 10y ago
Someone call the CDC. Whatever California's got appears to be contagious.
- michaelcampbell 10y ago
  I believe most call it "demand".
  - justinjlynn 10y ago
    At one point, tulips were in "demand" as well -- bubbles and other irrational market behaviours are endemic to most economic systems.
    - mywittyname 10y ago
      You're talking about speculative bubbles. The high housing prices are not driven by speculation, they are driven by supply constraints. People aren't buying houses to flip in six months, they are buying them to hold onto long-term. It's pretty clear that public policy isn't going to shift towards affordable housing any time soon. So the only options are: continue to pay high rents and wait for people to lose their jobs/homes so they can be bought cheaper, or buy now and hope you don't become one of the former. If we start seeing houses sold multiple times in the same year, or people starting buying homes that they clearly can't afford, then we have a problem. But I don't see evidence that is where the US is. The housing shortage is ensuring that only those top earners are competing. Price are driven up by the fact that the top 20% of buyers can afford to outspend the bottom 80% on housing by a factor of 5 or more. An additional $500/mo can cover another 100k for a 30 year mortgage. A couple making around $10k/mo after taxes can spend $5k/mo on a mortgage and still live comfortably while a median income couple earning maybe $4k/mo can only spend $2k/mo before things get tight. So, the high income couple can easily afford a million dollar mortgage, but could stretch that to $1.2MM if they really had to while the median earner can only spend $400k MAX.

dsfyu404ed 10y ago

Someone call the CDC. Whatever California's got appears to be contagious.

michaelcampbell 10y ago
I believe most call it "demand".
- justinjlynn 10y ago
  At one point, tulips were in "demand" as well -- bubbles and other irrational market behaviours are endemic to most economic systems.
  - mywittyname 10y ago
    You're talking about speculative bubbles. The high housing prices are not driven by speculation, they are driven by supply constraints. People aren't buying houses to flip in six months, they are buying them to hold onto long-term. It's pretty clear that public policy isn't going to shift towards affordable housing any time soon. So the only options are: continue to pay high rents and wait for people to lose their jobs/homes so they can be bought cheaper, or buy now and hope you don't become one of the former. If we start seeing houses sold multiple times in the same year, or people starting buying homes that they clearly can't afford, then we have a problem. But I don't see evidence that is where the US is. The housing shortage is ensuring that only those top earners are competing. Price are driven up by the fact that the top 20% of buyers can afford to outspend the bottom 80% on housing by a factor of 5 or more. An additional $500/mo can cover another 100k for a 30 year mortgage. A couple making around $10k/mo after taxes can spend $5k/mo on a mortgage and still live comfortably while a median income couple earning maybe $4k/mo can only spend $2k/mo before things get tight. So, the high income couple can easily afford a million dollar mortgage, but could stretch that to $1.2MM if they really had to while the median earner can only spend $400k MAX.