<story><title>Maybe treating housing as an investment was a mistake</title><url>https://goodreason.substack.com/p/maybe-treating-housing-as-an-investment</url></story><parent_chain><item><author>bityard</author><text>I don&amp;#x27;t mean to be blunt, but if modest homes in your area are $1m, then you are in a VERY high-cost-of-living area and what you see here is not at all typical of the rest of the country. Where I live, a charming 1200sqft starter home in a blue collar neighborhood goes for $150-$200k.</text></item><item><author>angarg12</author><text>I&amp;#x27;m a new immigrant to the US, and housing is my single biggest worry together with my work visa.&lt;p&gt;Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder.&lt;p&gt;Even old, basic houses in our suburbs outside town go for ~$1M. I spend an inordinate amount of mental energy calculating how we can jump into the property ladder as quickly and safely as possible. My current plan involves saving for a few years and dump a good chunk of cash into a down payment; it doesn&amp;#x27;t seem we could ever afford a property otherwise.&lt;p&gt;I wonder how property prices affect &amp;quot;the american dream&amp;quot;. It&amp;#x27;s baffling to me that I&amp;#x27;m so worried about housing while making a top ~5% income.</text></item><item><author>photon12</author><text>&amp;gt; Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall.&lt;p&gt;I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren&amp;#x27;t familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate mortgage and my prices are set for the next 30 years. I probably work half as hard as he does, if not even less than half. I have a lot of cognitive dissonance associated with that.</text></item></parent_chain><comment><author>krferriter</author><text>A lot of jobs are in high cost of living areas. The reason they&amp;#x27;re high cost of living is because there are jobs there, the demand to live there is high, and they haven&amp;#x27;t built nearly enough housing. Some bay area municipalities have essentially not added any housing in the last 50 years. They  made it illegal, because incumbent property owners don&amp;#x27;t want more people to be allowed to live there.&lt;p&gt;And it&amp;#x27;s not just the bay area. The populations of Cambridge and Boston have gone &lt;i&gt;down&lt;/i&gt; since 1950, because a series of laws were passed that put tight restrictions on residential construction that reduced the allowed density and effectively made almost all of the existing housing stock illegal (but it was grandfathered in) and anything more dense than that, like even building a 5 story residential building in a lot zoned for 4 stories, when that lot is surrounded by 4 and 5 story buildings, is an expensive, long process of arguing with the zoning board and going through arbitrarily subjective design review processes.</text></comment>
<story><title>Maybe treating housing as an investment was a mistake</title><url>https://goodreason.substack.com/p/maybe-treating-housing-as-an-investment</url></story><parent_chain><item><author>bityard</author><text>I don&amp;#x27;t mean to be blunt, but if modest homes in your area are $1m, then you are in a VERY high-cost-of-living area and what you see here is not at all typical of the rest of the country. Where I live, a charming 1200sqft starter home in a blue collar neighborhood goes for $150-$200k.</text></item><item><author>angarg12</author><text>I&amp;#x27;m a new immigrant to the US, and housing is my single biggest worry together with my work visa.&lt;p&gt;Our household income is north of 300k, but housing still seems unaffordable. It might sound like whining, but we only achieve this level of income recently, so our lifelong savings are in the low 6 figures. We got no assets or property abroad, and no family that can help us to get in the property ladder.&lt;p&gt;Even old, basic houses in our suburbs outside town go for ~$1M. I spend an inordinate amount of mental energy calculating how we can jump into the property ladder as quickly and safely as possible. My current plan involves saving for a few years and dump a good chunk of cash into a down payment; it doesn&amp;#x27;t seem we could ever afford a property otherwise.&lt;p&gt;I wonder how property prices affect &amp;quot;the american dream&amp;quot;. It&amp;#x27;s baffling to me that I&amp;#x27;m so worried about housing while making a top ~5% income.</text></item><item><author>photon12</author><text>&amp;gt; Meanwhile, renters are desperate. They’re begging for housing prices not just to slow, but to fall.&lt;p&gt;I have a friend who is a head chef at a decently popular bar and restaurant on Broadway in Capitol Hill, Seattle (very trendy part of town if you aren&amp;#x27;t familiar, steep commercial rent). He lives in a 400 sq ft studio and is barely, barely making it from one paycheck to the next. I am sitting on a 2.6% interest rate mortgage and my prices are set for the next 30 years. I probably work half as hard as he does, if not even less than half. I have a lot of cognitive dissonance associated with that.</text></item></parent_chain><comment><author>petsfed</author><text>Great, if only there were adequate jobs in those places, so we could all own homes without needing $300K annual family income.&lt;p&gt;The dissonance comes from the fact that a lot of hackernews readers make apparently high incomes, but the cost of living in their areas keeps them squarely working class.&lt;p&gt;The best example I can give is in the Bay Area. I lucked out with $2850&amp;#x2F;month to rent a 1400 square foot house in San Leandro. Except that I worked in South San Francisco, and my commute was 45 minutes to 90 minutes each way, every day. I looked into it, even did the math with average commute times and Health and Human Services housing cost data, and found that if I wanted to cut 15 minutes off of that commute would cost me an extra $1000 a month, or I&amp;#x27;d lose the yard and the other bedroom. With a kid, a stay-at-home spouse (a lot cheaper than child care given wages for my wife&amp;#x27;s field in the bay area) and a dog, that was just a non-starter. I knew people who drove in from Vacaville or Tracey, every day, just to keep the housing prices within their means.&lt;p&gt;Prior to that experience, I honestly thought $140K a year was the best I could ever hope for. I was top 15% of individual wage earners in the country but I was considerably more stressed out than when I was making minimum wage at an office supply store in suburban Oregon.</text></comment>