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House prices house prices house prices house prices house prices. When will the people who write these articles understand this? I am convinced that today's h

by llimos 5y ago

House prices house prices house prices house prices house prices. When will the people who write these articles understand this? I am convinced that today's house prices are tearing apart the fabric of society, without exaggeration.

lotsofpulp 5y ago
The root cause is not house prices. The root cause is automation/technology/outsourcing causing income/wealth gaps to increase, and concentrating the geographic locales where the probability of one moving up on the socioeconomic ladder is sufficient, resulting in very high demand for land in fewer areas. This is then coupled with restrictions on land use for those limited areas that are in high demand (sometimes because of the quality of life enabled by the restrictions on land use). Otherwise, there are very large swaths of the US with reasonable land prices. But they come with tradeoffs, so addressing house prices itself is not good solution. Addressing the tradeoffs themselves is a long term solution.
nodesocket 5y ago
Unless every person in the poll lives in California or New York I don’t think that’s entirely accurate. I was born and raised in California and moved to Nashville TN three years ago. I bought a house last year at the height of covid (thanks fed) and my biggest debt is not the mortgage, car payment, health insurance, food and entertainment, streaming subscriptions it’s by far taxes. Want to close the wealth gap? Then politicians should lower and more importantly simplify taxes. Close the loop hole for crypto wash sales, back door conversions, real estate tricks and implement a basic flat tax. Wishful thinking, this ain’t gonna happen. It’s easier for people to blame housing costs or wealthy people instead.
- triceratops 5y ago
  > Close the loop hole for crypto wash sales, back door conversions, real estate tricks With you so far. > and implement a basic flat tax What's a "basic flat tax"? How does taxing every income at the same percentage simplify "loopholes"? Loopholes occur when deciding what counts as income.
klyrs 5y ago
The article does talk about that? But it is weird that they call people making $100k "high earners", because where I live, that's barely enough to afford a 1br condo or a spot in a trailer park
- milkytron 5y ago
  > That means a six-figure salary is no longer what it used to be. In today's economy, $100,000 is considered middle class in the US. They do say that $100k is considered middle class, so I guess they might be semi-high earners. But they still aren't in the upper class according to income.
switch007 5y ago
Absolutely agree. I predicted house prices would soar during this pandemic and they did just that, and continue to do so, here in the UK. It is one of the biggest issues in the country.
deleted 5y ago
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deleted 5y ago
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missedthecue 5y ago
Even so, it's still crazy. An unmarried individual in the bay area earning $100k will take home about $72,000 after state and federal taxes, which is $6000 per month. Studio rent in San Francisco averages $1900 according to a few online sites. That means after housing and taxes in the most expensive city in the most expensive state, a single millennial making $100k per year will have $4100 per month in disposable income. That is plenty to invest, cover a car payment and some student loans, food, clothing and other essentials, and still have plenty in the bank afterwards.
- sjg007 5y ago
  Up to 140k for a family of four qualifies you for subsidized housing in San Mateo county.
- asdffdsa 5y ago
  More like 60,000 - 65,000 after health insurance, 401k. Throw in another 24,000 for rent. In practice, you'll have like 3000 a month in disposable income. Living in an expensive city that pays high salaries, you can live frugally on $1,000 so that leaves $24,000 savings a year if you live an incredibly cheap life. Entertainment, alcohol, day trips/vacations, and hobbies can easily eat that up.
  - gruez 5y ago
    >Entertainment, alcohol, day trips/vacations, and hobbies can easily eat that up. $2000 seems like an insanely high amount of money to spend on "Entertainment, alcohol, day trips/vacations, and hobbies", especially when you consider that's almost double the federal minimum wage.
    - tamaharbor 5y ago
      A good hooker is $2k an hour, minimum.
    - asdffdsa 5y ago
      Ubers are $50 a pop (there and back), drinks are $15, an average lunch is $15, shows can run $30 to 90, hobbies the sky’s the limit (music you can get an instrument, mics for recording, DAW program, plugins, audio interface & cables) can add up to thousands, combat sports gyms can be $200 a month, etc.
neelm 5y ago
I tend to agree. Cory Doctorow has a good essay on how the deck is stacked against people who don't own homes. This doesnt include some of the health effects of loneliness and other issues when people can't live close to their friends/loved ones. https://doctorow.medium.com/the-rents-too-damned-high-1a04a547013a https://doctorow.medium.com/the-rents-too-damned-high-1a04a5...
gruez 5y ago
>I am convinced that today's house prices are tearing apart the fabric of society, without exaggeration. But how can it be tearing apart the fabric of society if inflation adjusted mortgage payments (ie. the number you actually care about) has been trending down since the 30s? https://awealthofcommonsense.com/wp-content/uploads/2021/03/Screenshot-2021-03-20-101503-1024x741.jpg https://awealthofcommonsense.com/wp-content/uploads/2021/03/..., from https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri...
- bronzeage 5y ago
  Because it's a horrible metric. It doesn't count how many people can purchase the house in full compared to having to take a mortgage. If previously people could buy a house without taking mortgage, now they are forced to take it.
- blagie 5y ago
  I'm not sure which number we care about. A $1 million mortgage at 2.5% is around 4k per month, as is a $300k mortgage at 15%. One of those is less brittle than the other, though: * Down payment on a $1M home is almost the cash price of a $300k home. Saving up for a down payment is analogous to saving up for a home. * It's a lot easier to come up with $300k than $1M if I want to pay off the mortgage early and be free (and it's financially worthwhile). A $1M mortgage is a 30-year ball-and-chain. * A lot of associated costs are lower. For example, if I sell a $1M home bought on margin, I'm out $50k in realtor fees. If I sell a $300k home on margin, I'm out $15k in realtor fees. I'm not quite sure the right number to look at. Down payment doesn't seem like a bad one, though.
- joshuamorton 5y ago
  A simple answer: The newly built houses are in less desirable areas. If you break down that statistic by location, you find that in basically every metro area, the prices have increased (and done so significantly, 2-3x). It's in suburban areas or less commonly desirable cities (Cleveland, Charlotte) where the real prices have decreased. If your job opportunities aren't in Cleveland, that housing prices have decreased there doesn't really help you.

by llimos 5y ago

lotsofpulp 5y ago

The root cause is not house prices. The root cause is automation/technology/outsourcing causing income/wealth gaps to increase, and concentrating the geographic locales where the probability of one moving up on the socioeconomic ladder is sufficient, resulting in very high demand for land in fewer areas. This is then coupled with restrictions on land use for those limited areas that are in high demand (sometimes because of the quality of life enabled by the restrictions on land use). Otherwise, there are very large swaths of the US with reasonable land prices. But they come with tradeoffs, so addressing house prices itself is not good solution. Addressing the tradeoffs themselves is a long term solution.

nodesocket 5y ago

Unless every person in the poll lives in California or New York I don’t think that’s entirely accurate. I was born and raised in California and moved to Nashville TN three years ago. I bought a house last year at the height of covid (thanks fed) and my biggest debt is not the mortgage, car payment, health insurance, food and entertainment, streaming subscriptions it’s by far taxes. Want to close the wealth gap? Then politicians should lower and more importantly simplify taxes. Close the loop hole for crypto wash sales, back door conversions, real estate tricks and implement a basic flat tax. Wishful thinking, this ain’t gonna happen. It’s easier for people to blame housing costs or wealthy people instead.

triceratops 5y ago
> Close the loop hole for crypto wash sales, back door conversions, real estate tricks With you so far. > and implement a basic flat tax What's a "basic flat tax"? How does taxing every income at the same percentage simplify "loopholes"? Loopholes occur when deciding what counts as income.

klyrs 5y ago

The article does talk about that? But it is weird that they call people making $100k "high earners", because where I live, that's barely enough to afford a 1br condo or a spot in a trailer park

milkytron 5y ago
> That means a six-figure salary is no longer what it used to be. In today's economy, $100,000 is considered middle class in the US. They do say that $100k is considered middle class, so I guess they might be semi-high earners. But they still aren't in the upper class according to income.

switch007 5y ago

Absolutely agree. I predicted house prices would soar during this pandemic and they did just that, and continue to do so, here in the UK. It is one of the biggest issues in the country.

deleted 5y ago

[deleted]

deleted 5y ago

[deleted]

missedthecue 5y ago

Even so, it's still crazy. An unmarried individual in the bay area earning $100k will take home about $72,000 after state and federal taxes, which is $6000 per month. Studio rent in San Francisco averages $1900 according to a few online sites. That means after housing and taxes in the most expensive city in the most expensive state, a single millennial making $100k per year will have $4100 per month in disposable income. That is plenty to invest, cover a car payment and some student loans, food, clothing and other essentials, and still have plenty in the bank afterwards.

sjg007 5y ago
Up to 140k for a family of four qualifies you for subsidized housing in San Mateo county.
asdffdsa 5y ago
More like 60,000 - 65,000 after health insurance, 401k. Throw in another 24,000 for rent. In practice, you'll have like 3000 a month in disposable income. Living in an expensive city that pays high salaries, you can live frugally on $1,000 so that leaves $24,000 savings a year if you live an incredibly cheap life. Entertainment, alcohol, day trips/vacations, and hobbies can easily eat that up.
- gruez 5y ago
  >Entertainment, alcohol, day trips/vacations, and hobbies can easily eat that up. $2000 seems like an insanely high amount of money to spend on "Entertainment, alcohol, day trips/vacations, and hobbies", especially when you consider that's almost double the federal minimum wage.
  - tamaharbor 5y ago
    A good hooker is $2k an hour, minimum.
  - asdffdsa 5y ago
    Ubers are $50 a pop (there and back), drinks are $15, an average lunch is $15, shows can run $30 to 90, hobbies the sky’s the limit (music you can get an instrument, mics for recording, DAW program, plugins, audio interface & cables) can add up to thousands, combat sports gyms can be $200 a month, etc.

neelm 5y ago

I tend to agree. Cory Doctorow has a good essay on how the deck is stacked against people who don't own homes. This doesnt include some of the health effects of loneliness and other issues when people can't live close to their friends/loved ones. https://doctorow.medium.com/the-rents-too-damned-high-1a04a547013a https://doctorow.medium.com/the-rents-too-damned-high-1a04a5...

gruez 5y ago

>I am convinced that today's house prices are tearing apart the fabric of society, without exaggeration. But how can it be tearing apart the fabric of society if inflation adjusted mortgage payments (ie. the number you actually care about) has been trending down since the 30s? https://awealthofcommonsense.com/wp-content/uploads/2021/03/Screenshot-2021-03-20-101503-1024x741.jpg https://awealthofcommonsense.com/wp-content/uploads/2021/03/..., from https://awealthofcommonsense.com/2021/03/what-if-housing-prices-arent-as-high-as-they-appear/ https://awealthofcommonsense.com/2021/03/what-if-housing-pri...

bronzeage 5y ago
Because it's a horrible metric. It doesn't count how many people can purchase the house in full compared to having to take a mortgage. If previously people could buy a house without taking mortgage, now they are forced to take it.
blagie 5y ago
I'm not sure which number we care about. A $1 million mortgage at 2.5% is around 4k per month, as is a $300k mortgage at 15%. One of those is less brittle than the other, though: * Down payment on a $1M home is almost the cash price of a $300k home. Saving up for a down payment is analogous to saving up for a home. * It's a lot easier to come up with $300k than $1M if I want to pay off the mortgage early and be free (and it's financially worthwhile). A $1M mortgage is a 30-year ball-and-chain. * A lot of associated costs are lower. For example, if I sell a $1M home bought on margin, I'm out $50k in realtor fees. If I sell a $300k home on margin, I'm out $15k in realtor fees. I'm not quite sure the right number to look at. Down payment doesn't seem like a bad one, though.
joshuamorton 5y ago
A simple answer: The newly built houses are in less desirable areas. If you break down that statistic by location, you find that in basically every metro area, the prices have increased (and done so significantly, 2-3x). It's in suburban areas or less commonly desirable cities (Cleveland, Charlotte) where the real prices have decreased. If your job opportunities aren't in Cleveland, that housing prices have decreased there doesn't really help you.