Evidence for the “great resignation” is thin on the ground
economist.com
economist.com
I’ll start off by saying that I work 60 hours a week, at least. My stress and anxiety levels are manageable now, but only because I found ways of managing them. They’re not reasonable though and most importantly, they’re not sustainable.
Based on the neighborhood I live in and my compensation, I am extremely privileged. I don’t have money concerns that my parents had. Most things that I might need, I can buy them without having to think too much or without putting a dent in my net worth.
But my job is not sustainable. So, I live way below my means and avoid any lifestyle creep.
I would like to own a home, a nice one. Not a $1M property that’s not even comparable to my parents home. Given my compensation and many, many years of savings, this would be reasonable. I looked at several houses over the weekend. One dump after another, going for $1.3MM at the minimum. One actually had an offer accepted, merely hours after we toured it. They told us the buyer offered $1.6MM.
But Seattle has become a lawless dump. The east side has started homes for $1.4MM where the inspection report shows you that you’re basically just paying for the land.
If I have to be a renter my whole damn life and can’t even afford a house, what is the god damn point? Yeah I get paid very well, but I am a pawn of people who earn significantly more. And it’s not that I’m just comparing myself, but even after all this work and money I can’t comfortably buy a house - then where does this leave the majority of this country?
I don’t know.
Jokes aside, why the prices are so high in some countries?
Basically, houses are being used to serve profiteering much moreso than actually housing people affordably.
That's a lot of un-lived-in houses.
Also, because it’s a non-custodial physical asset, countries that allow foreign ownership get a lot of real estate investment from money laundered out of more financially-repressive countries.
Single family zoning, NIMBYism, moral panics over public transit, suburbanism... the list goes on and on.
Building duplexes is a start but Seattle should look a lot more like Brooklyn than like Idaho Falls: 6 story apartment buildings everywhere. Density. Public transit galore with very restricted parking.
Only then would housing prices be reasonable.
I was born in a city that lost 40 000 people over the last generation. From 320 000 people to 280 000 people. A Central European rust belt city called Ostrava.
And the real estate prices there made a huge jump in the last three years. Not as huge as in Prague, but +50 per cent nonetheless.
Lots of those apartments are actually empty and cannot attract tenants, because there just isn't enough demand on the rental market. But they still sell like hot buns at a bakery. I believe this is caused by the fear of inflation combined with relatively low mortgage interest rates. People don't want to have cash in hand.
In the US: Interest rates.
Interest rates are low, so mortgage rates are low, so there is a crap-ton of money going after what is effectively a fixed resource.
Outside the US: Investments.
A lot of people have made a shit-ton of money from low-interest-rate investments like the stock market in the last decade. These people are looking for places to put said money, including real estate in out of the way places. Once again, a lot of money going after fixed resources.
This is a case in Europe, too, especially in the Eurozone, where interest rates are kept very low by the ECB to keep heavily indebted countries afloat.
MILLER: Yeah. It's a huge, huge issue, a global issue. And you're right, Terry, it distorts the real estate market when you have individuals - Saudi billionaires, Russian oligarchs or whoever - buying real estate as a way of basically moving money that they made from other sources into hard assets in Western countries that are attractive because of their stability. I mean, it works for them. it's basically - they've acquired an asset that they know is going to be reliable. It's going to be there. Their money - they're not going to lose."
https://www.npr.org/2021/10/14/1046008243/the-pandora-papers...
Housing prices are NOT reasonable in Brooklyn.
> NIMBYism
I really dislike it when people immediately jump to this. There are simply a whole lot more people living in Seattle than a generation ago. The math dictates that the housing would be more expensive.
2. Housing prices in Seattle would be more reasonable than they currently are with more supply of housing.
3. NIMBYism is absolutely the problem in Seattle. Upzone everything to have a minimum density requirement of 4 family, instead of insisting that 70%+ of the city stay in single family zoning. Don't want a duplex in your back yard? Tough. Move. If the entirety of the city core were as dense as average Brooklyn you would have sufficient supply to meet demand. As is you can buy a fixer up apartment in Brooklyn for half the price of a burnt out shell in Seattle.
4. There are more people than ever and they're all coming back from the desolation known as suburbia: Cities simply have to densify in response. You can't keep your city the same size forever.
3. Having lived in NYC, I can tell you that living in Seattle is far more pleasant than Brooklyn with its massive over population.
4. "Cities simply have to densify in response." Your solution is to make it unpleasant for everyone. Got it. There are many other solutions - don't jump to the easiest one.
Having also lived in both I deal with needles and aggressive homeless people far less often here than I ever did in Seattle. I have functional public transit. I can also even walk places for food, groceries and entertainment.
Don't be such a NIMBY: You're clearly against people having affordable housing. Just move to some shithole suburb and get out of the cities.
You jump to conclusions a lot. I disagree with your solution of making it overcrowded for everyone. There are other solutions.
> Just move to some shithole suburb
Your language says a lot about you. The reason suburbs exist is because people don't want to live in overcrowded places.
This is localized to specific cities, not the entire country. (Though country-wide home prices are also up, just not into the millions like this).
The reason is that people want to live in these specific places, but they can't build upward fast enough to hold everyone who wants to move in. So instead, new buyers compete over the same housing inventory and the current residents never want to sell because they're afraid they may never be able to buy back into the city in the future.
Seattle does have some major problems right now, but it's not literally a lawless wasteland. I think most of us believe that the city will get on top of the social issues eventually, at which point it becomes even more attractive to live in Seattle and the prices go up even more.
Prices of all assets has skyrocketed in the last few years. Part of the blame for that is speculated to lie on the ZIRP (Zero interest-rate policy). Real estate all throughout the developed world has seen a lot of money going into it, as has the stock market as well.
Most people agree everything is overinflated right now and a correction will come, but that sentiment has been around since around 2016. I don't think a violent crash will come without another event to cause it, but I wouldn't be surprised by a plateau or a stagnation in prices for a few years.
I know it's the exact opposite of what everyone was told would happen, but it turns a lot of places are expensive because people want to live there. Letting everyone cut physical ties to their jobs means everyone who wants to live there can now rush in and do it.
In many places, such as East TN (Knoxville) remote workers are moving in with CA salaries. HN thinks that someone remote working from Knoxville, TN should be paid Bay Area salaries. However, Bay Area salaries are high for a reason. There are many Knoxville companies that can't compete with those salaries, which is why they set up Knoxville offices in the first place.
But now their employees are suddenly priced out - and no one is happy about it.
Their company had a simple CoL compensation adjustment that only accounts for zip code. Move to a more expensive zip code, get a raise.
It was always the dream. I have no regrets. Yes I could have retired to somewhere cheap but I'm only 34 and my skills are in high demand seeing salaries in the 200k+ range.
They are building housing here but so many people want to live here that no matter how much they build it will just all be absorbed immediately.
It made one thing perfectly clear to me though. Building wealth is more about investing than saving.
There is nothing special about Seattle (or anywhere else) that made it's descent into an overpriced lawless dump inevitable. It was the people who live(d) there. Not all of them, and probably not even a majority of them. But enough of them.
BUT. "where does this leave the majority of this country?" -- well, the majority of the country does not have as crazy a real estate market as Seattle, as far as paying ~$1.5 mil for a dump where you're basically just paying for the land. That is not most of the country.
So... have you considered moving elsewhere? Even if you take a salary drop, you can probably wind up ahead overall with cost of living, especially if buying a home is a main goal you have. Of course, you won't get to live in Seattle. Seattle is awfully nice, it's true. But maybe you can afford a nice home and without working 60 hour weeks either.
But as far as "where does this leave the majority of this country" -- definitely not in the insane Seattle or San Francisco (or other "hot" cities with tech money) real estate market, is where.
Where I live (on the east coast even, but in a disinvested non-top-tier city) you can easily get a perfectly liveable no-repairs-needed if modest-sized ~1300 sq ft townhome for $200K, or easily a nice detached larger home in a "good" neighborhood for $500K. which I almost don't want to talk about, becuase if the tech money comes here, maybe that won't last.
But there's plenty of the country that's not on the coasts and is not Austin or Boulder or something, that is like this or even cheaper.
(And, as we both know, there are also plenty of people in even these cities who don't make nearly as much as you or I, and have trouble affording a home in them too!)
And everything is "close enough" to a major city, and there is enough of the city that expands out in the surrounding areas (a number of large employers aren't downtown, although some have been migrating back to the city to attract the employee demographic that prefers the city life).
It is not a substitute for living in a city. I do not see the draw in buying a cheap house in a rural community with nothing to do and nothing around it. My family owns a house in a rural community. It is dead weight. Nobody wants to buy it from us.
It is not a good place to raise your kids. The schools are under-funded. The people you interact with are bigots and they will teach your kids to be bigots.
If your kid is gifted they will sit them in a corner and do NOTHING to address how they are learning more quickly than their peers. They will suffer from under-funded schooling that is just desperately trying to keep the bottom half of the students from spilling out.
Kids are heavily influenced by their peers. There are no "garage bands" or art groups or clubs or anything for your kids to participate in. There is school and sports. If you are lucky there will be a marching band.
Also, you are assuming this person is a cis hetero white male. There IS sexism in these communities, there IS racism, there IS bigotry. You will not be welcome if you do not fit in. You WILL be confronted, you WILL be harassed.
Move away from your friends and family and community to somewhere in the middle of nowhere, make a massive investment, and cross your fingers you find friends in the community! There is no job market to speak of, so good luck when the remote work fad ends[0]!
Also pretending these communities are not extremely religious and contain bigotry is dishonest. It is out there.
[0]: which is not guaranteed but possible
It is a problem, and it’s not that most rural dwellers are bigots but enough people are, and they’re the loudest in the room.
Asking a person of color, lgbt, Muslim, etcz to live in rural white america is often a non starter.
How often are you actually making that trip? At that point you aren't participating in the culture of the city.
Also you aren't going to school in the city, aren't meeting people at cultural events in the city, etc. Etc.
Not that I would have wanted to do it long-term, but 60+ minute commutes are not exactly rare (and I once had one part-time), so that length of drive hardly rules out going into a city on a weeknight or weekend every 2 or 3 weeks.
I call "40 miles away" a daily commute distance.
Personally, I'm not sure that I'd want to be closer than 40 miles to downtown Chicago... but I might want to be close to a Metra line.
The only solution in aggregate is political, indeed. I didn't mean to suggest individual choice of where to live as a solution to the socio-political problem, but it can be an individual's solution to present situation that's making you miserable. Even that's not available to everyone, but just for those who can manage to get a job that pays well more than typical for the USA, even if not enough to live comfortable in Seattle. As long as you buy before the place "blows up", you're good even if it does. But if you want to reduce the chances the place you pick will "blow up" for a good long time, and are willing to live a place with less obvious regional amenities to do so, while there's no guarantee, we can all come up with places that seem like good bets. Des Moines maybe? Median house price $185K compared to $870K in Seattle.
Boring at times, but it's a lively enough city and you can still park in front your destination for free, which I've always appreciated.
Second reaction - so uh where in Oklahoma exactly?
Factor 1 - Very low interest rates allow people to borrow large sums.
Factor 2 - NIMBY-ism is in various degrees the de facto policy in most major cities, so very little new housing is built there.
Factor 1 might be ending as we speak, since the Fed is talking about changing policy.
Factor 2... I wish it will change, but don't have a ton of hope.
Bingo. If you want to be part of the solution, this is a good group of people: https://yimbyaction.org/2021/
Although, it must be said that building homes takes time, and getting the politics right takes time, so don't think of it as a short-term solution.
Builders want to build. Let's make it easier for them to do that.
Millions of people could live there.
1. https://www.chron.com/news/houston-texas/article/Why-do-publ...
2. https://www.nbcnews.com/news/us-news/texas-mayor-resigns-aft...
https://www.bloomberg.com/opinion/articles/2021-12-04/arkans...
And of course there’s plenty of cities that were reasonable a couple years ago but are creeping up: Boise residents complain constantly about all the transplants, and I expect Raleigh to look a lot like Austin in 10-15 years (to give a couple examples).
In 2021 there is not a single remote corner of this place that's affordable anymore.
I think the income levels interest rates have helped raise values, but I think income has more to do with it. You’ll see high prices anywhere that can support workers, and they will pay for proximity.
That was all the incentive I needed to stay put. IIRC, I wasn't making that much more than $70k at the time but I could have worked in a coffee shop and paid my mortgage.
Median home values (per Zillow):
San Francisco: $1,526K
Seattle: $870K
Austin: $606K
Dallas: $287K
Houston: $238K
Seattle: 0.930% of Assessed Home Value
SF: 0.640% of Assessed Home Value
Dallas: 1.930% of Assessed Home Value
Austin: 1.820% of Assessed Home Value
Houston: 2.030% of Assessed Home Value
Putting taxes on sales and property means that even those paid under the table can't escape taxation.
How this shapes the valuation of other things, like houses, is an interesting second order effect. Property tax rates shape how affordable housing is during the mortgage period and after.
Another important thing about property taxes is to know when an updated assessed value is triggered and if there are any limits on how it changes. For example in SF, the assessed value is basically set to the sale price, immediately. But then the assessed value doesn't change until there's another property sale (or permitted improvements are made).
In some states assessed values are updated every year regardless of sales or improvements. [2]
[1] https://sftreasurer.org/property/secured-property-taxes
[2] https://taxfoundation.org/state-provisions-property-reassess...
But, for example, while Boston/Cambridge are very pricey in general as are some of the more exclusive suburbs with good school systems, there's almost certainly housing in that general range within an hour drive (or even on a commuter rail).
I'm in Madison, WI. The house I'm currently in was 180k back in '09. It has appreciated some since then. My neighbors have each turned over in the past decade and have sold their house for ~$300k.
If you go with 500k, you're in a very nice part of town or one of the extremely large corner lots. Most of the houses are in the 300k - 350k range.
https://www.zillow.com/homedetails/1305-N-Thompson-Dr-Madiso... isn't uncommon.
> And the worse the weather is, the better the real-estate value.
That's a big consideration for many people. Little tolerance for the winter.
True - and the problem is less bad in cheaper areas, but it's still bad and getting worse there, too. OP may be able to afford a $300k house in Kansas, but I doubt the average worker in Kansas can.
I'm not sure what this person is looking for, honestly.
Even stretching out just a bit and going to the Mill Creek area for more north, or Lynnwood, or Issaquah and perfectly nice, even new construction are in their claimed price range.
Of course many Asian and people of color move to less diverse communities. They have my respect, but I'm not sure I want to end up one of a handful of Asians or relegated to a chinatown.
Moving to a cheaper city is a valid decision but it's a more complicated value choice as a person of color.
I certainly can’t imagine someone from Texas moving to Japan and wondering where the all American BBQ places are :)
If you’re a person of color, it matters. If you’re the only non-white family in the neighborhood, it matters. If your kids are going to stand out in school because of the color of their skin, it matters.
If you’re white, then yes, moving to Japan is probably easier (though you might be surprised).
My question is this: doesn't it matter more to engage those communities with the same level of willingness to live among them as to deliberately pick already diverse areas, or an area that matches your own genetic happenstance?
If you don't have specific friends and family you're relocating for, then I'd say it's probably better to minimize the impact of any sort of decisions based on race or ethnic diversity. I think it's best to find good people and participate in your adopted community. And with that in mind, if you can work remotely, there's a vast array of affordable housing and land and communities of good people out there.
Roxane Gay has a good bit in one of her essays about how she struggled to help the black and LGBT organizations in colleges. She felt obligated as one of the few black queer professors, but that obligation in of itself really wore her down. Being a minority can be an extra job and some people do not want that responsibility.
why dont we see as many british or french neighborhoods?
>but they're not white for any reason except genetic happenstance
:hmm: i dont agree that one could accurately describe the evolution of racial diversity in american communities as "not white for any reason except genetic happenstance"
> so you get Irish towns and Polish towns and Italian places
My italian ancestors settled where they did because (a) the polish wouldn't sell them the land they originally wanted near but not in the italian neighborhood, so they had to find an italian to sell them some and (b) they wanted to live somewhere that had italian grocery stores, and italian churches (this is very important 100 years ago) and other italian cultural points.
> They become more diverse over time but they're not white for any reason except genetic happenstance.
Redlining. Segregation. The history of america is "genetic" segregation.
> If you don't have specific friends and family you're relocating for, then I'd say it's probably better to minimize the impact of any sort of decisions based on race or ethnic diversity
I think the opposite is true. If you don't care where you're going, why not go somewhere that can feel like you're a bit at home when you're homesick?
There are American food places in Japan, even BBQ.
Wealth or safety commonly.
You can't? You don't think eventually they won't crave the food they're used to eating?
New ideas are one thing, but your food, the food your mother cooked you growing up, will always be special to a person. And your people will understand you better than anyone else-- I'm the child of Indian immigrants and I still find people from my culture get the issues that I have to do through better than others. No one else knows or cares about the stereotypes one has to deal with, the particular ways culture can clash, the common challenges, etc etc
B. An american would definitely choose to live in Tokyo versus a small town in the middle of nowhere. That’s why ex pat communities are a thing! No harm in wanting a little bit of home abroad.
C. I get plenty of America in New York. It’s not like the city is some asian bubble. Indeed part of the reason I want to live in New York is to have access to asian food and asian people without living in a solely asian neighborhood. I like having multiple cultures in one neighborhood.
NIMBY free, as long as you don't mind the billboard in your back yard.
Its not just racial minorities that face this issue either. If you're gay, you might have a very limited selection of potential partners to meet in a minor city, and very few culturally gay places to go to. If you're trans, you'll probably be alone in a small town and almost certain victim of a hate crime.
A good perspective i like to use for regular straight white americans that don't experience much diversity is sports teams. If you like the cowboys, how much would you enjoy going to only sports bars in boston that play the Patriots games? Sure you can watch the cowboys at home, but none of your friends will want to watch with you, and if there is a cowboy v patriots game on TV, you might feel super comfortable wearing your team's jersey out in public.
This anxiety over housing seems to be primarily limited to select cities.
Also, somehow in Zurich (another place with obscene salaries and real estate prices), the service workers lead decent lives from what I've heard. They're paid enough to live on, and it's reflected in everything involving local labor (e.g. a sandwich at a local kiosk) being super expensive in absolute terms. BTW, I'm not sure if their higher wages are mandated by minimum wage laws or are an just effect of labor market forces.
Something in Scandinavia which usually would be operated by a single person, likely teenager, instead has 2 or 3 people hanging around.
For the few go backs the cashiers has a tiny stash. For the rare question you likely have to find someone restocking somewhere in the store and ask, otherwise their time is wasted. If you forget something, well pay and put the bag(s) by the cashier and go back in yourself.
I guess someone sometimes are sent on cart-return or rebalancing. Though we tend to place those out by the cars so you grab them outside and then put them back by your car when done.
You can, just not in Seattle. Just like you probably couldn't comfortably buy a penthouse in NYC or a wooded estate in London. There are countless places you can afford to buy a house
Me and my partner want to start a family, but on my sole income we'll be paying ~50% of my take-home pay in mortgage + property taxes. It's probably not worth her continuing to work (although it's her choice) if we have a kid, due to the cost of childcare.
Belts will be extremely tight even though I'm well inside the top 1% income wise. That said, I still thank my lucky stars I am where I am, and can't imagine how someone on a median income feels about their prospects.
We're all tech workers, we all work remotely - why stay in London? Because it has nice restaurants and museums? I don't buy it. Not if you want to start a family, own a house, afford a nice car and still have some money left at the end of the day.
Besides all that, home ownership is really becoming a huge class and generational divide and house prices are rising faster outside London than within. It's only a matter of time before people in areas like you describe are priced out too.
One thing I'll say you might be very off the mark with the quarter of salary thing. Both me and my wife(also a programmer) make about 75% as much as those friends who just moved out of London.
Yes, anecdotes, I know. But I'm pretty sure tech worker salaries aren't as bad up here as people make it out to be.
Before moving to London I had offers from 2 other companies both offering numbers close to what I was on previously. Moving to London was instantly 2x their best offer.
Overall I think if you can get over the home ownership hurdle, the potential for future comfort in the city is way greater.
Did the city try not to be an asset parking for questionably acquired assets by wealthy foreigners?
I just left Seattle and moved to Olympia. Sold my Seattle house and got a lot more for my money this far out. My company is fully supporting remote into the future, and we've hired a lot of folks that don't live in Seattle.
I won't name and shame, but Seattle has always had a number of hellish "startups" that are basically pump and dump schemes. They come and go. There are plenty of places that do offer sustainable employment, and I was lucky enough to land at one, so leaving the city was an option afforded to me by landing somewhere stable.
Also fuck 60 hour weeks.
Almost every person in my neighborhood works in tech and most of them used to live in Seattle but got fed up with the prices and the size of homes available for any kind of non-insane price.
Issaquah is another option at around $1.4M for a nice house. It also has great schools etc.
At 60 hrs per week there's no time to spend money.
Everyone wanting to live in the same 5 cities doesn’t scale.
Do what the people who moved to Seattle did 50 years ago. Move to some dumpy up and coming city.
Chattanooga, TN
Birmingham, AL
Sioux Falls, SD
Fort Wayne, IN
San Antonio, TX
you can find 4-5 bed room houses for < 300k in some of these areas
Seriously, there's a reason properties are cheap over there.
If more people moved to red states instead of threatening to move to canada when republicans take higher office, our country might look a lot different.
Too much, even if you want to work that much. Do 40 for your primary and then 20 where you are your own boss.
>Based on the neighborhood I live in and my compensation, I am extremely privileged. I don’t have money concerns that my parents had. Most things that I might need, I can buy them without having to think too much or without putting a dent in my net worth.
HN is very likely >90% part of the zoom class. Though you it might not be zoom but rather whatever flavour, teams, etc. Welcome to being rich. You got there because of whatever skillset you have learnt. Good for you.
>But Seattle has become a lawless dump. The east side has started homes for $1.4MM where the inspection report shows you that you’re basically just paying for the land.
Welcome to high energy costs fueling inflation and pushing high energy things like homes so expensively.
>If I have to be a renter my whole damn life and can’t even afford a house, what is the god damn point? Yeah I get paid very well, but I am a pawn of people who earn significantly more.
You're looking at it the wrong way. What is your investment strategy? Rent vs own calculators certainly exist. Maybe you're out of real estate because you predict a crash? If you expect they continue rising. Then buying is the way to go.
imagine a 1m$ house. you have to put 200k$ down into a single house (no diversification). A 10% decline means a 50% decline on that 200k. selling it takes days to months with usually at least 6% fees. So this thing is highly illiquid. so its not like stocks where you can say 'well just buy and hold'.
given that they dislike Seattle, Seattle is as bubbly as ever, there is a new condo in construction on every other block, and things like the mayor saying 'we are not going to enforce the law in favor of safety towards the protestors', purchasing a home in Seattle is a scary idea.
Also another issue with Seattle its not like you can buy and rent out. a typical home that costs 3500$/month to own will only rent for max 2500$. so you have to be in something thats 1k$/month cash flow negative. even if you are networth positive, that may be unsustainable for the individual
Even better :)
>imagine a 1m$ house. you have to put 200k$ down into a single house (no diversification). A 10% decline means a 50% decline on that 200k. selling it takes days to months with usually at least 6% fees. So this thing is highly illiquid. so its not like stocks where you can say 'well just buy and hold'.
But you cant buy 1m$ of stocks on borrowed money. 10% increase means 50% increase on your downpayment. Even better, when does housing crash? The governments just printed a bijillion dollars to prevent it crashing and rates have real yields of negative. It's free money. There is a rent vs own calculator and even in bad cities the ROI will be only a few years tops.
>given that they dislike Seattle, Seattle is as bubbly as ever, there is a new condo in construction on every other block, and things like the mayor saying 'we are not going to enforce the law in favor of safety towards the protestors', purchasing a home in Seattle is a scary idea.
The antifa rioters aren't about race or whatever they claim. It's about destroying a neighbourhood to push people like you out of the market and reduce demand. The george floyd riots have caused billions in damage, very much higher than the few hundred million in insured damages. Those markets like Seattle and Portland are going to pay for in the long run. House insurance will be exorbitantly high.
>Also another issue with Seattle its not like you can buy and rent out. a typical home that costs 3500$/month to own will only rent for max 2500$. so you have to be in something thats 1k$/month cash flow negative. even if you are networth positive, that may be unsustainable for the individual
That's the funny thing about investing. The first hit at your mortgage is the worst. You amortize for 25 years. You pay some principal in say the first 5-10 years. In those 10 years you also got a raise and are earning more. So the next time you are coming to bat to refinance you're in a better situation owing less and able to pay more. You will then be winning. The calculators out there will tell you buying vs owning is only a few years. The question is whether or not you're staying in seattle that long.
There's also the spin of the dice. There will be homeowner moments where oh shit I have tospend $5000 to fix that sump pump or roof. So its not so easy to calculate.
$199,900, 3,594 sq. ft. -- https://www.zillow.com/homedetails/110-E-1st-Ave-Flandreau-S...
$149,000, 2250 sq. ft. with an outdoor pool -- https://www.zillow.com/homedetails/1643-Washington-Ave-Baxte...
$192,500, 3,017 sq. ft. -- https://www.zillow.com/homedetails/906-7th-Ave-S-Moorhead-MN...
$199,500, 2,799 sq. ft. -- https://www.zillow.com/homedetails/906-5th-Ave-NE-Devils-Lak...
$174,900, 2,449 sq. ft. -- https://www.zillow.com/homedetails/504-W-3rd-St-Washburn-WI-...
There is a reason these places are cheap. It is partly because it would mean living in North Dakota.
Supply and demand don't lie :)
Others are less sensitive to human waste then I am and will work 60 hour weeks to be around it.
I'm seeing claims that it got that low once back in 1795.
In North Dakota they get some days that cold practically every year[2].
$70,000, 1,808 sq. ft. -- https://www.zillow.com/homedetails/909-E-12th-St-Parkersburg...
$77,00, 1,168 sq. ft. -- https://www.zillow.com/homedetails/921-W-5th-St-Elk-City-OK-...
$60,000, 2,216 sq. ft. -- https://www.zillow.com/homedetails/154-N-Cedar-St-Manistique...
You can get land pretty cheap there, though. I've thought about buying a forested plot before but ... nah. If I want to do that I can afford to do it in a more rural part of Ohio.
You start to notice these little brown specks all over the state: https://www.google.com/maps/place/West+Virginia/@38.5978727,...
then you zoom in and see the mines: https://www.google.com/maps/place/West+Virginia/@37.9086459,...
That entire geographical region is an economically depressed shithole (until you get up to Pittsburgh and Columbus and their suburban areas). WV may be ground zero (it's also not the only one, Kentucky has it's fair share of the same thing going on) but its contagion rots out from the center. If you're ever looking for land in rural Ohio or rural southwestern PA, I'd implore you to go spend some time on the ground in those communities first.
If you want world class dining just hop in your Tesla down to the airport for a quick weekend excursion, who cares what it costs, you're swimming in money without a rent bill.
Something that blew my mind when researching internet there was that 90% of the county has fiber to the door with 1GB speed. The entire county has a population less than 25k distributed pretty evenly throughout.
At 200k I’d prefer an apartment and trade size / space for location. Even with kids.
For some such as myself the choice is anything but simple. In fact I left Seattle primarily for this very reason and one cheap house bought and sold in the midwest and a year later I found myself back.
> If I have to be a renter my whole damn life and can’t even afford a house, what is the god damn point?
People seem to have been taken in by the societal conditioning that you need to buy a house. Housing and shelter is a basic human need. Owning a house is not. As you yourself mentioned, you are extremely privileged and can afford most things you want without having to think twice. So why stress yourself out over piece of paper.
I too live in one of the highest-COL places in America. And I'm paying $3k/month in rent for a wonderful 4-bedroom townhouse in a great neighborhood. I've done the math, and I financially come out ahead by paying $3k/month in rent and investing the remainder in worldwide index funds - a strategy which made me a millionaire in my 30s. I spend an hour commuting into the city via public transit, but that's no problem. I include this time as part of my working hours, and specifically chose my home for its accessibility to public transit.
You mentioned that you're avoiding lifestyle creep. But your biggest lifestyle creep is your expectation of owning a family-sized home in a prime urban neighborhood. Let go of this societal brainwashing and you'll find yourself far happier.
For example, if you bought a house, it would have to lose $72K value in 2 years or $144K in 4 years (minus inflation, taxes, maintenance) to break even with paying $3000/month rent.
However, if your house appreciates as most do in highly industrialized areas, you basically get paid to live there.
You're not factoring in transaction costs, maintenance, property taxes, and cost of capital (ie. the downpayment). Transaction costs (eg. relators) are 2.5% on each side, so after buying/selling you're already down 5%. Property taxes and maintenance are estimated to be 1% each, so over 4 years you're down 8%. The cost of capital is hard to quantify, especially if you also factor in appreciation, but housing has historically under-preformed the stock market, so that should theoretically be a non-zero cost there.
Suppose we ignore cost of capital (since that's hard to quantify), let's calculate what that % equates to. According to [1] the price to rent ratios is many cities exceed 30. If we use a price to rent ratio of 30, then a $3000/month rent translates to a house price of $1.08M. Factoring in the % costs from before, that's a cost of $140.4k. That's nearly as big as the $144k loss that you budgeted for, before factoring in drop in home price. The maintenance/property taxes alone is going to eat up more than half of your hypothetical $3000 in rent savings.
[1] https://smartasset.com/mortgage/price-to-rent-ratio-in-us-ci...
>However, if your house appreciates as most do in highly industrialized areas, you basically get paid to live there.
but that's the same force that makes housing unaffordable.
For a married person with a million dollar home, they'll make ~$150k back from the section 121 nonrecognition provision alone if they ever sell, not to mention the salt and mortgage interest tax deductions. The tax code heavily incentivizes home ownership.
1. that's on capital gains. If they're selling for a loss in OP's scenario, that works out to a tax savings of $0.
2. realistically speaking this can be factored into the cost of cost of capital (ie. opportunity cost of the downpayment/mortgage payment), but I didn't want to get into that because the calculation can get subjective. Housing has historically under-performed the stock market, but if you're a housing permabull, you might argue that the housing bubble will continue and outperform the stock market, making the opportunity cost of buying a house negative.
>not to mention the salt and mortgage interest tax deductions
that's a savings on mortgage interest, which is a cost that wasn't in my calculations. Including that cost and factoring in that deduction will make the numbers worse, not better.
>The tax code heavily incentivizes home ownership.
no disagreement there.
Further, any of this handwaving about all the fees of ownership apply just as well to whoever owns the property you're renting -- all of which costs they simply pass to the renter. There is no world where renting is as cost-effective as ownership over the long term.
1. even if you're not paying them, it's baked into the price.
2. OP mentioned buying and selling (for a loss), so he'll eventually have to pay it
3. if you search around, realtor fees are customarily at 6% for the seller, so my estimate of 2.5% for both sides is actually underestimating it.
> What you've described is a worst-case scenario which completely ignores the fact that homeowners have a real asset they can then sell.
I'm using the case that OP himself provided.
>Further, any of this handwaving about all the fees of ownership apply just as well to whoever owns the property you're renting -- all of which costs they simply pass to the renter. There is no world where renting is as cost-effective as ownership over the long term.
Right, I'm not claiming that you're not throwing away any money when renting, just that it's nowhere the full rent, and the numbers aren't as rosy as OP initially suggested (ie. you can lose $144K house value in 4 years, and still break even).
Buying a house only makes sense if you're going to stay there 5+ years.
I've owned several homes as I've moved around. Lost money on all but one. My parents lost money on all the houses they bought. Real estate is hardly the guaranteed "wealth builder" people think it is.
I hate mowing the lawn, too.
Oh, and if you build a new house in Washington state, you get to pay sales tax on it! That's another 10% poke in the eye.
I don't understand, do you think landlords don't pay tax, insurance premiums, or maintenance costs for their property? Those are all passed on to tenants with room left over to make the landlord a profit.
Compare paying someone $3k a month to use their asset vs paying a bank ~$3k (probably less) a month while owning that same appreciating asset. When renting, that $3k is gone, a guaranteed loss. With buying, it goes into an asset you can later sell, hopefully at a higher price. Alternatively you can keep it and not have to pay mortgage or rent once it's paid off and still have a place to live. You can also borrow off whatever equity you've built up. Also that mortgage payment is locked in, so you aren't subject to the landlord raising rent after your contract expires in a couple of years.
It's a big investment that you also get to live in. You could lose money on it, but it's unlikely in most populated places, and you will most likely lose less than what you would otherwise pay in rent.
Just make sure you buy in an area / state that isn't shrinking.
> that mortgage payment is locked in
Unless you bought an adjustable rate mortgage. Once you do buy a house, you'll discover that taxes, maintenance, insurance, etc., are not at all locked in. If you don't pay the taxes, you won't have a place to live, as the government will toss you out.
Nearly all people imagine that if they paid $X for a house, then sold it for $(X +Y) that they made $Y profit. They leave out all other costs, like taxes, real estate commissions, insurance, etc., etc., etc.
Ya that's fair based on the payment schedule, banks gotta get their money if you pay it off early; but still more equity than renting.
>Unless you bought an adjustable rate mortgage.
Ya a lot of people got burned by balloon payments in 2008 after the market tanked. They were speculating more so than buying a house to live in many times I suspect. I bought a house in 2002 and it never went below what I paid for it by 2008. I bought at a really good time for my city though.
>Nearly all people imagine that if they paid $X for a house, then sold it for $(X +Y) that they made $Y profit.
I don't think anything ever works that way. Always giving someone a cut.
>They leave out all other costs, like taxes, real estate commissions, insurance, etc., etc., etc.
Ya all that sucks. But if you are renting, you still pay that for somebody else, it's baked in plus profit. If renting wasn't profitable, they wouldn't do it.
But yes, I agree that that's the history, that if you're in an area for a few years it's better to buy than to rent, but isn't it untenable for real estate to increase in value at ~3% higher than inflation indefinitely? I genuinely don't understand the long run bull case for real estate as an investment.
But the idea that you'll get a rate of return that's close to the stock market, from owning some land that's just sitting there? It's very strange to me, from a 10,000 foot view of the economics.
It's true that there's a fixed amount of land, but the population (both in the US and in the world as a whole) is growing slowly now and will soon stop.
I suppose one potential driver for real estate's value in major cities is that the returns to concentration of talent will continue to increase. That seems possible (though beware of tail risks there, like remote work, VR, pandemic). But for real estate that's outside of a big growing city?
It just seems possible that we've been in a long bull run in real estate that could slow down or halt drastically at any time.
But that doesn't mean that it's not better to own than to rent. When you rent, you've got another party that's looking for a profit, and your rent is pricing in risks that are more under your control when you're an owner (like the risk that you totally trash the property, or the opportunity cost when the house is sitting empty).
You sound like a propaganda billboard from "They Live"; it's pretty incredible to call a property deed a "piece of paper". Setting aside the financial and psychological benefits that come with home ownership, the United States is a society that has made a lot of sacrifices in the name of preserving choice. You made yours, you chose to rent; the choice to own a home should remain a realistic alternative for those who want it. If your argument is that houses in absolutely prime real estate areas are always going to be out of reach of most buyers fair enough, but treating the idea of home ownership like a diamond ring is absurd.
I'm in this boat. I told my manager, talked about my pay & how it doesn't match my responsibilities. I talked about how I'm OK with a little crunch, but crunch 52 weeks a year is not crunch, it's just taking advantage. He said he's aware of the situation and that everyone's in the same boat, as if that justifies it somehow. He said wait to ask for higher pay. I feel like I'm being jerked around. I hear this from you & I hear the same from some of my other friends in my field, too, so I doubt the grass is greener anywhere else, and leaving won't have much effect.
I liked my job in the past. I think I would like it again if my workload was more reasonable. The best I can do is just constantly try to set expectations that, no, I won't be putting in any more additional extra effort.
See if you can get more money or even just better work life balance elsewhere if you're not happy. These designated promotion/raise times are the biggest load of BS. "oh sorry, we'd love to give you a raise but those happen in 6 months, so maybe then?"
Edit: Boss is basically saying to you: "turnover is expected" while he is crossing his fingers you'll shut up and get back to work
(I'm privileged. I am in a scale-up that has found product-market fit. We could be cashflow positive if we needed to. I'm in a management position now so I get to shape the rules. Engineers work 40 hours, and nothing's on fire)
No problem if you don't feel comfortable to, I'm just curious to hear what kinds of problems people are having.
vs
>"can’t even afford a house"
Only one of these statements can be true. Would you have money concerns if you did buy a house that is as good as your parents? i.e. if your housing costs were $10k/mo, $20k/mo or more?
A $1m home is going to cost you $3,500 a month right now for the mortgage. That's very affordable for a lot of people in tech, especially couples.
OTOH, having a mortgage "locks in" your price of housing for the next ## years. It's perfect for families and startup businesses because it affords some long term stability.
It doesn't sound like you're ready to settle down yet, so buying a SFH probably isn't the best move right now anyway.
You absolutely buy yourself a degree of stability and reduced future payments with a house but you're still probably looking at thousands of dollars a year for a standalone house.
How is a ten-year mortgage less risky than a 30 year?
You will likely move and sell the house before the 30 years are up. The only risk is your home price cratering.
I'm also formerly a Seattle Amazon office worker. After a few years and promotions, I started working remotely for Bay Area companies (the short flight makes me appealing) for good pay for years now. But I still love living in WA.
Sounds like you should consider leveraging your prestigious Seattle tech pedigree into a remote position. If you really work 60h now, your effective hourly wage will skyrocket even if you get paid less by nature of going down to sub-40h due to remote work. And it'll still be plenty of money for Western WA.
Citations:
2200 square feet, sold for $1M: https://www.redfin.com/WA/Seattle/516-NE-91st-St-98115/home/... 2340 square feet, large lot, $1M, sold a month ago: https://www.redfin.com/WA/Seattle/9509-5th-Ave-NE-98115/home... 2000 square feet and a bit lot in Redmond, listed for $1M and will probably sell for 1.2 max: https://www.redfin.com/WA/Redmond/13626-179th-Ave-NE-98052/h...
These aren't cherry-picked, the listings are full of them.
There are lots of inexpensive cities with incredible housing inventory. Cities that are surrounded by culture, cuisine, and an endless assortment of things to do.
Big city prices are driven by offices. You're going to be working remotely anyway.
Atlanta, Charlotte, Miami, Austin, Chattanooga, Savannah. You can draw a $300-500k salary living in these places, pay a low mortgage, and buy a second or third home for travel / rent.
In what universe is 2000 square feet tiny? Most of America - to say nothing of the rest of the world - makes do with far less. Sure, if you have 5-7 people living under one roof, more might be appreciated, but especially for 2-4 people it's tons of space.
If you want more space, a city isn't the place for you.
My fiancee and I live in a house that's ... I forget how big, something like 2200sqft of finished space. We basically ignore probably 40% of the house. If we didn't have animals (rabbits take up one room) it'd be even more than that.
Most people can't afford 2,000 sqft at these prices, so they wind up living in closets or renting in perpetuity.
1) Bigger cities have more and better things to do. Sports teams, theaters (both local and touring professional), concerts, bars, parks. Faster access to a major airport makes travel easier and cheaper.
2) More space isn't always better. More space means more to clean and heat. It's also an excuse to fill with more junk you don't necessarily need. If you added another room or two to my house, I have a good idea of the kinds of things I would fill them with - but my life has been fine for 5+ years without those things.
3) It's feasible to work in an expensive city while maxing out your retirement savings and go live somewhere cheaper later. It's impossible to do the opposite. It gives you choices.
4) The local populace in many of those areas can be unwelcoming if you're anything other than a white heterosexual. Even if you find a neighborhood that tolerates you, your state government is gerrymandered by people who go around vocally wishing you were dead. That turns away a lot of people. I grew up in Michigan, I still have family in Michigan, and I visit regularly enough to be quite certain I never want to move back there regardless of if its cheaper.
Intergenerational wealth transfer. Every single millennial home-owner that I know (myself included) received a very generous gift from their parents, or, in some cases, other surviving relatives (usually older than them).
The average gift size was approximately the size of the down-payment.
> They just live in different places, places that we don't think are good enough.
Young people generally live approximately where their parents live, regardless of what people think about that place. NYT found the average distance from parents that people live at, is approximately 18 miles. The reasons, again, should be fairly obvious.
For now, I landed a consulting gig, helping a small agency improve team dynamics and build the company they want to work for. I'd like to expand into technical training, mentoring, and find more clients. I think this industry has potential for awesome careers, and most of the struggles we feel comes from resolvable problems. Fixing these things would lead to higher productivity and happiness.
Most of the country isn't trying to buy a house in San Francisco—they're living in much more affordable places. Some problems are universal, but others are limited to a few small locations—or at least, considerably worse there than others.
- Houses are cheap compared to other metros related to comp. You can get something great for 700-800k that would be 1.5m in the valley.
- You are working way too much. You can certainly work 40 hours or less for whatever comp you’re getting now. This takes work - learning to set boundaries, learning how to pick a team.
Why don't you move?
If you have tech skills, get a remote job (or a local one and make a little less), pick any metro area with 1-3 million metro population and move yourself somewhere where you can live an affordable life.
If your office is either within walking distance of the Seattle ferry terminal or there are good public transit options between the terminal and your office, so that you don't need to take your car on the ferry I don't think ferry contention is an issue. I believe there are park and ride lots near the ferry terminals on the Kitsap side, but I don't know if they fill up.
Would you care to share what kinds of things specifically cause you stress and anxiety?
No problem if you don't feel comfortable to do so, I am just really curious what kinds of stressors people such as yourself are experiencing.
If you go looking, it's not hard to find comments, anecdotes, and stories from people whose workplaces did experience some sort of large resignation event where a lot of people went out and got new jobs.
The common theme in those anecdotes is always that they were underpaid and/or mistreated to begin with. In some ways, the "Great Resignation" news stories being blasted all over the news gave a lot of people the final push they needed to go out and look for new jobs. Combined with the booming economy, it wasn't hard for these people to find better jobs. Once their coworkers realized what was happening, they also made the leap.
So in a sense, it does appear that small pockets of employers who were behind the curve are finally getting what's coming to them. I half believe the news stories about "Great Resignation" stuff became a self-fulfilling prophecy where everyone who wasn't getting a new job felt left out.
But if you look at any larger company data or at companies who were smart enough to keep pace with compensation and employee treatment norms, there isn't really a wave of resignations like the news stories suggest.
Overall employee turnover is slightly higher than normal, unless you also factor in the decrease in employee turnover during early COVID, at which point the running average of employee turnover is all that abnormal.
One area where it certainly seems to be very common is with restaurants. In every city I've been to over the past few months, restaurants are very obviously on reduced hours, reduced days, or (supposedly "temporarily") closed. And it's fairly obvious in many cases that it's not due to lack of demand. And, in many cases, these jobs are not terribly attractive.
Restaurants are adding surcharges and increasing worker pay but it appears to not be enough in general.
It doesn't have to be this way but no one wants to be the first place to refuse abusive customers.
> The great-resignation thesis seems strongest in America and Britain. In September a record 4.4m Americans quit their jobs (see chart 1). In the third quarter of the year nearly 400,000 Britons moved from one job to another after handing in their notice, also the highest-ever level.
> In other parts of the rich world, however, a great resignation is harder to spot.
So basically the premise of their title is that the "Great Resignation" doesn't count because it's primarily happening in two countries instead of in every country.
If you want to be right, maybe name it more like "The Minor Resignation".
So perhaps the reasons for quitting haven't changed much, but the burden of jumping is lower so it's happening more often.
The “great resignation” will be more pronounced in different cities and professions. Eg I’ve noticed London based cloud engineers such as DevOps seem to be really affected at the moment whereas a lot of friends in other industries haven’t seen any change at all.
On the flip side higher payed professional positions are seeing some turnover but no where anywhere like the other lower paid sectors.
I know for a fact that the restaurant/food service situation is on full meltdown mode in Southern California. A few panda expresses have run out rice. Multiple Habit burgers have shut down due to lack of staff, eating out at restaurants have been the worse I have ever seen it as everyone is really new and it shows.
That being said I have been to a lot of places in the country this year(Utah, Arizona, Hawaii) and nothing is similar to what I've seen locally in southern California so it may track to how expensive California has become and could be people are quitting jobs in expensive areas and moving to cheaper ones.
It’s a great state in many ways, but the way most of the local and state leaders have repeatedly punted on the issue of housing affordability is shameful. Calling their efforts half assed would be too generous, it’s quarter assed at most.
The recent change to upzone previously single family home only areas is good, but even then, the new regulation is filled with caveats that weaken it.
I won't say it's everywhere but I've seen the same problem as California in Washington (including rural Washington) and Raleigh. Everyone I know who travels has been running into the difficulties of trying to find places to eat at on a given day.
So restaurants are getting squeezed on all sides. Supply costs up, wages are up, labor shortage, rent is up. Tips will go down as customers are upset with poor service, which means more pressure on wages. All of this means higher prices, which means fewer customers and more takeout orders. The old restaurant business model is simply not sustainable.
This worked out well for me. The negative side-effect is that I am getting ghosted a lot on linked-in as my salary is high for the area and recruiters just stop responding when they hear what offer I would consider.
However, my next move is going to be to a tech company which will enable another 50% jump hopefully.
Not saying that your boss is bad or that you should leave your company, whatever works, but yeah it's something.
I doubled my salary in 4 years, but I try to do my best to produce results.
It means I'm not getting nagged by recruiters weekly. I still get a new one every month or two, but the frequency is much more manageable now.
Every time I do look at switching jobs I consider going into recruiting instead as most all recruiters I've ever worked with are completely incompetent. I don't expect them to know every technology and how it works but I do expect some basic patten-matching-level of competence (for example, you don't need to know anything about Angular/Vue/React but those should come to mind when "frontend" is mentioned and if a developer says they want to work with "Vue" the recruiter should be able to ask "Would you also be ok with Angular/React?"). Most of the time they function only as slow go-betweens in a game of telephone that they mangle horribly. I've had recruiters lie, ghost me, or just fail at basic message-passing. The last recruiter I worked with was so slow at responding that I just went around them and contacted the company directly and had an interview setup almost immediately. For the amount a recruiter gets for placing someone I'd expect they'd be much better at what they do.
Edit: I am not telling anyone my salary, but minimum for me to consider a position.
Haha, sounds like a real first world problem!
https://www.investopedia.com/terms/p/participationrate.asp
A quick look at the Fred chart shows that the US is nowhere close to regaining pre-pandemic levels, and that this comes amid a multi-year decline:
https://fred.stlouisfed.org/series/CIVPART
Although the reasons may not be clear, the resignation itself has some pretty good evidence.
I'd be shocked if we got back up to pre-pandemic participation barring a WWII style extreme scenario.
The reasoning:
- People want to leave the cities
- People want to spend time with family
- Racism, sexism and exclusion is becoming unbearable (largest single factor I've seen)
- Forcing medical procedures (second largest single factor I've seen)
- Salaries are becoming very competitive with the inflation and job switching
- Companies are re-gearing to be more online and that means more tech opportunities
Every time someone leaves I ping them and ask why. Personally I'm curious. Many have purchased farms and have moved to the middle of no where. I generally think they'll miss the cities, but there's a pretty significant move of tech people out to the country.
Covid vaccines?
Yeah I'm sure this is true. /s
Even the supposed "mass exodus" of cops everyone was saying will happen, didn't happen. Cops, a very conservative group of people, decided getting the jab was better than getting a new job.
Do you know any cops? Many of the mayors backed down and many more just retired. I know several in around the Chicago area and none of them followed through, they updated their guidelines.
https://www.cnn.com/2021/10/17/us/chicago-police-department-...
https://www.sfchronicle.com/sf/article/With-hundreds-of-offi...
How many? I have no idea, based on what I've seen probably ~10-15% of people would rather be fired than get a vaccine. I know a couple in the medical field, a couple of friends in sales, etc.
Anyway, it's anecdotal to a degree, but only because most people aren't tracking it. It's easier for people in tech to just move to a remote-first company.
Edit: Also, FWIW roughly 4 people left my team in the past year (since Oct 2020) before me. A couple went to new jobs, a couple did not and just resigned without plans (me too).
In a sense I'm sort of glad about growing to hate the job as much as I did; it inspired me to finish my bachelors and start the path forward to transition out of software engineering and into CS research.
Granted, this transition is going to take 5-6 years, but it's at least a path forward.
No, I don't think so, and I don't think they pay terribly well. I just got accepted into a PhD program, which will take me 5-6 years to complete, so I'm hoping that will qualify me for the roles that do exist, and get something approaching a decent salary in the process.
> What roles would that entail?
I would ideally like to work entirely on formalization of algorithms, working primarily within Isabelle or Coq or Agda or something like them. I realize those jobs aren't exactly common, but it's at least a goal to work towards.
You weren't getting a decent salary at a FAANG? :-o
I meant to say that I’m hoping to eventually get a research job with a decent salary
I think there are probably 10% of the worst employers in the country who just can't hire right now - from a mixture of bad reputation and unwillingness to pay (rising) market wages. There are better jobs out there - so workers are going to where managers treat them with humanity.
Check out reddit.com/r/antiwork - this subreddit has grown extremely rapidly over the past ~6 months. It feels like a movement is bubbling. I wouldn't be surprised if we see widespread labor marches and strikes in 2022.
... however. This depends on where the inflation is in the market and the way you intend to use your wages. "Inflation" is a number that we use to indicate much more complex and varied market trends.
Recognizing my own privilege here, for me, for example, many of my expenses are fixed: student loans and mortgage take the lion’s share of our monthly cash flow after taxes and retirement. Neither of those are indexed to inflation so if this drives higher cost of living increases, it’s a net win for me, in all likelihood.
Who doesn't like inflation? I love it when the market makes my existing debt cheaper.
Those of us who want to purchase? …And understand that the housing market cannot outpace inflation indefinitely, and are queasy about what will happen when that day comes: do home prices eventually level off at some absurd level, or do interest rates rise, demand slackens, prices level off & then speculators jump ship for more lucrative investments and then prices crater, putting people underwater on their mortgage?
- People who aren’t leveraged with a lot of debt.
- People who are seeing wage stagnation while the cost of living goes up. The majority of jobs that keep the economy running aren’t like the tech sector where one can job hop to keep wages up.
- People who have a significant chunk of their savings in cash for a down payment, and they are seeing property values run away from them while the value of their money goes down. They are also seeing increasing costs, impacting their ability to save for a down payment.
- The people who are trying to buy a house that was $400k in 2005, that is now valued at 1.2M and requires $240k for a down payment.
This is a very important issue, but it's not really inflation in any normal sense.
2) Rental housing costs and owner-occupied housing costs are correlated but have a complex non-linear, non-monotonic relationship
3) Housing costs vary in absolute terms by substantial ratios in different areas
4) Housing costs vary in relative (CoL) terms in different areas
5) Changes in housing costs over a given time period can vary dramatically in different areas.
If prices on goods and services are increasing that extra money should proportionally drive wages. When people complain about how single income for blue collar employees no longer can support a family like in the times of yore it is exactly because the wages in these sectors didn’t keep up with inflation.
As an aside, in terms of home ownership, Seattle housing prices are up 20% in 2021 (more than CPI) [0]. For many tech workers (skew younger) saving for housing is a significant cost and for them the effective increase in cost may be significantly more that CPI (thus their real wage cut is even greater!).
Like, why plan ahead when you can just go into huge amounts of debt. Seems pretty short sighted and yet these decisions are the ones that are rewarded.
Further, I think highlighting the collective power of workers and people generally leaving shitty jobs, bosses, and companies for greener pastures is a good thing. There's a million ways to Sunday that this phenomenon could be localized or sliced (certain geographies, any number of socio-economic or demographic lines, industries, even specific job titles etc. may show increased worker turnover). If people are leaving customer facing service jobs because of anti-mask nut-jobs, low pay, lack of autonomy in hours, and general staff shortages I don't exactly blame them. It also doesn't mean that this turnover would be visible in high-earning tech jobs.
I hate being conspiratorial, but who does this narrative benefit? Obviously employers (and probably the majority of the subscribership of The Economist).
So... less than inflation?
The reality of the so-called "great resignation" is just pent-up demand for job switching that didn't happen during the pandemic. Every number looks high compared to 2020's artificially suppressed baseline.
Of course social media wants to push the idea that people aren't working, because people who aren't working consume more media, and that's all they care about.
What has changed? LinkedIn. People get hit on via LinkedIn a lot. And this caused a landslide. New hires vs resignations is negative.
This might be different to especially the USA, but I believe that headhunting for jobs now has finally arrived in Europe. And that is a huge factor. Beforehand it was tough to recruit people via headhunters. Now this can even be automated to a certain extend.
Some companies may also be doing a bit of downsize without layoffs and others have done layoffs and reigned in comp in a way that leaves the remaining people looking at their options.
Overall it seems like a good time to be hiring, especially as a startup/pre ipo company.
A great turn over where people that weren't happy try to find a job they are happy with might happen, and honestly that sounds great for everyone.
If the "great resignation" is not real, who is benefiting from that narrative?