As a 39-year old in a DINK household in the low six figures, everything in this feels true to me. We have no shot of owning a similar apartment in our neighborhood to what we currently rent.
I’m also skeptical of the “carrots, not sticks” approach. It reminds me of the early years of Obamacare when red states flat-out refused to take the federal dollars for Medicaid expansion. Their citizens suffered, and their leaders paid no political price for it. Never underestimate what a Long Islander is willing to pay in opportunity cost to keep their town/village/hamlet single-family and ethnically homogeneous.
I very much doubt it was much to do with ethnics anymore. Most people are happy to live next door to a black doctor or lawyer. But don't want a white trailer park nearby (I know I don't).
But agreed on how out of control prices are.
While married we moved in with my parents for over 2 years to save up a down payment. And even then we wouldn't have gotten in except it was 2010 when we bought. I couldn't imagine trying to get in now. It would never happen.
My house now (that no one would call a McMansion) is bigger than the house I grew up in, which is bigger than my grandparents’ house etc. (my grandmother lived there until she died in 2023 at age 94). Similarly, I saw a TikTok about a guy saying people complain about housing prices - but for example, he grew up without air conditioning in his house. Serious question - do these stats take those kinds of things into account? I never know that when I read these articles. Thanks! P.S. Ramit Sethi suggests renting and investing the difference as the mathematically better investment over buying a house if anyone wants to check him out.
There is some truth to that. But I know in my home town in the late 1990's you could get a 1960's track home for $100 to $120k or so. Now those same 1960's track homes are going for $550k to $600k.
Same old homes (well older now) still no AC, but 6x more expensive. I can assure you incomes didn't go up 6x in that time.
Also, in 2010, when we bought, you could get one of those homes for a bit more than $200k.
Perhaps the most enlightening conversation I have had on this issue was one with a close friend's 23 year old son last summer. As I good naturally complained to him broadly about his generation not having a desire to work as hard as those before them but, rather, approaching work win a 9 - 5 mentality, and not seeing the advantage of getting ahead, he said something that hit home with me.
"The way my generation sees it," he said, "is why should we work harder and harder to make you money when we can't even my a home." Continuing, he told me that his was the first generation that couldn't afford to buy homes after college while working at a good job. Because of this, many friends of his saw no reason to go to college and, certainly, no reasons to go above and beyond at work, try to get ahead, etc.
He was headed to medical school, so he recognized that his life likely would be different. Still, he was speaking for many, if not most, of his friends.
This all sounds great but a functional government, including the legislative branch and ideally less fragmentation at the local level, is a precondition to change. I work in infrastructure planning and in my experience even attempts to spur investment, like the IRA, end up imposing even *more* rules and funding dubious and wasteful pet projects.
My hope is that we use this dumpster fire as a bunch of natural experiments to point toward a better, much leaner framework for planning and development. But what we’re actually seeing so far seems to be a will to destroy on one side and a clinging to a sclerotic status quo ante on the other. I hope it doesn’t stay this way.
The intersection of housing & fertility deficits is starting to get it’s well-warranted attention.
I would love to start the family i’ve envisioned a la Norman Rockwell. However, the reality is that my Fiancé and I— despite enjoying DINK existence comfortably in the 1-200k income range in a M-LCOL region can’t chart a swift enough path to home ownership that would allow us to start a family until we’re in our 30s.
The deck is stacked against starting a family responsibly as early as previous generations have, and we can’t act surprised to reap the demographic consequences.
All of this is correct and I love the Abundance book. But also don’t forget about the dollar debasement that really started in the early 70s when Nixon completely spike the remnants of the gold standard. Take a look at new or existing home prices divided by either the M2 money supply or even divided by gold and you can clearly see that real estate is one of the stores of value that increases in price more because the dollar decreases in value by about 10% per year while, when divided by other stores of value, the trend is much flatter.
We did not just buy 4 walls with a roof over them. Instead, in large part we bought a “neighborhood.”
Before we even saw our home, while driving to it with the realtor, what was salient to us was the neighborhood. Were streets lined with parked cars? How much “space” was there in the neighborhood? How quiet was the neighborhood? Did the other homes look well kept? Were drivers exceeding the speed limit? Were people sitting on their front porches? Were there sidewalks for walking? How “crowded” did it appear? Were there places for children to play or could they only “play” in their locked back yards? Were there dogs and more dogs barking and barking…..running loose in fenced-in front yards?
After assessing all of these neighborhood factors, then we got to the house we were going to look to buy, and only then we started caring about whether the home had matching appliances, etc. Some terrific homes were off the market for us because the neighborhoods are not what we wanted to live in and invest in.
Importantly, we also knew that we could fix up our own home and get those all-important matching appliances (important to some people, but irrelevant to us), but we could NEVER “fix up” a neighborhood. The neighborhood was set. Unchangeable. Except along one dimension: It could be made worse. And they would by those YIYBY (Yes In YOUR Back Yard) people (the same people who if OUR homes becomes worth less are not going to take up a collection to pay us, and our neighbors, to make up the difference).
There are huge differences in neighborhoods, and neighborhoods are key to one’s satisfaction with their home.
Many proposals (at least that we have seen) for “solving” the housing crisis are to build smaller homes, multi-family dwellings. Crowding things, changing the character of the neighborhoods, noisier, more cars, fewer “backyards.”
We’re firmly middle class, not anywhere near rich. We don’t travel to Europe on a whim. Our homes are “it.” They are our worlds and our primary investments. And those homes exist in an atmosphere/neighborhood we chose when buying them. They partially created the financial value of our homes
Trying to change those neighborhoods is going to meet with tons of resistance. And that resistance makes sense, psychologically and financially.
And if people are upset with us, we’d like to ask why? How many YIMBYs live in places where their own neighborhoods actually would be subject to massive changes? Why is this the only solution? We have 6 kids. 3 live in large, expensive cities. 3 live in inexpensive places. They all own homes.
People do not have a constitutional right to live in large cities. There is plenty of inexpensive housing in other places. But you may not be able to have the job you want, but that was a decision you made. YOU chose a profession that exists only in large cities, and then expect the rest of us to accommodate that. You wanted fancy restaurants, coffee shops, entertainment, and expect the rest of us to provide for that.
Quit feeling so entitled. If you are an immigrant, there’s plenty of non-college jobs elsewhere. We know….we live in one of those areas and hire them all of the time, manyof whom can't speak English, and pay them what they are asking......a fine salary, by the way (we're not into exploiting anyone, imagine that?) They’re GREAT! We love them.
My wife and I purchased our first home in 2017 both of us make less than 6 figures which probably means if we lived in a city or a more expensive housing market we couldn’t have purchased a house. In rural America if you even want to think about raising a family with more than one child you have to purchase a home there arnt rental units designed for families. However I’m very glad we purchased in 2017 because the price of the house we bought now compared to the. I’m guessing would have priced us out or made us live outside our budgetary constraints.
As a 39-year old in a DINK household in the low six figures, everything in this feels true to me. We have no shot of owning a similar apartment in our neighborhood to what we currently rent.
I’m also skeptical of the “carrots, not sticks” approach. It reminds me of the early years of Obamacare when red states flat-out refused to take the federal dollars for Medicaid expansion. Their citizens suffered, and their leaders paid no political price for it. Never underestimate what a Long Islander is willing to pay in opportunity cost to keep their town/village/hamlet single-family and ethnically homogeneous.
(Edited for typos)
I very much doubt it was much to do with ethnics anymore. Most people are happy to live next door to a black doctor or lawyer. But don't want a white trailer park nearby (I know I don't).
But agreed on how out of control prices are.
While married we moved in with my parents for over 2 years to save up a down payment. And even then we wouldn't have gotten in except it was 2010 when we bought. I couldn't imagine trying to get in now. It would never happen.
My house now (that no one would call a McMansion) is bigger than the house I grew up in, which is bigger than my grandparents’ house etc. (my grandmother lived there until she died in 2023 at age 94). Similarly, I saw a TikTok about a guy saying people complain about housing prices - but for example, he grew up without air conditioning in his house. Serious question - do these stats take those kinds of things into account? I never know that when I read these articles. Thanks! P.S. Ramit Sethi suggests renting and investing the difference as the mathematically better investment over buying a house if anyone wants to check him out.
There is some truth to that. But I know in my home town in the late 1990's you could get a 1960's track home for $100 to $120k or so. Now those same 1960's track homes are going for $550k to $600k.
Same old homes (well older now) still no AC, but 6x more expensive. I can assure you incomes didn't go up 6x in that time.
Also, in 2010, when we bought, you could get one of those homes for a bit more than $200k.
Agreed it’s insane what houses are going for that would have once been in a realistic range for non 6 figure earners.
Perhaps the most enlightening conversation I have had on this issue was one with a close friend's 23 year old son last summer. As I good naturally complained to him broadly about his generation not having a desire to work as hard as those before them but, rather, approaching work win a 9 - 5 mentality, and not seeing the advantage of getting ahead, he said something that hit home with me.
"The way my generation sees it," he said, "is why should we work harder and harder to make you money when we can't even my a home." Continuing, he told me that his was the first generation that couldn't afford to buy homes after college while working at a good job. Because of this, many friends of his saw no reason to go to college and, certainly, no reasons to go above and beyond at work, try to get ahead, etc.
He was headed to medical school, so he recognized that his life likely would be different. Still, he was speaking for many, if not most, of his friends.
That 30 minute conversation has stayed with me.
This all sounds great but a functional government, including the legislative branch and ideally less fragmentation at the local level, is a precondition to change. I work in infrastructure planning and in my experience even attempts to spur investment, like the IRA, end up imposing even *more* rules and funding dubious and wasteful pet projects.
My hope is that we use this dumpster fire as a bunch of natural experiments to point toward a better, much leaner framework for planning and development. But what we’re actually seeing so far seems to be a will to destroy on one side and a clinging to a sclerotic status quo ante on the other. I hope it doesn’t stay this way.
I really think it needs to happen at the state level. Just plain bulldozing (prohibiting) of most zoning regulations.
Agreed to all of this. And I would add that if you fix the cost of housing I bet it would go a long ways towards helping fix the fertility problems.
Most people don't want to raise a kid in an apartment. I know my wife and I refused to have kids until we got a home.
The delay quite likely meant the difference between 2 kids and 3 kids (we had the 2nd kid when she was 38, so we were out of time).
The intersection of housing & fertility deficits is starting to get it’s well-warranted attention.
I would love to start the family i’ve envisioned a la Norman Rockwell. However, the reality is that my Fiancé and I— despite enjoying DINK existence comfortably in the 1-200k income range in a M-LCOL region can’t chart a swift enough path to home ownership that would allow us to start a family until we’re in our 30s.
The deck is stacked against starting a family responsibly as early as previous generations have, and we can’t act surprised to reap the demographic consequences.
All of this is correct and I love the Abundance book. But also don’t forget about the dollar debasement that really started in the early 70s when Nixon completely spike the remnants of the gold standard. Take a look at new or existing home prices divided by either the M2 money supply or even divided by gold and you can clearly see that real estate is one of the stores of value that increases in price more because the dollar decreases in value by about 10% per year while, when divided by other stores of value, the trend is much flatter.
We are NIMBYs. And make no apologies about it.
We did not just buy 4 walls with a roof over them. Instead, in large part we bought a “neighborhood.”
Before we even saw our home, while driving to it with the realtor, what was salient to us was the neighborhood. Were streets lined with parked cars? How much “space” was there in the neighborhood? How quiet was the neighborhood? Did the other homes look well kept? Were drivers exceeding the speed limit? Were people sitting on their front porches? Were there sidewalks for walking? How “crowded” did it appear? Were there places for children to play or could they only “play” in their locked back yards? Were there dogs and more dogs barking and barking…..running loose in fenced-in front yards?
After assessing all of these neighborhood factors, then we got to the house we were going to look to buy, and only then we started caring about whether the home had matching appliances, etc. Some terrific homes were off the market for us because the neighborhoods are not what we wanted to live in and invest in.
Importantly, we also knew that we could fix up our own home and get those all-important matching appliances (important to some people, but irrelevant to us), but we could NEVER “fix up” a neighborhood. The neighborhood was set. Unchangeable. Except along one dimension: It could be made worse. And they would by those YIYBY (Yes In YOUR Back Yard) people (the same people who if OUR homes becomes worth less are not going to take up a collection to pay us, and our neighbors, to make up the difference).
There are huge differences in neighborhoods, and neighborhoods are key to one’s satisfaction with their home.
Many proposals (at least that we have seen) for “solving” the housing crisis are to build smaller homes, multi-family dwellings. Crowding things, changing the character of the neighborhoods, noisier, more cars, fewer “backyards.”
We’re firmly middle class, not anywhere near rich. We don’t travel to Europe on a whim. Our homes are “it.” They are our worlds and our primary investments. And those homes exist in an atmosphere/neighborhood we chose when buying them. They partially created the financial value of our homes
Trying to change those neighborhoods is going to meet with tons of resistance. And that resistance makes sense, psychologically and financially.
And if people are upset with us, we’d like to ask why? How many YIMBYs live in places where their own neighborhoods actually would be subject to massive changes? Why is this the only solution? We have 6 kids. 3 live in large, expensive cities. 3 live in inexpensive places. They all own homes.
People do not have a constitutional right to live in large cities. There is plenty of inexpensive housing in other places. But you may not be able to have the job you want, but that was a decision you made. YOU chose a profession that exists only in large cities, and then expect the rest of us to accommodate that. You wanted fancy restaurants, coffee shops, entertainment, and expect the rest of us to provide for that.
Quit feeling so entitled. If you are an immigrant, there’s plenty of non-college jobs elsewhere. We know….we live in one of those areas and hire them all of the time, manyof whom can't speak English, and pay them what they are asking......a fine salary, by the way (we're not into exploiting anyone, imagine that?) They’re GREAT! We love them.
And they can afford homes.
My wife and I purchased our first home in 2017 both of us make less than 6 figures which probably means if we lived in a city or a more expensive housing market we couldn’t have purchased a house. In rural America if you even want to think about raising a family with more than one child you have to purchase a home there arnt rental units designed for families. However I’m very glad we purchased in 2017 because the price of the house we bought now compared to the. I’m guessing would have priced us out or made us live outside our budgetary constraints.