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Well, they're doing something right when a median home costs $272k compared to the $1.5m one needs to live in the Bay Area growing up here.

russellbeattie 4y ago
I don't think you're making the argument you think you are.
andybak 4y ago
Doesn't "technical debt" imply something on the balance sheet that hasn't yet become due?
seanmcdirmid 4y ago
> Well, they're doing something right when a median home costs $272k compared to the $1.5m one needs to live in the Bay Area growing up here. You can get a house for $75k (median) if you want in Gary Indiana. I'm not sure how lower housing prices can be directly correlated with "doing things more right".
- volkk 4y ago
  isn't Gary Indiana a failed city? I would imagine Houston as relatively thriving given work, safety and industry levels?
  - Entinel 4y ago
    You're missing the point. They are saying Houston having lower housing prices is not an indicator that Houston is "doing something right."
    - volkk 4y ago
      i'm not missing anything, i'm just pointing out that using Gary doesn't make any sense. if you're going to use other cities to counter the OP's point, then choose something like Dallas or Tampa, or Miami. Gary is literally decrepit.
      - Entinel 4y ago
        That is the point you are missing. It is not just about price of homes but quality of life while the OP is just comparing $ vs $ when there is more to it than that.
        volkk 4y ago
        i am saying that the example of Gary doesn't prove that Houston ISN'T a thriving city only based on housing costs. you need to use a city that is a bit more comparable to Houston to drive the point that low housing costs don't equate with a successfully run city. it's a bit like someone arguing that Land Rovers are bad cars because they are built poorly, and then someone else coming in and saying well at least they don't cost the amount that a lamborghini costs, they must be doing something right. and then a third person coming into that argument and saying "well, actually you can't use price because a bicycle costs 200$ and that doesn't mean a bicycle is better than a Land Rover based on price alone" ...the point they're driving could be correct, but the comparison is apples to oranges. you can't compare bicycles to cars to drive the point, just like i wouldn't use Gary to make the argument that low prices does not mean a thriving city. a better argument would be to use something that is comparable to a Land Rover (Houston) like say, a car that is within 10-20k range that does the job but is still largely a piece of crap to argue your point that price alone doesn't dictate success.
- api 4y ago
  The difference is that Houston has more diverse and better job opportunities yet still has reasonably affordable housing. There are tons of places with very cheap housing and no jobs. Nobody moves there except maybe a few teleworkers looking to optimize hard for surplus or people with other reasons to go there like family ties.
- nilkn 4y ago
  Houston is the home of the US oil & gas industry and has one of the largest and most advanced medical centers in the world. There's a lot of money in Houston, and the city has incredibly ritzy neighborhoods like River Oaks and Piney Point Village, among many others; keeping overall housing relatively affordable with so many affluent people competing for it actually is an accomplishment.
  - seanmcdirmid 4y ago
    I'm sure Houston works for you, but it just isn't the happening place on many people's radars. We could split hairs about its benefits; e.g. * Economy comes and goes with natural resource boom bust cycle. * America's most obese city * A huge sprawl with bad traffic and poor public transportation There are other cities that match some of those qualities that I don't much care for, but I can see why a lot of people wouldn't mind and go for the cheap housing there as a decent trade off. But in my original comment, my only point was that you can't judge how great a city is based on how cheap its real estate is (and the correlation often goes the opposite way).
    - nilkn 4y ago
      The most expensive house listing for Gary right now seems to be for $575k; for Houston, it's $20 million, a difference of 35x. The average sale price in Piney Point Village is apparently just under $3.7 million (https://www.har.com/pineypointvillage/realestate https://www.har.com/pineypointvillage/realestate) and the average rent is $8500/month. So on and so forth. I think you're imagining all Houston real estate as cheap/affordable, when in reality the city has lots of extremely expensive real estate. It just also has affordable housing due to widespread construction of townhomes, apartments, and condos. Something like Gary just isn't comparable.
      - selectodude 4y ago
        Gary is a suburb of Chicago and comparing it to Greater Houston seems a bit absurd. Chicagoland has many units that are listed for $15+ million.
- crawl_soever 4y ago
  I live in Gary and there are many factors that can factor into the economics here, mainly a single employer planning the entire city and that employer collapse. A house is only worth what someone is willing to pay for it
  - Maursault 4y ago
    > A house is only worth what someone is willing to pay for it Are you kidding? Its easily worth twice that. Wait until I show you the upgrades, new paint and wall to wall carpet. The bathroom's been renovated with new fixtures, and that is genuine imported Mexican tile. You'd be a fool to pass on this. Just think of the possibilities.
- sershe 4y ago
  Except Houston is a fast-growing city, and Gary is a dying city. Houston managed to keep housing affordable while growing faster than most/all major cities.
rootusrootus 4y ago
It's barely under median for the US, that is the real comparison. There are many places across the US with significantly less expensive homes.
- hilbertseries 4y ago
  Homes in large cities are almost always more expensive than rural areas. I don’t think median is the right comparison, comparing to other large cities and metro areas makes much more sense.
  - rootusrootus 4y ago
    This is not a completely mismatched urban-vs-rural comparison, it is looking just at metro statistical areas across the U.S. https://cdn.nar.realtor/sites/default/files/documents/metro-home-prices-q2-2022-ranked-median-single-family-2022-08-11.pdf https://cdn.nar.realtor/sites/default/files/documents/metro-...
ceejayoz 4y ago
Hamburger is cheaper than ribeye, but I’m not sure that makes it better.
taeric 4y ago
The assertion seems to be that it is not going to end well. If it really is unsustainable sprawl with poorly put together civic functions, why do we expect it to go on forever? That is, sure, houses are cheap for now. But that doesn't mean you will have a place worth living in, given time.
- Tempest1981 4y ago
  > unsustainable sprawl 13 million people living in the Los Angeles basin seem to disagree.
  - woodruffw 4y ago
    I’m not one of them, but Los Angeles doesn’t really scream “sustainable” to me. Is it really a counterexample to what the GP is saying?
  - taeric 4y ago
    The basin has house prices much lower than the bay area. Still higher than Houston, but I'm not sure where that fits in this discussion. Did I mix up threads?
    - Tempest1981 4y ago
      If Houston is unsustainable, then LA must be far beyond unsustainable... yet it continues to sprawl with no end in sight. So the ability to sustain/tolerate sprawl seems far higher than we expect.
      - taeric 4y ago
        Is it established that the basin has less regulation then normal, as well? Or on par with Houston?
shagie 4y ago
The greater Huston area is approximately 10,000 square miles. The city of Huston itself is 670 square miles. The 9 county area of the Bay Area is 7000 square miles... and that includes a lot of land that you can't reasonably build a city on. If you take the land area of the cities in the Bay Area ( https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_the_San_Francisco_Bay_Area https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_th... ) and sum them all up, you've got something on the order of 1,600 square miles. The land constraints within the Bay Area contribute significantly to the price of a house.
- dan_quixote 4y ago
  And general desirability - diverse and well-paying economy, weather, water, mountains.
  - shagie 4y ago
    Absolutely... though that's harder to point a number to. The "this is how much land is there" is a metric that can't be argued. If you then try to look at the population densities of those areas, it becomes even more clear about why a single family detached house would be that much more expensive.
  - kortilla 4y ago
    Houston is more racially diverse than the Bay Area.
- ch4s3 4y ago
  It’s also functionality illegal to build anything but single family homes in most of the Bay Area and it’s now out of places to do that. Houston does have more space, but also doesn’t prevent you from building a duplex on your own land.
  - exhilaration 4y ago
    Pretty much all of the HOAs that are de facto zoning boards of the Houston area would most definitely prevent you from doing anything like that. HOA by-laws are where you'll find the real zoning regulations over there.
gpm 4y ago
$1.5m houses is a signal that a ton of people want to live there, and are willing to pay a premium for doing it. That's not a signal that you're doing something wrong. Of course, it would be nice if you could keep everything you're doing right and bring housing prices down (largely by building more of it). But on the whole real-estate being valuable is generally a positive sign. On the flip side, the cheapest houses you could find for awhile (maybe still?) were in detroit, that's not a sign that Detroit was doing well - but that demand had plummeted to literally 0 because it was doing so poorly.
- kube-system 4y ago
  High prices aren’t necessarily an indicator of the quantity of demand but more so that >= 2 people with that amount of money want that home. For instance: nice homes in very low demand areas may sell for large amounts of money and only have a single offer.
  - gpm 4y ago
    I think there are two (very fair) criticisms in your post. One is that we're really talking about demand from people who can afford it. All the demand in the world from people living on minimum wage won't drive house prices up so they aren't really "counted" in my analysis. There's not really a way to fix this issue with the data, but I'd argue that demand from reasonably rich people is still a good sign. Indeed, rich people are the most mobile and able to move away from a shitty place to live. The other is that the quality of the home matters (a lot). Which is completely true, but the cheap shitty homes in the bay area are still demanding these prices, so I'm not sure it really applies to the concrete situation being discussed even though it is an issue with my general argument. You could maybe try and find "comparable" homes in different places to try and account for that, but I have no doubt doing so would open you up to issues with bias (intentional or otherwise).
  - danans 4y ago
    > For instance: nice homes in very low demand areas may sell for large amounts of money and only have a single offer. These houses and the areas they occupy (i.e Beverly Hills, Park Ave ) are an extreme edge case, and don't exist in the same housing market as normal houses. Above a certain very high price percentile, there are always very few buyers and sellers, and they are all paying a high premium for things like high physical security.
micromacrofoot 4y ago
you can get a house for under 100k in mississippi and they’re definitely not doing something right

russellbeattie 4y ago

I don't think you're making the argument you think you are.

andybak 4y ago

Doesn't "technical debt" imply something on the balance sheet that hasn't yet become due?

seanmcdirmid 4y ago

> Well, they're doing something right when a median home costs $272k compared to the $1.5m one needs to live in the Bay Area growing up here. You can get a house for $75k (median) if you want in Gary Indiana. I'm not sure how lower housing prices can be directly correlated with "doing things more right".

volkk 4y ago
isn't Gary Indiana a failed city? I would imagine Houston as relatively thriving given work, safety and industry levels?
- Entinel 4y ago
  You're missing the point. They are saying Houston having lower housing prices is not an indicator that Houston is "doing something right."
  - volkk 4y ago
    i'm not missing anything, i'm just pointing out that using Gary doesn't make any sense. if you're going to use other cities to counter the OP's point, then choose something like Dallas or Tampa, or Miami. Gary is literally decrepit.
    - Entinel 4y ago
      That is the point you are missing. It is not just about price of homes but quality of life while the OP is just comparing $ vs $ when there is more to it than that.
      - volkk 4y ago
        i am saying that the example of Gary doesn't prove that Houston ISN'T a thriving city only based on housing costs. you need to use a city that is a bit more comparable to Houston to drive the point that low housing costs don't equate with a successfully run city. it's a bit like someone arguing that Land Rovers are bad cars because they are built poorly, and then someone else coming in and saying well at least they don't cost the amount that a lamborghini costs, they must be doing something right. and then a third person coming into that argument and saying "well, actually you can't use price because a bicycle costs 200$ and that doesn't mean a bicycle is better than a Land Rover based on price alone" ...the point they're driving could be correct, but the comparison is apples to oranges. you can't compare bicycles to cars to drive the point, just like i wouldn't use Gary to make the argument that low prices does not mean a thriving city. a better argument would be to use something that is comparable to a Land Rover (Houston) like say, a car that is within 10-20k range that does the job but is still largely a piece of crap to argue your point that price alone doesn't dictate success.
api 4y ago
The difference is that Houston has more diverse and better job opportunities yet still has reasonably affordable housing. There are tons of places with very cheap housing and no jobs. Nobody moves there except maybe a few teleworkers looking to optimize hard for surplus or people with other reasons to go there like family ties.
nilkn 4y ago
Houston is the home of the US oil & gas industry and has one of the largest and most advanced medical centers in the world. There's a lot of money in Houston, and the city has incredibly ritzy neighborhoods like River Oaks and Piney Point Village, among many others; keeping overall housing relatively affordable with so many affluent people competing for it actually is an accomplishment.
- seanmcdirmid 4y ago
  I'm sure Houston works for you, but it just isn't the happening place on many people's radars. We could split hairs about its benefits; e.g. * Economy comes and goes with natural resource boom bust cycle. * America's most obese city * A huge sprawl with bad traffic and poor public transportation There are other cities that match some of those qualities that I don't much care for, but I can see why a lot of people wouldn't mind and go for the cheap housing there as a decent trade off. But in my original comment, my only point was that you can't judge how great a city is based on how cheap its real estate is (and the correlation often goes the opposite way).
  - nilkn 4y ago
    The most expensive house listing for Gary right now seems to be for $575k; for Houston, it's $20 million, a difference of 35x. The average sale price in Piney Point Village is apparently just under $3.7 million (https://www.har.com/pineypointvillage/realestate https://www.har.com/pineypointvillage/realestate) and the average rent is $8500/month. So on and so forth. I think you're imagining all Houston real estate as cheap/affordable, when in reality the city has lots of extremely expensive real estate. It just also has affordable housing due to widespread construction of townhomes, apartments, and condos. Something like Gary just isn't comparable.
    - selectodude 4y ago
      Gary is a suburb of Chicago and comparing it to Greater Houston seems a bit absurd. Chicagoland has many units that are listed for $15+ million.
crawl_soever 4y ago
I live in Gary and there are many factors that can factor into the economics here, mainly a single employer planning the entire city and that employer collapse. A house is only worth what someone is willing to pay for it
- Maursault 4y ago
  > A house is only worth what someone is willing to pay for it Are you kidding? Its easily worth twice that. Wait until I show you the upgrades, new paint and wall to wall carpet. The bathroom's been renovated with new fixtures, and that is genuine imported Mexican tile. You'd be a fool to pass on this. Just think of the possibilities.
sershe 4y ago
Except Houston is a fast-growing city, and Gary is a dying city. Houston managed to keep housing affordable while growing faster than most/all major cities.

rootusrootus 4y ago

It's barely under median for the US, that is the real comparison. There are many places across the US with significantly less expensive homes.

hilbertseries 4y ago
Homes in large cities are almost always more expensive than rural areas. I don’t think median is the right comparison, comparing to other large cities and metro areas makes much more sense.
- rootusrootus 4y ago
  This is not a completely mismatched urban-vs-rural comparison, it is looking just at metro statistical areas across the U.S. https://cdn.nar.realtor/sites/default/files/documents/metro-home-prices-q2-2022-ranked-median-single-family-2022-08-11.pdf https://cdn.nar.realtor/sites/default/files/documents/metro-...

ceejayoz 4y ago

Hamburger is cheaper than ribeye, but I’m not sure that makes it better.

taeric 4y ago

The assertion seems to be that it is not going to end well. If it really is unsustainable sprawl with poorly put together civic functions, why do we expect it to go on forever? That is, sure, houses are cheap for now. But that doesn't mean you will have a place worth living in, given time.

Tempest1981 4y ago
> unsustainable sprawl 13 million people living in the Los Angeles basin seem to disagree.
- woodruffw 4y ago
  I’m not one of them, but Los Angeles doesn’t really scream “sustainable” to me. Is it really a counterexample to what the GP is saying?
- taeric 4y ago
  The basin has house prices much lower than the bay area. Still higher than Houston, but I'm not sure where that fits in this discussion. Did I mix up threads?
  - Tempest1981 4y ago
    If Houston is unsustainable, then LA must be far beyond unsustainable... yet it continues to sprawl with no end in sight. So the ability to sustain/tolerate sprawl seems far higher than we expect.
    - taeric 4y ago
      Is it established that the basin has less regulation then normal, as well? Or on par with Houston?

shagie 4y ago

The greater Huston area is approximately 10,000 square miles. The city of Huston itself is 670 square miles. The 9 county area of the Bay Area is 7000 square miles... and that includes a lot of land that you can't reasonably build a city on. If you take the land area of the cities in the Bay Area ( https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_the_San_Francisco_Bay_Area https://en.wikipedia.org/wiki/List_of_cities_and_towns_in_th... ) and sum them all up, you've got something on the order of 1,600 square miles. The land constraints within the Bay Area contribute significantly to the price of a house.

dan_quixote 4y ago
And general desirability - diverse and well-paying economy, weather, water, mountains.
- shagie 4y ago
  Absolutely... though that's harder to point a number to. The "this is how much land is there" is a metric that can't be argued. If you then try to look at the population densities of those areas, it becomes even more clear about why a single family detached house would be that much more expensive.
- kortilla 4y ago
  Houston is more racially diverse than the Bay Area.
ch4s3 4y ago
It’s also functionality illegal to build anything but single family homes in most of the Bay Area and it’s now out of places to do that. Houston does have more space, but also doesn’t prevent you from building a duplex on your own land.
- exhilaration 4y ago
  Pretty much all of the HOAs that are de facto zoning boards of the Houston area would most definitely prevent you from doing anything like that. HOA by-laws are where you'll find the real zoning regulations over there.

gpm 4y ago

$1.5m houses is a signal that a ton of people want to live there, and are willing to pay a premium for doing it. That's not a signal that you're doing something wrong. Of course, it would be nice if you could keep everything you're doing right and bring housing prices down (largely by building more of it). But on the whole real-estate being valuable is generally a positive sign. On the flip side, the cheapest houses you could find for awhile (maybe still?) were in detroit, that's not a sign that Detroit was doing well - but that demand had plummeted to literally 0 because it was doing so poorly.

kube-system 4y ago
High prices aren’t necessarily an indicator of the quantity of demand but more so that >= 2 people with that amount of money want that home. For instance: nice homes in very low demand areas may sell for large amounts of money and only have a single offer.
- gpm 4y ago
  I think there are two (very fair) criticisms in your post. One is that we're really talking about demand from people who can afford it. All the demand in the world from people living on minimum wage won't drive house prices up so they aren't really "counted" in my analysis. There's not really a way to fix this issue with the data, but I'd argue that demand from reasonably rich people is still a good sign. Indeed, rich people are the most mobile and able to move away from a shitty place to live. The other is that the quality of the home matters (a lot). Which is completely true, but the cheap shitty homes in the bay area are still demanding these prices, so I'm not sure it really applies to the concrete situation being discussed even though it is an issue with my general argument. You could maybe try and find "comparable" homes in different places to try and account for that, but I have no doubt doing so would open you up to issues with bias (intentional or otherwise).
- danans 4y ago
  > For instance: nice homes in very low demand areas may sell for large amounts of money and only have a single offer. These houses and the areas they occupy (i.e Beverly Hills, Park Ave ) are an extreme edge case, and don't exist in the same housing market as normal houses. Above a certain very high price percentile, there are always very few buyers and sellers, and they are all paying a high premium for things like high physical security.

micromacrofoot 4y ago

you can get a house for under 100k in mississippi and they’re definitely not doing something right