21 ms·

How Many Years of Life Does That House Cost?

• observation 9y ago
  Great article.
• Clubber 9y ago
  That was a really nice overview. One thing to consider though, when you gain more expertise through experience, you typically gain more income. Of course, most of the time, homes tend to appreciate as well. But to the point, it's best not to burden yourself too much with a home. I bought mine in my late 20s. My criteria was that I didn't ever want to move again (and could fit a pool table), so I bought a house big enough for a family to live comfortably that I could reasonably afford in my late 20s. It's worked out so far.
  • pjc50 9y ago
    > bought a house big enough for a family to live comfortably that I could reasonably afford in my late 20s. Well, we'd all love to do that, but where? (That was a rhetorical question, I personally moved to Edinburgh and bought an affordable family house in my late 30s) I remember a website tracking London affordability that pointed out that in some years price appreciation made it literally impossible to save for a house: the value (maybe even the minimum deposit) went up faster than average income.
    • sokoloff 9y ago
      Even if house values (or even 20% deposits) are going up faster than incomes, you can still save towards a house. Imagine a $1MM house, with a $200K minimum deposit, $135K of household income. If that house goes up by 5% per year ($50K, $10K deposit), your income never goes up, and you save 8% or more of your income towards a down payment, you are still making headway towards the down payment. If you save 15-20% of your income, you are making substantial progress towards the down payment. Scale the numbers up/down as you wish to fit your particular area/situation, but if the house is affordable by traditional mortgage underwriting requirements, it seems like it's possible to save for the downpayment in scenarios that I explored.
      • pjc50 9y ago
        Ah, here we go: https://www.theguardian.com/business/2017/may/01/smaller-deposits-raise-hopes-for-uk-first-time-homebuyers https://www.theguardian.com/business/2017/may/01/smaller-dep... "The average length of time for a single first-time buyer to save a 15% deposit in the fourth quarter of 2016 was a whole year longer than in the fourth quarter of 2015" http://colresearch.typepad.com/colresearch/2017/03/trends-in-housing-affordability-england-london-and-london-boroughs.html http://colresearch.typepad.com/colresearch/2017/03/trends-in... It probably is doable, but at median incomes of £29k most people are barely keeping up with the rent in London and making zero savings.
      • elijahwheelock 9y ago
        I think what you've said is only true asssuming that you can always afford to increase the portion of your income that you spend on housing. If housing prices increase faster than your income does, there will come a time when you must spend 100% of your income on housing. If prices increase further, you will be unable to pay. In practice, you will be unable to pay long before then.
    • losteric 9y ago
      Nowhere! If you're in SF, move out to the east bay Besides that, hope residents use legislation to balance out the market... progressive taxes in aesthetically pleasing areas, education/public transportation in economically competitive areas, condos/up-zoning in popular urban areas.
      • deleted 9y ago
        [deleted]
      • fergie 9y ago
        Is Oakland OK or is it really sketchy? Getting mixed messages.
        • danans 9y ago
          I live in Oakland. Oakland is composed dozens of distinct areas, with wildly varying crime rates. Adjectives like OK and sketchy don't begin to describe its complexity. If crime is your major fear there are several places with crime rates that are low. Conversely there are areas with very high crime rates. If you don't know which is which, ask a local whom you trust for advice and maybe a tour. It's an incredible place to live but one that will challenge any simplistic description.
      • pcsanwald 9y ago
        Rental prices in the Excelsior district seem comparable to many neighborhoods in Oakland.
• mooreds 9y ago
  That was a great use of maps. Thanks!
• setr 9y ago
  Scrolling gets really messy on mobile but otherwise a neat way to show the visualizations. Still can't be assed to read it fully though with my scroll being screwed by intermediate textboxes though.
  • jjr8 9y ago
    As I understand it, this type of scrolling map visualization is something designed and implemented by Esri specifically for arcgis.com. See https://storymaps.arcgis.com/en/ https://storymaps.arcgis.com/en/ for more examples and details. It may be that the author of this article on housing developed the analysis, maps, and text but not the actual web UI. That might be something provided by Esri that is common to all of these "story maps".
    • tardo99 9y ago
      The map stopped working for me about 2/3 of the way down the page... Divs started getting resized incorrectly.
• anorphirith 9y ago
  great visualization, If he uses the skills he now has, he's hopefully making 100K+ by now
  • mywittyname 9y ago
    Still won't be able to afford a home in Duke County on that salary.
• dfrey 9y ago
  Cool visualization, but kind of a useless statistic. The question that matters is: How many years will it take me to pay off my mortgage after my expenses (food, transportation, housing maintenance, utilities, taxes) are taken into account? It doesn't matter how cheap a house is if you can't save any money.
  • autokad 9y ago
    how many years will it take to pay off your mortgage? thats done for you, about 15 or 30. how does other factors like food/transportation/taxes factor in? though not always, but they tend to go hand in hand no? the cost of real estate is factored into much of what we buy / spend money.
    • sp332 9y ago
      There's a big difference between 15 and 30, and the choice between those comes down to all those other questions. Anyway that number is just a maximum.
    • AustinG08 9y ago
      It is honestly worth your while to pay off your mortgage as soon as humanly possible.
      • steven777400 9y ago
        This is an oversimplification. The average household has several kinds of debt, and generally debt should be paid down in descending order of interest rate. More significantly, investment income opportunities need to have their interest rate (or equivalent) assessed. For example, in the past 12 months, the DIA has risen 18%. Thus, if 12 months ago I had money to spare, it would have been better to put the money into DIA rather than make an extra principal payment on the mortgage, unless my mortgage is 18% or more. With the exception of bonds and CDs, it's not possible to know the investment growth in advance, so that creates some risk of course.
        • 9y ago
• magic_beans 9y ago
  Is it really necessary to own a home if your mortgage is going to be 20 years long? I get that renting is like throwing money in a hole, but people are so much more nomadic these days. What's the big deal in moving once every 10 years once rent gets unbearable?
  • sp332 9y ago
    The ability to repaint and punch holes in your walls. Having a lawn and some privacy from the neighbors. Not everyone is nomadic.
    • toomuchtodo 9y ago
      Or having certain pets. I had to buy in Tampa because no one would rent to me and my Great Dane, regardless of amount I was willing to part with as a pet fee (I offered extra insurance and $1000 and was still declined).
    • nasalgoat 9y ago
      Also, don't forget outbuildings like garages or workrooms for all the maker hobbies.
    • umanwizard 9y ago
      There are plenty of houses for rent. Rent doesn't imply apartment.
      • MrFoof 9y ago
        Moreover, talk to the person managing your apartment. In my apartment (managed by a property management company at that), they allowed me to repaint some walls, bring in three appliances of my own (washer/dryer and dishwasher), completely customize a closet, and replace a light fixture. Took a week for the business manager and corporate to sign off on the modifications, but they felt the requests were entirely reasonable. This happened because of two reasons: 1) I asked. 2) I agreed to pay a very modest additional deposit for the modifications ($400 total), and used suitably insured vendors of their choosing to have the appliances and light installed (they let me do the closet myself, as the paint with just a $100 deposit to cover changing it back), at a total cost of about $300. To get this stuff elsewhere I would've paid FAR, FAR more in rent (+$1000-1500/mo, easily). Though I asked, was very reasonable, and made it clear that I wasn't looking to half-ass anything. At the end of the day the new apartment was a tactical downgrade ($700/mo savings) from where I came from. With the new stuff I got approved I have "broken even" on my changes after 7 months. Now for the next 4-5 years that $700/mo savings just goes in my pocket, the apartment is now barely a downgrade from where I was prior, and I have top-notch appliances that most luxury rentals in the city don't even offer. Moreover, when I move out those appliances come with me -- I should get a good 15-20 total years out of them with proper care.
• lpolovets 9y ago
  I liked the visualization and data, but I don't think it makes sense to compare home prices to wages w/o considering alternatives to home ownership. Home prices don't exit in a vacuum. That is, if a home is 10x the median salary, you can't really say "well, if I didn't buy a home I could work 10 years less." That's because the alternative to buying is renting, which is also expensive. So sure, a mortgage in SF is $6k/mo. But rent might be $6k/mo as well -- and you don't earn any equity or tax write-offs while renting. I think what the alternative title to this blog post could be is: "How many years of life does that city cost?" What it's really comparing is the relative cost of having a roof over your head in different areas. Would you rather work 40 years and live in SF or work 30 years and live in rural Wisconsin? (I don't have an opinion on those two options. I'm sure there are many people in both of those places that are happy with their choices.)
  • sbenitoj 9y ago
    You also have to factor in the opportunity cost of what you could've done with that down payment (e.g. What would a $100k downpayment invested for 30 years in the stock market be worth vs how much is that worth in your home in 30 years?) The NYT has a buy vs rent calculator that helps make some of these decisions: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0 https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...
    • rconti 9y ago
      And of course the NYTimes calculator also factors in home prices appreciation. This is not really academic; it's fairly important. In cheaper housing markets with limited growth, it might be cheaper to rent because the expected cost of a major repair (and return on that investment) are both so low. Of course, you can't ever recognize the value of your house unless you sell it and move somewhere cheaper (or buy a 2nd house and rent out the first one, but that's just another side of the same coin).
      • shados 9y ago
        Reverse mortgages are an option too, especially around retirement. I didn't do too much research and I'm sure on paper it's a scam, but with no kids and no one to really give the house to beyond charity when my wife and I kick the bucket, I am considering making my place part of my retirement plan. Or just sell it to pay rent for the rest of your life. Either way it's a pretty big boon.
• sillysaurus3 9y ago
  This is really cool. Can anyone guess which frameworks power this article? I'd love to try to put together something similar. I wonder if the code is on github somewhere?
  • zaroth 9y ago
    Scroll to the bottom of TFA to see for yourself.
  • bluedino 9y ago
    He mentions it - https://storymaps.arcgis.com/en/app-list/cascade/ https://storymaps.arcgis.com/en/app-list/cascade/
  • jpatokal 9y ago
    Ha. It's powered by ArcGIS, the Oracle of the mapping world, meaning it's all proprietary, locked down and expensive. If you want freer alternatives, check out CartoDB, Mapbox and QGIS.
    • lscharen 9y ago
      Except for the fact that you can sign up for ArcGIS Online as an individual for free and all of the application templates (in addition to tons of other Esri projects) are up on github. e.g. https://github.com/Esri/storymap-cascade https://github.com/Esri/storymap-cascade Almost everything they release is under the Apache license.
      • jpatokal 9y ago
        Huh, color me surprised (I used to work in the GIS space, but have moved on to cloudier pastures). Then again, Microsoft's now all gung ho about open source at least on paper, so perhaps ESRI can change its spots as well...
  • mapster 9y ago
    you can create a somewhat similar experience with mapbox api https://www.mapbox.com/mapbox-gl-js/example/scroll-fly-to/ https://www.mapbox.com/mapbox-gl-js/example/scroll-fly-to/
• sbenitoj 9y ago
  This is an awesome site, visually depicting how unaffordable housing has become in so many parts of the US. It's truly amazing how much the Fed (with perpetually low interest rates) and local restrictions on building (making it more expensive or impossible to build) have increased the cost of home ownership over the past 60 years. Anyone who's seriously considering purchasing a home should read The Housing Trap by Patrick Killelea, it's a short, amazing overview of how we arrived in the situation we're in as well as a practical guide for when to buy vs rent housing. https://www.amazon.com/dp/1479156213/ref=cm_sw_r_sms_awdb_KiWSzbNN7T5YE https://www.amazon.com/dp/1479156213/ref=cm_sw_r_sms_awdb_Ki...
  • zaroth 9y ago
    That's funny, my takeaway was that the vast majority of the US has incredibly affordable housing. But I suppose if your call center employees simply must be living in downtown S.F. the answer must be that we just need lax zoning and higher density!
    • sbenitoj 9y ago
      Ha, well in non-major cities you're right, but all the major cities cost an arm and a leg for the most part!
      • zaroth 9y ago
        Well the only way to drive down price is to either increase supply or decrease demand. So make cities shitier and denser. Is this a case where a small increase in supply would decrease the price significantly? I doubt it. So, is there some reason we (as a nation) need to double population density of our largest cities? With the huge advances we are likely to see in autonomous zero-emission delivery infrastructure and remote communication over the next 20 years, not to mention the increasing likelihood of natural disasters and WMDs hitting these cities, I really don't see the point of pushing for so much urban growth.
        • brightball 9y ago
• mattmcegg 9y ago
  https://www.fha.com/fha-downpayment-grants https://www.fha.com/fha-downpayment-grants
• sfbay 9y ago
  This is such a good representation of the data. Great Job.
• guesto 9y ago
  Fantastic storytelling! Great job. @sndean I also have to wonder how many years home ownership is taking off my life expectancy, due to the stress of trying to maintain the house and associated payments!?!
  • sliverstorm 9y ago
    The real trick is to learn to enjoy it, like with cooking and car repair and cleaning. Also helps to be on top of things, poking around periodically to see things are working as they should. You find yourself with fewer catastrophic failures on a dark blustery night that way.
• xvolter 9y ago
  The data was very interesting, but there wasn't anything meaningful mentioned that came out of the data, other than possibly where you should look to move to if you have flexibility. I personally bought a house in my early twenties. At the time it was roughly 2.5x my income. I've been there a few years and went through some changes to my employment, I now earn more making it easier. Over the course of ownership, in the ~20 years, I'll have paid close to $400k between the principal and interest. If I made more, it wouldn't change the amount I pay toward my house so it wouldn't make me own the house faster. While I could send additional payments, the amount of interest I'd avoid would not be worth it. If I had $20k available to me right now and sent it entirely to my house it'd save around $12k in interest over 15 years. Had I invested that $20k now and received only a 5% growth, over 15 years that would have earned $22k in compound earnings leaving me with $42k of potentially easily liquidatable assets. Buying a house that is close to your annual income doesn't make you own the house faster, it just makes it easier for you to afford. I think the guidance most people should take away is to avoid buying a house that you cannot pay off in 10-15 years. A house at $250k at a 3.5% interest rate would cost you $72k in interest on a 15-year mortgage or $154k in interest on a 30-year mortgage. At that point, it is worth sending additional payments (especially early on in the mortgage) to save on interest. This is pretty popular advice, to not overshoot for a house you cannot afford. The best reason is that you can still move later on. Buying a house you'll live in the rest of your life might be a good goal (@Clubber) but it doesn't happen for most of us. Instead, buy a house you can actually make a dent toward ownership in, so if you want to sell it in 10-15 years you'll do so with potential profit. You don't need to sell your house for a profit (although we all would love to). Had you rented like @magic_beans wants you to, you might have lost 100% of that money and every year your rental price may go up, you might not be allowed to have pets, you can't make improvements you want; you can lose a lot of control with renting. If you buy an affordable house though, in 10 years you might sell it and if you get back even 50% of the total cost of ownership you still walk away better than someone who rented. If you got a house you could pay off in 10 years, you might walk away with a lot of cash and some profit (especially if the house's value went up). You then have the choice to use the cash from your home sale as a down payment for your next house, which would allow you to afford a slightly more expensive house while still paying it off in 10 years. Imagine you buy a house now for $250k, pay it off 15 years (that might cost you around $2.5k/month). You sell it in 10 years, you could then buy a house for $500k and only mortgage another $250k. Or you could buy a reasonably priced home in the middle, allowing you to start investing your money elsewhere, pay off the house sooner, etc. My plan, my suggestion: Buy a house when you're in your 20s that is affordable. By the time you're married, have kids that need their own rooms, and are looking to settle down a bit more you'll be able to sell that first house and afford that house you need. It's worked out so far.
• Mankhool 9y ago
  Please do one of these for Canada!
• readhn 9y ago
  What i would like to see incorporated is the real estate cycle data. Real estate prices move in cycles.
• matrix 9y ago
  I like this concept a lot, but like most choropleth maps (i.e. maps that color-code a state or county for a given value), it's misleading because the this is really city-level, or even suburb-level data. I'm not sure what the bedt way to represent this data is; maybe a histogram of median property value of zip code vs population density?
  • cossatot 9y ago
    Census tracts are good because they're high resolution and still spatial polygons but are more or less sized by population, having ~2-10k people in each (so population density is factored out).
• juiyout 9y ago
  The author took a simple price-to-income ratio and gave it a nice spin. Search for property price index. The US housing prices shows pretty good affordability compared to where I live now.
• foota 9y ago
  I think that the property tax and home loan interest deductions significantly influence the better decision for most of the people on this site.
• pascalxus 9y ago
  This is an excellent post. I've always fantasized of leaving the bay area but haven't because of job and family. Heads up, anyone else dreaming of this, check out Zapier, i hear they like to hire remotely!
• bufordsharkley 9y ago
  It goes to show that it's not construction costs that account for variances in home prices, but rather something location based: land values. Policies that will work to drive down land values (and utilize land values to fund public infrastructure instead of private land speculation) would be very useful in many overheated land markets.
  • JumpCrisscross 9y ago
    > Policies that will work to drive down land values (and utilize land values to fund public infrastructure instead of private land speculation) would be very useful in many overheated land markets Supply and demand. Allowing builders to build higher, thereby increasing density, amortizes the land's value across more living space. Turning land into parks is nice, for people and property values, but does nothing to reducing housing prices nor rents. (If anything, by yanking land supply off the market such policies could actually exacerbate the problem if carried out in a vacuum.)
    • timr 9y ago
      Land value does not stay constant as density is increased. It goes up. Sellers are not dumb. If land is the limiting factor, increasing the density of the buildings on the land by 10x will increase the value of the land by 10x as well.
      • JumpCrisscross 9y ago
        > Land value does not stay constant as density is increased. It goes up. True. But when you measure the price elasticity of land you find that density doesn't increase land value as fast as it creates space. This occurs independently of the value of the new units. Consider a town with three occupied units: one for $5,000, one for $4,000 and one for $3,000. A new unit is built for $6,000. A simple example would involve everyone trading up, thereby leaving an unoccupied $3,000 unit on the market, but let's be more realistic. The person in the $5,000 unit doesn't budge, so the $6,000 unit gets discounted to $5,500. Our top-tier renter moves, leaving their $5,000 unit open. This must now compete for the other two renters, and so on, and so forth. New renters will enter the market, but there is scant evidence that people move to cities to move into specific units. Instead, people choose and city and then find a place. New units more-efficiently use limitedly-available land. The other benefits from density, e.g. environmental efficiency, faster exchange of ideas and the resulting productivity boost, et cetera, are just cherries on top.
• tw1010 9y ago
  You guys may have this or that problem in the US, but the fact that you have people like this author who put so much effort into communicating the problems and who care this much, that makes me envious of you all. You'd be really hard pressed to find a good number of people in my country who cared as much about the welfare of the rest of the people.
  • icu 9y ago
    Sorry to hear that, just out of interest which country are you speaking about?
    • alecco 9y ago
      Many, perhaps most.
• kentt 9y ago
  That was a lot of javascript for almost zero content. Is it just that people love reading that houses are expensive?
• elihu 9y ago
  High-cost cities get their high property values via network effects -- it's the proximity of other people that makes the land valuable. I wonder if a good way to circumvent high home prices is to create new cities deliberately in rural land. For instance, get a few thousand people to agree to buy a large plot of land in a sparsely populated area. All the early-adopters get a cheap plot of land to build a house on, with most of the lots left unclaimed and managed by a non-profit. As people move in, the value of the land rises and the non-profit generates revenue and pays for infrastructure by selling the remaining lots. In the end, the citizens and town are better off financially because collectively they only paid rural-land prices for high value urban real estate. This would be more practical if it's near an existing town (for basic necessity, schooling, proximity to hospitals, etc..), and could perhaps be helped along by partnering with a university or large employer wishing to establish a new campus. There's a lot of ways this could fail, but it seems at least plausible that it could work. There's a lot of mostly-empty land, especially in those west-coast purple areas shown on the map on the linked page.
  • bitxbitxbitcoin 9y ago
    Add in some gambling and I think you're onto something :).
  • stickfigure 9y ago
    This has been tried. Check out California's 3rd largest city (by area): http://www.atlasobscura.com/places/california-city-unbuilt-suburb http://www.atlasobscura.com/places/california-city-unbuilt-s... https://en.wikipedia.org/wiki/California_City,_California https://en.wikipedia.org/wiki/California_City,_California Turns out it's pretty hard to create a critical mass of population.
    • elihu 9y ago
      I would expect most attempts to do this as a get-rich scheme would either fail outright or not become the kind of place people would want to live. If done as more of a crowd-sourced community-driven non-profit project, at least you have everyone's interests more-or-less aligned and some basis of trust.
• hajile 9y ago
  With houses getting larger every year, it's crazy to assume anything less than a couple years is possible. An average house is 2.6K square feet and is going to take at least a man-year of time to complete. Materials are about 80% of total labor costs. Those places with super-low housing costs require some combination of: 1. below average wages for construction workers 2. low standard for building materials 3. surplus of materials to drive down costs
  • jowiar 9y ago
    Or a preexisting supply of houses. It may not mean low costs that will last forever, but it will hold prices down in the short run.
  • madengr 9y ago
    Hasn't the average home size always been 2400 ft^2
    • hajile 9y ago
      In the 70s, it was around 1600 http://www.aei.org/publication/todays-new-homes-are-1000-square-feet-larger-than-in-1973-and-the-living-space-per-person-has-doubled-over-last-40-years/ http://www.aei.org/publication/todays-new-homes-are-1000-squ...
• Animats 9y ago
  Nice visualization. I've mentioned the median house price to median income ratio many times before, usually in the context of "how close are we to the bubble collapsing". Around 4:1 is about as high as it gets before something gives. It would be nice to see that map over time.
• cwkoss 9y ago
  Why is that chunk of Wyoming so expensive?
  • mikekij 9y ago
    Vacation homes for the wealthy, compared to incomes of service workers who provide services for visiting Hooli employees.
• geff82 9y ago
  I always wonder why it is an unknown fact for many that in Texas houses are still very affordable, even in metropolitan areas. I follow the market there closely, and you can get quality homes for the cheap. Is it that the high property taxes work their magic in that they hold the upfront purchase price low? It would have pros and cons - while keeping your house when retired gets more difficult, buying one when still young gets a lot easier.
  • gedy 9y ago
    They build a lot, and the flat cheap land goes forever..
  • branchless 9y ago
    Yes it's due to high property taxes. Keeps the speculator scumbags out.
  • kodablah 9y ago
    Oh it's quite known as the population growth rate (especially from interstate migrants) shows over the past several years. Granted life affordability is only one of many reasons.
  • rconti 9y ago
    I'm not sure. I know a guy in the Dallas area that works in finance, who keeps dragging his heels because he thinks a $300k place is so unaffordable. I don't get the dynamic -- it seems cheap to anyone in the Bay Area (Or San Diego, or Portland, or Seattle, or LA, or New York City, or.. most cities on the eastern seaboard). My understanding is that pay is fairly decent in Dallas. I don't get how $300k is anywhere near burdensome. And yet, here I am in one of the most expensive markets in the world, and I can swing housing, but he cannot bring himself to do it. That's not to say it's less affordable there; it could be a matter of personal psychology, but regardless, I don't get it. All I know is that I've noticed over the past decade or so, everyone who argues that they can buy property far cheaper in XYZ location far away from the bay area, and live like kings... somehow... don't.
• tnt128 9y ago
  Does anyone if there is a public source for these data?
• averagewall 9y ago
  How can houses cost $50,000 in those two Texas counties? Don't builders cost far more than that? If the cost of rebuilding is far more than the purchase price, then insurance and maintenance will be expensive - how will you afford a $10,000 new roof if you could only just afford the $50,000 house? Maybe America really has wide salary gaps for the same jobs in different places?
  • chris_st 9y ago
    It's entirely possible that no new housing has been built in those areas for decades... and yeah, labor's cheap, but if there's no work in the area, that $10,000 roof is going to cost a lot less. Possibly relevant experience: my daughter attended college in a very small town in rural Tennessee. We were there to drop her off, and overheard a painter talking to the owner of the hotel about doing painting some of the hotel. The painter told the owner the price, and then offered a discount before the owner could reply.
• dbg31415 9y ago
  This isn't the right way to look at a home purchase. Seems like it was written by someone who hasn't bought a house. Homes go up in value, so in the long-run you tend to make money or at least break even. A lot of this depends on how into "keeping up with the Jones" you are. If you remodel your house a lot, need the latest and greatest garage door opener and bathroom sinks... yeah, you're sinking money into the property that you won't ever recover through sales. BUT... that's OK! Because it means you have the house you always wanted, and y'know... we only go around once. Buying vs. renting. Guess what, you're going to spend money putting a roof over your head. That's life. Does it cost more to buy or rent? Over 5 years? 10 years? 30 years? In the long run it's almost always better to buy. But short term, if you know you're only in a city for 5 years... maybe just rent. That's fine. No harm no foul, you're advancing your career... or just living. Don't fret it too much. If you're happy, you're happy. What do you need? Do you need a house with lots of bedrooms for your kids / family? Do you need a year for your dogs? Do you need quick walking access to the coffee shop near the train station? There's no right answer, buying vs. renting... for people who move every 2-5 years, pretty much works out even. (Having done both I can say from experience that buying just ties up a lot of your savings and keeps you from being able to spend it.) Anyway a house is not "years of life" -- it's something you live in for years of your life. You can buy as an investment... and you'll make money. You can trade up ever 2 years... and it's probably better to just rent. Roots are great as long as the local economy is doing well, but if it's not... hey, you've gotta move to keep ahead. Plenty of ways to get ahead in life, a house can be one, or moving city to city as a consultant is one. There's no wrong answer.
• zappo2938 9y ago
  "The price of anything is the amount of life you exchange for it"- Henry David Thoreau from Walden
• panic 9y ago
  Why is California such an outlier? Is it solely due to Prop. 13, or are there other factors?
  • ghaff 9y ago
    A lot comes down to "perfect storm." At least many parts of California have a long history of controlling growth for a variety of reasons including environmental concerns and people wanting to preserve existing character. Proposition 13 likely plays at least some role. People like living in California. For the most part, it's just about the perfect climate whether your idea of a perfect climate is better satisfied by SoCal or NoCal. Lots of natural and other recreation activities of all sorts. Finally, it's been a job growth magnet across a lot of different areas, most recently in certain types of tech. And, with respect to the Bay Area specifically, much of that growth has been relatively sudden on the scale that sort of thing normally happens.
• markvdb 9y ago
  Be my hero and compile a similar map for the EU, from Eurostat data. One possible starting point: http://ec.europa.eu/eurostat/statistics-explained/index.php/Housing_price_statistics_-_house_price_index http://ec.europa.eu/eurostat/statistics-explained/index.php/...
• mabbo 9y ago
  A better metric I like to use: how many extra years of work before retiring will this large expense cost me? (Admittedly: this does not work the same for housing for lots of obvious reasons). An example: a friend of mine is renovating the exterior of his house for $100,000. He plans to live there until he dies (it's a lovely house), so he'll never see that money again. He'll just have a nicer house. My alternative option for him: retire 4 years early instead. If you invest $1 now, you can expect it to double in about 14 years, give or take. So since he has more than 14 years left until retirement, that $100,000 would be $200,000. If he plans to live off $50,000/year, then he's giving up 4 years of retirement for the sake of his house looking nicer. If he plans on living off $30,000, then it's nearly 7 years early retirement. It's not exact math, but it's a good metric to put things in perspective.
  • kowdermeister 9y ago
    Your friend is right. You can't put a price on the feeling that you live in the house of your dreams.
    • mabbo 9y ago
      I'm not saying he's wrong. I'm saying it's worth comparing to other options. And yes, you can put a price on a feeling. If it was $1,000,000, he wouldn't do it and neither would you.
• tim333 9y ago
  The article looks at the cost to buy which is high in places like SF but not total cost of ownership including change in value over the time of ownership. I bought a place in London and the initial cost was >10 wages but then it's gone up by 1 or 2 wages per year so the TCO is negative - it pays me to own it. It can be a mistake not to take that stuff in to account.
• jvvw 9y ago
  If you are in a professional career, then it's not the median salary that matters but the median salary for your particular profession (and indeed whether there are any jobs in your profession in that area). You also want to be looking at home prices for a particular class/size of home as the nature of housing stock varies considerably from place to place. I'm in the UK, 50 minutes by train from one of the mainline London train stations, but prices here are a fraction of what they would be next to that train station. Median salaries here would also be much lower, but if you moved out here and commuted into London, your salary would effectively only decrease by your commuting cost, not lower to the media salary in this area (although you of course then need to commute which has its own set of disadvantages). Other costs such as childcare are significantly cheaper here too than in central London.
• DesiLurker 9y ago
  I recall per bob shiller (of case shiller index) on an average it has taken 30 years of work to own a house throughout ages. Now try to figure out how many years of that life were spent working for real estate agent? at 6.5% commision if you go through 4 houses that's 25% of cost. so effectively 25% of your life you have worked for realtors!
• mmjaa 9y ago
  I've been living in a comfortable, if but small, house, about 15 years now. Its my family home. One of my kids was born in it. That can never be explained in terms of capital.