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Myself and many other "millennials" are very reluctant to "buy" such things because they can't. What we can do is go into massive, enslaving, soul-crushing deb

by api 14y ago

Myself and many other "millennials" are very reluctant to "buy" such things because they can't. What we can do is go into massive, enslaving, soul-crushing debt for them, something the smart ones are justifiably reluctant to do. Real estate hyperinflation is particularly bad. A house is unthinkable to anyone under 40 unless: a) they've had a liquidity event, inherited money, or have a big trust fund. b) they are willing to live in bumscrew nowhere or the ghetto. c) they are willing to go into soul-crushing debt with the very real threat of being rendered underwater and thus permanently shackled to that house without bankruptcy or a short sale. Screw that. Screw it all. Turn on, tune in, drop out.

Swizec 14y ago
I should send this comment to my parents and grandparents the next time they berate me about why I'm not planning on owning a home any time soon and would rather rent and/or mooch off them for as long as possible.
- api 14y ago
  Send them the median income / home value ratios too. I think the boomers qualify as the most irresponsible generation in history, especially in the USA. Now half of them have no retirement savings and are getting old, fast. Guess who's going to pay for it.
  - DonnyV 14y ago
    Worst generation EVER! Almost every boomer I talk to complain about everything but don't do a damn thing about it.
will_work4tears 14y ago
I'm under 40 and own a house. a.) Nope, none of those. Two incomes though, of which combined is higher than the median, but not by that much... b.) Not quite the ghetto, though some would say all of Tacoma is the ghetto. Still, there are much, much worse areas around here. c.) Not soul crushing. We pay about 1400/mo for our mortgage, which isn't much more than rent around here. (we had a small two bedroom apartment for 750, so it is possible to go cheaper though)
runako 14y ago
Or d) they are willing to move out of the top 5-10 mostly coastal real estate markets. For instance, tech hub Austin, TX has a median home price of $122k. The payment on that will be around $1k-$1100/mo including taxes etc. You'll find very similar numbers in places like Atlanta, Houston, Dallas, Raleigh, etc.
- jseliger 14y ago
  The basic problem with coastal markets (and a few inland ones) is that building regulation has messed up the housing market by making it impossible to build enough to meet demand, as Matt Yglesias describes in The Rent is Too Damn High and Edward Gleaser describes in The Triumph of the City.
- api 14y ago
  That's a valid point, but I didn't know there were any tech hubs or otherwise interesting places with jobs that had house prices like that. That is lower than small Midwestern cities with lousier economies. Why is housing so affordable in Texas? Lack of stupid regulations? Loads of land?
  - runako 14y ago
    Both, plus c) it's not perceived as being as cool as living in a trendier place and d) it's under-marketed relative to the bigger cities. Note also that Raleigh/Durham has a smallish tech hub and housing is cheap there too. Oh, and also e) the perception that nothing is interesting unless it happens in NYC or SF (or other mega-city). If you're willing to live outside a tech hub (which has other advantages), you'll find that in most places in the US programmers make high salaries relative to the cost of living, but the focus tends to be on the few places that this is not true. Outside the top markets, $70k + bonus is more than enough to be comfortably middle class (and own a home and car if desired).
TheFuture 14y ago
Every market is different, but there is a lot of housing supply in most of the US, prices are depressed and lending rates are the lowest they'll probably ever be in our lifetime. I have a couple friends (from our generation) who are buying up duplexes. They can live upstairs and rent the lower and nearly cover their mortgage from the rent income. They are living for free and banking the savings for the down-payment on the next duplex. Seems incredibly smart to me. You have a generation of people who've convinced themselves not to buy a house, driving up rents and driving down home prices. You can borrow money for next to free to buy those assets and rent them. Even if you don't want to be a landlord, you can get a mortgage payment that is less than rent. Sure you have debt, but rent is just burning money every month. Even if your home declines in value, it probably won't lose as much value as you'd have paid in rent, so you're basically breaking even.

by api 14y ago

Swizec 14y ago

I should send this comment to my parents and grandparents the next time they berate me about why I'm not planning on owning a home any time soon and would rather rent and/or mooch off them for as long as possible.

api 14y ago
Send them the median income / home value ratios too. I think the boomers qualify as the most irresponsible generation in history, especially in the USA. Now half of them have no retirement savings and are getting old, fast. Guess who's going to pay for it.
- DonnyV 14y ago
  Worst generation EVER! Almost every boomer I talk to complain about everything but don't do a damn thing about it.

will_work4tears 14y ago

I'm under 40 and own a house. a.) Nope, none of those. Two incomes though, of which combined is higher than the median, but not by that much... b.) Not quite the ghetto, though some would say all of Tacoma is the ghetto. Still, there are much, much worse areas around here. c.) Not soul crushing. We pay about 1400/mo for our mortgage, which isn't much more than rent around here. (we had a small two bedroom apartment for 750, so it is possible to go cheaper though)

runako 14y ago

Or d) they are willing to move out of the top 5-10 mostly coastal real estate markets. For instance, tech hub Austin, TX has a median home price of $122k. The payment on that will be around $1k-$1100/mo including taxes etc. You'll find very similar numbers in places like Atlanta, Houston, Dallas, Raleigh, etc.

jseliger 14y ago
The basic problem with coastal markets (and a few inland ones) is that building regulation has messed up the housing market by making it impossible to build enough to meet demand, as Matt Yglesias describes in The Rent is Too Damn High and Edward Gleaser describes in The Triumph of the City.
api 14y ago
That's a valid point, but I didn't know there were any tech hubs or otherwise interesting places with jobs that had house prices like that. That is lower than small Midwestern cities with lousier economies. Why is housing so affordable in Texas? Lack of stupid regulations? Loads of land?
- runako 14y ago
  Both, plus c) it's not perceived as being as cool as living in a trendier place and d) it's under-marketed relative to the bigger cities. Note also that Raleigh/Durham has a smallish tech hub and housing is cheap there too. Oh, and also e) the perception that nothing is interesting unless it happens in NYC or SF (or other mega-city). If you're willing to live outside a tech hub (which has other advantages), you'll find that in most places in the US programmers make high salaries relative to the cost of living, but the focus tends to be on the few places that this is not true. Outside the top markets, $70k + bonus is more than enough to be comfortably middle class (and own a home and car if desired).

TheFuture 14y ago

Every market is different, but there is a lot of housing supply in most of the US, prices are depressed and lending rates are the lowest they'll probably ever be in our lifetime. I have a couple friends (from our generation) who are buying up duplexes. They can live upstairs and rent the lower and nearly cover their mortgage from the rent income. They are living for free and banking the savings for the down-payment on the next duplex. Seems incredibly smart to me. You have a generation of people who've convinced themselves not to buy a house, driving up rents and driving down home prices. You can borrow money for next to free to buy those assets and rent them. Even if you don't want to be a landlord, you can get a mortgage payment that is less than rent. Sure you have debt, but rent is just burning money every month. Even if your home declines in value, it probably won't lose as much value as you'd have paid in rent, so you're basically breaking even.