How Long Will You Need to Save to Buy a Home In Your City?
theatlanticcities.com
theatlanticcities.com
* note my experience is based on living primarily in SF and LA, so if you are willing to put up with Middle America I'm sure you can find much better value
Mostly it depends on your circumstances. If you're single and you change jobs relatively often, it doesn't make sense to buy a house. If you have children it's cheaper to buy a house in a good school district than to send your kids to private schools.
I'm genuinely fascinated by this, because it really does seem like American society frowns upon people who don't own a home by a certain age, especially when children are involved, almost as if a backyard is absolutely fundamental to the child-rearing process.
I don't know about the USA, but with current interest rates and the end of the housing boom a couple of years ago, in the UK it's often cheaper to buy than to rent, assuming you can get the deposit together.
My number is roughly in line with the $700/100k figure. I'm assuming 20% down, so the loan is for $400k. If your credit is excellent, and you don't live in one of the high-tax areas, $2000 loan payment + $500 taxes is doable.
As for rent increases, I've never not had a rent increase in 8 years of renting in Chicago and Atlanta. It's standard practice in the city.
I guess my bottom line with my original comment was, I can think of a lot better uses for the money, time, and effort it takes to buy a $500,000 condo, and to me the returns in my quality of life vastly outweigh any sort of long-term security you might feel from owning a home
My girlfriend and I bought a house together a year after we finished university. We're now married. We found a beautiful 100-year old brick house in a village in the UK an hour from my work, 30 minutes from hers. It's just big enough for the family that we want in the future so we're not planning on moving.
We bought it because we wanted to have our own space to live and raise a family in. Every penny that we pay off is ours in equity. The interest base rate is so insanely low (0.5% in the UK) that we hardly pay any interest on the mortgage. We've worked hard to pay off as much of the mortgage as possible, forgoing holidays for a couple of years, so it's now more ours than the banks. In a decade or two it will be ours entirely. If we rented (and some of the houses in the village can be rented) we would pay twice as much each month and having nothing to show for it after decades.
We're close to two major UK cities, so we are not out in the sticks. We're both young academics, so we are certainly not rich.
As a couple we have a lot of fun decorating, remodelling and maintaining it. The previous owners had windows that weren't in keeping with the style so together we replaced them with hand crafted sash windows. Every summer we spend a glorious weekend having fun painting all the woodwork together.
When we die we will be able to pass on our house and its value to our children. It will be the house they grew up in, in the village they grew up in. They will either be able to sell it to get our life savings, meaning they or their children can buy their dream home, or perhaps they'll build a family in it as well.
Having your own house is about having your own space - your own castle.
New York: $275 Los Angles: $236 Chicago: $112 San Francisco: $459 Washington, DC: $164
Housing here is comparable to places like Richmond or Raleigh, except it's got the public infrastructure of a world-class city with 10 million people. Even if you live in the suburbs, you can take the extensive commuter rail system straight to downtown.
It's like buying a brand new car. Sure it's nice and cool looking, but eventually it becomes just a transportation option to get you from point a to point b. Or it could be like that you're going to buy a house with a pool. However, you'll rarely actually use the swimming pool.
It is dangerous in ways you cannot possibly comprehend.
Sweating in a suit is a first world problem. Try riding on a two-wheeled motor vehicle on ice in the presence of traffic.
I'll stick to California, thanks.
Sweating in a suit is a first world problem. Try riding
on a two-wheeled motor vehicle on ice in the presence of
traffic.
So no, it's not a first-world problem to ride a two-wheeled vehicle in bad weather because you can't afford a car.
Try visiting Southeast Asia or India sometime.
Anecdotally, my impression is that lots of people wear suits in both India and Southeast Asia. Maybe even more so than we tend to do in "the West". For lots of people it's not a choice, but a requirement to keep a job.
But your assumptions about my status in being a yuppie like you are noted.
>Anecdotally, my impression is that lots of people wear suits in both India and Southeast Asia.
That wasn't my impression at all. Most people wore nice, cool button-down shirts with slacks.
Buying a house might even be in the near future for one of our founders, and that's only possible at the prices around here.
Slightly unrelated: I'm surprised to see the average weekly wage out in Detroit so high ($1,015), given all the tales of woe you hear about it.
[1] http://www.econtalk.org/archives/2012/08/ohanian_on_the.html
At that kind of rate, I'd rather put my money elsewhere (you can buy great property pretty much anywhere on the planet for those prices..), especially somewhere that can offer a better quality of life.
.. waiting for it to pop .. if it ever will sigh
I spend 90 minutes in a car every day, and while I love my house, my commute, gas cost, lack of public transportation, etc sucks. It also forces everyone to be so insular. No one socializes outside of work because we have to drive forever to get home.
I had a glorious three years where I lived .75 miles from work and it made the town better.
I also did live closer to work but changed jobs.
* Why use average income? Why not median family income?
* Why use median $/square foot, and then assume a 2000 square foot house? Why not just rely on median sale price?
I looked up the data for San Francisco, where median family income is $81,136 and median home sale price is $705,000.
Using the same methodology but with these income/price numbers, saving up for the down payment on a home in San Francisco takes ~14.5 years instead of 20.6. I'm not sure how this compares to other cities, but I think it's a bit more reasonable of an estimate of how long it takes to "save up for a house" in San Francisco.
Medical science will have to make strides in prolonging life if the average person wishes to ever to buy their own home here.
Average Weekly wage = $860.57 Median Price = ~$700/sqft
To give some of you non-aussies an example...
The average price for 2 bedroom victorian era terraces (hundred year old plus buildings) with next to no real land except the land the property sits on in sydney can be anywhere from 800k (AU) to millions of dollars.
Our interest rates are also higher then US.
Meanwhile a friend of mine just south of Newcastle bought a 3 Bedroom house with double garage & front and back yards for just around $400K... It's tempting to just start doing the commute with a difference like that
Now i'm thinking I just need to move to a country that isn't so ridiculous when it comes to living costs.
Outside the city center the prices are roughly half that (so a little more that San Francisco). According to the same data source, average weekly pay is around $1064.
[1] http://www.numbeo.com/cost-of-living/city_result.jsp?country...
You'll see that prices for just about everything are higher in Sydney. Except apples, oranges and tennis court hire.
Salaries are slightly higher in Sydney (according to that site), but not enough to make up for the increase in costs.
Its definitely not a 1 to 1 comparison because of the crazy cost of living here.
Theres also the jump in the amount you get taxed (disregarding additional things we have to pay for such as private health care/medicare levy, superannuation, etc), so even if you were earning say 100k a year, you automatically lose a quarter of it before you ever see any of it.
Most people I know that live in the city do not have a salary that exceeds 50k a year, so all of this plus the cost of housing is leading to several generations of renters instead of home buyers. I dont actually know a single person in the city that has a mortgage, everybody seems to be renting because few people can afford to have a mortgage in the city.
I can only speak from my experiences knowing the people I know, but I know many people from all walks of life, so i doubt my view is that biast.
I pay as much in rent for a 1 bedroom apartment in the sydney than I would with a mortgage for a 3 bedroom home well outside of the city.
Heres another example of how expensive things are here that always makes my blood boil - a bottle of coke is going to cost you 4-6 dollars at your typical convenience store.
When i was last in San Fransisco 4-5 years ago, It cost around a $1.50 including tax.
Oslo $ 970 / sqft
In Norway you have a 28% tax decuction on interest paid, but it seems more likely to be a case of tulip fever. Still 85% own their own homes in Norway.
Well, it's a good thing that most homes are much smaller than 2,000 sq feet in SF. It's also a good thing that if you are buying a house you probably have a 2nd income.
Those two factors alone should reduce time to save to 7 years or less.
20% is only required if you don't want to pay private mortgage insurance.
NYC was way...way better in this respect.
What prevents Caltrain to do better in terms of keeping up with schedule? Also, there must be a way to keep fare reasonably cheaper than cost of driving a car to work.
Me, I live near SOMA so I can stumble home when essentially everything but taxis is shut down.
São Paulo $ 969 / sqft
With an average income of $ 783. And the land tax is probably a lot higher, too. Rio is even higher.
Shouldn't it be median household income?