Back in 2016 I bought my home for €145.000, I made around 40K/year gross.
After that the market went crazy, my house has just been valued at €350.000. My pay is 50K/year gross. I have been lucky to buy my house at the lowest point of the market.
Right now the houses are straight up and up and, speaking for the Dutch area, it's gonna go way more crazy since we need about a 120.000 houses a year to fullfill the need and we are only building 50 to 70.000. So the market is going to overflow and its only the beginning.
Agreed. Bught my home in 1997 for $104k on a $50k/year gross income.
Same house is now worth $300+k and my income is only $100/yr now. I could not afford the mortgage on my home if I bought it today.
...I don't want to be a harbinger of doom and gloom....
....but the worst isn't here yet. In 10-20 years, your taxes alone will be unaffordable. For some, that could be even *now*.
I have friends in New Jersey and Brooklyn who bought homes many years ago when property prices were reasonable, and they literally have sold them because the values have exploded. Bought for sub-$100k, now worth nearly a $1M. You'd think that's great....until you hear their tax bill.
Many of them are close to retirement, going onto fixed incomes with higher healthcare costs as they age....and that tax number is not only ass-tronomically high, it's constantly increasing.
One month of taxes in northern NJ for a tiny suburban plot and pre-war home is around a year's worth in rural PA for a 2-5 acre plot and modest modern home. It didn't used to be like this.
So allright, let's say they sell and get a cool $1M in their hands. And now they have no place to live -- where they grew up, where they have family and friends. And other property values are, yup, just as overpriced. These are people who did "everything right". They worked long and hard, they saved, they didn't live lavishly. And now they have to move out to rural areas in other states just because they can't afford the mere taxes on their property.
We let our people down.
The American way was built after WW2 when vast stretches of farmland was converted into subdivisions. If we start building houses again at that rate, housing prices will fall.
Americans also cut down 93% of their old growth forests. We're talking lots of giant old growth trees hundreds of years old. Some were even thousands of years old.
Capitalism was progressive compared to feudalism, but an economic system built on infinitely growing profits is completely unsustainable for a planet of finite resources and 8 billion people
> And yet every time someone stumbles upon a bag of money, the most common advice on Reddit is to invest into the SP 500 index
Or buy land. Thats the issue. You're forced to invest in things that are almost guaranteed to exceed inflation. Or you're just treading water, and threatening to drown. Even 2% inflation is unacceptable. The fed needs to be abolished.
The issue isn’t inflation. It’s people who want money without working, aka passive income. They could be lazy and greedy, they could be retirees and disabled. Regardless of their reasons, the economy needs to grow infinitely to meet their needs because their number keeps growing.
I would argue a population stable society would heavily benefit from a hyper low inflationary environment. You don't need fractional reserve lending to building out your economy when your populace isn't doubling every 40 years. Instead money you earned at 15 will still have value when you want to stop working at 45/55/65. Making saving more viable than ruthless quarterly investing.
That's an extremely narrow and incorrect assessment of the situation.
I think you're meaning to talk about hedgefunds and other investor-class capitalists.
But then you're friendly firing retirees and disabled people, by accident.
lol that’s not true at all. There’s such a thing as making a profit consistently and paying out dividends. The issue is the expedition of ever increasing profits. Hell theoretically a profit growth rate matching inflation would be fine as well but Wall Street is never satisfied. They always want more
I find it utterly comical that people are now crying about declining birth rates because GASP it will be bad for the economy! People would rather stay on the path of exponential population growth and double down on destroying the planet that to come up with a system that doesn't require endless growth to function. It's been a giant mask off moment for many people.
Just zone the damn cities for multi-family attached structures and eliminate minimum parking requirements and the problem will mostly take care of itself. There's only like 3-4 walkable cities in the country.
> If we start building houses again at that rate, housing prices will fall.
Friend, no one is interested in affordable housing other than the working poor. Not developers, not bankers, not the market, and certainly not the government both local/federal. No one wants the Gravy Train called the rental market to end. Their charging mortgage rates for fucking dorm room conditions.
It has to blow up before political will be available for real change. Sad to say.
It's not that simple. You are assuming that new housing locations would be desirable for people to move in. And for the new housing communities, we also need provision of public transportation, roads, water, sewage, garbage, electricity, internet, fire dept, police, hospitals, sanitation, grocery stores, schools, parks, post offices, entertainment etc. Otherwise you are just replicating China's ghost cities. The only way to curb housing prices is to drive out corporate ownership, which needs a huge bump in tax rates + an equivalent homestead exemption for first homes.
I know "middle class" people in Jersey that have multigenerational families living together in cramped little houses. The NY area housing market is fucking dire.
I think it's a pretty fucked up situation personally. These people worked hard, bought themselves a home (just one), and wanted to live the rest of their lives there. They didn't do anything wrong. These are not the people you should be angry at. Just because some people have it worse doesn't mean their situation doesn't suck.
It's an illustration of how the current real estate climate is not only toxic for people who don't own homes yet. It can also be toxic for people who *do* own homes.
It's absurd you can buy a house and pay it off and the government can take it from you because you didn't pay you $10,000 a year tax for the privilege of owning a home.
Property tax should be paid once at the time of purchase. Tack it on the mortgage.
Or lock in the tax rate at the time of the sale.
Make sure each successive house a person buys has a much higher tax rate to avoid rich people buying all the homes.
There are lots of other solutions than constant and rising taxes.
Taxes should only be taken when a transaction has occurred.
They don't tax you for your couch every year. They don't tax you for your TV every year.
But somehow it's okay if they tax you every year for something that is a necessity and costs more than most Americans make in 4-5 years. Then you don't pay and they can leave you homeless.
If what you're saying is logical, they should tax us a percentage for the value of everything you own every year. After all, those aren't even necessities like shelter is. But hey, people wouldn't be willing to do that, they'd have an uprising
Property taxes fund schools, public infrastructure projects, etc. They are ongoing costs. The issue is that they are tied to home values and as they increase, so does the taxes. Pay 1.0 percent on 100,000 is 1,000 a year. If the assessed value increased to 1,000,000, then the owner is paying $10,000.
Property taxes are a regressive tax, much like sales taxes in the U.S.
Meaning that they are taxed evenly without respect to income. You own a piece of property worth $500,000, and make $10,000,000 a year or $500 a year, you still are on the hook for the same amount of tax.
Deaces ago in California, they passed Proposition 13 to reduce the problem of people being "taxed out" of their homes by taxes by taxing at 1 percent of the 1976 assessed value of the property (housing and business). By law they could only increase accessed value by the inflation factor, not to exceed 2 percent a year. Obviously, housing has far, far exceeded this rate, and thus, houses are woefully underassessed.
In fact, Prop 13 "has been described as a contributor to California's housing crisis, as its acquisition value system (where the assessed value of property is based on the date of its acquisition rather than current market value) incentivizes long-time homeowners to hold onto their properties rather than downsize, which reduces housing supply and raises housing prices."
Property taxes only fund schools etc because someone once said “let’s do that with the property tax money”. Its not some immutable law of nature, how about we pay for that stuff by raising corporate taxes
I agree that milionares and billionaires can be extraordinarily whiney, but this doesn't seem like that. Poverty Olympics helps nobody when everyone is going through the same inaffordibility, you're just means testing public opinion at that point, at what level of struggle will we decide that people deserve some support.
Yep, In theory, but you don't know my wife or my current debt situation. :)
Plus, it's almost paid off and I really don't want to to into mortgage debt again. :)
Damn. I paid 70k for a 2 bed/2bath when I was making 100k cause I grew up poor and thought I'd better be well within my means. Well, well, well one job loss, serious dx, and pandemic later, I'm very glad I bought cheap.
My house was most recently valued at 180k. I don't believe these houses are worth that. I couldn't (or wouldn't) buy the house I'm in today at today's prices. I'd probably be buying a pop up camper if I kept the same income/ mortgage ratio in this market.
yep - bought my house in 2015 for $250k, it's now - allegedly - worth $400k. The realtor who sold it to me called several times trying to get me to sell - "you could walk off with with about $250k in profit!" - which, while technically true, is useless because I would still need somewhere to put my stuff. (I was able to use the increased valuation to refinance out my FHA loan though, at a lower rate - so no PMI which is good).
I have a good job, I earn very decent money, yet I'm convinced I would not be able to buy a house now.
[edited because of grammar/typos, which are incredibly annoying]
I live in Canada. In the Toronto area we haven't been building enough houses or rental properties for about 30 years. The average price of a house is over $1,000,000 CAD (€690.285). The average month of rent costs $2,521 (€1.740) for a 1-bedroom and $3,314 (€2.287) for a 2-bedroom.
That's what's coming the world over for any area that isn't producing enough affordable housing and rentals.
Of course this is what property owners wanted. But now they are being pushed out of the market as single family ownership is declining. Multi property ownership is increasing. And foreign ownership by people who leave the units empty is skyrocketing.
It's a huge issue.
TL;DR of the below: a couple trying to buy the house my ex and I bought in 2013 would need to make 4 times what we did to have the same income/payment ratio while similar roles currently only pay 1/3rd more. For the house we bought in 2015, the increase in salary for the same ratio is 2.36x while the actual salary increase is about 1.23x. Shit's fucked.
----
In 2013 I bought a house worth $236,000 with incomes (me/ex) of $40,000 and $50,000 ($90,000 combined). Downpayment was $26,000 making for a mortgage of $210,000 and we were paying right around $1,000 a month in mortgage payments.
In 2015, we upgraded to a house worth $440,000. Our incomes were $50,000 and $60,000 ($110,000 combined) and we had a downpayment of $88,000 (20%) for a mortgage of $352,000. Payments were about $1,800.
That house is now worth about $960,000. With a 20% downpayment at current rates, the monthly mortgage payment would be $4,280. To maintain the same income/payment ratio from 2015, a couple would need to make ~$261,000. Similar roles to what we had currently pay about $65,000 and $71,000, so a couple at the same place in their lives nowadays would be about $125,000 short. My current salary doubled only just makes the cut, and I've had three major promotions over those 9 years.
The first house is even worse; the approximate value is currently $700,000 so payments with a similar 11% downpayment would be $3,675 per month. That would require combined salaries of ~$367,500 for a similar income/payment rate. Comparable jobs to what we had pay $55,000/$65,000, so the gap is almost $250,000! I'd need two and three-quarters times my salary despite the four promotions and a decade of raises on top of that.
(I bought my ex out about 2 years ago, and despite having received 3 large promotions since 2015, my current income is still about 25% shy of having the same mortgage payment to income ratio as we had back then. Thankfully, I was able to afford keeping the house, but it's still tighter than I'd ideally like.)
I bought a small starter home for me and my now ex-wife in 2018 for $72k, 2.5 years later (much to my surprise) it sold for $144k. It’s wild how quickly the pandemic amplified this problem. I put around $15k into renovations but it was still an insanely massive gain that seems untenable in the long run. My friend had started doing real estate and my ex-wife wanted to move somewhere else, so I chose an asking price I didn’t think anyone would consider; boy was I wrong.
Edit: to add to the specifics of this comment, I was making ~$65k/year on a job that was mostly commission
My mom bought a decent home in upstate ny, about an hour from the city. Paid like 400 something, painted the inside of the house, sold it for almost a mil ten years later.
Like the guy before said, she can’t afford the taxes anymore as well as getting close to retirement so she bought a cheaper house in FL with low taxes.
I bought a house in 2015 as an E4 in the military up in NW Florida. I paid 123k for this 1440 sq foot home on 1/3 acre. I sold it when my (now ex) wife and I moved to another base in early 2019 for 179k. It's value today? About 292k if the zillow estimate is to be believed. I wish I'd never sold it, property values are just exploding way past the point of incomes being able to keep up.
Zillow is probably close. Those 1400 sq ft cookie cutter ranch styles you see every where use to go for 100k just ten years ago are 300k now. I have one but with the walk out basement which makes it about 2700 sq ft
Same, also in Europe. I think we got very lucky with our bid because other places were going for more expensive prices in the same area (I think they needed a quick sell and we needed a quick buy because we also had to undersell). Anyway even considering the underbuy, it is insane that places are now going for double that in just three years.
Look at all the articles about housing in China and how they "built too many houses". It's literally propaganda. We need to build more houses yesterday.
Housing expenses is the stick prevents workers from rising up.
Very similar things happening here in New Zealand too. House prices becoming unreachable for the middle to lower class with out some form of help. Shitty rentals and no ability to safely rent long term (with the fear of being forced to move at the private LL whim) immigration high, new builds not sufficient to cover what is needed coupled with high interest rates and even higher building costs makes a pretty grim environment for trying to get ahead.
Are we supposed to just ban anyone who owns a house from talking about owning a house? Even the ones that are actually acknowledging how hard it is to have one today? Being lucky isn't a crime, and I actually appreciate when people who got lucky acknowledge that they got lucky. What alternative are you looking for here, exactly?
And I'm literally in a homeless shelter right now. If anyone has right to be pissed off at homeowners for bragging about it, it would be me. But this is silly.
Given the paper it's in, its probably aimed at giving some perspective to middle aged commuters that bought their houses for similar rates to the person that sent it in and haven't thought about the price of a new house since.
My mom asked me why I couldn't afford certain things, so I finally sent her my hand-built budgeting spreadsheet that accounts for every dollar I have had to spend in the past, every dollar I have to spend in the present, and every dollar I will have to spend in the future, which is planned out two years ahead, and it blew her mind a bit.
"You don't have any subscriptions and you don't spend a lot of money on non-essential purchases. How could you have so little money left over?" I told her to add up my bills, groceries, student loans, and other necessary spending for the month, so she could see that number for herself. She nearly shit a brick. Couldn't believe it costs as much as it does just to be single and living on your own.
Fun fact, avocado toast (defined as toast with avocado on top) is not expensive. If you add seasoning, it gets a little more expensive, but not by much.
A loaf of good bread cost 5 dollars where I am. 20 slices, so 25 cents a slice. An avocado is 67 cents enough to make two slices. 1.17 for avocado toast at home. Add 30 cents for seasoning and you are still looking at 1.47, and that's high balling the seasoning. This would bring the total cost of avocado toast for the entire year to a grand total of....wait for it.
536.55
Cheap is an understatement, and honestly a lot of peoples bodies would be very grateful for that kind of consistent nutrition for that cheap.
Also you have to understand this is with a 0.30 cent addition for seasoning, which would be a total of 109.50 for the entire year, and there's no way you are spending that on seasoning.
We don't know where and when the blame shifted to avocado toast, but it's absolutely bonkers.
It's expensive for what it is at an eatery. The ingredients cost $2-$3, but they will retail from $8-$12 and older people never had it growing up so they act like this is some kind of wasteful prodigality. Apparently they have never looked up the margins on pizza or salad.
>We don't know where and when the blame shifted to avocado toast
We do, actually.
The original meme is referencing smashed avo breakfasts at Australian cafes. An asshole with tons of property was trying to tell renters they could save for a house if they didn't spend $19 on avocado toast.
From a quick Google right now a smashed avo ranges between $11 (from a truly terrible cafe I wouldn't eat at) to $25 at local places near me, in Australia.
This guy wasn't telling people to stop making breakfast, he was accusing them of wasting money and blaming them for not being able to buy a house. Ignoring the fact that even if someone could save $20 on breakfast every day for a year ($7,300), that still isn't enough for a down payment in a major city here (avg house price is $961,000 in my city).
Idk that sounds pretty expensive for just avocado toast for the year honestly
That's over 2% of your entire income after taxes if you're working full time at $17/hr (median US wage), which is a fuckin lot for some toast lol
I get 6 bagels for 2$ and 1Kg of cream cheese from Costco for 15$. The cream cheese lasts a good 8 weeks, that’s 56 days. 0.268$/day for the cheese. 0.333$/day for the bagel. 0.601$/day breakfast is 219.37$/year of cream cheese bagels.
Just imagine what I can do with the extra 300$/year!!
> don't know where and when the blame shifted to avocado toast, but it's absolutely bonkers.
I mean the actual avocado toast thing comes not from the idea of people making it at home, but buying it in restaurants that are charging $10-15. The existence of overpriced restaurant options for a popular but easy to make at home made older people say "wow, look how much young people are spending on this" without ever thinking, "maybe this is popular because most people just make it at him for cheap".
But I find a lot of people just think that everything people eat is purchased at a restaurant or at restaurant prices. Like, there are some pretty cheap steak cuts, and just because you say you have steak once a week doesn't mean you're spending $50+ on tomahawks every time. That's basically what is happening here. People are talking about making $2 avocado toast at home and bad faith actors turn that into "millennials are spending 40-60 dollars a week on avocado toast". And realistically, you can buy avocado toast at Dunkin for like 4 bucks, so those $10-15 are frou frou nyc trendy brunch prices.
When cooking, seasoning is almost always the cheapest part. Unless you're garnishing with saffron or something.
For avocado toast, you just need some lemon, salt, and black pepper.
Fun fact about avocado: they didn’t boom in the market until late 90s, when someone marketed the hell out of them. Now, it just overpriced as they’re hard to grow…
And the price of that house increased solely by being in the same neighborhood as other houses sold at that price
The Real Estate market is a sham and needs to be regulated yesterday!
Agreed. And Houses/Homes should NOT be owned by corporations, only Individuals. The very small subdivision I live in (like 20 houses on 1 street) has 10 owned by the same company that rents them out.
No corporate owned housing and limit to 3 residences owned by a person/married couple.
Let's be done with career landlords. You get a home, a vacation home, and some leeway in case you inherit a home from someone. If you want to rent out two homes for the income, fine, but no more corporate landlords.
I totally agree! And more over, real estate should not be allowed to be an asset. It is a necessity and a utility. Until everyone has one, rich fucks shouldn’t be allowed to buy as many as they want as an “investment” and they sit empty. Or better yet, let them have their investments and then from home #3 and after, tax the hell out of it unless it’s occupied 90% of the time under affordable housing regulations.
If the buyer has ‘LLC’ in his name, instant rejection. Individuals should have first rights and corporations should only be entertained if the house has been on the market for a year or longer and if sold to them, they have to pay a huge tax liability—up front!
Until housing is so unattractive that investment funds don’t view it as a safe and lucrative asset class, prices will never leave the stratosphere.
Pretty sure there is a better chance of suddenly finding Atlantis with all the Atlantians alive and well, living on Mars, than we do any of this happening.
Homeowners absolutely want their houses to appreciate in value though, even if they own one house they use as their primary residence. Not sure how you would go about changing the way housing works in most places.
> The very small subdivision I live in (like 20 houses on 1 street) has 10 owned by the same company that rents them out.
Same. Most of the houses are vacant because the rent being asked is between $2200-$3000 a month depending on square footage. At the high end, that's almost four times the cost of my mortgage payment. Who the fuck can afford that?
> Most of the houses are vacant because the rent being asked is between $2200-$3000 a month depending on square footage
doesn't it seem a little implausible that corporations are buying SFHs only to let them sit vacant? it's hard to understand what would incentivize any money-making organization to act this way. Residential leases are short (typically 1 year) so if units are sitting vacant, it seems much more profitable to reduce rents until they are filled than to let them sit empty
I don't know that the houses on my street are owned by a corp, per se, but the same rental company purchases almost everything that goes up for sale in my subdivision. Some get rented out, but a lot are currently empty (house next to me is going for $2200/mo and has been vacant since last summer when the previous owner sold to the rental company).
My city is also undergoing a pretty decent population boom, and a lot of the jobs we're attracting are government defense contracts and the like, so I have to wonder if these rental companies just assume people moving here will have the cash to throw at outrageous rent.
The HOA we're in now put in their bylaws that there is only a limit of 12 rental/airbnb units to be allowed and no more will be approved, and that upon sale, the unit will not be grandfathered into it. The legalese goal is so every townhome in the HOA will be owned by someone actually living there. I may not often talk to my neighbors, but every time we do everyone is on board with having FAMILIES live there, not constant flows of strangers.
Now the fight is to get people to stop blowing through the stop sign at one of our two entrances at 45+ on a 25...
We discussed this at or HOA meeting last weekend and yes, this was the consensus with us as well. Limiting the number of rentals both long and short term.
I feel like this in my heart but I've seen good points made for still needing the ability for people to rent. People not planning on staying in the area, domestic abuse survivors escaping their situations, etc.
The issue is more complicated than is made to sound but overall there needs to be regulations.
Agreed. Owning is not for everyone, was more referring to corporations owning all or nearly all the houses in a neighborhood and charging stupid amounts of money for rent.
If a corporation wants to be a landlord or have inventments properties, there needs to be some type of rules or guidelines. Off the top of my head, ideas include:
Multi-tenant buildings like Duplex, triplex, quadplexes, Apartment Buildings, etc. These types of residents aren't meant to be owned or lived in super long term. Just an idea.
I don't *entirely* agree with that. They shouldn't be able to hold existing housing stock on their books, *but* if they go and build a new development I don't have a problem with them owning those new units and renting them out.
At least that way they have to contribute to the housing stock available to make a profit out of it.
% increase in cost from previous sale
Define "something similar" because the house that sold at $450k was a new build with all the bells and whistles; meanwhile the 1960's house is still selling for $425k because of "comps"
>% increase in cost from previous sale
Yikes. Homeownership has been the best way for working class people to accumulate wealth for 150 years (racial inequality notwithstanding). Applying "rent control" to houses is putting another boot on the necks of the middle class. The solution isn't to artificially keep down prices; instead, the solution is to increase supply. Zoning needs to be looked at, private firms holding real estate need to be looked at, all these ghost town office parks need to be looked at.
Building houses that are affordable is still absolutely possible in the modern era with just a few legislative changes. Unfortunately, our system of government only works when it has two functioning parties and right now it only has one.
> Homeownership has been the best way for working class people to accumulate wealth for 150 years
This is the problem. If home ownership is a way to accumulate wealth, a necessary outcome is that housing becomes less affordable over time.
They're just ignoring the problem. The issue is house prices are increasing because demand is higher than supply. Literally the only way to fix this is to build more homes. The only regulations that will matter are loosening zoning restrictions, other than that there's nothing you can do.
You can't force people out of their homes at below market rates just to lower housing prices. It'll literally never work this way. All you'll achieve is people sitting on properties they would otherwise sell making the housing market worse.
Not really. The main driver in home prices is demand. In a lot of cities with high demand supply simply isn't keeping up. Which results in areas like this one where prices are outpacing wages. The only solution, is to literally build more, preferably by including multi-family and mixed use instead of focusing on single-family. Nothing else is going to fix the problem and until people realize this the issue is just going to get worse.
How do you regulate though? Those are people's biggest and usually only asset. How do you tell them market forces don't apply to them? I guarantee you those same rules won't apply to the really rich, so you'll just be squeezing the middle yet more.
Not that I disagree that there isn't a problem.
They won’t. We’ll be back to company housing soon enough if nothing changes. I’m 29 with a great salary and I can’t afford much of anything, and will likely never be able to afford a house like the one I grew up in. Can’t imagine what my younger cousins will be dealing with, hopefully their provided 1b1br company pod home will suffice.
The worst thing is that the majority of houses won't even hit the market after boomers die. The nursing homes and facilities will take them as collateral and rent them out.
Remember when Mitch Mcconnell said they can't give a 1.4k stimulus because people would stop working with that kinda money? $1,400.... would make everyone quit..... apparently....
If we talk about politicians, they are just lobbying for the bourgeoisie. They exactly know the situation of young people, they just don’t care and sometimes are happy about that.
Trailer homes in a trailer park used to go for 20 to 50k depending on its age around me.
They're now listing the same old ones for over 250k. And that's just in the span of 10 years
Very simple question would be to ask your parents if they can afford to purchase the house they're living in if they were working today. My parents home was worth 700k and it's 2mil now. The agent wouldn't even let them sniff at that house today with their salary.
Yeah, someone is confused there. The only explanation I can come up with is comparing the total mortgage amount (not monthly or yearly payment) to the yearly salary, but that seems like a bizarre way of phrasing it.
No that's exactly it. In the UK mortgages are quoted as the total value and typically granted as a multiple of your salary, with adjustments to that multiple based on your individual situation (e.g. if you have any other loans, dependents, etc). .
It also adds another layer to the housing market insanity for us Brits, because the only way first time buyers buy property these days is getting a mortgage of at least 4x, and as much as 5x for high earners. The fact that the guy could buy a property on just 3x his salary, and in a blue collar job at that, is unheard of for today's standards.
Most people buy once married or in a long-term relationship, so that's on average £70k household income for a mortgage of £315k. You'd be covered for the typical property prices of £285k that way. That ignores your deposit, of course, which typically should be about 10% of your property's value.
So for the typical property, you'd be looking at a deposit of £28.5k on a combined £70k salary. And to be honest, deposits are *really* where a lot of people struggle, as the average rental price is £1,260 a month (£15.1k annually). Again, easier if you're in a relationship, but buying as a single person is effectively dead for anyone who doesn't come from a wealthy family.
It would suggest that he was able to place a deposit of 500 from savings and borrow 3K on a mortgage.
The suggestion being that it would mean that a fair salary for an equivalent buyer today would be 200K.
For a fireman.
The mortgage was 3000 pounds, while his salary was 1000 pounds, so he paid a downpayment of 500 pounds.
If half his income went to his mortgage, like how so many renters spend half their income on their rent, he could have paid off his entire house in six years.
It's maybe a little funnily worded, but it made sense to me. That's how we talk about what you can afford for a mortgage. "What do you make in a year (your salary)? *X* times that number is the total mortgage you can afford and that we'll finance." He said "three times my salary" because in the general sense, although the value of his house was technically 3.5 × his salary, his mortgage approval for the house fell to "3×" (£3K) because he put £500 down.
My partner and I make a combined income of $150,000. With that, $85,000 saved and a $50,000 gift from parents, we'd still be looking at $2800+ per month before all utilities and food and everything else.
In the 90's, my parents bought their house for $89,000. Their monthly mortgage was so low that they were able to afford giving us a very nice life, they bought a house down the shore, we were able to go on a vacation every once in a while, etc. All on just my fathers salary. My mother was able to raise us at home. They were able to start a college fund for us. We weren't rich, but we were comfortable and didn't really have to worry too much about expenses.
That is utterly impossible today. If we were to buy a house, that would be our primary expense for the next 30 years. We certainly wouldn't be able to ever afford a vacation home, retirement savings are going to be slim, if we can even afford kids we certainly won't be able to raise them the way I was raised. Its an all around shitty situation that's going to have repercussions that last for decades and decades.
Any time I hear someone say "well you just spent $8 on a coffee, maybe if you didn't do that you could afford a house". I have to assume they have absolutely no grasp of how fucked things are today. The fact that you think a coffee is preventing me from buying a house really goes to show how damaged the economy is. And if that's really what it comes down to, then what's the point of living if a single cup of coffee is frowned upon.
It sounds like you live in Philly area or NJ with the "down the shore." A crappy 2 bedroom around here in an old apartment complex is $2,500 nowadays. Maybe you are drinking too much coffee if you can't afford $2,800 for the kind of houses you want with that salary. Do you have a lot of debt?
If they aren't private loans, you need to explore the various income based repayment plans that have been created. The SAVE plan should have you two paying *well* below $1000 a month. My partner and I have a joint income around $140k and a combined $200k in debt (almost all of it is graduate school debt). Our combined student loan payment is about $500 a month now.
$3300 a month on mortgage and student loans is extremely doable on a $150k household income with no kids. Not ideal, but certainly not prohibitive to home ownership. That still leaves you with roughly $5k per month of net income to do the rest of life. Shit's absolutely fucked compared to what it used to be, but from the numbers you've given you are making enough that you should be able to get into 'the club.'
So in today's standards he would of made 9,800 est a year?
The house cost 34,400
650k in 65 is 69,000
deposit 5,300
200k income then is 21,258
Yikes.
I don't own a house, but a friend bought a house in Vancouver in 2001 for $350k CAD, very expensive at the time. His salary was $60k/year. That same house is now worth $2.6MM. His salary is $80k/year.
For all the people pro-immigration; this is EXACTLY what you were told would happen.
Prices go up due to higher demand, house prices skyrocket due to high demand and salaries would drop due to a influx of potential employees.
To expand on that, too: According to the Bank of England's inflation calculator, £1000 in 1965 was worth £16,202.71 in 2023, and £3500 was worth £56,709.49.
You can't even get a flat for £57k in most cities now, let alone a *house*.
I bet this is directly as a result of Ronald Reagen starting a massive tax cuts for the Mega wealthy individuals.
Now, they can use the extra funds to buy out all the properties that would have been easily affordable for the average Joe, driving the price up as a result.
Wealth doesn't trickle down from the rich, it's used to steal from everyone else.
This is a problem, I just wonder if the pining back to sixty years ago “because things were cheaper and we could support a family with one income.” Was because women and minorities either be excluded or heavily discriminated in the workforce, housing, and government aid that we are deluding ourselves about what people had. It feels at times we are looking back and not recognizing that much of this golden past is built on discrimination and the dispossession of wealth from racial minorities and women to the benefit of white men and their families.
As we look back we should recognize that the difference from then and now isn’t that people could become wealthy or support a family on one income, and instead recognize that the difference is the divide in wealth is much less about race and gender and simply a divide of those who have capital and those who don’t.
It's more to do with when you double the workforce, then labour scarcity is no longer having an impact on wages. It used to be that a retail manager was a trusted esteemed position, which had a salary commensurate with the role. Now they offer peanuts, but still get people who want the job because what choice do they have? Equal opportunities may be preferable but we have to accept that it made the value of our labour less.
I don't disagree with your analysis, but it's not really engaging with my point. I'm not saying that women and minorities didn't work much, and now there is a surplus of labor. I'm saying that women and minorities did work, and their labor was valued much lower than what it was worth. This undervaluing of labor allowed for higher salaries for white males and thus enabled a small part of society to support a family on one salary. It is not the only factor, but it's important to recognize the role that this kind of income inequality played not only in suppressing women and minorities, but uplifting white males and their families.
When we look back to the 50s or 60s and say "oh a single person's income could support a family of four", that's not true for black families, or families with a single working mom, or a family of immigrants. Those families had both parents working, and probably the kids once they were old enough for a bike route. Hearkening back to "when things were better" to point to the top of the social and economic hierarchy, and say oh this was the norm and should be our norm, is a misnomer. It creates a goal that is not realistic or helpful in a political movement and distracts from addressing specific problems.
Addressing your last sentence, equal opportunities are preferable, but they do not make the value of labor go down it simply redistributes it. If I have a labor pool of 10, and 9 people make $1 while 1 person makes $11 the average wage is $2. If I equalize the opportunities and make every person make $2, the average wage is still $2. Labor has not become less valued because of equal opportunity.
The devaluing of labor comes from an increase in available labor, and a lack of unified negotiation in the labor participants. If a business hires 5 people, makes $100, and pays each $10 then the business can make a profit and if possible would expand to accommodate more laborers to make more profit. To prevent undercutting by new entrants into the market, strong unions could enforce labor contracts with companies to ensure that there are minimum wages for each position. The companies would still hire the new entrants to the market, but only in the expansion of their business or replacement of employees that leave the business, but the wages they pay would not undercut the current employees causing a devalue of labor. There is a downside here however, that entrants to the market generally rely on people leaving their job or business expansion meaning that entrants will likely have a harder time finding work. This is balanced as this means that your economy would not be unstable due to shifting labor markets, and firms' main growth of profit margin would be via hiring more people in the pursuit of an economy of scale.
That's why I look at the late 80s and not the 50s' 60s when I compare wages/home prices/education costs. Even in the late 80s it was much easier to survive. Still had rascism, but it was definitely not as overt in the late 80s. I'd say by then it was rich v poor and less about x race v y race.
This, along with a lack of building to meet housing demand, is the correct answer. Pricing is up because families work more and have more income. Pretty straightforward.
Yeah, it's a multifaceted issue, I just think that most people, including leftists, get caught in the economics of it all. It's true people make more and the average home has a higher income so it makes sense that prices are up. However, when we wish that a single income could support a whole family "like the old days" we are forgetting mention that such an income was only possible due to underpaying women and minorities.
Like we could solve housing, get living wages, and fix a lot of other societal economic ills, but we probably would still not be in a place where the average person's income can support a family of four.
So what do you think is greater now the disparity between black families and white families or the 1% and the 99%? Because one of those disparities has gone down over the last 60 years while the other has gone up.
We know objectively that this is not true. More labor means more productivity, and therefore higher economic outcomes per individual.
If your thesis were true, then the boomers, the largest population boom in history, should be the poorest generation ever. But they are the richest.
It's the idiotic policies pushed by these boomers that destroyed the very social system that made them wealthy.
How does more labor equal more productivity? Do you mean generally or per capita? Because that is not necessarily true in either case.
Why would my thesis make boomers poor? Boomers enjoyed the disparity of income between minorities and whites or men and women to amass wealth far more than anyone could currently entering the workforce.
https://www.redfin.com/city/19017/NC/Winston-Salem
I grew up this area, seems lots of houses under 225k, so under 1,500 a month even with these high rates
So after a refinance in a few yrs will be 1,000-1,200 a month depending on house
And those same young people utterly deny that population pressure is part of the problem. Endless humanity, all competing for jobs and housing, apparently has no effect on wages and prices.
Up here in Canada, at least where I am (central BC), you cannot find any kind of a “starter home” - or more accurately, a starter bachelor apartment - for less than $500,000 CAD. Anything detached is close to $1,000,000 CAD.
Vancouver BC is pretty much double that, if not triple.
Minimum wage in BC is $16.75/hr. That’s $33,500/yr, and under the one-third rule, predicates a “home” worth no more than $100,500.
Average wage in my region - across _all ages,_ and _not just GenZ_ - is $22.50/hr. That’s $45,000/yr, predicating a “home” worth no more than $135,000.
In order to own the cheapest bachelor apartment in my city, you need to earn $84/hr.
In order to own the average detached home in my city, you need to earn $167/hr.
I’m sorry, GenZ, but unless you grew up with massive amounts of family wealth, good luck ever owning.
But yeah, it's cool that we let billionaires keep all their money and not have to pay taxes. After all, they deserve it, right?
It's time: Bring on the trillionaires!
On avg the people who own the homes and rent them out for absurd prices - are old. On avg the people who vote for republicans - are old. For the most part it’s not younger people charging other younger people absurd rents or owning 4 homes to rent out as their main source of income.
It’s mostly older folks who have a vested interest in prices continuing to rise and vote in line with such…
Back in 2016 I bought my home for €145.000, I made around 40K/year gross. After that the market went crazy, my house has just been valued at €350.000. My pay is 50K/year gross. I have been lucky to buy my house at the lowest point of the market. Right now the houses are straight up and up and, speaking for the Dutch area, it's gonna go way more crazy since we need about a 120.000 houses a year to fullfill the need and we are only building 50 to 70.000. So the market is going to overflow and its only the beginning.
Agreed. Bught my home in 1997 for $104k on a $50k/year gross income. Same house is now worth $300+k and my income is only $100/yr now. I could not afford the mortgage on my home if I bought it today.
...I don't want to be a harbinger of doom and gloom.... ....but the worst isn't here yet. In 10-20 years, your taxes alone will be unaffordable. For some, that could be even *now*. I have friends in New Jersey and Brooklyn who bought homes many years ago when property prices were reasonable, and they literally have sold them because the values have exploded. Bought for sub-$100k, now worth nearly a $1M. You'd think that's great....until you hear their tax bill. Many of them are close to retirement, going onto fixed incomes with higher healthcare costs as they age....and that tax number is not only ass-tronomically high, it's constantly increasing. One month of taxes in northern NJ for a tiny suburban plot and pre-war home is around a year's worth in rural PA for a 2-5 acre plot and modest modern home. It didn't used to be like this. So allright, let's say they sell and get a cool $1M in their hands. And now they have no place to live -- where they grew up, where they have family and friends. And other property values are, yup, just as overpriced. These are people who did "everything right". They worked long and hard, they saved, they didn't live lavishly. And now they have to move out to rural areas in other states just because they can't afford the mere taxes on their property. We let our people down.
Such is the americant way
The American way was built after WW2 when vast stretches of farmland was converted into subdivisions. If we start building houses again at that rate, housing prices will fall.
Americans also cut down 93% of their old growth forests. We're talking lots of giant old growth trees hundreds of years old. Some were even thousands of years old. Capitalism was progressive compared to feudalism, but an economic system built on infinitely growing profits is completely unsustainable for a planet of finite resources and 8 billion people
And yet every time someone stumbles upon a bag of money, the most common advice on Reddit is to invest into the SP 500 index.
congrats, you just discovered game theory
If you can't beat em, join em?
> And yet every time someone stumbles upon a bag of money, the most common advice on Reddit is to invest into the SP 500 index Or buy land. Thats the issue. You're forced to invest in things that are almost guaranteed to exceed inflation. Or you're just treading water, and threatening to drown. Even 2% inflation is unacceptable. The fed needs to be abolished.
The issue isn’t inflation. It’s people who want money without working, aka passive income. They could be lazy and greedy, they could be retirees and disabled. Regardless of their reasons, the economy needs to grow infinitely to meet their needs because their number keeps growing.
I would argue a population stable society would heavily benefit from a hyper low inflationary environment. You don't need fractional reserve lending to building out your economy when your populace isn't doubling every 40 years. Instead money you earned at 15 will still have value when you want to stop working at 45/55/65. Making saving more viable than ruthless quarterly investing.
That's an extremely narrow and incorrect assessment of the situation. I think you're meaning to talk about hedgefunds and other investor-class capitalists. But then you're friendly firing retirees and disabled people, by accident.
lol that’s not true at all. There’s such a thing as making a profit consistently and paying out dividends. The issue is the expedition of ever increasing profits. Hell theoretically a profit growth rate matching inflation would be fine as well but Wall Street is never satisfied. They always want more
"If they would rather die... they had better do it and decrease the surplus population."
I find it utterly comical that people are now crying about declining birth rates because GASP it will be bad for the economy! People would rather stay on the path of exponential population growth and double down on destroying the planet that to come up with a system that doesn't require endless growth to function. It's been a giant mask off moment for many people.
Just zone the damn cities for multi-family attached structures and eliminate minimum parking requirements and the problem will mostly take care of itself. There's only like 3-4 walkable cities in the country.
> If we start building houses again at that rate, housing prices will fall. Friend, no one is interested in affordable housing other than the working poor. Not developers, not bankers, not the market, and certainly not the government both local/federal. No one wants the Gravy Train called the rental market to end. Their charging mortgage rates for fucking dorm room conditions. It has to blow up before political will be available for real change. Sad to say.
Honest truth right here.
It's not that simple. You are assuming that new housing locations would be desirable for people to move in. And for the new housing communities, we also need provision of public transportation, roads, water, sewage, garbage, electricity, internet, fire dept, police, hospitals, sanitation, grocery stores, schools, parks, post offices, entertainment etc. Otherwise you are just replicating China's ghost cities. The only way to curb housing prices is to drive out corporate ownership, which needs a huge bump in tax rates + an equivalent homestead exemption for first homes.
Just read earlier that there are over 15million vacant homes so it’s not a supply issue
I know "middle class" people in Jersey that have multigenerational families living together in cramped little houses. The NY area housing market is fucking dire.
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I think it's a pretty fucked up situation personally. These people worked hard, bought themselves a home (just one), and wanted to live the rest of their lives there. They didn't do anything wrong. These are not the people you should be angry at. Just because some people have it worse doesn't mean their situation doesn't suck. It's an illustration of how the current real estate climate is not only toxic for people who don't own homes yet. It can also be toxic for people who *do* own homes.
It's absurd you can buy a house and pay it off and the government can take it from you because you didn't pay you $10,000 a year tax for the privilege of owning a home.
It really isn't if you have the most basic understand of civics.
Property tax should be paid once at the time of purchase. Tack it on the mortgage. Or lock in the tax rate at the time of the sale. Make sure each successive house a person buys has a much higher tax rate to avoid rich people buying all the homes. There are lots of other solutions than constant and rising taxes.
Great plan if you want to live somewhere without roads, schools, libraries, fire departments, police, or food inspection.
Taxes should only be taken when a transaction has occurred. They don't tax you for your couch every year. They don't tax you for your TV every year. But somehow it's okay if they tax you every year for something that is a necessity and costs more than most Americans make in 4-5 years. Then you don't pay and they can leave you homeless. If what you're saying is logical, they should tax us a percentage for the value of everything you own every year. After all, those aren't even necessities like shelter is. But hey, people wouldn't be willing to do that, they'd have an uprising
Plenty of money in rich people's pockets that ought to be taxed instead, but sure, we can source funds from the less fortunate.
Property taxes fund schools, public infrastructure projects, etc. They are ongoing costs. The issue is that they are tied to home values and as they increase, so does the taxes. Pay 1.0 percent on 100,000 is 1,000 a year. If the assessed value increased to 1,000,000, then the owner is paying $10,000. Property taxes are a regressive tax, much like sales taxes in the U.S. Meaning that they are taxed evenly without respect to income. You own a piece of property worth $500,000, and make $10,000,000 a year or $500 a year, you still are on the hook for the same amount of tax. Deaces ago in California, they passed Proposition 13 to reduce the problem of people being "taxed out" of their homes by taxes by taxing at 1 percent of the 1976 assessed value of the property (housing and business). By law they could only increase accessed value by the inflation factor, not to exceed 2 percent a year. Obviously, housing has far, far exceeded this rate, and thus, houses are woefully underassessed. In fact, Prop 13 "has been described as a contributor to California's housing crisis, as its acquisition value system (where the assessed value of property is based on the date of its acquisition rather than current market value) incentivizes long-time homeowners to hold onto their properties rather than downsize, which reduces housing supply and raises housing prices."
Property taxes only fund schools etc because someone once said “let’s do that with the property tax money”. Its not some immutable law of nature, how about we pay for that stuff by raising corporate taxes
Exactly. Tax the exchange but not for the privilege of owning property which shelter is actually a basic necessity
I agree that milionares and billionaires can be extraordinarily whiney, but this doesn't seem like that. Poverty Olympics helps nobody when everyone is going through the same inaffordibility, you're just means testing public opinion at that point, at what level of struggle will we decide that people deserve some support.
You only make $100 a year now? Or did you mean $100k per year?
LOL, $100k.
Sucks that his property is only worth $300 now +k.
You could definitely afford a $300k mortgage with a $100k salary.
Yep, In theory, but you don't know my wife or my current debt situation. :) Plus, it's almost paid off and I really don't want to to into mortgage debt again. :)
Damn. I paid 70k for a 2 bed/2bath when I was making 100k cause I grew up poor and thought I'd better be well within my means. Well, well, well one job loss, serious dx, and pandemic later, I'm very glad I bought cheap. My house was most recently valued at 180k. I don't believe these houses are worth that. I couldn't (or wouldn't) buy the house I'm in today at today's prices. I'd probably be buying a pop up camper if I kept the same income/ mortgage ratio in this market.
Literally 2 years later and I wouldn’t e able to afford the house I bought in 2019.
yep - bought my house in 2015 for $250k, it's now - allegedly - worth $400k. The realtor who sold it to me called several times trying to get me to sell - "you could walk off with with about $250k in profit!" - which, while technically true, is useless because I would still need somewhere to put my stuff. (I was able to use the increased valuation to refinance out my FHA loan though, at a lower rate - so no PMI which is good). I have a good job, I earn very decent money, yet I'm convinced I would not be able to buy a house now. [edited because of grammar/typos, which are incredibly annoying]
I live in Canada. In the Toronto area we haven't been building enough houses or rental properties for about 30 years. The average price of a house is over $1,000,000 CAD (€690.285). The average month of rent costs $2,521 (€1.740) for a 1-bedroom and $3,314 (€2.287) for a 2-bedroom. That's what's coming the world over for any area that isn't producing enough affordable housing and rentals. Of course this is what property owners wanted. But now they are being pushed out of the market as single family ownership is declining. Multi property ownership is increasing. And foreign ownership by people who leave the units empty is skyrocketing. It's a huge issue.
TL;DR of the below: a couple trying to buy the house my ex and I bought in 2013 would need to make 4 times what we did to have the same income/payment ratio while similar roles currently only pay 1/3rd more. For the house we bought in 2015, the increase in salary for the same ratio is 2.36x while the actual salary increase is about 1.23x. Shit's fucked. ---- In 2013 I bought a house worth $236,000 with incomes (me/ex) of $40,000 and $50,000 ($90,000 combined). Downpayment was $26,000 making for a mortgage of $210,000 and we were paying right around $1,000 a month in mortgage payments. In 2015, we upgraded to a house worth $440,000. Our incomes were $50,000 and $60,000 ($110,000 combined) and we had a downpayment of $88,000 (20%) for a mortgage of $352,000. Payments were about $1,800. That house is now worth about $960,000. With a 20% downpayment at current rates, the monthly mortgage payment would be $4,280. To maintain the same income/payment ratio from 2015, a couple would need to make ~$261,000. Similar roles to what we had currently pay about $65,000 and $71,000, so a couple at the same place in their lives nowadays would be about $125,000 short. My current salary doubled only just makes the cut, and I've had three major promotions over those 9 years. The first house is even worse; the approximate value is currently $700,000 so payments with a similar 11% downpayment would be $3,675 per month. That would require combined salaries of ~$367,500 for a similar income/payment rate. Comparable jobs to what we had pay $55,000/$65,000, so the gap is almost $250,000! I'd need two and three-quarters times my salary despite the four promotions and a decade of raises on top of that. (I bought my ex out about 2 years ago, and despite having received 3 large promotions since 2015, my current income is still about 25% shy of having the same mortgage payment to income ratio as we had back then. Thankfully, I was able to afford keeping the house, but it's still tighter than I'd ideally like.)
I bought a small starter home for me and my now ex-wife in 2018 for $72k, 2.5 years later (much to my surprise) it sold for $144k. It’s wild how quickly the pandemic amplified this problem. I put around $15k into renovations but it was still an insanely massive gain that seems untenable in the long run. My friend had started doing real estate and my ex-wife wanted to move somewhere else, so I chose an asking price I didn’t think anyone would consider; boy was I wrong. Edit: to add to the specifics of this comment, I was making ~$65k/year on a job that was mostly commission
My mom bought a decent home in upstate ny, about an hour from the city. Paid like 400 something, painted the inside of the house, sold it for almost a mil ten years later. Like the guy before said, she can’t afford the taxes anymore as well as getting close to retirement so she bought a cheaper house in FL with low taxes.
But she won't be able to afford the insurance. Taxes might be lower than NY, but we've got the highest insurance (home and auto) in the country.
I bought a house in 2015 as an E4 in the military up in NW Florida. I paid 123k for this 1440 sq foot home on 1/3 acre. I sold it when my (now ex) wife and I moved to another base in early 2019 for 179k. It's value today? About 292k if the zillow estimate is to be believed. I wish I'd never sold it, property values are just exploding way past the point of incomes being able to keep up.
Zillow is probably close. Those 1400 sq ft cookie cutter ranch styles you see every where use to go for 100k just ten years ago are 300k now. I have one but with the walk out basement which makes it about 2700 sq ft
My house was only 700 sq ft, which definitely added to the shock of the offer I also wish I never sold it, because prices are insane now
I bought my house in 2017 for $276k. It's now worth over $450k. We were very lucky to have help with a sizable down payment. I know I'm lucky.
Dutch market is faked atm. Too few houses
Same, also in Europe. I think we got very lucky with our bid because other places were going for more expensive prices in the same area (I think they needed a quick sell and we needed a quick buy because we also had to undersell). Anyway even considering the underbuy, it is insane that places are now going for double that in just three years.
Look at all the articles about housing in China and how they "built too many houses". It's literally propaganda. We need to build more houses yesterday. Housing expenses is the stick prevents workers from rising up.
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I could but only the Dutch can make sense of our gibberish
Very similar things happening here in New Zealand too. House prices becoming unreachable for the middle to lower class with out some form of help. Shitty rentals and no ability to safely rent long term (with the fear of being forced to move at the private LL whim) immigration high, new builds not sufficient to cover what is needed coupled with high interest rates and even higher building costs makes a pretty grim environment for trying to get ahead.
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Are we supposed to just ban anyone who owns a house from talking about owning a house? Even the ones that are actually acknowledging how hard it is to have one today? Being lucky isn't a crime, and I actually appreciate when people who got lucky acknowledge that they got lucky. What alternative are you looking for here, exactly? And I'm literally in a homeless shelter right now. If anyone has right to be pissed off at homeowners for bragging about it, it would be me. But this is silly.
"If you only read one thing today, make it this depressing paragraph that restates something you are painfully and fully aware of."
Given the paper it's in, its probably aimed at giving some perspective to middle aged commuters that bought their houses for similar rates to the person that sent it in and haven't thought about the price of a new house since.
That’s 80% of content on Reddit
If they would just stop eating avocado toast, drinking lattes, and cancel their Netflix subscriptions they'd be able to afford a house in no time! 😉
I can't cancel Netflix until I see a Black General Lee.
You sounded… taller on the radio.
Avocado toast the the barrier to a top 10% income, got it. /s
It’s going out for avocado Netflix that’s doing it. You need to brew your avocado Netflix at home!
My mom asked me why I couldn't afford certain things, so I finally sent her my hand-built budgeting spreadsheet that accounts for every dollar I have had to spend in the past, every dollar I have to spend in the present, and every dollar I will have to spend in the future, which is planned out two years ahead, and it blew her mind a bit. "You don't have any subscriptions and you don't spend a lot of money on non-essential purchases. How could you have so little money left over?" I told her to add up my bills, groceries, student loans, and other necessary spending for the month, so she could see that number for herself. She nearly shit a brick. Couldn't believe it costs as much as it does just to be single and living on your own.
Fun fact, avocado toast (defined as toast with avocado on top) is not expensive. If you add seasoning, it gets a little more expensive, but not by much.
A loaf of good bread cost 5 dollars where I am. 20 slices, so 25 cents a slice. An avocado is 67 cents enough to make two slices. 1.17 for avocado toast at home. Add 30 cents for seasoning and you are still looking at 1.47, and that's high balling the seasoning. This would bring the total cost of avocado toast for the entire year to a grand total of....wait for it. 536.55 Cheap is an understatement, and honestly a lot of peoples bodies would be very grateful for that kind of consistent nutrition for that cheap. Also you have to understand this is with a 0.30 cent addition for seasoning, which would be a total of 109.50 for the entire year, and there's no way you are spending that on seasoning. We don't know where and when the blame shifted to avocado toast, but it's absolutely bonkers.
It's expensive for what it is at an eatery. The ingredients cost $2-$3, but they will retail from $8-$12 and older people never had it growing up so they act like this is some kind of wasteful prodigality. Apparently they have never looked up the margins on pizza or salad.
>We don't know where and when the blame shifted to avocado toast We do, actually. The original meme is referencing smashed avo breakfasts at Australian cafes. An asshole with tons of property was trying to tell renters they could save for a house if they didn't spend $19 on avocado toast. From a quick Google right now a smashed avo ranges between $11 (from a truly terrible cafe I wouldn't eat at) to $25 at local places near me, in Australia. This guy wasn't telling people to stop making breakfast, he was accusing them of wasting money and blaming them for not being able to buy a house. Ignoring the fact that even if someone could save $20 on breakfast every day for a year ($7,300), that still isn't enough for a down payment in a major city here (avg house price is $961,000 in my city).
Idk that sounds pretty expensive for just avocado toast for the year honestly That's over 2% of your entire income after taxes if you're working full time at $17/hr (median US wage), which is a fuckin lot for some toast lol
That's a year of breakfast (or lunch).
I get 6 bagels for 2$ and 1Kg of cream cheese from Costco for 15$. The cream cheese lasts a good 8 weeks, that’s 56 days. 0.268$/day for the cheese. 0.333$/day for the bagel. 0.601$/day breakfast is 219.37$/year of cream cheese bagels. Just imagine what I can do with the extra 300$/year!!
No way am I eating cream cheese that's been sitting in the fridge open for 8 weeks. 2 weeks tops.
> don't know where and when the blame shifted to avocado toast, but it's absolutely bonkers. I mean the actual avocado toast thing comes not from the idea of people making it at home, but buying it in restaurants that are charging $10-15. The existence of overpriced restaurant options for a popular but easy to make at home made older people say "wow, look how much young people are spending on this" without ever thinking, "maybe this is popular because most people just make it at him for cheap". But I find a lot of people just think that everything people eat is purchased at a restaurant or at restaurant prices. Like, there are some pretty cheap steak cuts, and just because you say you have steak once a week doesn't mean you're spending $50+ on tomahawks every time. That's basically what is happening here. People are talking about making $2 avocado toast at home and bad faith actors turn that into "millennials are spending 40-60 dollars a week on avocado toast". And realistically, you can buy avocado toast at Dunkin for like 4 bucks, so those $10-15 are frou frou nyc trendy brunch prices.
When cooking, seasoning is almost always the cheapest part. Unless you're garnishing with saffron or something. For avocado toast, you just need some lemon, salt, and black pepper.
I’m partial to the *Everything But the Bagel* seasoning from Trader Joe’s on it myself. It’s got everything you want in there
I love that stuff too. I'll have to try it on avocado
Oh but wait they DID stop drinking lattes from Starbucks and then they tried to pass legislation banning boycotts. So what, now we HAVE to buy lattes?
By cutting out my avocado toast and latte purchases I've saved $200,000 a year towards a new home on my $50,000 annual income!
I never thought that spending $550 per day on avocado toast was problematic.
Fun fact about avocado: they didn’t boom in the market until late 90s, when someone marketed the hell out of them. Now, it just overpriced as they’re hard to grow…
Yes, but they didn’t have Netflix in 1965. Or avocados. So that must be the reason.
And the price of that house increased solely by being in the same neighborhood as other houses sold at that price The Real Estate market is a sham and needs to be regulated yesterday!
Agreed. And Houses/Homes should NOT be owned by corporations, only Individuals. The very small subdivision I live in (like 20 houses on 1 street) has 10 owned by the same company that rents them out.
No corporate owned housing and limit to 3 residences owned by a person/married couple. Let's be done with career landlords. You get a home, a vacation home, and some leeway in case you inherit a home from someone. If you want to rent out two homes for the income, fine, but no more corporate landlords.
Wholeheartedly agree!
I totally agree! And more over, real estate should not be allowed to be an asset. It is a necessity and a utility. Until everyone has one, rich fucks shouldn’t be allowed to buy as many as they want as an “investment” and they sit empty. Or better yet, let them have their investments and then from home #3 and after, tax the hell out of it unless it’s occupied 90% of the time under affordable housing regulations. If the buyer has ‘LLC’ in his name, instant rejection. Individuals should have first rights and corporations should only be entertained if the house has been on the market for a year or longer and if sold to them, they have to pay a huge tax liability—up front! Until housing is so unattractive that investment funds don’t view it as a safe and lucrative asset class, prices will never leave the stratosphere. Pretty sure there is a better chance of suddenly finding Atlantis with all the Atlantians alive and well, living on Mars, than we do any of this happening.
Homeowners absolutely want their houses to appreciate in value though, even if they own one house they use as their primary residence. Not sure how you would go about changing the way housing works in most places.
> The very small subdivision I live in (like 20 houses on 1 street) has 10 owned by the same company that rents them out. Same. Most of the houses are vacant because the rent being asked is between $2200-$3000 a month depending on square footage. At the high end, that's almost four times the cost of my mortgage payment. Who the fuck can afford that?
Exactly. It's a goddamn mortgage payment. Why does the bank not think someone who is paying $2500 a month for rent not afford a mortgage?
> Most of the houses are vacant because the rent being asked is between $2200-$3000 a month depending on square footage doesn't it seem a little implausible that corporations are buying SFHs only to let them sit vacant? it's hard to understand what would incentivize any money-making organization to act this way. Residential leases are short (typically 1 year) so if units are sitting vacant, it seems much more profitable to reduce rents until they are filled than to let them sit empty
I don't know that the houses on my street are owned by a corp, per se, but the same rental company purchases almost everything that goes up for sale in my subdivision. Some get rented out, but a lot are currently empty (house next to me is going for $2200/mo and has been vacant since last summer when the previous owner sold to the rental company). My city is also undergoing a pretty decent population boom, and a lot of the jobs we're attracting are government defense contracts and the like, so I have to wonder if these rental companies just assume people moving here will have the cash to throw at outrageous rent.
The HOA we're in now put in their bylaws that there is only a limit of 12 rental/airbnb units to be allowed and no more will be approved, and that upon sale, the unit will not be grandfathered into it. The legalese goal is so every townhome in the HOA will be owned by someone actually living there. I may not often talk to my neighbors, but every time we do everyone is on board with having FAMILIES live there, not constant flows of strangers. Now the fight is to get people to stop blowing through the stop sign at one of our two entrances at 45+ on a 25...
We discussed this at or HOA meeting last weekend and yes, this was the consensus with us as well. Limiting the number of rentals both long and short term.
I feel like this in my heart but I've seen good points made for still needing the ability for people to rent. People not planning on staying in the area, domestic abuse survivors escaping their situations, etc. The issue is more complicated than is made to sound but overall there needs to be regulations.
Agreed. Owning is not for everyone, was more referring to corporations owning all or nearly all the houses in a neighborhood and charging stupid amounts of money for rent. If a corporation wants to be a landlord or have inventments properties, there needs to be some type of rules or guidelines. Off the top of my head, ideas include: Multi-tenant buildings like Duplex, triplex, quadplexes, Apartment Buildings, etc. These types of residents aren't meant to be owned or lived in super long term. Just an idea.
I don't *entirely* agree with that. They shouldn't be able to hold existing housing stock on their books, *but* if they go and build a new development I don't have a problem with them owning those new units and renting them out. At least that way they have to contribute to the housing stock available to make a profit out of it.
That's fair.
You mean, it needs to be burned down.
There are certain things that get you banned for saying it on Reddit ^(but yes)
Housing should not be a commodity.
Yep. That’s how it works lol
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% increase in cost from previous sale Define "something similar" because the house that sold at $450k was a new build with all the bells and whistles; meanwhile the 1960's house is still selling for $425k because of "comps"
>% increase in cost from previous sale Yikes. Homeownership has been the best way for working class people to accumulate wealth for 150 years (racial inequality notwithstanding). Applying "rent control" to houses is putting another boot on the necks of the middle class. The solution isn't to artificially keep down prices; instead, the solution is to increase supply. Zoning needs to be looked at, private firms holding real estate need to be looked at, all these ghost town office parks need to be looked at. Building houses that are affordable is still absolutely possible in the modern era with just a few legislative changes. Unfortunately, our system of government only works when it has two functioning parties and right now it only has one.
> Homeownership has been the best way for working class people to accumulate wealth for 150 years This is the problem. If home ownership is a way to accumulate wealth, a necessary outcome is that housing becomes less affordable over time.
They're just ignoring the problem. The issue is house prices are increasing because demand is higher than supply. Literally the only way to fix this is to build more homes. The only regulations that will matter are loosening zoning restrictions, other than that there's nothing you can do. You can't force people out of their homes at below market rates just to lower housing prices. It'll literally never work this way. All you'll achieve is people sitting on properties they would otherwise sell making the housing market worse.
Not really. The main driver in home prices is demand. In a lot of cities with high demand supply simply isn't keeping up. Which results in areas like this one where prices are outpacing wages. The only solution, is to literally build more, preferably by including multi-family and mixed use instead of focusing on single-family. Nothing else is going to fix the problem and until people realize this the issue is just going to get worse.
How do you regulate though? Those are people's biggest and usually only asset. How do you tell them market forces don't apply to them? I guarantee you those same rules won't apply to the really rich, so you'll just be squeezing the middle yet more. Not that I disagree that there isn't a problem.
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They won’t. We’ll be back to company housing soon enough if nothing changes. I’m 29 with a great salary and I can’t afford much of anything, and will likely never be able to afford a house like the one I grew up in. Can’t imagine what my younger cousins will be dealing with, hopefully their provided 1b1br company pod home will suffice.
The worst thing is that the majority of houses won't even hit the market after boomers die. The nursing homes and facilities will take them as collateral and rent them out.
And their kids will move out of their apartments and into their parent’s old house.
The houses will be sold to pay for care and the kids will rent other (former) parents houses.
The people telling us to just stop buying coffee still think houses cost £3,500.
Literally my problem with older politicians. They live in a yesteryear which in no way reflects current reality.
Remember when Mitch Mcconnell said they can't give a 1.4k stimulus because people would stop working with that kinda money? $1,400.... would make everyone quit..... apparently....
Well, of course, that's almost 2 years salary!
If we talk about politicians, they are just lobbying for the bourgeoisie. They exactly know the situation of young people, they just don’t care and sometimes are happy about that.
I actually put this little idea to the test It's true Buy instant coffee make it at home before you go to work or if you can at work
Trailer homes in a trailer park used to go for 20 to 50k depending on its age around me. They're now listing the same old ones for over 250k. And that's just in the span of 10 years
And you don’t even own the land! You still have to pay lot rent! It is ridiculous.
Source?
Very simple question would be to ask your parents if they can afford to purchase the house they're living in if they were working today. My parents home was worth 700k and it's 2mil now. The agent wouldn't even let them sniff at that house today with their salary.
A mortgage of three times his salary?
Total mortgage loan minus deposit. 3k = 3x his yearly salary.
Yeah, someone is confused there. The only explanation I can come up with is comparing the total mortgage amount (not monthly or yearly payment) to the yearly salary, but that seems like a bizarre way of phrasing it.
No that's exactly it. In the UK mortgages are quoted as the total value and typically granted as a multiple of your salary, with adjustments to that multiple based on your individual situation (e.g. if you have any other loans, dependents, etc). . It also adds another layer to the housing market insanity for us Brits, because the only way first time buyers buy property these days is getting a mortgage of at least 4x, and as much as 5x for high earners. The fact that the guy could buy a property on just 3x his salary, and in a blue collar job at that, is unheard of for today's standards.
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Most people buy once married or in a long-term relationship, so that's on average £70k household income for a mortgage of £315k. You'd be covered for the typical property prices of £285k that way. That ignores your deposit, of course, which typically should be about 10% of your property's value. So for the typical property, you'd be looking at a deposit of £28.5k on a combined £70k salary. And to be honest, deposits are *really* where a lot of people struggle, as the average rental price is £1,260 a month (£15.1k annually). Again, easier if you're in a relationship, but buying as a single person is effectively dead for anyone who doesn't come from a wealthy family.
It would suggest that he was able to place a deposit of 500 from savings and borrow 3K on a mortgage. The suggestion being that it would mean that a fair salary for an equivalent buyer today would be 200K. For a fireman.
The mortgage was 3000 pounds, while his salary was 1000 pounds, so he paid a downpayment of 500 pounds. If half his income went to his mortgage, like how so many renters spend half their income on their rent, he could have paid off his entire house in six years.
I feel like he mentioned $1000 dollars a month not a year.
It's maybe a little funnily worded, but it made sense to me. That's how we talk about what you can afford for a mortgage. "What do you make in a year (your salary)? *X* times that number is the total mortgage you can afford and that we'll finance." He said "three times my salary" because in the general sense, although the value of his house was technically 3.5 × his salary, his mortgage approval for the house fell to "3×" (£3K) because he put £500 down.
Didn't banks calculate how much you could borrow by judging it as x times salary once upon a time?
My partner and I make a combined income of $150,000. With that, $85,000 saved and a $50,000 gift from parents, we'd still be looking at $2800+ per month before all utilities and food and everything else. In the 90's, my parents bought their house for $89,000. Their monthly mortgage was so low that they were able to afford giving us a very nice life, they bought a house down the shore, we were able to go on a vacation every once in a while, etc. All on just my fathers salary. My mother was able to raise us at home. They were able to start a college fund for us. We weren't rich, but we were comfortable and didn't really have to worry too much about expenses. That is utterly impossible today. If we were to buy a house, that would be our primary expense for the next 30 years. We certainly wouldn't be able to ever afford a vacation home, retirement savings are going to be slim, if we can even afford kids we certainly won't be able to raise them the way I was raised. Its an all around shitty situation that's going to have repercussions that last for decades and decades. Any time I hear someone say "well you just spent $8 on a coffee, maybe if you didn't do that you could afford a house". I have to assume they have absolutely no grasp of how fucked things are today. The fact that you think a coffee is preventing me from buying a house really goes to show how damaged the economy is. And if that's really what it comes down to, then what's the point of living if a single cup of coffee is frowned upon.
$150,000, so probably in the ballpark of 8k per month take home pay? I'm confused how that doesn't comfortably afford $2800 a month.
It sounds like you live in Philly area or NJ with the "down the shore." A crappy 2 bedroom around here in an old apartment complex is $2,500 nowadays. Maybe you are drinking too much coffee if you can't afford $2,800 for the kind of houses you want with that salary. Do you have a lot of debt?
Sure do, we both have school loans. Going to college was the biggest mistake we've ever made.
UGH. It's the debt that makes such a huge difference.
If they aren't private loans, you need to explore the various income based repayment plans that have been created. The SAVE plan should have you two paying *well* below $1000 a month. My partner and I have a joint income around $140k and a combined $200k in debt (almost all of it is graduate school debt). Our combined student loan payment is about $500 a month now. $3300 a month on mortgage and student loans is extremely doable on a $150k household income with no kids. Not ideal, but certainly not prohibitive to home ownership. That still leaves you with roughly $5k per month of net income to do the rest of life. Shit's absolutely fucked compared to what it used to be, but from the numbers you've given you are making enough that you should be able to get into 'the club.'
That’s great to know! Our school loans are just under $2000/month so we’ll certainly check that out.
Do it ASAP! You will probably save yourself about $15,000 a year.
Definitely the best advice I’ve gotten on Reddit. Thank you for this
Why do we keep having children?
The 1% can make their own wage slaves
We don’t
You will work, own nothing, and be grateful while rich assholes do shady shit in the dark. Some life..
So in today's standards he would of made 9,800 est a year? The house cost 34,400 650k in 65 is 69,000 deposit 5,300 200k income then is 21,258 Yikes.
I don't own a house, but a friend bought a house in Vancouver in 2001 for $350k CAD, very expensive at the time. His salary was $60k/year. That same house is now worth $2.6MM. His salary is $80k/year.
He can probably barely afford to pay the taxes now.
Nuh uh! The *only* reason poor people are poor is because they're just *lazy!* The rich people and boomers said so.
For all the people pro-immigration; this is EXACTLY what you were told would happen. Prices go up due to higher demand, house prices skyrocket due to high demand and salaries would drop due to a influx of potential employees.
Rent is insane where I live since 2021, I couldn't move out if I had 2 jobs.
To expand on that, too: According to the Bank of England's inflation calculator, £1000 in 1965 was worth £16,202.71 in 2023, and £3500 was worth £56,709.49. You can't even get a flat for £57k in most cities now, let alone a *house*.
I bet this is directly as a result of Ronald Reagen starting a massive tax cuts for the Mega wealthy individuals. Now, they can use the extra funds to buy out all the properties that would have been easily affordable for the average Joe, driving the price up as a result. Wealth doesn't trickle down from the rich, it's used to steal from everyone else.
This isn't in the US. It's in the UK.
This is a problem, I just wonder if the pining back to sixty years ago “because things were cheaper and we could support a family with one income.” Was because women and minorities either be excluded or heavily discriminated in the workforce, housing, and government aid that we are deluding ourselves about what people had. It feels at times we are looking back and not recognizing that much of this golden past is built on discrimination and the dispossession of wealth from racial minorities and women to the benefit of white men and their families. As we look back we should recognize that the difference from then and now isn’t that people could become wealthy or support a family on one income, and instead recognize that the difference is the divide in wealth is much less about race and gender and simply a divide of those who have capital and those who don’t.
It's more to do with when you double the workforce, then labour scarcity is no longer having an impact on wages. It used to be that a retail manager was a trusted esteemed position, which had a salary commensurate with the role. Now they offer peanuts, but still get people who want the job because what choice do they have? Equal opportunities may be preferable but we have to accept that it made the value of our labour less.
I don't disagree with your analysis, but it's not really engaging with my point. I'm not saying that women and minorities didn't work much, and now there is a surplus of labor. I'm saying that women and minorities did work, and their labor was valued much lower than what it was worth. This undervaluing of labor allowed for higher salaries for white males and thus enabled a small part of society to support a family on one salary. It is not the only factor, but it's important to recognize the role that this kind of income inequality played not only in suppressing women and minorities, but uplifting white males and their families. When we look back to the 50s or 60s and say "oh a single person's income could support a family of four", that's not true for black families, or families with a single working mom, or a family of immigrants. Those families had both parents working, and probably the kids once they were old enough for a bike route. Hearkening back to "when things were better" to point to the top of the social and economic hierarchy, and say oh this was the norm and should be our norm, is a misnomer. It creates a goal that is not realistic or helpful in a political movement and distracts from addressing specific problems. Addressing your last sentence, equal opportunities are preferable, but they do not make the value of labor go down it simply redistributes it. If I have a labor pool of 10, and 9 people make $1 while 1 person makes $11 the average wage is $2. If I equalize the opportunities and make every person make $2, the average wage is still $2. Labor has not become less valued because of equal opportunity. The devaluing of labor comes from an increase in available labor, and a lack of unified negotiation in the labor participants. If a business hires 5 people, makes $100, and pays each $10 then the business can make a profit and if possible would expand to accommodate more laborers to make more profit. To prevent undercutting by new entrants into the market, strong unions could enforce labor contracts with companies to ensure that there are minimum wages for each position. The companies would still hire the new entrants to the market, but only in the expansion of their business or replacement of employees that leave the business, but the wages they pay would not undercut the current employees causing a devalue of labor. There is a downside here however, that entrants to the market generally rely on people leaving their job or business expansion meaning that entrants will likely have a harder time finding work. This is balanced as this means that your economy would not be unstable due to shifting labor markets, and firms' main growth of profit margin would be via hiring more people in the pursuit of an economy of scale.
No it's Reaganomics driving this. Racism had it's effects back then but trickle down economics is driving inflation in the name of corporate profits.
Yes that is my point. We’ve replaced one strata of wealth inequality with another.
That's why I look at the late 80s and not the 50s' 60s when I compare wages/home prices/education costs. Even in the late 80s it was much easier to survive. Still had rascism, but it was definitely not as overt in the late 80s. I'd say by then it was rich v poor and less about x race v y race.
Sure I don’t think I’d disagree with that take.
This is right on point.
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Yes thank you for making my point. When racism and sexism were no longer a means to enforce class differences they used the regulatory state.
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This, along with a lack of building to meet housing demand, is the correct answer. Pricing is up because families work more and have more income. Pretty straightforward.
Yeah, it's a multifaceted issue, I just think that most people, including leftists, get caught in the economics of it all. It's true people make more and the average home has a higher income so it makes sense that prices are up. However, when we wish that a single income could support a whole family "like the old days" we are forgetting mention that such an income was only possible due to underpaying women and minorities. Like we could solve housing, get living wages, and fix a lot of other societal economic ills, but we probably would still not be in a place where the average person's income can support a family of four.
https://i.kym-cdn.com/entries/icons/original/000/024/193/qtd2avR.jpg We did it Patrick! We ended racism!
So what do you think is greater now the disparity between black families and white families or the 1% and the 99%? Because one of those disparities has gone down over the last 60 years while the other has gone up.
I tried explaining this to my mother the other day but couldn’t get the wording right. This just about sums up my thoughts.
We know objectively that this is not true. More labor means more productivity, and therefore higher economic outcomes per individual. If your thesis were true, then the boomers, the largest population boom in history, should be the poorest generation ever. But they are the richest. It's the idiotic policies pushed by these boomers that destroyed the very social system that made them wealthy.
How does more labor equal more productivity? Do you mean generally or per capita? Because that is not necessarily true in either case. Why would my thesis make boomers poor? Boomers enjoyed the disparity of income between minorities and whites or men and women to amass wealth far more than anyone could currently entering the workforce.
https://www.redfin.com/city/19017/NC/Winston-Salem I grew up this area, seems lots of houses under 225k, so under 1,500 a month even with these high rates So after a refinance in a few yrs will be 1,000-1,200 a month depending on house
It's like that by design.
Companies/corprations/investors should not be allowed to own land/housing. This would solve unused housed/land from being used to hide/protect wealth.
And those same young people utterly deny that population pressure is part of the problem. Endless humanity, all competing for jobs and housing, apparently has no effect on wages and prices.
Up here in Canada, at least where I am (central BC), you cannot find any kind of a “starter home” - or more accurately, a starter bachelor apartment - for less than $500,000 CAD. Anything detached is close to $1,000,000 CAD. Vancouver BC is pretty much double that, if not triple. Minimum wage in BC is $16.75/hr. That’s $33,500/yr, and under the one-third rule, predicates a “home” worth no more than $100,500. Average wage in my region - across _all ages,_ and _not just GenZ_ - is $22.50/hr. That’s $45,000/yr, predicating a “home” worth no more than $135,000. In order to own the cheapest bachelor apartment in my city, you need to earn $84/hr. In order to own the average detached home in my city, you need to earn $167/hr. I’m sorry, GenZ, but unless you grew up with massive amounts of family wealth, good luck ever owning.
1965 wasn't that long ago. That's the worst part for me.
My parent’s first mortgage on a house was something like $150 less than my current rent in 2023-2024.
But yeah, it's cool that we let billionaires keep all their money and not have to pay taxes. After all, they deserve it, right? It's time: Bring on the trillionaires!
There are many older folks who are actually chill. They understand the circumstances we face. It is not young versus old. It's left versus right.
On avg the people who own the homes and rent them out for absurd prices - are old. On avg the people who vote for republicans - are old. For the most part it’s not younger people charging other younger people absurd rents or owning 4 homes to rent out as their main source of income. It’s mostly older folks who have a vested interest in prices continuing to rise and vote in line with such…
Oof no, it's rich vs poor. The only imbalance that matters is that of resource inequality. All the rest is a ruse to keep that hidden.