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Remember $1M today is the same as $750K in January 2019.
yes, everyone’s salary also went up by the same so comparison is solid
The "everyone" in that statement needs a citation, I'm afraid
This tells you more about inflation methodology than it does home affordability.
Yes. I meant to point out that "million dollar home" has a certain psychological meaning but it's the same as what a $750K home was just 7 years ago.
Mortgage payment vs. household income is probably the best way to assess affordability.
Housing in US is one of the easiest ways to launder money: https://globalwitness.org/en/campaigns/corruption-and-money-...
Housing as an investment is bad policy. If your house appreciates, it doesn't mean that you can sell it and buy another which is cheaper. All livable (and unlivable) houses have appreciated and it will cost at least that much to buy another. It is far more likely your new house will cost a lot more, because you are moving from a less desirable house to a more desirable house and there are always people with more money than you. Making it worse are the global money laundering bidders, who don't care about how much, just as long as they can quickly launder money.
Ever increasing home prices is essentially sociatal wealth redistribution from the young to the old, as every following generation needs to pay a larger amount to the previous owners.
No wealth is being generated (no product is being created), that's why it is - fundamentally - a redistribution
Not just in housing - in policy and the social safety net (SS). There's a new book out on the subject:
https://us.macmillan.com/books/9780374607647/gerontocracyina...
You'll make more money when you downsize or move to a cheaper city or country for retirement if your house goes up in price. If you own a house in San Francisco you can sell, move to a vlcol city, buy a new house, invest the remainder, and retire. You probably will want a smaller house once the kids move out too.
> move to a cheaper city or country for retirement if your house goes up in price
What kind of life experience would lead to such a conclusion? It's almost like you have no idea what a community is - with one's friends, neighbors, familiar shops, clubs, church etc. Money is not everything in life. Any policy which forces people in their late 60's to uproot and go somewhere else to rebuild their lives is bound to face a very angry backlash. A mindset like yours is why we got prop 13 here in California.
> The number of cities where a typical starter home is worth $1 million or more has nearly tripled since before the pandemic, rising from 80 in February 2020 to a record 242 today.
Doubt. They don't define what constitutes a city and seem to be purposely be hiding the data. There's only a count of the cities per state with no mention their names. I followed link after link and couldn't find them and gave up. Texas supposedly has 7 of these $1m+ starter home cities. Austin is the most expensive metropolitan area, and there are plenty of < $600k homes in centrally located areas. Venture out to the suburbs like Pflugerville, Cedar Park or Buda and you'll have plenty of options with $400k to spend. There are only a handful of small pockets around the city where $1m won't buy you a starter home like Zilker and Tarrytown.
> For buyers navigating today's market, Zillow Home Loans' BuyAbility℠ tool provides a personalized, real-time estimate of the home price and monthly payment that fit within their budget. Home listings on Zillow also include a down payment assistance module to help shoppers identify local programs that may be available to them.
> For those who decide renting is the right call, Zillow Rentals® lists options across every price point and property type — including single-family homes, apartments and individual room listings. Renters can also use CreditClimb to report on-time rent payments to the major credit bureaus, building the credit history that will put them in a stronger position when they're ready to buy.
This is just fear driven advertising. BUY NOW OR YOU'LL NEVER OWN A HOME!!
Does the US have the same distinction we have here in Australia where there will be a small local government area in the centre of a city named that?
For example, the City of Sydney LGA is only one of 33 LGAs that make up what is normally known as Sydney.
> Does the US have the same distinction we have here in Australia where there will be a small local government area in the centre of a city named that?
It varies, but mostly yes. I think they're limiting the definition of a "city" to as small as possible to inflate the prices for a scary headline. Austin is the most expensive metropolitan area in TX. Fire up zillow if you can access it, search for Austin, TX with a $600k limit and it'll automatically put the city boundary on the results. You'll find plenty of listings, over 1900 standalone homes for me as of right now. Including townhomes and condos it's over 2800.
They aren't going by the minima, they are taking the 33rd percentiles.
It's fear driven advertising with no meaningful information. They don't mention the cities and I wasn't able to find them. The article is chock full of links other zillow articles, their own products and 3rd party advertisers.
The median price of a house in Oak Park, Illinois --- the inner-ring suburb of Chicago in which I live --- is $700,000. This is an M-COL region.
They have products for owners and renters alike, they don't need to nudge you into a particular position.
Austin had a building glut suppressing prices. The rest of the country didn't experience that.
I have a theory that the housing crisis is caused by the dating crisis. Statisticians estimate that in the Netherlands we're missing 400 000 houses, while we have 1,2 million people aged 30 to 60 living alone. If two-thirds of those people married each other, the entire housing crisis would be solved overnight. And it's worth pointing out that people used to marry each other at much higher rate than they do now, so it's not an unrealistic solution.
And it's not smartphones that broke our mating rituals, because the change was already happening long before. I'd argue that economic development exposed the dirty truth that people just don't like each other and given the choice between marriage or watching TV undisturbed, they'll choose the latter.
Something that doesn't intuitively click for me is, if the lack of housing is the issue, then why do we have historically low average number of people living in a single house.
Do you have a source against the smartphone claim? There was a recent NBER paper in favor of this hypothesis
https://news.ycombinator.com/item?id=48444543
The GFC housing bust happened at the same time but note that the drop in fertility was most severe for teens so the phone effect predates the shortfall in units built
Most of the cities in California[1] could fit their population into 5 buildings[2] at a cost of $1200 per person to build and $200-$600 to rent[3] if there was political will and competence. Unfortunately (or fortunately) we have none.
[1] https://en.wikipedia.org/wiki/List_of_largest_cities_in_Cali...
[2] https://en.wikipedia.org/wiki/Regent_International_Center
[3] https://zh.wikipedia.org/zh-cn/%E6%96%B0%E4%B8%96%E7%95%8C%E...
"The architectural design has been called "dull,"[4] and the entire concept of the complex is frequently referred to as "dystopian."[4][7][11] Residing in a "self-sufficient living environment" can negatively affect an individual's mental health. In addition, the tightly-packed apartments can cause claustrophobia. The various amenities are restricted by the floor the residents live on, and different floors have different rent prices, which can result in socioeconomic differences between residents."
Yeahhhhhh I'll be first in line for the "does not have the will for this" queue. Yuck.
Unless you're arguing this is inherent to high density of any signifcant magnitude, I don't see how management or design of this one project is relevant. Buildings in Singapore like SkyVille @ Dawson are maybe 30% the DU/acre of Regent Intl but are green, open, humane in layout.
Apparently this means that the top house of the bottom 1/3rd is now $1m in 242 cities.
Technically, "the top house of the bottom 1/3rd is at least $1m"
The title of the article is not helpful.
Even "In 242 cities[1], 2/3 of homes are more than $1M" is better.
[1]where "city" is ambiguous
" The housing problem hasn't been solved"
This assumes it is a problem that is being addressed.
When housing values soar, there are people getting rich off of that.
The "solution" is devaluation of people's assets, and all politics is local, and all local politics is housing values.
As clearly is a supply and demand issue. Supplies clearly being artificially suppressed.
Of course, the housing market merely reflects every other segment in our our "market economy"... Everything is Monopoly cartel or regulatory capture
Exactly. For most people, the housing problem is that their house isn't worth more.
My parents were whining a few months ago about the possibility of new apartments being built not far from their house. Why? More noise, more traffic, more people. Things that would impact the value of their nearly debt-free home.
Meanwhile most people my age (mid-30s) who don't have a home have more-or-less given up on the idea of getting one, and people their age (mid-60s) are having the possibility of property tax abatements thrown their way so that they can stay in a home until they absolutely can't anymore, or pass away.
The vast majority of American economic decisions are ultimately aimed at passing off more value into the hands of asset-holding retirees. Full stop.
Yeeep. It feels like one of those “holding a wolf by the ears” situations. I don’t know how we get out of this mess.
One especially frustrating part of it is that it really benefits nobody. Your home goes up in value, cool. You owe more property taxes. And all the other homes around you also go up in value, so… you’re really no better off unless you downsize or move to a cheaper housing market.
Something akin to Georgism seems like the correct answer. But how you get there from here? Beats me!
All of the English speaking capitalistic countries are suffering from the same problem the United States, Canada, Great Britain, Australia, and New Zealand.
Housing un affordability for the next generation coming up, starter homes in California are easily at least 500,000 the old two bedroom one car garage starter house I grew up in cost $550,000 today built in the 1925. There is no way anyone in the surrounding area for the most part make enough money to afford to buy it today.
The one thing that is going up all over the place across the country are those so-called luxury apartments which cost an arm and a leg even for a one bedroom studio, the one thing that is interesting or ironic. The only reason I can afford to buy anything is because relatively late in life bought as many shares of Apple computer as I could about 21 years ago.
Anyone coming up between 18 and 30 are in trouble unless their family is relatively well off and can help them.
The thing is homeowners benefit from denser zoning because the potential of their land is increased even if the average unit price comes down - also the amenity value of more jobs, amusements, school funding/tax base, etc in the city should show up in the price too.
There's no city in Georgia where a starter home is $1 million. This methodology has to be highly flawed.
Perhaps it's Sea Island which is a luxury enclave with homes in the millions. They seem to define cities as incorporated & unincorporated cities, towns, communities, etc.
Does this analysis only include incorporated cities or does it also count unincorporated census-designated places?
I sold my company ~2 years ago for a very decent 8-figure exit where we cleared multiples, everybody got paid, fat bonuses all around, etc. just real pipedream founder stuff. Was incredibly excited and thought "we've made it!"
Currently barely affording a condo in Jersey City (not Manhattan). Don't really understand why the prices are this high, none of these homes are selling, the ones that sell are vacant EB-1 investments of which there surely cannot be that many, and there's no way an upper-middle class family could afford this.
More ludicrously taxes keep going up, property tax is super high making it impossible for buying to ever be better than renting.
Everyone in tech keeps talking about how AI might usher in a permanent underclass but it's already here. It's not "you will own nothing and be happy" for most people I think it's already "you own nothing and aren't happy." It's very confusing what is happening with the real estate market but what is obvious is that local politicians and housing regulations have invented feudalism from first principles.
I genuinely do not understand the controversy here, imagine somebody said this about bread.
1) It is the 12th century. Local lords own all the wheat farms and bakeries. Bread is incredibly expensive, nobody can buy bread, people are simply buttering the bread and licking off the butter, and still having to pay a portion of their wages to help maintain the bakeries.
2) ~1000 years pass. Everyone looks back at that time as the worst economic reality in human history, the foundation of most political systems is the ability for anyone to own bread and operate bakeries, people can buy bread.
3) One day you go to the bakery to buy some bread and it's now $120 a loaf. You say WTF this is so expensive, nobody can buy bread anymore, but there are so many loaves on the shelf. You're informed all of these loavess are spoken for by the people in the parking lot who are apparently gambling on the value of bread.
4) Nobody is saying you can't gamble on the value of bread. Instead, everyone agrees it would cost less if we would simply make more bread. But the people in the parking lot, who are already rich and supposedly champion a totally free bakery, say we can't make more bread as that might drop the value of bread and reduce their portfolio value, which would be worse than starvation, so we must limit the bakery. This is obviously ridiculous.
5) Then somebody walks into the bakery and says, I am a champion of the working class, I am one of you, I too cannot afford bread, make me your leader! So you think amazing, let's put them in charge, they will make more bread.
6) Unfortunately, no, for a variety of reasons that sound like they were made up on the spot, they further reduce the supply of bread, stop people from building more bakeries, and install a series of their supporters to 'review' the grain quality of bread at great expense. Also, a very small group of people will get a loaf of bread for free.
7) The price of soars further, everyone agrees that all of this is making it even less affordable. However it becomes culturally unacceptable to reverse any of these policies.
8) You have obviously been betrayed by the current leader. One of the current leader's supporters decides they want to be leader. The other supporters, who again are responsible for this crisis, back this person and say this is the next leader. They say you cannot question them, you must put them in charge or you're to blame for the bread prices. They run constant smear campaigns against anybody who disagrees, branding them all the same as the people in the parking lot, and scare people on the brink of starvation. So fine, you put them in charge, but demanding they change things.
9) They say yes we have a great solution. The people in the parking lot who are gambling on the prices of bread will now let you borrow a slice from them. You cannot eat it but you may butter it and lick the butter. If the butter seeps into the bread, as tends to happen with butter, you will be charged for the cost of drying out the slice later.
10) It is the 21st century. Local lords own all the wheat farms and bakeries. Bread is incredibly expensive, nobody can buy bread, people are simply buttering the bread and licking off the butter, and still having to pay a portion of their wages to help maintain the bakeries.
Genuinely incredible
Talking about "gambling" is entirely missing that there is a genuine and massive housing shortage in literally every major US metro area. https://www.fanniemae.com/research-and-insights/perspectives...
There is no level of banning housing speculation that will ever make prices go down. Housing speculation is only profitable because there aren't enough homes in the first place.
The concept of a "starter home" has always seemed asinine to me.
You can't convince me there's a housing crisis when houses like this exist,
https://www.zillow.com/homedetails/404-W-Broadway-Centralia-...
Walkable. Passenger rail. Fiber internet. Affordable with a single income.
With a crime rate of 32 per one thousand residents, Centralia has one of the highest crime rates in America compared to all communities of all sizes - from the smallest towns to the very largest cities. One's chance of becoming a victim of either violent or property crime here is one in 31. Within Illinois, more than 95% of the communities have a lower crime rate than Centralia.
https://www.neighborhoodscout.com/il/centralia/crime#descrip...
The house is over 100 years old. The heating is through radiators. The town has a population of 12,000 people. It has high crime. It's more dangerous than Chicago. It has poorly achieving schools. It has no way access to job markets.
It's a total bargain!
Weird how everyone isn't beelining to Centralia, Illinois to capitalize on these opportunities. It definitely isn't 50 years of continuous declining population driving these bargains.
"How can there be a housing crisis when there are houses available for $1 in Pontiac, MI?"
"People don't want houses in random small towns with few local jobs, so the housing shortage isn't real" continues to be a bullshit claim every time it comes up.
With STL the nearest job center, not doable on transit and not near even with a car (1h15). That's the catch.
Something has to be horribly undesirable about that.
No responses from op. Classic bait.