You need to earn over $200k to afford a typical home in these 8 U.S. cities
cnbc.com
cnbc.com
The point being, as we've moved to the two incomes per household standard the price of things driven by demand (e.g., housing) has also naturally increased.
In those 8 urban areas compensation is higher. It's not advance economics to understand that housing - especially when supply is limited* - is going to increase. And as a percentage of the entire population, these are outliers. We always have outliers.
All that said, the better question is: As a percentage of salaries, which areas are most the most expensive?
* There's a cost to NIMBY and these communities seem to be okay with that.
If you both are making FAANG comp sure, keep working. If your spouse is a teacher? Maybe not.
For people who already own their own home, though, it's a pretty attractive living if you like kids. Most of the home daycares we looked at are run by people who bought ~10-15 years ago, and they make a very good living, and oftentimes have the house fully paid off. Either that or they bought recently but are pooling resources from multiple family members to afford the house, and then have them helping out with the childcare.
But now, simultaneously, there are two income households with zero kids. That's the new benchmark.
I'm not going to judge / critique / question why it is, but the shift from one income per household to two has create economic chaos. Chaos we have yet to come to terms with.
But more irony, from an economic POV there are couples opting out of families because of the costs. And the new benchmark nudges up...
People without kids also tend to compete in different areas for housing. A place with a great view in a bad school district could be appealing. Where people with kids typically want a SFH in the burbs in a good school district.
Really the strongest competitor in the housing market is the older generation with more disposable income and a house(s) already.
And you don't see the younger ones because, yes they still have economic headroom to travel.
Their argument isn't "if you have 5 million dollars you're a bad person".
But also, those two are not that rich. The top 1% is the biggest net you could reasonably cast for "too much wealth", and they're below that $11M threshold.
Another good reference point is "what would have gotten you called a millionaire around 1800-1930, before we had several decades of consistent inflation", and the answer is at least 25 million dollars today.
The argument against taxes is that the government will squander it. It is, in the context of history, a solid argument. Futhermore, much of such wealth is via capital gains, not income. Are we going to discourage investing? (Maybe we should, but it's a complicated answer compared to upping income taxes).
It's strange the Warren and her ilk could be a model for such a path, and yet refuse to do so. *Nothing* is preventing them, not even the tax code (as they could often make such donations tax deductible). But maybe they need that bigger more expensive home? The rest of us don't understand where that is.
According to this article from a couple years ago, "Elizabeth Warren and her husband have contributed about $420,000 to charity since 2008". That's not a huge percent of her income but it seems like a solid amount to me, depending on which of these wealth estimates is actually correct. So sure "nothing" is preventing them from doing more, but there's also no big pressing reason to do so. It's not like she doesn't donate at all, and if she's actually in the 99% then whatever that's enough of a donation. And Bernie's definitely in the 99% and donated a hundred thousand over the same time period.
> Futhermore, much of such wealth is via capital gains, not income. Are we going to discourage investing?
I feel like "discourage" is much too strong of a word here. Capital gains taxes could be 80% and people would still invest their money. What else are they going to do with it?
Nothing stops her and similar from donating a higher percentage of their wealth to non-profits. She could have brought a $2M home - and lived quite well - and donated $1M*. But she didn't. What are we to make of that, if not hypocritical?
* I understand it's a mortgage. But she could have went smaller and donated the difference monthly.
And would donating 25% of her wealth make people stop complaining? I doubt it. But it's more of an increase than any tax proposal I've seen.
Sometimes I agree with them, and sometimes I don't. But it's lazy to label them hypocrites.
This is funny to hear after a few days of FTX/SBF threads, where a common talking point was how SBF's activities in effective altruism (aka. "espouse values like... the betterment of society") was some sort of selfish ploy to improve his public image.
https://finance.yahoo.com/news/disregard-livelihoods-million...
“These statements reflect an apparent disregard for the livelihoods of millions of working Americans, and we are deeply concerned that your interest rate hikes risk slowing the economy to a crawl while failing to slow rising prices that continue to harm families.”
She's a populist. Say whatever get the masses riled up with no regard to actually making sound decisions.
I'm more curious about the bottom 8 of the list, however; the cheapest cities in the US.
Apparently most states recognize a place as a city if it just has a few hundred residents/voters. There's plenty of abandoned houses (thus $0 homes) in places that fit these definitions.
[1] https://www2.census.gov/geo/pdfs/reference/GARM/Ch9GARM.pdf
What would be interesting (to me anyway) is a list of some cities who are disproportionately cheap related to their density.
The problem is, younger generations all want to move to the same handful of cities and wonder why pricing is so high in those cities.
Because that's where the jobs are?
Perhaps the real problem is that the jobs are concentrated in a handful of cities (and those cities also host a high concentration of NIMBYs who refuse to build more housing).
If I choose a random street in inner London (UK) then homes on that street are worth approximately £1 million.
One way to buy one of those houses would be to have a deposit of around £100K, taxes of about 50K (very rough estimate), a mortgage of £900K, and an income of around 200K at a 4.5x multiplier.
But I don't believe that the majority of purchases in that part of the market function in that fashion. Instead, full cash purchases or >50% deposit purchases are fairly common. The money comes from savings and investments, either inherited or via saving for tens of years, trading up from a smaller place or in a different area, homes bought decades earlier, etc.
If only the cities were walkable here, it might be perfect then.
You and I must have lived in two very different cities in California. The Bay Area, at least, is one of the least diverse cities I have ever experienced, when it comes to jobs and hobbies/culture.
You think everyone worked in tech or something and only rock climbed?
Diverse for me means I'm not the only dark skinned person
That you mentioned the cliche before I had to says more about the city itself than anything.
> Diverse for me means I'm not the only dark skinned person
I would have difficulty relating with anyone if all I cared about was race but hey you do you. It's only considered racism if a white person does it right? Imagine someone like me moving to a place like India, and one of the top pros I could say about it was "you know what, there are a decent amount of other white people here." It would very likely not go over well.
The person you replied to listed 10+ other reasons, of which diversity was buried in the middle. You asked for a clarification specifically on diversity, then leapt to an unfounded judgment implying that that’s all they care about.
That sequence of events seems like an entirely unnecessary and counterproductive provocation.
I think it's obvious that it's not a shortage driving these prices.
https://www.populationpyramid.net/united-states-of-america/2...
Things will change in ~10 years as baby boomers start dying off (or at least vacating their homes for senior living) en masse and are replaced by the relatively tiny Zoomer generation, but things are going to be tight for the next decade or so.
Household size also changes. People are forming families later or not at all, so spending more time living alone. Empty nesters are staying in the houses they raised children in instead of downsizing, for various reasons, but especially a lack of smaller places to downsize to. The mix of apartments, houses, townhouses, and bedroom counts needs to be flexible and respond to population over time.
It’s simply not the case that the living arrangements that were in place when we froze everything in amber just keep working for us indefinitely into the future. Needs change!