10 ms·

well as a 30 year old looking for my first home who grew up in the bay area... yeah that's exactly what I feel.

wyre_ 6y ago
As a 26 year old the feels stuck working minimum wage jobs I feel the same way. Similar to the college industry as well.
refurb 6y ago
Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily. That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on. To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home).
- legulere 6y ago
  Moving often means leaving friends and family behind.
  - refurb 6y ago
    There are drawbacks. But find a lower cost of living city and the savings on housing means you could probably fly back home once a month and still be ahead.
    - alisonkisk 6y ago
      Sacrificing 10% of your life to air travel, plus massive fuel waste, doesn't sound nice
      - missedthecue 6y ago
        Point is, you can't expect to have your cake and eat it too
        FiReaNG3L 6y ago
        You mean, like the previous generation did?
        chrononaut 6y ago
        Worth noting that [in the US] a large part of the previous generation ended up living in cheaper suburbs because of flight from urban areas, which also made those urban areas cheaper.
        refurb 6y ago
        I think you’re romanticizing the prior generation. Sure they could buy a house with a blue collar job, but they weren’t doing that in NYC or other top tier cities and they often lived in much smaller home. Maybe 2bed/1bath 1000 sq ft house for a family of 5. My entire extended family struggled a lot when growing up in the 50-70s. It’s easy to look back at those that lucked out and bought a house in a prime location in CA (before it was prime) and say how easy they had it. You’re just ignoring all those people who did the same in Ohio and Michigan and lost their jobs and have houses worth about the same as when they bought it (adjusting for inflation).
        rrrrrrrrrrrryan 6y ago
        There are extremes at both sides of the spectrum - Detroit real estate plummeted, San Francisco real estate skyrocketed. You're right to point out that there isn't one narrative that defines the prior generation. Some people lucked out, others didn't, but the reality is that on average (both median and mean) home prices have drastically outpaced wage growth for the past few decades, which is obviously unsustainable. The best the younger generations can hope for is to eventually have enough wage growth to afford a home that hopefully holds its value.
        CydeWeys 6y ago
- epicureanideal 6y ago
  The problem is that at the same time, the good jobs are being concentrated in a small number of cities. Even if someone is willing to move to a cheaper place, they find that relative to the employment available, it isn't much better. In the end, they realize that no matter what they choose, they need to struggle incredibly hard just to get a similar quality of life to what a baby boomer was able to achieve with a high school diploma and a manual labor job.
  - alisonkisk 6y ago
    You just have to take some of that time saved thanks to internet and smartphones, and put it into commuting. or telecommute.
  - MattGaiser 6y ago
    The good jobs are concentrated in a small number of cities. But the number of cities is far larger than SFO and NYC.
    - bluedino 6y ago
      The bad part of this is the wage variation. In Smalltown, USA, a programmer or network administrator might make $55k per year. However, 90 minutes away in the largest city in the state, you have people making $75k to reset passwords or change backup tapes.
  - markvdb 6y ago
    More difficult than the baby boomer generation most certainly, but not impossible. You could take the arbitrage further by increasing upfront and post move earnings and decreasing future expenses: - Save up "no thanks" money at the high cost of living place. Not "f* y" money, but a significant sum. - Ideally, find a remote job at the hight cost of living place. - Relocate to a low cost of living place with decent socialised medicine. This can lower provisions for future expenses _a lot_. At least in the EU, there are nice and safe places with very low real estate prices, quite decent socialised medicine, very low taxes and easy cheap transportation links around the continent.
- jointpdf 6y ago
  Housing (and construction) prices have been ballooning out of control everywhere for the last several years. Both major cities (DC, Boston, Portland, Seattle, Chicago, LA, Denver, San Diego) and secondary cities (Boise ID, Grand Rapids MI, many more) are all totally unaffordable. I’ve spent hundreds of hours researching different areas over the last year. Looking at sold homes from just 2-3 years ago, many seem like a steal compared to what’s available now. It’s just extremely bleak. Meanwhile, my landlord bragged about buying the house I live in with no money down and no income check during the subprime mortgage era, and has been renting it out since. Now he is selling it during a pandemic and I’m about to become a vagabond. I do think the vacuuming up of affordable housing by real estate investors (perhaps many of whom accumulated wealth via the surging stock market) is at least part of the problem. Landowners have strong incentives to keep the housing stock low (and the rents high), or they get washed.
  - mrep 6y ago
    What data are you looking at? Median home price for Chicago (where I live incidentally) is 229,000, for Dallas is 225,000, for Houston is 197,000 according to this source [0] and those are the 3rd, 4th, and 5th largest metropolitan statistical areas in the United States and Dallas and Houston have both grown a whopping 19% in the past decade [1]. Trick is, they all still have plenty of land to build new homes on to keep up with demand growth. [0]: https://www.kiplinger.com/article/real-estate/t010-c000-s002-home-price-changes-in-the-100-largest-metro-areas.html https://www.kiplinger.com/article/real-estate/t010-c000-s002... [1]: https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas https://en.wikipedia.org/wiki/List_of_metropolitan_statistic...
    - mywittyname 6y ago
      The past few years have hit the construction industry hard, with the trade war spiking steel prices, the crack down on immigration combined with low unemployment reducing the workforce, and now there's a lumber shortage to go along with the pandemic. I built a house during the beginning of this mess and it was painful: it took 13 months to build a house that would normally take 8. The cost of construction has risen such that I can't find a new construction house in my area for under $400,000 with the median on Zillow being $495,000. And this is for an area in the midwest that those reports you link report "median home price" of well under $200,000. If you can't build cheap houses, then soon there won't be cheap houses. A lot of cities on that first list are reporting 10%+ YoY changes. That's significant. Those used to be numbers you'd see in Seattle Washington, not fucking Allentown Pennsylvania...
- inglor_cz 6y ago
  We are having precisely the same convo in my family, in the Czech republic. My wife is from Prague. A gem of a city, but unaffordable. Too much speculative capital from Russia, China etc. Being a slave of a mortgage until 70 is a ghastly prospect. I am from Ostrava, a post-industrial city where property prices are about a third of Prague level. Incomes are lower, but not that much lower. For an accountant (my wife is), the difference is about 10 per cent. Overall, much easier to sustain middle class life standard. She does not like the idea of leaving her native city, but if we manage to have a child (still a very open question), we will have to, at least for a few years.
  - jacobush 6y ago
    If you can rent significantly cheaper than total cost of servicing loans etc, consider investing the difference in index funds and rent as cheap as you can. It might be a good bet, especially if speculation in housing is slowing down compared to the last 20-30 years.
    - ethbr0 6y ago
      It's possible the problem isn't speculation, but the rate of return on capital vs the rate of return on labor. If capital dominates, you're going to run into scenarios where it's fundamentally impossible to ever afford scarce goods that generate returns, because someone who started with more capital will now have an even larger delta with you, and is therefore able to outbid you.
      - the_gastropod 6y ago
        Not all capital generates the same returns. Index funds have virtually no gatekeeper—you can open a brokerage account, toss in $10, and be an honest-to-god capitalist. And stocks tend to outperform real estate by a hefty margin. So catching up is possible.
        ethbr0 6y ago
        Unfortunately, you need somewhere to live while you're catching up. How much of salary - CoL can an average person dedicate to building capital? I'm not saying it's hopeless, only that there are systemic factors fighting against home ownership in extremely supply-limited cities.
- rebuilder 6y ago
  This is a side effect of urbanization. Economic opportunity is increasingly concentrated in cities and the increased demand inevitably increases the cost of housing. If that cost becomes too high relative to the income increase gained by living in, say, SF, people will certainly move elsewhere. But they'll still largely move to cities, and the cycle will just repeat there.
  - AstralStorm 6y ago
    No it isn't. There's tons of free space surrounding cities, including with developed infrastructure and support. The demand driven forcing is miniscule compared to artificial scarcity due to zoning permits or bad infrastructure. (Typically slow transportation.)
    - Schiendelman 6y ago
      Not just surrounding cities - to your point, above them. All those single family neighborhoods. All those new buildings built to 6 stories instead of 60. In Seattle, basically every building built is built to the maximum zoning allows. And it’s all arbitrary - purely about the whims of the local homeowners.
      - rwmurrayVT 6y ago
        My parents moved to Charlotte, NC in 1999. It amazes me the sheer growth in HOUSING in city center. There are several new buildings well beyond 6 stories. There are even more new buildings in the 3-8 range in areas like South End. There are even more single family homes further out of the city. It may not be perfect, but it's seriously beautiful and developed nicely in the last 20 years.
        jehb 6y ago
        It can't be understated what a huge impact the Lynx Blue Line (light rail) had on Charlotte's ability to shape and concentrate their growth in the past 15-20 years. Developers started planning and building around it well before it opened. Strong transit can make a huge impact on affordability, especially if it frees families up from the burden of car ownership (expensive depreciating assets with large operating costs).
- rayiner 6y ago
  I mean this is an excellent point. There was a reason they built semiconductor facilities where Silicon Valley now is, and why all the housing is so drab. It was not a highly desirable place to live back then. At today’s prices, my parents couldn’t have afforded to live in the drab DC suburb where I grew up. But there were almost no jobs paying six figures in the area back then, nothing like today.
- IkmoIkmo 6y ago
  > Unless you got in early or are one of the 1%, it's not a great place to try and build a life in I mean, even if you got in early, you're still locking up lots of wealth in housing, an opportunity cost that could be differently spent. For example, suppose you bought a place in NY in the 80s for 200k that's now $3m. Sure, you got in early and your mortgage has been paid off and you live without any housing expenses (outside of taxes, hoa etc, let's for the sake of argument ignore those). Let's assume we consider this to be living in 'free housing'. But the S&P500 does 10% a year on long-term averages. It is still fully up to you to say, I like living in NY so much, that I want to forgo selling my home for $3m, putting it in the stock-market, and earning a passive average $300k a year (which compounds if left (partially) unspent, for example it'd turn into $770k a year after 10 years if not spent). That $3m property, then, is at times a greater portion of someone's income than their own salary. I know some old people (50-60) who have nice careers, make $150-200k, yet live in a property in which $200-300k of annual investment income is locked-up. In a way, these people are 'spending' $200-300k a year on housing, while an alternative housing choice (e.g. renting a place for $3k somewhere else and selling their home and investing it long-term) would cost maybe $30-40k. You can argue the details like whether the $3m or 10% stock return is accurate, they're just examples. But the point still stands, even those who got in early and continue choosing to live there, are continuously forgoing a lot of money (which can translate into a very high quality of life elsewhere). I live in the capital of a EU country and own a home outright. In terms of monthly cashflow, housing is not a big deal as I just pay some taxes. Yet it's starting to weigh more heavily on me whether to stay here, or whether to sell my home, take all that money and enjoy a much higher income/consumption level elsewhere. I used to really enjoy the city and all that it had to offer, but sometimes I now find myself just working all the time, with barely any energy, time or motivation to make use of it to its fullest. I don't think enough people consider that you can be so called 'house poor', while owning an expensive home without a mortgage.
  - jointpdf 6y ago
    I’m not sure about the EU, but in the US you could do a cash-out refinance. Effectively, liquidate your equity in the house in exchange for interest payments that go to the bank (~3%), then invest that cash elsewhere.
zalkota 6y ago
Welcome to communism! Maybe try another state chap! I was easily able to buy a house outside of California.
throwaway6734 6y ago
Consider Baltimore. There's some tech work in the city + a good chunk between Baltimore & DC. Areas like Locust Point, Roland Park, Hampden, Fells Point, etc.

As a 26 year old the feels stuck working minimum wage jobs I feel the same way. Similar to the college industry as well.

refurb 6y ago

Not to be snarky or obvious, but you should do what the people in the past did - find a better place to live that allows you to buy a home more easily. That's one of the reasons why there was a big migration to places like LA. Lots of jobs and cheap land to build on. To me, SF is like NYC. Unless you got in early or are one of the 1%, it's not a great place to try and build a life in (if you're looking to own a home).

legulere 6y ago
Moving often means leaving friends and family behind.
- refurb 6y ago
  There are drawbacks. But find a lower cost of living city and the savings on housing means you could probably fly back home once a month and still be ahead.
  - alisonkisk 6y ago
    Sacrificing 10% of your life to air travel, plus massive fuel waste, doesn't sound nice
    - missedthecue 6y ago
      Point is, you can't expect to have your cake and eat it too
      - FiReaNG3L 6y ago
        You mean, like the previous generation did?
        chrononaut 6y ago
        Worth noting that [in the US] a large part of the previous generation ended up living in cheaper suburbs because of flight from urban areas, which also made those urban areas cheaper.
        refurb 6y ago
        I think you’re romanticizing the prior generation. Sure they could buy a house with a blue collar job, but they weren’t doing that in NYC or other top tier cities and they often lived in much smaller home. Maybe 2bed/1bath 1000 sq ft house for a family of 5. My entire extended family struggled a lot when growing up in the 50-70s. It’s easy to look back at those that lucked out and bought a house in a prime location in CA (before it was prime) and say how easy they had it. You’re just ignoring all those people who did the same in Ohio and Michigan and lost their jobs and have houses worth about the same as when they bought it (adjusting for inflation).
        rrrrrrrrrrrryan 6y ago
        There are extremes at both sides of the spectrum - Detroit real estate plummeted, San Francisco real estate skyrocketed. You're right to point out that there isn't one narrative that defines the prior generation. Some people lucked out, others didn't, but the reality is that on average (both median and mean) home prices have drastically outpaced wage growth for the past few decades, which is obviously unsustainable. The best the younger generations can hope for is to eventually have enough wage growth to afford a home that hopefully holds its value.
      - CydeWeys 6y ago
epicureanideal 6y ago
The problem is that at the same time, the good jobs are being concentrated in a small number of cities. Even if someone is willing to move to a cheaper place, they find that relative to the employment available, it isn't much better. In the end, they realize that no matter what they choose, they need to struggle incredibly hard just to get a similar quality of life to what a baby boomer was able to achieve with a high school diploma and a manual labor job.
- alisonkisk 6y ago
  You just have to take some of that time saved thanks to internet and smartphones, and put it into commuting. or telecommute.
- MattGaiser 6y ago
  The good jobs are concentrated in a small number of cities. But the number of cities is far larger than SFO and NYC.
  - bluedino 6y ago
    The bad part of this is the wage variation. In Smalltown, USA, a programmer or network administrator might make $55k per year. However, 90 minutes away in the largest city in the state, you have people making $75k to reset passwords or change backup tapes.
- markvdb 6y ago
  More difficult than the baby boomer generation most certainly, but not impossible. You could take the arbitrage further by increasing upfront and post move earnings and decreasing future expenses: - Save up "no thanks" money at the high cost of living place. Not "f* y" money, but a significant sum. - Ideally, find a remote job at the hight cost of living place. - Relocate to a low cost of living place with decent socialised medicine. This can lower provisions for future expenses _a lot_. At least in the EU, there are nice and safe places with very low real estate prices, quite decent socialised medicine, very low taxes and easy cheap transportation links around the continent.
jointpdf 6y ago
Housing (and construction) prices have been ballooning out of control everywhere for the last several years. Both major cities (DC, Boston, Portland, Seattle, Chicago, LA, Denver, San Diego) and secondary cities (Boise ID, Grand Rapids MI, many more) are all totally unaffordable. I’ve spent hundreds of hours researching different areas over the last year. Looking at sold homes from just 2-3 years ago, many seem like a steal compared to what’s available now. It’s just extremely bleak. Meanwhile, my landlord bragged about buying the house I live in with no money down and no income check during the subprime mortgage era, and has been renting it out since. Now he is selling it during a pandemic and I’m about to become a vagabond. I do think the vacuuming up of affordable housing by real estate investors (perhaps many of whom accumulated wealth via the surging stock market) is at least part of the problem. Landowners have strong incentives to keep the housing stock low (and the rents high), or they get washed.
- mrep 6y ago
  What data are you looking at? Median home price for Chicago (where I live incidentally) is 229,000, for Dallas is 225,000, for Houston is 197,000 according to this source [0] and those are the 3rd, 4th, and 5th largest metropolitan statistical areas in the United States and Dallas and Houston have both grown a whopping 19% in the past decade [1]. Trick is, they all still have plenty of land to build new homes on to keep up with demand growth. [0]: https://www.kiplinger.com/article/real-estate/t010-c000-s002-home-price-changes-in-the-100-largest-metro-areas.html https://www.kiplinger.com/article/real-estate/t010-c000-s002... [1]: https://en.wikipedia.org/wiki/List_of_metropolitan_statistical_areas https://en.wikipedia.org/wiki/List_of_metropolitan_statistic...
  - mywittyname 6y ago
    The past few years have hit the construction industry hard, with the trade war spiking steel prices, the crack down on immigration combined with low unemployment reducing the workforce, and now there's a lumber shortage to go along with the pandemic. I built a house during the beginning of this mess and it was painful: it took 13 months to build a house that would normally take 8. The cost of construction has risen such that I can't find a new construction house in my area for under $400,000 with the median on Zillow being $495,000. And this is for an area in the midwest that those reports you link report "median home price" of well under $200,000. If you can't build cheap houses, then soon there won't be cheap houses. A lot of cities on that first list are reporting 10%+ YoY changes. That's significant. Those used to be numbers you'd see in Seattle Washington, not fucking Allentown Pennsylvania...
inglor_cz 6y ago
We are having precisely the same convo in my family, in the Czech republic. My wife is from Prague. A gem of a city, but unaffordable. Too much speculative capital from Russia, China etc. Being a slave of a mortgage until 70 is a ghastly prospect. I am from Ostrava, a post-industrial city where property prices are about a third of Prague level. Incomes are lower, but not that much lower. For an accountant (my wife is), the difference is about 10 per cent. Overall, much easier to sustain middle class life standard. She does not like the idea of leaving her native city, but if we manage to have a child (still a very open question), we will have to, at least for a few years.
- jacobush 6y ago
  If you can rent significantly cheaper than total cost of servicing loans etc, consider investing the difference in index funds and rent as cheap as you can. It might be a good bet, especially if speculation in housing is slowing down compared to the last 20-30 years.
  - ethbr0 6y ago
    It's possible the problem isn't speculation, but the rate of return on capital vs the rate of return on labor. If capital dominates, you're going to run into scenarios where it's fundamentally impossible to ever afford scarce goods that generate returns, because someone who started with more capital will now have an even larger delta with you, and is therefore able to outbid you.
    - the_gastropod 6y ago
      Not all capital generates the same returns. Index funds have virtually no gatekeeper—you can open a brokerage account, toss in $10, and be an honest-to-god capitalist. And stocks tend to outperform real estate by a hefty margin. So catching up is possible.
      - ethbr0 6y ago
        Unfortunately, you need somewhere to live while you're catching up. How much of salary - CoL can an average person dedicate to building capital? I'm not saying it's hopeless, only that there are systemic factors fighting against home ownership in extremely supply-limited cities.
rebuilder 6y ago
This is a side effect of urbanization. Economic opportunity is increasingly concentrated in cities and the increased demand inevitably increases the cost of housing. If that cost becomes too high relative to the income increase gained by living in, say, SF, people will certainly move elsewhere. But they'll still largely move to cities, and the cycle will just repeat there.
- AstralStorm 6y ago
  No it isn't. There's tons of free space surrounding cities, including with developed infrastructure and support. The demand driven forcing is miniscule compared to artificial scarcity due to zoning permits or bad infrastructure. (Typically slow transportation.)
  - Schiendelman 6y ago
    Not just surrounding cities - to your point, above them. All those single family neighborhoods. All those new buildings built to 6 stories instead of 60. In Seattle, basically every building built is built to the maximum zoning allows. And it’s all arbitrary - purely about the whims of the local homeowners.
    - rwmurrayVT 6y ago
      My parents moved to Charlotte, NC in 1999. It amazes me the sheer growth in HOUSING in city center. There are several new buildings well beyond 6 stories. There are even more new buildings in the 3-8 range in areas like South End. There are even more single family homes further out of the city. It may not be perfect, but it's seriously beautiful and developed nicely in the last 20 years.
      - jehb 6y ago
        It can't be understated what a huge impact the Lynx Blue Line (light rail) had on Charlotte's ability to shape and concentrate their growth in the past 15-20 years. Developers started planning and building around it well before it opened. Strong transit can make a huge impact on affordability, especially if it frees families up from the burden of car ownership (expensive depreciating assets with large operating costs).
rayiner 6y ago
I mean this is an excellent point. There was a reason they built semiconductor facilities where Silicon Valley now is, and why all the housing is so drab. It was not a highly desirable place to live back then. At today’s prices, my parents couldn’t have afforded to live in the drab DC suburb where I grew up. But there were almost no jobs paying six figures in the area back then, nothing like today.
IkmoIkmo 6y ago
> Unless you got in early or are one of the 1%, it's not a great place to try and build a life in I mean, even if you got in early, you're still locking up lots of wealth in housing, an opportunity cost that could be differently spent. For example, suppose you bought a place in NY in the 80s for 200k that's now $3m. Sure, you got in early and your mortgage has been paid off and you live without any housing expenses (outside of taxes, hoa etc, let's for the sake of argument ignore those). Let's assume we consider this to be living in 'free housing'. But the S&P500 does 10% a year on long-term averages. It is still fully up to you to say, I like living in NY so much, that I want to forgo selling my home for $3m, putting it in the stock-market, and earning a passive average $300k a year (which compounds if left (partially) unspent, for example it'd turn into $770k a year after 10 years if not spent). That $3m property, then, is at times a greater portion of someone's income than their own salary. I know some old people (50-60) who have nice careers, make $150-200k, yet live in a property in which $200-300k of annual investment income is locked-up. In a way, these people are 'spending' $200-300k a year on housing, while an alternative housing choice (e.g. renting a place for $3k somewhere else and selling their home and investing it long-term) would cost maybe $30-40k. You can argue the details like whether the $3m or 10% stock return is accurate, they're just examples. But the point still stands, even those who got in early and continue choosing to live there, are continuously forgoing a lot of money (which can translate into a very high quality of life elsewhere). I live in the capital of a EU country and own a home outright. In terms of monthly cashflow, housing is not a big deal as I just pay some taxes. Yet it's starting to weigh more heavily on me whether to stay here, or whether to sell my home, take all that money and enjoy a much higher income/consumption level elsewhere. I used to really enjoy the city and all that it had to offer, but sometimes I now find myself just working all the time, with barely any energy, time or motivation to make use of it to its fullest. I don't think enough people consider that you can be so called 'house poor', while owning an expensive home without a mortgage.
- jointpdf 6y ago
  I’m not sure about the EU, but in the US you could do a cash-out refinance. Effectively, liquidate your equity in the house in exchange for interest payments that go to the bank (~3%), then invest that cash elsewhere.

zalkota 6y ago

Welcome to communism! Maybe try another state chap! I was easily able to buy a house outside of California.

throwaway6734 6y ago

Consider Baltimore. There's some tech work in the city + a good chunk between Baltimore & DC. Areas like Locust Point, Roland Park, Hampden, Fells Point, etc.