9 ms·

A national housing crisis is brewing

34 points by spking 8y ago

slenk 8y ago
I feel like they are projecting SF's problem on the rest of the US. In my city, affordable housing isn't available downtown, but it's not more than a 10 minute bus ride away.
- xvedejas 8y ago
  If it's a problem that will follow anywhere experiencing strong economic growth, that's a problem that can affect everyone indirectly. It probably hurts young opportunity-seekers most though.
- moorhosj 8y ago
  Aren’t you possibly doing the reverse with your anecdote? The points raised: higher interests rates, higher construction costs, flat home building stats, slower price growth, and historically low homeownership rates are countrywide facts, not specific to San Fran.
  - mywittyname 8y ago
    But none of those indicate a lack of affordability, except home ownership rates. In most states (31 of 50), the median household income can more than afford a median mortgage. http://time.com/money/5355518/home-price-salary-every-state/ http://time.com/money/5355518/home-price-salary-every-state/ So I agree with the OP, the author of this article is unjustifiably projecting the SF housing crisis onto the rest of the country.
    - jfoutz 8y ago
      Did you get that backwards? Also, this map looks a lot like a population density map - it’s great housing is cheap in Nebraska. But there’s just not many people there. I would say Pennsylvania and Ohio might be worth looking at though. > Indeed, only 19 states have an actual median income that tops the amount needed to buy a home: Alabama, Alaska, Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, West Virginia, Wisconsin, Wyoming.
      - mywittyname 8y ago
        Yes I did. Oops.
      - moorhosj 8y ago
        Pennsylvania and Ohio are interesting in that they contain many rust belt towns devastated by de-industrialization. You can buy an affordable house in Erie, PA or Youngstown, OH because the populations of those towns have fallen as the jobs have left. Doing this type of analysis state-by-state doesn't really tell the story as you can't really live in Youngstown and work in Cleveland or live in Erie and work in Pittsburgh.
        Kihashi 8y ago
        FWIW, there are also plenty of affordable options that are in the Cleveland metro area, too. > Doing this type of analysis state-by-state doesn't really tell the story Yeah. For example, that map does an average of property taxes, which is not super great. Property taxes in some of the suburbs in Cleveland can be higher than your mortgage.
    - rfeather 8y ago
      If you look at the referenced map, the affordable states aren't exactly hotbeds of opportunity. Anecdotally,I had to move from one of those to one of the not affordable ones to have a decent career (by my standards). On a less anecdotal note, they are also less populous states,so they don't represent the condition experienced by most Americans. If trading off "quality of life" for the ability to participate in a high productivity industry like tech is a common experience, what is the aggregate effect on those industries?
- jdlyga 8y ago
  Which city? New York has the same problem.
  - thousandautumns 8y ago
    I would argue most cities outside of a handful of the largest metropolises. I would argue that outside of the LA, San Francisco, New York, Seattle, DC, Boston, and maybe one or two more cities, affordable housing is well within the 10 minute radius posed by the above commenter is pretty common. Obviously that list of cities makes up a large group of Americans, but it still isn't really representative of the country as a whole. That said, at least in my field, the vast majority of jobs are in those cities, and so it becomes problematic when from an employment perspective, it is difficult to avoid those areas, while from a livability perspective, it is financially difficult to get by (at least, without the torturous commutes).
    - mdorazio 8y ago
      I was curious on the actual numbers here so I summed it up based on census data. Between greater LA, the Bay Area, San Diego, NY metro, Seattle, Boston, Austin, and DC there are just under 54 million people, or somewhere between 16-17% of the total US population and significantly higher than that for working age population. Also as you said, the vast majority of high-paying jobs in many fields (excluding Oil & Gas and a few others) are going to be in one of those places.
- skh 8y ago
  In my metropolitan area being 10 minutes from downtown via bus is much different than being in downtown. Our public transit system is such that going from downtown to any other location serviced by the transit system is easy. But if don’t start from downtown then you first, usually, have to go downtown and then catch the bus to the location you want. This makes using the public transit system a burden for anyone who doesn’t live downtown.
- magduf 8y ago
  In my city (DC), housing is expensive everywhere unless you're willing to drive 2 hours each way to work.
  - JohnJamesRambo 8y ago
    Move to slenk's city!
    - slenk 8y ago
      ha. I guess I do live in a smaller city (Grand Rapids, MI). We do have housing issues downtown that's for sure, but just a little outside it seems better. Maybe I am turning my opinion around
- in_cahoots 8y ago
  The author is the Chief Economist for Moody’s Analytics, I believe he’s located in New York. Your point still stands but I’m hoping someone with such an influential position is skilled at taking a broader perspective.
jeletonskelly 8y ago
A lot of young people are saddled with student loans that eat into their budgets for things like housing. Obviously a lot of factors at play.
- magduf 8y ago
  I think it'd really be better if young people stopped getting student loans, and just didn't go to college, so they wouldn't have this problem. Eventually, the problem of overpriced housing will correct itself.
  - ilikehurdles 8y ago
    By the same logic, if they keep at it, eventually wages will rise to accommodate increased housing costs, and the problem corrects itself. The problem is “eventually” has an unclear definition in both cases, and few are willing to sacrifice their potential of attaining certain careers or income in exchange for working low wage jobs waiting for a hypothetical future correction of this inequality. It’s hard to level existing residences in many historic cities and so housing costs rise, yet people are still wanting the opportunities afforded by those cities enough to sacrifice having better housing conditions elsewhere.
    - magduf 8y ago
      >It’s hard to level existing residences in many historic cities and so housing costs rise, yet people are still wanting the opportunities afforded by those cities enough to sacrifice having better housing conditions elsewhere. We don't have historic cities in America. At best, we have a few small historic districts, but everything else in the metro area is certainly not historic. But they don't build enough housing anyway, because too many Americans want McMansions instead of condos which are far more space-efficient. The Bay area is particularly awful since existing homeowners have too much power (and local government has way too much power; local government should have NO power to restrict development, that should be the state's decision) and won't allow higher-density housing to be built as it affects their property values. This is a uniquely American problem. >The problem is “eventually” has an unclear definition in both cases, and few are willing to sacrifice their potential of attaining certain careers or income in exchange for working low wage jobs waiting for a hypothetical future correction of this inequality. My proposal is to just let the economy crash and take a couple of generations to recover, so just worry about your kids or grandkids having a better future. It's basically what's going to happen anyway, so you might as well not burden yourself with student debt. The situation we have now is totally unsustainable.
apearson 8y ago
Non-mobile link: https://www.sfgate.com/news/article/A-national-housing-crisis-is-brewing-What-13505365.php https://www.sfgate.com/news/article/A-national-housing-crisi...
olivermarks 8y ago
https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA Overpriced and due for a correction
- epistasis 8y ago
  There's a couple reasons it could be over priced. If it's a bubble, then we could be due for a correction. If it's a shortage, and it certainly looks more like a shortage from my vantage point in California, there wont be a huge fall in prices unless there's a large economic decline.
  - helen___keller 8y ago
    Probably both a bubble and a shortage. I can't speak for California, but in Boston rents are high and mortgages to sustain the same units are much much higher. Regardless of the existence of a housing shortage, this is bubble economics. In a zero-speculation environment, the total cost of homeownership should be comparable to the cost of renting. Without speculation, market prices in places like Boston mean investment properties are absolutely horrid investments because they have little or no return (when you factor in the total cost of managing the property and the opportunity cost of the capital used to purchase the property). The fact that despite this most properties are rented means that landowners are banking on rents rising to meet current prices (or they aren't confident they can sell at current "market price" in a short amount of time - real estate can't be easily liquidated with a click like stocks can, plus there's tons of overhead costs involved in trying to liquidate real estate) Or to put it in other words, the high rents in boston reflect the current housing shortage and the higher home prices in boston reflect the expected continuation of the housing shortage (backed by the reality that population here is increasing faster than housing is being built)
    - pjmorris 8y ago
      Actually, rents should not just be about equal to mortgages+maintenance but higher, because they are more liquid - it's easier and cheaper to finish or exit a lease than it is to sell a house, and that's worth something.
bradleyjg 8y ago
Zandi is the chief economist at Moody's Analytics. Does Moody’s stand to benefit more or less directly from the policy changes being advocated here?
outside1234 8y ago
The real housing crisis is the inability of cities like SF to approve redevelopment projects to tear down single story structures and build multistory structures as fast as is needed by the growth of the economy. We might not like to admit this but part of this problem is us: people vote against putting up an apartment complex across the street from them while claiming that "affordable housing" should simultaneously exist. This leads to all sorts of bad decisions like restricting this building, but when we do build it, setting aside two apartments for "low income" occupants that is intellectually dishonest at best.
- helen___keller 8y ago
  To add to this, it's not just that restricting the housing supply results in a shortage. Also, because there's systematic restrictions on construction, speculating on a continued housing shortage (and hence consistently high housing prices) is a surefire bet if the housing supply never increases. If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. On the other hand, going housepoor on a six figure salary seems like a reasonable choice when you see articles like this https://www.mercurynews.com/2018/06/28/map-shows-it-may-take-centuries-to-reach-housing-goals-in-the-bay-area/ https://www.mercurynews.com/2018/06/28/map-shows-it-may-take... and think that you might not have another chance in your lifetime to afford a house in the area.
  - mywittyname 8y ago
    > If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. This is absolutely the way people think, but it might actually not be true. The person in question may be able to sell their land for a large multiple of their purchase price, if a developer were able to tear down the structure to build a multi-tenant dwelling. As it currently stands, the maximum economic value that can be derived is based on that of a single family home for the top x% of earners who can afford to buy one. But if you could house ten families on the same land, the economic value probably skyrockets.
CHsurfer 8y ago
Things aren't likely to get better soon, particularly for lower- and middle-income households struggling to make the rent and become homeowners. This sounds backwards. If housing prices stop going up, won’t it be easier to make the jump from renter to buyer?
cherrygarcia 8y ago
I don't know about SF (I have no first hand experience there) but I can say that the market in the Boston area seems similarly overpriced and not very sustainable. Maybe for some different reasons, maybe some are the same. It's to the point where mediocre 3br suburban homes even far from the city are 500k+. It makes me very hesitant to purchase a home right now because I don't see how the value could do much anything besides decrease from here. That's my gut feeling. Would love to understand better how prices could continue to increase still.
- leongrado 8y ago
  Agreed. I recently moved from the Midwest to Boston and the housing and rent prices are giving me major sticker shock. My rent has tripled and looking at the housing prices, looks like they have too. Who's buying these 1 million dollar homes?
  - shados 8y ago
    That's easy. Depending on the interest rate, condo fees, taxes, etc, a 1 million home is about $4500 (less when the interest rates were lower, I think). If you have a couple of DINKs, it's 2250 per person per month, or about $27000/year. 150k/year per person, about 90-100k/year after tax, and that's well under 30% of your take home pay. I used round numbers and I'm probably off, but even if you have to tweak the math, it's pretty easy to see where people are coming from. When I was looking to buy in the area, a bunch of people looking at the open houses were couples with both people sporting their Amazon/Microsoft/Google/whatever backpacks or jackets.
- shados 8y ago
  Define "far from the city". A 3br for 500k is available (if on the low-ish end) for Whaltam, which Boston folks consider to be in the middle of nowhere, but if it wasn't for traffic/transportation problems, wouldn't be all that far (it's not very far at all if it wasn't for the traffic issues). A friend of mine just got a 1BR 50 minutes away for <150k (and it wasnt even a fixer upper, and is on the commuter rail). 50 minutes is "far", but it's far from insane... IMO Boston has a lot of places that can be developed within 30-45 minutes before we really need to start tearing everything down. (There's 3 high density development in construction literally in my backyard, so I'm not saying that because I have anything to gain from it, either). The biggest thing to fix about the Boston area right now is the entrance from the suburb into Cambridge...the Alewife area is ridiculous, but that's what happens when you built a ton of mid/high rise without proper planning of infrastructure.
api 8y ago
Brewing? We have had a national housing crisis since the bubble around 2005 made housing unthinkable to a generation and then the crash destroyed those who did manage to wedge into an overpriced house. Since then we've reinflated to sacrifice the young to the baby boomers, and now it looks like another crash is looming. The housing market hasn't been sane in 20 years. Brewing? Seriously? People wonder what is fueling populist rage and a desire to basically fire everyone in any position of authority or expertise...
forgingahead 8y ago
Housing cannot be both an asset, and also affordable. Pick one.
- deleted 8y ago
  [deleted]
robterrin 8y ago
Just going to leave this here: https://www.bloomberg.com/news/articles/2019-01-03/manhattan-home-prices-fall-under-1-million-as-sellers-cut-deals https://www.bloomberg.com/news/articles/2019-01-03/manhattan... I buy the story about rates and mobility falling in general, although I think this a longer term trend. Mostly, if wages stagnate, people don't buy homes. Not rocket science. Been going on for nearly 50 years now.
RickJWagner 8y ago
I think there will be problems in housing, but not the problems this article describes. (Yes, I am over 40. And no, a 5% mortgage is not remotely problematic.) With increased automation and wage stratification, there will be fewer jobs and fewer good-paying ones to allow people to buy houses. The price of housing has always marched upward, but it will get to the point where only the wealthy can afford a house. That's my guess, anyway. Time will tell.

34 points by spking 8y ago

I feel like they are projecting SF's problem on the rest of the US. In my city, affordable housing isn't available downtown, but it's not more than a 10 minute bus ride away.

xvedejas 8y ago
If it's a problem that will follow anywhere experiencing strong economic growth, that's a problem that can affect everyone indirectly. It probably hurts young opportunity-seekers most though.
moorhosj 8y ago
Aren’t you possibly doing the reverse with your anecdote? The points raised: higher interests rates, higher construction costs, flat home building stats, slower price growth, and historically low homeownership rates are countrywide facts, not specific to San Fran.
- mywittyname 8y ago
  But none of those indicate a lack of affordability, except home ownership rates. In most states (31 of 50), the median household income can more than afford a median mortgage. http://time.com/money/5355518/home-price-salary-every-state/ http://time.com/money/5355518/home-price-salary-every-state/ So I agree with the OP, the author of this article is unjustifiably projecting the SF housing crisis onto the rest of the country.
  - jfoutz 8y ago
    Did you get that backwards? Also, this map looks a lot like a population density map - it’s great housing is cheap in Nebraska. But there’s just not many people there. I would say Pennsylvania and Ohio might be worth looking at though. > Indeed, only 19 states have an actual median income that tops the amount needed to buy a home: Alabama, Alaska, Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, West Virginia, Wisconsin, Wyoming.
    - mywittyname 8y ago
      Yes I did. Oops.
    - moorhosj 8y ago
      Pennsylvania and Ohio are interesting in that they contain many rust belt towns devastated by de-industrialization. You can buy an affordable house in Erie, PA or Youngstown, OH because the populations of those towns have fallen as the jobs have left. Doing this type of analysis state-by-state doesn't really tell the story as you can't really live in Youngstown and work in Cleveland or live in Erie and work in Pittsburgh.
      - Kihashi 8y ago
        FWIW, there are also plenty of affordable options that are in the Cleveland metro area, too. > Doing this type of analysis state-by-state doesn't really tell the story Yeah. For example, that map does an average of property taxes, which is not super great. Property taxes in some of the suburbs in Cleveland can be higher than your mortgage.
  - rfeather 8y ago
    If you look at the referenced map, the affordable states aren't exactly hotbeds of opportunity. Anecdotally,I had to move from one of those to one of the not affordable ones to have a decent career (by my standards). On a less anecdotal note, they are also less populous states,so they don't represent the condition experienced by most Americans. If trading off "quality of life" for the ability to participate in a high productivity industry like tech is a common experience, what is the aggregate effect on those industries?
jdlyga 8y ago
Which city? New York has the same problem.
- thousandautumns 8y ago
  I would argue most cities outside of a handful of the largest metropolises. I would argue that outside of the LA, San Francisco, New York, Seattle, DC, Boston, and maybe one or two more cities, affordable housing is well within the 10 minute radius posed by the above commenter is pretty common. Obviously that list of cities makes up a large group of Americans, but it still isn't really representative of the country as a whole. That said, at least in my field, the vast majority of jobs are in those cities, and so it becomes problematic when from an employment perspective, it is difficult to avoid those areas, while from a livability perspective, it is financially difficult to get by (at least, without the torturous commutes).
  - mdorazio 8y ago
    I was curious on the actual numbers here so I summed it up based on census data. Between greater LA, the Bay Area, San Diego, NY metro, Seattle, Boston, Austin, and DC there are just under 54 million people, or somewhere between 16-17% of the total US population and significantly higher than that for working age population. Also as you said, the vast majority of high-paying jobs in many fields (excluding Oil & Gas and a few others) are going to be in one of those places.
skh 8y ago
In my metropolitan area being 10 minutes from downtown via bus is much different than being in downtown. Our public transit system is such that going from downtown to any other location serviced by the transit system is easy. But if don’t start from downtown then you first, usually, have to go downtown and then catch the bus to the location you want. This makes using the public transit system a burden for anyone who doesn’t live downtown.
magduf 8y ago
In my city (DC), housing is expensive everywhere unless you're willing to drive 2 hours each way to work.
- JohnJamesRambo 8y ago
  Move to slenk's city!
  - slenk 8y ago
    ha. I guess I do live in a smaller city (Grand Rapids, MI). We do have housing issues downtown that's for sure, but just a little outside it seems better. Maybe I am turning my opinion around
in_cahoots 8y ago
The author is the Chief Economist for Moody’s Analytics, I believe he’s located in New York. Your point still stands but I’m hoping someone with such an influential position is skilled at taking a broader perspective.

jeletonskelly 8y ago

A lot of young people are saddled with student loans that eat into their budgets for things like housing. Obviously a lot of factors at play.

magduf 8y ago
I think it'd really be better if young people stopped getting student loans, and just didn't go to college, so they wouldn't have this problem. Eventually, the problem of overpriced housing will correct itself.
- ilikehurdles 8y ago
  By the same logic, if they keep at it, eventually wages will rise to accommodate increased housing costs, and the problem corrects itself. The problem is “eventually” has an unclear definition in both cases, and few are willing to sacrifice their potential of attaining certain careers or income in exchange for working low wage jobs waiting for a hypothetical future correction of this inequality. It’s hard to level existing residences in many historic cities and so housing costs rise, yet people are still wanting the opportunities afforded by those cities enough to sacrifice having better housing conditions elsewhere.
  - magduf 8y ago
    >It’s hard to level existing residences in many historic cities and so housing costs rise, yet people are still wanting the opportunities afforded by those cities enough to sacrifice having better housing conditions elsewhere. We don't have historic cities in America. At best, we have a few small historic districts, but everything else in the metro area is certainly not historic. But they don't build enough housing anyway, because too many Americans want McMansions instead of condos which are far more space-efficient. The Bay area is particularly awful since existing homeowners have too much power (and local government has way too much power; local government should have NO power to restrict development, that should be the state's decision) and won't allow higher-density housing to be built as it affects their property values. This is a uniquely American problem. >The problem is “eventually” has an unclear definition in both cases, and few are willing to sacrifice their potential of attaining certain careers or income in exchange for working low wage jobs waiting for a hypothetical future correction of this inequality. My proposal is to just let the economy crash and take a couple of generations to recover, so just worry about your kids or grandkids having a better future. It's basically what's going to happen anyway, so you might as well not burden yourself with student debt. The situation we have now is totally unsustainable.

apearson 8y ago

Non-mobile link: https://www.sfgate.com/news/article/A-national-housing-crisis-is-brewing-What-13505365.php https://www.sfgate.com/news/article/A-national-housing-crisi...

olivermarks 8y ago

https://fred.stlouisfed.org/series/CSUSHPINSA https://fred.stlouisfed.org/series/CSUSHPINSA Overpriced and due for a correction

epistasis 8y ago
There's a couple reasons it could be over priced. If it's a bubble, then we could be due for a correction. If it's a shortage, and it certainly looks more like a shortage from my vantage point in California, there wont be a huge fall in prices unless there's a large economic decline.
- helen___keller 8y ago
  Probably both a bubble and a shortage. I can't speak for California, but in Boston rents are high and mortgages to sustain the same units are much much higher. Regardless of the existence of a housing shortage, this is bubble economics. In a zero-speculation environment, the total cost of homeownership should be comparable to the cost of renting. Without speculation, market prices in places like Boston mean investment properties are absolutely horrid investments because they have little or no return (when you factor in the total cost of managing the property and the opportunity cost of the capital used to purchase the property). The fact that despite this most properties are rented means that landowners are banking on rents rising to meet current prices (or they aren't confident they can sell at current "market price" in a short amount of time - real estate can't be easily liquidated with a click like stocks can, plus there's tons of overhead costs involved in trying to liquidate real estate) Or to put it in other words, the high rents in boston reflect the current housing shortage and the higher home prices in boston reflect the expected continuation of the housing shortage (backed by the reality that population here is increasing faster than housing is being built)
  - pjmorris 8y ago
    Actually, rents should not just be about equal to mortgages+maintenance but higher, because they are more liquid - it's easier and cheaper to finish or exit a lease than it is to sell a house, and that's worth something.

bradleyjg 8y ago

Zandi is the chief economist at Moody's Analytics. Does Moody’s stand to benefit more or less directly from the policy changes being advocated here?

outside1234 8y ago

The real housing crisis is the inability of cities like SF to approve redevelopment projects to tear down single story structures and build multistory structures as fast as is needed by the growth of the economy. We might not like to admit this but part of this problem is us: people vote against putting up an apartment complex across the street from them while claiming that "affordable housing" should simultaneously exist. This leads to all sorts of bad decisions like restricting this building, but when we do build it, setting aside two apartments for "low income" occupants that is intellectually dishonest at best.

helen___keller 8y ago
To add to this, it's not just that restricting the housing supply results in a shortage. Also, because there's systematic restrictions on construction, speculating on a continued housing shortage (and hence consistently high housing prices) is a surefire bet if the housing supply never increases. If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. On the other hand, going housepoor on a six figure salary seems like a reasonable choice when you see articles like this https://www.mercurynews.com/2018/06/28/map-shows-it-may-take-centuries-to-reach-housing-goals-in-the-bay-area/ https://www.mercurynews.com/2018/06/28/map-shows-it-may-take... and think that you might not have another chance in your lifetime to afford a house in the area.
- mywittyname 8y ago
  > If people somewhere nearby were building a lot of housing, an individual would feel a lot less certain about committing 7 figures of debt to own a dinky 3 bedroom house built last century, because the value is derived entirely from scarcity. This is absolutely the way people think, but it might actually not be true. The person in question may be able to sell their land for a large multiple of their purchase price, if a developer were able to tear down the structure to build a multi-tenant dwelling. As it currently stands, the maximum economic value that can be derived is based on that of a single family home for the top x% of earners who can afford to buy one. But if you could house ten families on the same land, the economic value probably skyrockets.

CHsurfer 8y ago

Things aren't likely to get better soon, particularly for lower- and middle-income households struggling to make the rent and become homeowners. This sounds backwards. If housing prices stop going up, won’t it be easier to make the jump from renter to buyer?

cherrygarcia 8y ago

I don't know about SF (I have no first hand experience there) but I can say that the market in the Boston area seems similarly overpriced and not very sustainable. Maybe for some different reasons, maybe some are the same. It's to the point where mediocre 3br suburban homes even far from the city are 500k+. It makes me very hesitant to purchase a home right now because I don't see how the value could do much anything besides decrease from here. That's my gut feeling. Would love to understand better how prices could continue to increase still.

leongrado 8y ago
Agreed. I recently moved from the Midwest to Boston and the housing and rent prices are giving me major sticker shock. My rent has tripled and looking at the housing prices, looks like they have too. Who's buying these 1 million dollar homes?
- shados 8y ago
  That's easy. Depending on the interest rate, condo fees, taxes, etc, a 1 million home is about $4500 (less when the interest rates were lower, I think). If you have a couple of DINKs, it's 2250 per person per month, or about $27000/year. 150k/year per person, about 90-100k/year after tax, and that's well under 30% of your take home pay. I used round numbers and I'm probably off, but even if you have to tweak the math, it's pretty easy to see where people are coming from. When I was looking to buy in the area, a bunch of people looking at the open houses were couples with both people sporting their Amazon/Microsoft/Google/whatever backpacks or jackets.
shados 8y ago
Define "far from the city". A 3br for 500k is available (if on the low-ish end) for Whaltam, which Boston folks consider to be in the middle of nowhere, but if it wasn't for traffic/transportation problems, wouldn't be all that far (it's not very far at all if it wasn't for the traffic issues). A friend of mine just got a 1BR 50 minutes away for <150k (and it wasnt even a fixer upper, and is on the commuter rail). 50 minutes is "far", but it's far from insane... IMO Boston has a lot of places that can be developed within 30-45 minutes before we really need to start tearing everything down. (There's 3 high density development in construction literally in my backyard, so I'm not saying that because I have anything to gain from it, either). The biggest thing to fix about the Boston area right now is the entrance from the suburb into Cambridge...the Alewife area is ridiculous, but that's what happens when you built a ton of mid/high rise without proper planning of infrastructure.

api 8y ago

Brewing? We have had a national housing crisis since the bubble around 2005 made housing unthinkable to a generation and then the crash destroyed those who did manage to wedge into an overpriced house. Since then we've reinflated to sacrifice the young to the baby boomers, and now it looks like another crash is looming. The housing market hasn't been sane in 20 years. Brewing? Seriously? People wonder what is fueling populist rage and a desire to basically fire everyone in any position of authority or expertise...

forgingahead 8y ago

Housing cannot be both an asset, and also affordable. Pick one.

deleted 8y ago
[deleted]

robterrin 8y ago

Just going to leave this here: https://www.bloomberg.com/news/articles/2019-01-03/manhattan-home-prices-fall-under-1-million-as-sellers-cut-deals https://www.bloomberg.com/news/articles/2019-01-03/manhattan... I buy the story about rates and mobility falling in general, although I think this a longer term trend. Mostly, if wages stagnate, people don't buy homes. Not rocket science. Been going on for nearly 50 years now.

RickJWagner 8y ago

I think there will be problems in housing, but not the problems this article describes. (Yes, I am over 40. And no, a 5% mortgage is not remotely problematic.) With increased automation and wage stratification, there will be fewer jobs and fewer good-paying ones to allow people to buy houses. The price of housing has always marched upward, but it will get to the point where only the wealthy can afford a house. That's my guess, anyway. Time will tell.