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The economy is doing stellar for the upper classes which account for maybe 10 to 15% of the population. That’s the so-called disconnect that the Biden administr

The economy is doing stellar for the upper classes which account for maybe 10 to 15% of the population. That’s the so-called disconnect that the Biden administration doesn’t understand. But the economy in general is not doing stellar, regardless. This bifurcation of wealth is going to lead, or is at least a marker, of an instability in the system. The fact that the Fed just decided that they’re looking at lowering interest rates means that they can’t lower inflation because the stock market and housing prices will crash. Housing prices increase because money printing increased.

tristor 3y ago
> The economy is doing stellar for the upper classes which account for maybe 10 to 15% of the population. Part of the problem is that the US isn’t one “the economy”, it’s localized, primarily due to housing markets. There is no way that the top 10% of income earners qualify as “upper class” in the US, because the majority are in high COL areas. When you make $400k/pa, but pay $5k/mo in rent/housing, that’s a very different outcome than making $400k/pa and paying $1k/mo in rent/housing. Both of these situations exist in the US, but the former is much more common than the latter. Looking at income only without accounting for cost of living presents a skewed view of things. The person paying the higher cost of living in this situation is solidly middle class, if and only if they own that property, renters by definition aren’t middle class. The person paying the low cost of living almost certainly owns the property and is able to invest heavily, so is almost certainly upper class or a HENRY. Earning $90k/pa puts you in the top 10% of income earners, and isn’t even six figures. The new middle class for non-Boomers starts in the top 3%. You only need to earn $300k/pa to be in the vaunted 1%, and in most high COL areas you’ll never be able to afford a house. Looking at income percentiles without looking at cost of living is a really skewed viewpoint, and it ignores the huge wealth chasm between the top 0.1% and everyone else, even 1%ers struggle to make rent.
- pandaman 3y ago
  If you define "high COL" as the area where you cannot afford a house on 300K income then sure, but you definitely can afford a house pretty much anywhere in the US with such an income, which qualifies you for over $1M loan.
  - tristor 3y ago
    At $300k/pa with $5000/mo in rent, it’s pretty obvious I am talking about SFBA and NYC, which unsurprisingly have the highest density of people earning $300k/pa. In those areas you need to spend at least $2.5M to buy anything decent, it would take 62 months (or 5 years) if you saved every penny earned after you paid rent (infeasible) to save up a 20% down payment for the mortgage. You’re only “qualified” for what you can make the down payment on, and starter homes in high CoL areas are nonexistent. You seem to have rose colored glasses.
    - pandaman 3y ago
      Even in SF proper there are plenty of houses under 1M, much more in the Bay Area. Same with NYC: quite a lot of houses in the city proper, much more in NJ over the river [1]. >You’re only “qualified” for what you can make the down payment on You sound like you've never applied for a loan. >You seem to have rose colored glasses. You seem to consider only the housing you cannot afford "decent" and then complain as if it's the reality. 1. https://www.zillow.com https://www.zillow.com
      - tristor 3y ago
        I live in a much cheaper area than the SFBA (Denver), and anything decent starts at $1.2M, if you find a house here for $600K, it’s what’s considered “bulldoze ready”, empty lots with sewer, water, power already connected go for $550K+. If you think something you can buy in SFBA under $1M is livable rather than “bulldoze ready”, you are the one that is out of touch.
        pandaman 3y ago
        I am not sure how your observation in Denver translates to SFBA? Some teardowns/lots will go for $550K or more, depending on location. It does not mean a house under $1M is unlivable in SFBA. Teardowns do not have staged interior pictures on Zillow, JFYI.
gruez 3y ago
> The economy is doing stellar for the upper classes which account for maybe 10 to 15% of the population. That’s the so-called disconnect that the Biden administration doesn’t understand. It's been also doing great for the lower classes. The bottom quartiles have seen far higher wage growth than the top quartiles. https://www.atlantafed.org/chcs/wage-growth-tracker https://www.atlantafed.org/chcs/wage-growth-tracker

tristor 3y ago

> The economy is doing stellar for the upper classes which account for maybe 10 to 15% of the population. Part of the problem is that the US isn’t one “the economy”, it’s localized, primarily due to housing markets. There is no way that the top 10% of income earners qualify as “upper class” in the US, because the majority are in high COL areas. When you make $400k/pa, but pay $5k/mo in rent/housing, that’s a very different outcome than making $400k/pa and paying $1k/mo in rent/housing. Both of these situations exist in the US, but the former is much more common than the latter. Looking at income only without accounting for cost of living presents a skewed view of things. The person paying the higher cost of living in this situation is solidly middle class, if and only if they own that property, renters by definition aren’t middle class. The person paying the low cost of living almost certainly owns the property and is able to invest heavily, so is almost certainly upper class or a HENRY. Earning $90k/pa puts you in the top 10% of income earners, and isn’t even six figures. The new middle class for non-Boomers starts in the top 3%. You only need to earn $300k/pa to be in the vaunted 1%, and in most high COL areas you’ll never be able to afford a house. Looking at income percentiles without looking at cost of living is a really skewed viewpoint, and it ignores the huge wealth chasm between the top 0.1% and everyone else, even 1%ers struggle to make rent.

pandaman 3y ago
If you define "high COL" as the area where you cannot afford a house on 300K income then sure, but you definitely can afford a house pretty much anywhere in the US with such an income, which qualifies you for over $1M loan.
- tristor 3y ago
  At $300k/pa with $5000/mo in rent, it’s pretty obvious I am talking about SFBA and NYC, which unsurprisingly have the highest density of people earning $300k/pa. In those areas you need to spend at least $2.5M to buy anything decent, it would take 62 months (or 5 years) if you saved every penny earned after you paid rent (infeasible) to save up a 20% down payment for the mortgage. You’re only “qualified” for what you can make the down payment on, and starter homes in high CoL areas are nonexistent. You seem to have rose colored glasses.
  - pandaman 3y ago
    Even in SF proper there are plenty of houses under 1M, much more in the Bay Area. Same with NYC: quite a lot of houses in the city proper, much more in NJ over the river [1]. >You’re only “qualified” for what you can make the down payment on You sound like you've never applied for a loan. >You seem to have rose colored glasses. You seem to consider only the housing you cannot afford "decent" and then complain as if it's the reality. 1. https://www.zillow.com https://www.zillow.com
    - tristor 3y ago
      I live in a much cheaper area than the SFBA (Denver), and anything decent starts at $1.2M, if you find a house here for $600K, it’s what’s considered “bulldoze ready”, empty lots with sewer, water, power already connected go for $550K+. If you think something you can buy in SFBA under $1M is livable rather than “bulldoze ready”, you are the one that is out of touch.
      - pandaman 3y ago
        I am not sure how your observation in Denver translates to SFBA? Some teardowns/lots will go for $550K or more, depending on location. It does not mean a house under $1M is unlivable in SFBA. Teardowns do not have staged interior pictures on Zillow, JFYI.

gruez 3y ago

> The economy is doing stellar for the upper classes which account for maybe 10 to 15% of the population. That’s the so-called disconnect that the Biden administration doesn’t understand. It's been also doing great for the lower classes. The bottom quartiles have seen far higher wage growth than the top quartiles. https://www.atlantafed.org/chcs/wage-growth-tracker https://www.atlantafed.org/chcs/wage-growth-tracker