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Housing (and construction) prices have been ballooning out of control everywhere for the last several years. Both major cities (DC, Boston, Portland, Seattle, C

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...
- charlesu 6y ago
  The median home price doesn't mean much in Chicago. Most homes in the desirable neighborhoods are 1BR and 2BR condos and well over $300k or include outrageously high HOAs ($400 - $1K). There are thousands of sub $200k homes in the city but they're located in dangerous under resourced neighborhoods to the south and far west. In either case, you will pay 2% property taxes, which means comes out to $400 a month in property taxes -- about twice the amount you'd pay in any other part of the country. And that's in addition to 10% sales taxes and 4% income taxes. The only other places with property taxes that high have no income tax (Texas) or are near New York City. Chicago isn't nearly as great a deal as it's made out to be.
  - OldHand2018 6y ago
    "desirable neighborhoods" in Chicago is code for living in a bubble (should be very firmly noted that this is NOT race-related). Yes, you pay a lot more for that. There are neighborhoods in the city that have lower crime, faster access to downtown, higher median incomes, better-rated schools and lower house prices than many of the "desirable neighborhoods". The Near South Side is an obvious example. However, you can look at the tax rates within Cook County and even compare them to the suburban counties [1]. The composite property tax rate is as low as it gets around here. Most cities are double or triple the Chicago rate. It isn't as good of a deal as when I moved here, but if you've got a tech or other white-collar salary, Chicago is still a really good deal. It's your responsibility to consider cost when choosing a location within the metro area. If you ignore it, you shouldn't be surprised that you pay more. [1] https://www.cookcountyclerk.com/service/tax-extension-and-rates https://www.cookcountyclerk.com/service/tax-extension-and-ra... EDIT - Illinois and Texas heavily depend on property taxes for local funding. The actual rates you pay have an insanely high variance from city to city. Some taxing districts don't align with city boundaries either, so one neighborhood may pay more than another. You can use it as a proxy for how well-run a city is, but on the other hand Chicago isn't a particularly well-run city - it just has a huge amount of high-value commercial and industrial property (which is taxed at double the rate of residential property). If you're going to live in either state, you really need to look at the hyper-local tax rates and put that into your decision matrix. The data isn't even hard to find.
- jointpdf 6y ago
  Here is some data backing up what I’ve been (mostly subjectively) observing. In particular, look at the skyrocketing median list/sale price (+10% YOY) and the YOY changes in sale price since ~2010. Also, medians are of course just an aggregate measure that does not tell the full story—low quality cookie cutter developments drag the medians down. Older homes in decent neighborhoods are even hotter. [0]: https://www.redfin.com/blog/data-center/ https://www.redfin.com/blog/data-center/ [1]: https://www.zillow.com/research/zillow-weekly-market-report-27151/ https://www.zillow.com/research/zillow-weekly-market-report-...
wyclif 6y ago
Since you're spent a lot of time researching this: have you ever found a way to correlate 3rd-tier and below cities with fiber internet speeds and infrastructure? Seems like that info would be useful to a lot of people here, who are looking to move to a more rural area but are working tech jobs remote long term or even permanently and need fast internet.
- rayhendricks 6y ago
  This is a great idea. I’d take it a step further and correlate it to the availability of municipal fiber and also a Costco within a 30min drive.
  - runbsd 6y ago
    I live in a small town, about 20min away from the larger city, with FTTH and reasonable cost of living. There are disadvantages to living in the country (you have to drive everywhere), but it's just a balance.I definitely enjoy zero crime, no traffic, fresh air and a large lot so I am not crammed with my neighbors. The downside is that I can't walk everywhere, but that is fine.
- jointpdf 6y ago
  By “research” I really meant “searching, then searching again...and again”, not actual research. Word choice is important in HN comments because you all are too sharp. I haven’t looked at that, but I have wondered how universal satellite internet coverage and the more permanent (?) move towards remote work will affect rural areas. It is an interesting trend to keep an eye on.
jdhn 6y ago
>secondary cities (Grand Rapids MI) Grand Rapids? Unaffordable? Are you looking at condos downtown? Here's[0] a 3bd/2br with 1800 sq ft that admittedly is outside of downtown a bit, but is under $1000 a month. This condo [1] is more expensive, but would be totally affordable if 2 people were able to pay $1250 in rent by themselves. Both of these were on the first page of Trulia results when I searched for Grand Rapids. [0] https://www.trulia.com/p/mi/grand-rapids/1546-escott-ave-nw-grand-rapids-mi-49504--2100033813 https://www.trulia.com/p/mi/grand-rapids/1546-escott-ave-nw-... [1] https://www.trulia.com/p/mi/grand-rapids/60-monroe-center-st-nw-7a-grand-rapids-mi-49503--2173271481 https://www.trulia.com/p/mi/grand-rapids/60-monroe-center-st...
- jointpdf 6y ago
  A condo in GR is a possibility for sure, though you have to admit the market there has gotten ridiculous in recent years. Most of the decent houses near downtown get multiple offers instantly (same in Kalamazoo). Is $1250/mo a realistic amount to charge a roommate in GR?
  - jdhn 6y ago
    If you really want that downtown life, then it may be realistic. It's definitely a lot cheaper than a corresponding condo of that size in a major city.
vertis 6y ago
I'm an outsider, but when I look at the US market there seem to be really cheap houses away from the major cities. Far cheaper than Australia. For example: https://www.realtor.com/realestateandhomes-search/Rochester_NY/show-newest-listings https://www.realtor.com/realestateandhomes-search/Rochester_... Now I don't really know anything about Rochester. But you would be hard pressed to find anything in a city for ~50-60k in Australia. Not comparing Apples to Apples, but the 1 bedroom apartment I bought in Melbourne suburbs in 2016 was AU$265k If I look at somewhere like Bendigo (about 2 hours from Melbourne). The cheapest houses are about 250k. https://www.domain.com.au/sale/bendigo-vic-3550/?ptype=apartment-unit-flat,block-of-units,duplex,free-standing,new-apartments,new-home-designs,new-house-land,pent-house,semi-detached,studio,terrace,town-house,villa&excludeunderoffer=1&sort=price-asc https://www.domain.com.au/sale/bendigo-vic-3550/?ptype=apart... Does Australia have housing problems as well? Possibly.
- CydeWeys 6y ago
  Rochester is definitely cheap, but for a reason: It's a city on the down slope past its peak. It's a deindustrialized rust belt city with a population down 38% from its pre-WWII high. That goes a long way to explain why housing is so affordable. And I wonder what the tech job situation is like there (though that may matter less now, what with the pandemic increasing the acceptability of WFH). It's hard to move somewhere for cheap housing where you literally wouldn't know a single person, though. Social life is important. Also, there's the winter weather. I hope you like cold and snow.
  - pc86 6y ago
    > It's hard to move somewhere for cheap housing where you literally wouldn't know a single person, though. Social life is important. And this is fine, but it seems very disingenuous to say that it's a crime that you can't afford to buy a home when you refuse to move out of arguably one of the most expensive cities in the country. It's equivalent to crying about not being in the 1% when you're in the top 1.5%, and you could move if you wanted to. There's nothing wrong with wanting to live in San Francisco, but expecting to buy a home a few years after graduating from college is ridiculous in my opinion.
losvedir 6y ago
If you're considering Chicago unaffordable, I'm really curious what you think is affordable! When I moved here, I was blown away that house prices where I live, about 30 minutes from downtown, are on average $150k, or less than 3x median yearly income here. This isn't actually drastically different from a semi-rural Missouri town I lived in for a bit.
- charlesu 6y ago
  Do you live in Indiana? Did you move ten years ago? I can't think of a single safe neighborhood in Chicago or its surrounding suburbs that are $150k today.
  - losvedir 6y ago
    Yeah, Indiana, as of two years ago.
pc86 6y ago
This tale does not reflect reality when you look at the numbers. Housing prices have more-or-less always gone up, especially on time scales long enough to spread out market corrections. If housing prices 2-3 years ago "seem like a steal" (they don't), and the same has been true every 2-3 year cycle (it hasn't), an FHA/USDA mortgage with 3.5-5% in basically every market other than San Francisco and NYC makes sense, and if you're making software developer salaries it should take less than a year to save up 3.5% of a home you can afford (again, other than NYC and SF which are outliers).

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...
charlesu 6y ago
The median home price doesn't mean much in Chicago. Most homes in the desirable neighborhoods are 1BR and 2BR condos and well over $300k or include outrageously high HOAs ($400 - $1K). There are thousands of sub $200k homes in the city but they're located in dangerous under resourced neighborhoods to the south and far west. In either case, you will pay 2% property taxes, which means comes out to $400 a month in property taxes -- about twice the amount you'd pay in any other part of the country. And that's in addition to 10% sales taxes and 4% income taxes. The only other places with property taxes that high have no income tax (Texas) or are near New York City. Chicago isn't nearly as great a deal as it's made out to be.
- OldHand2018 6y ago
  "desirable neighborhoods" in Chicago is code for living in a bubble (should be very firmly noted that this is NOT race-related). Yes, you pay a lot more for that. There are neighborhoods in the city that have lower crime, faster access to downtown, higher median incomes, better-rated schools and lower house prices than many of the "desirable neighborhoods". The Near South Side is an obvious example. However, you can look at the tax rates within Cook County and even compare them to the suburban counties [1]. The composite property tax rate is as low as it gets around here. Most cities are double or triple the Chicago rate. It isn't as good of a deal as when I moved here, but if you've got a tech or other white-collar salary, Chicago is still a really good deal. It's your responsibility to consider cost when choosing a location within the metro area. If you ignore it, you shouldn't be surprised that you pay more. [1] https://www.cookcountyclerk.com/service/tax-extension-and-rates https://www.cookcountyclerk.com/service/tax-extension-and-ra... EDIT - Illinois and Texas heavily depend on property taxes for local funding. The actual rates you pay have an insanely high variance from city to city. Some taxing districts don't align with city boundaries either, so one neighborhood may pay more than another. You can use it as a proxy for how well-run a city is, but on the other hand Chicago isn't a particularly well-run city - it just has a huge amount of high-value commercial and industrial property (which is taxed at double the rate of residential property). If you're going to live in either state, you really need to look at the hyper-local tax rates and put that into your decision matrix. The data isn't even hard to find.
jointpdf 6y ago
Here is some data backing up what I’ve been (mostly subjectively) observing. In particular, look at the skyrocketing median list/sale price (+10% YOY) and the YOY changes in sale price since ~2010. Also, medians are of course just an aggregate measure that does not tell the full story—low quality cookie cutter developments drag the medians down. Older homes in decent neighborhoods are even hotter. [0]: https://www.redfin.com/blog/data-center/ https://www.redfin.com/blog/data-center/ [1]: https://www.zillow.com/research/zillow-weekly-market-report-27151/ https://www.zillow.com/research/zillow-weekly-market-report-...

wyclif 6y ago

Since you're spent a lot of time researching this: have you ever found a way to correlate 3rd-tier and below cities with fiber internet speeds and infrastructure? Seems like that info would be useful to a lot of people here, who are looking to move to a more rural area but are working tech jobs remote long term or even permanently and need fast internet.

rayhendricks 6y ago
This is a great idea. I’d take it a step further and correlate it to the availability of municipal fiber and also a Costco within a 30min drive.
- runbsd 6y ago
  I live in a small town, about 20min away from the larger city, with FTTH and reasonable cost of living. There are disadvantages to living in the country (you have to drive everywhere), but it's just a balance.I definitely enjoy zero crime, no traffic, fresh air and a large lot so I am not crammed with my neighbors. The downside is that I can't walk everywhere, but that is fine.
jointpdf 6y ago
By “research” I really meant “searching, then searching again...and again”, not actual research. Word choice is important in HN comments because you all are too sharp. I haven’t looked at that, but I have wondered how universal satellite internet coverage and the more permanent (?) move towards remote work will affect rural areas. It is an interesting trend to keep an eye on.

jdhn 6y ago

>secondary cities (Grand Rapids MI) Grand Rapids? Unaffordable? Are you looking at condos downtown? Here's[0] a 3bd/2br with 1800 sq ft that admittedly is outside of downtown a bit, but is under $1000 a month. This condo [1] is more expensive, but would be totally affordable if 2 people were able to pay $1250 in rent by themselves. Both of these were on the first page of Trulia results when I searched for Grand Rapids. [0] https://www.trulia.com/p/mi/grand-rapids/1546-escott-ave-nw-grand-rapids-mi-49504--2100033813 https://www.trulia.com/p/mi/grand-rapids/1546-escott-ave-nw-... [1] https://www.trulia.com/p/mi/grand-rapids/60-monroe-center-st-nw-7a-grand-rapids-mi-49503--2173271481 https://www.trulia.com/p/mi/grand-rapids/60-monroe-center-st...

jointpdf 6y ago
A condo in GR is a possibility for sure, though you have to admit the market there has gotten ridiculous in recent years. Most of the decent houses near downtown get multiple offers instantly (same in Kalamazoo). Is $1250/mo a realistic amount to charge a roommate in GR?
- jdhn 6y ago
  If you really want that downtown life, then it may be realistic. It's definitely a lot cheaper than a corresponding condo of that size in a major city.

vertis 6y ago

I'm an outsider, but when I look at the US market there seem to be really cheap houses away from the major cities. Far cheaper than Australia. For example: https://www.realtor.com/realestateandhomes-search/Rochester_NY/show-newest-listings https://www.realtor.com/realestateandhomes-search/Rochester_... Now I don't really know anything about Rochester. But you would be hard pressed to find anything in a city for ~50-60k in Australia. Not comparing Apples to Apples, but the 1 bedroom apartment I bought in Melbourne suburbs in 2016 was AU$265k If I look at somewhere like Bendigo (about 2 hours from Melbourne). The cheapest houses are about 250k. https://www.domain.com.au/sale/bendigo-vic-3550/?ptype=apartment-unit-flat,block-of-units,duplex,free-standing,new-apartments,new-home-designs,new-house-land,pent-house,semi-detached,studio,terrace,town-house,villa&excludeunderoffer=1&sort=price-asc https://www.domain.com.au/sale/bendigo-vic-3550/?ptype=apart... Does Australia have housing problems as well? Possibly.

CydeWeys 6y ago
Rochester is definitely cheap, but for a reason: It's a city on the down slope past its peak. It's a deindustrialized rust belt city with a population down 38% from its pre-WWII high. That goes a long way to explain why housing is so affordable. And I wonder what the tech job situation is like there (though that may matter less now, what with the pandemic increasing the acceptability of WFH). It's hard to move somewhere for cheap housing where you literally wouldn't know a single person, though. Social life is important. Also, there's the winter weather. I hope you like cold and snow.
- pc86 6y ago
  > It's hard to move somewhere for cheap housing where you literally wouldn't know a single person, though. Social life is important. And this is fine, but it seems very disingenuous to say that it's a crime that you can't afford to buy a home when you refuse to move out of arguably one of the most expensive cities in the country. It's equivalent to crying about not being in the 1% when you're in the top 1.5%, and you could move if you wanted to. There's nothing wrong with wanting to live in San Francisco, but expecting to buy a home a few years after graduating from college is ridiculous in my opinion.

losvedir 6y ago

If you're considering Chicago unaffordable, I'm really curious what you think is affordable! When I moved here, I was blown away that house prices where I live, about 30 minutes from downtown, are on average $150k, or less than 3x median yearly income here. This isn't actually drastically different from a semi-rural Missouri town I lived in for a bit.

charlesu 6y ago
Do you live in Indiana? Did you move ten years ago? I can't think of a single safe neighborhood in Chicago or its surrounding suburbs that are $150k today.
- losvedir 6y ago
  Yeah, Indiana, as of two years ago.

pc86 6y ago

This tale does not reflect reality when you look at the numbers. Housing prices have more-or-less always gone up, especially on time scales long enough to spread out market corrections. If housing prices 2-3 years ago "seem like a steal" (they don't), and the same has been true every 2-3 year cycle (it hasn't), an FHA/USDA mortgage with 3.5-5% in basically every market other than San Francisco and NYC makes sense, and if you're making software developer salaries it should take less than a year to save up 3.5% of a home you can afford (again, other than NYC and SF which are outliers).