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I ask this all the time: how can real estate costs in particular be so high with these wages? SF gets all the press for having loony real estate costs but vs w

• Jochim 3y ago
  Landlords and foreign investors.
• throwawaysleep 3y ago
  My theory is the change in cultural demographics. European/North American parents find it weird to help their kids buy housing. In Chinese culture, that is very much the norm. My Indian friend will get his down payment from his parents. So people don't need to buy housing with their own resources in many cases. It can also include the resource of two more people, or even 6 more people (grandparents chip in).
  • isaacremuant 3y ago
    > European/North American parents find it weird to help their kids buy housing. This is absolutely not true. I don't know where you're taking this from.
    • ecshafer 3y ago
      Coming from a working class / poor background it absolutely is true. Until I graduated and working in a wealthy area with upper middle class background people, I had never heard of anyone having their parents pay for their house. This is really split based on how Wealthy your background is.
      • Arrath 3y ago
        While not straight up buying a house for their children, in my experience (middle class, PNW) it is, while not common, not unheard of for parents to assist their kids in buying a house, be it by providing some/most of the downpayment, or co-signing on the home loan.
      • brailsafe 3y ago
        I figured that would go without saying. If your parents don't have a surplus of cash to help you with, they'd probably find it weird to do so.
    • ticviking 3y ago
      In North America its often considered "crippling" children to give them too much help. I've seen it repeatedly, with some families giving children 3 months after graduation to begin paying rent.
    • throwawaysleep 3y ago
      Everything from parents kicking their kids out or charging them rent at 18 (or ever) to anecdotes from North American friends of how they got pushed out of home to pay rent while in university. The endless lectures of Dave Ramsey on not wanting to provide a "hammock" for kids are also an abundant source of information. North American parents won't consistently have a college fund for their kids. Also planning to pay for the down payment on their home is absolutely not normal for them.
      • brailsafe 3y ago
        If North American people didn't chronically make questionable financial choices, Dave Ramsey wouldn't be super rich or have a show.
  • tonyedgecombe 3y ago
    Half of first time buyers in the UK get help from their parents.
• ilikerashers 3y ago
  Not generally bought by salaries. Family money, investments…
• michaelt 3y ago
  The government is more than happy to use inane schemes like "government-backed loans for 20% the cost of new-build properties" to prop up the market and ensure house buyers end up with the absolute largest amount of debt possible. Somehow, these schemes are then marketed to voters as "helping first-time buyers"
  • kalupa 3y ago
    which new build properties? there's a massive lack of supply and a huge amount of demand
• beezlebroxxxxxx 3y ago
  It's similar to other places, like Canada. Demand far outpaces supply. This leads to what I call a "propertied spiral", where people with property (propertied class) are enormously in favour of protecting the market value of their property to the point of constraining attempts at increasing supply (often but not always), where people who are just able to afford property live with quite a bit of precarity and large debt to income ratios, where people who are just unable to afford are still renting, which heightens demand on rental properties, pushing rents higher (because of the supply constraints), which squeezes even hard on people who are barely able to survive. And so on and so on. This is actually a picture of most real-estate markets pre-WWII, if I understand right.
  • brutus1213 3y ago
    I was going to reply to the parent and say Canada but you beat me to it. Canada's housing bubble (?) existed since at least the early 2000s when I was in grad school. Everyone expected the bubble to pop. When condo prices continued to be strong during covid (who the heck would buy condos), I just had to admit I was wrong. This is not a bubble but we did not see the true factors driving things. Immigration is the biggest one. People do indeed bring suitcases of cash from all over the world (including Ukraine). After covid, we had a torrent of international students enter, and these folks are bolstering rents (real-estate investment is probably the most profitable activity in Canada).
    • brailsafe 3y ago
      I know why I wouldn't buy a condo now (it's impossible) or particular condos in particular markets, but I don't see why someone wouldn't in general, though I'd probably prefer something at ground level. As long as I agree with the conditions, a condo would be fine. The rest, well, it's some of those factors, but it's also the whole system designed to be static and reward pensioners with property and investors. Every facet of the system is fucked, and it ain't gunna get better.
• tmnvix 3y ago
  Cheap credit and a rising market are all you need. Good for those with existing capital who can access the credit and use growing equity to leverage new investments. Terrible for anyone without existing capital actually earning an income. Both of these factors appear to be changing in many places (very significantly here in NZ). Interesting times ahead.
• bandrami 3y ago
  It's a deal with the political devil: if people view their house as an investment, housing prices must rise faster than inflation, or they're a horrible investment. But if they rise faster than inflation, new entrants to the housing market are priced out.
• alephnerd 3y ago
  In the UK, it's because Real Estate is a massive investment conduit. Plenty of British Nationals and foreigners across the world will buy property in London, causing downstream impacts on housing across the rest of the UK. In addition, British cities are artificially constrained from building due to the "Green Belt" construction bans from the 1930s-60s to prevent mass sprawl. All it did was essentially block construction though [0] On top of that, the UK has a very severe inequality issue - almost all (relatively) high paying jobs are located in Greater London, which forces prices to go into hypergrowth in an area smaller than Santa Clara County. Also, the UK has been in a lost decade since austerity kicked in around 2008 when several MASSIVE banks in the UK collapsed, which causes wages and spending within most industries and govt services in the UK to essentially be frozen at 2000s levels. [1] [0] - https://en.m.wikipedia.org/wiki/Green_belt_(United_Kingdom) https://en.m.wikipedia.org/wiki/Green_belt_(United_Kingdom) [1] - https://www.bloomberg.com/news/articles/2023-03-12/a-lost-decade-worse-than-japan-s-threatens-to-change-uk-forever?in_source=embedded-checkout-banner https://www.bloomberg.com/news/articles/2023-03-12/a-lost-de...
• CraigJPerry 3y ago
  40 year mortgages have gone from being a specialist product to a mainstream offering. Shared equity schemes are popular - both with investors and property buyers. Lending criteria have been relaxed again, it’s easier to get a mortgage. There’s a view in the UK that house prices can only go up. The shortage of housing stock bolsters this view.
• tonyedgecombe 3y ago
  Once you get more than two hours from London the prices become reasonable. The trouble is there isn't so much technology work outside of London.