4 ms·

It's interesting that $14000/month is "rich" on this website, and some people earning $100/month actually own houses. Meanwhile people making $50000/month in S

by qurren 3mo ago

It's interesting that $14000/month is "rich" on this website, and some people earning $100/month actually own houses. Meanwhile people making $50000/month in San Francisco can't afford a house because half of it is taxed away and housing is astronomically expensive.

EPWN3D 3mo ago
I promise you that someone in SF making $50k/month can comfortably afford a very nice house.
- qurren 3mo ago
  I promise you not. Houses here cost $2M+ for something livable and $1M for something with mold and other safety issues. When half that $50K gets taxed, half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house.
  - onraglanroad 3mo ago
    Ok, I made my other comment before seeing this but I find it very difficult to believe you can't find something reasonable for far less.
    - qurren 3mo ago
      Nah it's the reality here. I'd say minimum income to safely own housing here is $100K-150K/month. OR cash already saved for the home, in which case income doesn't matter. Yes, lots of households make that much, especially people at e.g. Nvidia with unvested appreciated RSUs. Yes, the US economy is that badly fucked. And the people on mortages were brainwashed into buying something they can't afford, and in for a foreclosure disaster when the economy corrects.
      - kbelder 3mo ago
        You can't make many national judgements based on the economics of the Bay Area. It's much more sane in nearly every other area (with some other outliers, such as New York City).
      - tenuousemphasis 3mo ago
        You're shifting the goal posts, but I'll bite... what is 'safely' owning a home, to you?
      - polairscience 3mo ago
        In every thread about housing people on HN post wildly outlandish claims about expenses that belie their totally out of touch perspectives. If you make 100K a month (the lower bound of what you just wrote). Let's say you put 25K into retirement. You eat out every meal so 4K food/living budget. That leaves 60K (I'll give you 10K slush fund for savings money or as a general keeping-up-with-the-jones' fund). 60K per month will pay a 4.5 million dollar mortgage. 4.5 million will buy you some of the nicest houses in the bay that aren't mansions. See: https://www.realtor.com/news/unique-homes/midcentury-modern-masterpiece-sale-historic-california/ https://www.realtor.com/news/unique-homes/midcentury-modern-... You are either insane, or out of touch in a way that makes you insane. Of course, you can get a much cheaper very nice condo and "safely" squirrel away phenomenal amounts of cash savings. Expecting to own a high end house in a dense metro are on its own, is a pretty insane expectation.
        nostrademons 3mo ago
        Don't forget taxes. In that bracket, in California, you're paying 50% of your income in taxes, and so $100K/month is actually $50K/month. I think OP is overselling the point, but not by nearly as much as people think.
        Symbiote 3mo ago
        That's not how tax brackets work. The effective tax would be about 26%.
    - arjie 3mo ago
      It’s untrue. Unstated assumptions are the quality of housing desired and location desired. In practice, because of the rent/price ratio being low here in SF most people will be taking a downgrade when going from rent to 1.25x that as mortgage after putting down $300k for a $1.5m. It is true that the marginal rate can be very high, though, so heuristics based on pre tax income break down at these numbers. The place we live in costs $7k/mo but to buy it we’d have to spend $450k and then $9.5k/mo.
  - skissane 3mo ago
    > half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house. Buying a $2M house is saving for retirement. Owning your own home in retirement is a massive financial win. And if you own a home in an expensive market, you can sell it, buy one in a more affordable market, and then the difference is unlocked retirement savings.
  - deleted 3mo ago
    [deleted]
  - dwa3592 3mo ago
    I am not even sure if you are being sarcastic. https://www.zillow.com/homedetails/80-Prentiss-St-San-Francisco-CA-94110/15161527_zpid/ https://www.zillow.com/homedetails/80-Prentiss-St-San-Franci... check this out.
    - mikestew 3mo ago
      Man, that's nicer than houses in Redmond for the same money (though the SF one is a touch smaller), and you won't get that view. Bay Area house prices are insane, ya say?
onraglanroad 3mo ago
If your net pay is $7000 per month you absolutely can afford to own a house, you're just being fussy about the house you want.
- qurren 3mo ago
  You're not going to save up for a $1-2M house very fast on $7000/month, when you also have to live off that $7K, pay rent, pay medical bills, and save up for retirement expenses.
- burner420042 3mo ago
  Does the website reference net or gross monthly income? Edit: So the numbers are not a direct exchange rate to USD. Q: How were dollar values assigned to households? A: The households’ door numbers represent the consumption values (US dollars) that each adult in the household has per month. This figure comes from a combination of the household’s self-reported consumption and income levels. We then checked the official cost of living data in each country to adjust the values for purchasing power parity (PPP) and converted the value into US dollars. Read more about how we assigned the Dollar Street values here.
- drivebyhooting 3mo ago
  If you’re gonna have kids, fussy means: * have decent schools * not covered in lead or asbestos * not next to a highway
  - qurren 3mo ago
    + * in an area not going to get shot or mugged * structurally earthquake safe so that we don't die
- jt2190 3mo ago
  The housing market is highly dependent on the job market so no, it’s not “being fussy”, it’s “I need to live here so I can have a job and income”. Unless you’re suggesting that people should quit their jobs and go get that cheap house in the middle of nowhere?
tjohns 3mo ago
You have it backwards. Housing is astronomically expensive in San Francisco precisely because there are so many people with high incomes bidding against each other. When you have a highly inelastic supply (constrained by zoning laws, density limits, and geographical boundaries), prices rise to the maximum margin of what the highest-income buyers are capable of paying. Regarding taxes: Since taxes apply to all local high-earners equally, it doesn't change their relative purchasing power against one another in the local housing market. If taxes were suddenly halved, that extra liquidity would be priced into the next bidding war, driving home prices even higher.
tenuousemphasis 3mo ago
Globally, $14k/mo is unbelievably, obscenely rich.

by qurren 3mo ago

EPWN3D 3mo ago

I promise you that someone in SF making $50k/month can comfortably afford a very nice house.

qurren 3mo ago
I promise you not. Houses here cost $2M+ for something livable and $1M for something with mold and other safety issues. When half that $50K gets taxed, half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house.
- onraglanroad 3mo ago
  Ok, I made my other comment before seeing this but I find it very difficult to believe you can't find something reasonable for far less.
  - qurren 3mo ago
    Nah it's the reality here. I'd say minimum income to safely own housing here is $100K-150K/month. OR cash already saved for the home, in which case income doesn't matter. Yes, lots of households make that much, especially people at e.g. Nvidia with unvested appreciated RSUs. Yes, the US economy is that badly fucked. And the people on mortages were brainwashed into buying something they can't afford, and in for a foreclosure disaster when the economy corrects.
    - kbelder 3mo ago
      You can't make many national judgements based on the economics of the Bay Area. It's much more sane in nearly every other area (with some other outliers, such as New York City).
    - tenuousemphasis 3mo ago
      You're shifting the goal posts, but I'll bite... what is 'safely' owning a home, to you?
    - polairscience 3mo ago
      In every thread about housing people on HN post wildly outlandish claims about expenses that belie their totally out of touch perspectives. If you make 100K a month (the lower bound of what you just wrote). Let's say you put 25K into retirement. You eat out every meal so 4K food/living budget. That leaves 60K (I'll give you 10K slush fund for savings money or as a general keeping-up-with-the-jones' fund). 60K per month will pay a 4.5 million dollar mortgage. 4.5 million will buy you some of the nicest houses in the bay that aren't mansions. See: https://www.realtor.com/news/unique-homes/midcentury-modern-masterpiece-sale-historic-california/ https://www.realtor.com/news/unique-homes/midcentury-modern-... You are either insane, or out of touch in a way that makes you insane. Of course, you can get a much cheaper very nice condo and "safely" squirrel away phenomenal amounts of cash savings. Expecting to own a high end house in a dense metro are on its own, is a pretty insane expectation.
      - nostrademons 3mo ago
        Don't forget taxes. In that bracket, in California, you're paying 50% of your income in taxes, and so $100K/month is actually $50K/month. I think OP is overselling the point, but not by nearly as much as people think.
        Symbiote 3mo ago
        That's not how tax brackets work. The effective tax would be about 26%.
  - arjie 3mo ago
    It’s untrue. Unstated assumptions are the quality of housing desired and location desired. In practice, because of the rent/price ratio being low here in SF most people will be taking a downgrade when going from rent to 1.25x that as mortgage after putting down $300k for a $1.5m. It is true that the marginal rate can be very high, though, so heuristics based on pre tax income break down at these numbers. The place we live in costs $7k/mo but to buy it we’d have to spend $450k and then $9.5k/mo.
- skissane 3mo ago
  > half of what's remaining has to be saved up for retirement in a place that deeply discriminates against age, you don't have much left to save up for buying a $2M house. Buying a $2M house is saving for retirement. Owning your own home in retirement is a massive financial win. And if you own a home in an expensive market, you can sell it, buy one in a more affordable market, and then the difference is unlocked retirement savings.
- deleted 3mo ago
  [deleted]
- dwa3592 3mo ago
  I am not even sure if you are being sarcastic. https://www.zillow.com/homedetails/80-Prentiss-St-San-Francisco-CA-94110/15161527_zpid/ https://www.zillow.com/homedetails/80-Prentiss-St-San-Franci... check this out.
  - mikestew 3mo ago
    Man, that's nicer than houses in Redmond for the same money (though the SF one is a touch smaller), and you won't get that view. Bay Area house prices are insane, ya say?

onraglanroad 3mo ago

If your net pay is $7000 per month you absolutely can afford to own a house, you're just being fussy about the house you want.

qurren 3mo ago
You're not going to save up for a $1-2M house very fast on $7000/month, when you also have to live off that $7K, pay rent, pay medical bills, and save up for retirement expenses.
burner420042 3mo ago
Does the website reference net or gross monthly income? Edit: So the numbers are not a direct exchange rate to USD. Q: How were dollar values assigned to households? A: The households’ door numbers represent the consumption values (US dollars) that each adult in the household has per month. This figure comes from a combination of the household’s self-reported consumption and income levels. We then checked the official cost of living data in each country to adjust the values for purchasing power parity (PPP) and converted the value into US dollars. Read more about how we assigned the Dollar Street values here.
drivebyhooting 3mo ago
If you’re gonna have kids, fussy means: * have decent schools * not covered in lead or asbestos * not next to a highway
- qurren 3mo ago
  + * in an area not going to get shot or mugged * structurally earthquake safe so that we don't die
jt2190 3mo ago
The housing market is highly dependent on the job market so no, it’s not “being fussy”, it’s “I need to live here so I can have a job and income”. Unless you’re suggesting that people should quit their jobs and go get that cheap house in the middle of nowhere?

tjohns 3mo ago

You have it backwards. Housing is astronomically expensive in San Francisco precisely because there are so many people with high incomes bidding against each other. When you have a highly inelastic supply (constrained by zoning laws, density limits, and geographical boundaries), prices rise to the maximum margin of what the highest-income buyers are capable of paying. Regarding taxes: Since taxes apply to all local high-earners equally, it doesn't change their relative purchasing power against one another in the local housing market. If taxes were suddenly halved, that extra liquidity would be priced into the next bidding war, driving home prices even higher.

tenuousemphasis 3mo ago

Globally, $14k/mo is unbelievably, obscenely rich.