Hooray, if you bought a house in 2018, it's now worth 2x! Unfortunately, if you try to liquidate that value, you'll be homeless. Less of a hooray. Oh, and all of the people younger than you have...
Hooray, if you bought a house in 2018, it's now worth 2x!
Unfortunately, if you try to liquidate that value, you'll be homeless. Less of a hooray.
Oh, and all of the people younger than you have been left holding the bag, unable to afford even a starter home.
Anyone interested in buying a bridge? I promise, it'll 2x in value in just 5 years!
The rest of the country really doesn't appreciate this mentality. This is a main part of the reason why things are so expensive in other states now. Tons of New Yorkers, Californians, and...
The rest of the country really doesn't appreciate this mentality. This is a main part of the reason why things are so expensive in other states now. Tons of New Yorkers, Californians, and Floridians moving to our states and paying 2x the price for homes because it's what they're used to.
This mentality isn’t great either — the idea that being born somewhere entitles you to being first in line for a particular region. I live in a popular area and I understand the sentiment but you...
This mentality isn’t great either — the idea that being born somewhere entitles you to being first in line for a particular region.
I live in a popular area and I understand the sentiment but you realize prices are so high in California and elsewhere is because people from all over the country move there?
I don't give a shit if they want to move to my state, that's not the issue. I care that they're inflating the market so heavily by bringing in far more capital than anyone in the area can afford...
I don't give a shit if they want to move to my state, that's not the issue. I care that they're inflating the market so heavily by bringing in far more capital than anyone in the area can afford to match and used it to bid cash offers over asking price on every house in the market which drove up prices insanely fast.
For the area where I grew up, it's basically the equivalent of Americans moving to developing nations in Asia/Indonesia and living like kings because of the difference in the cost of living. A few people may end up being a net positive for everyone. But the more people that end up coming in, the worse it ends up being for the locals; until eventually they're completely priced out of living in the place they were born.
Do you want to know the worst part about this? They can't afford to move AWAY in a lot of these situations. Moving is expensive and is often a last resort for poor people. You can't just up and leave your job and move to an even more cheap area because there's no opportunities for work there (something rich retirees don't have to worry about) and even in insanely rural areas the price of housing has increased heavily. So not only have rich homebuyers come in and destroyed any chance of locals owning a home (often with extreme disgust/prejudice against the very people they're displacing) locals don't even have a chance to continue renting in that area and serving as the serf class for the rich aristocrats coming in, and they can't leave either.
It’s the fundamental issue though — the only way around it is to restrict freedom of movement and you can make the same arguments all the way down to the local level with gentrification. I just...
It’s the fundamental issue though — the only way around it is to restrict freedom of movement and you can make the same arguments all the way down to the local level with gentrification.
I just think it’s a bit rich for people to complain now when people living on the west coast have been dealing with inflated costs of living for the better part of a century from people wanting to move there and now only when some of them want to move back it’s apparently an issue.
Rich people moving to poorer areas will always be a bitter pill for people to swallow. I don't think it's "rich" at all to complain about it. You're fixating on the west coast too which is telling...
Rich people moving to poorer areas will always be a bitter pill for people to swallow. I don't think it's "rich" at all to complain about it. You're fixating on the west coast too which is telling because I never limited my comments to them, I included 3 major parts of the country.
Again, I reiterate that I have nothing against people moving wherever they'd like to, the issue I have is when someone with 10x the net worth of my states average comes in and purchases a home for far over listing price and then brags to all their friends back home "how cheap everything is in X!!!" Obviously there's no realistic solution to fix this issue and I can't really offer one. That doesn't stop it from being frustrating and I have the right to get upset over.
If anything the people who didn't move to the west coast or wherever have the most right to complain about it because they never contributed to the issues of inflated cost of living in those "desirable" areas at all, and now they're feeling the effects of it in their previously "undesirable" homes.
What sucks more about all of this is that many of these people moving into LCoL areas are not actually wealthy even if they’d been getting paid much higher salaries prior, with some having been...
What sucks more about all of this is that many of these people moving into LCoL areas are not actually wealthy even if they’d been getting paid much higher salaries prior, with some having been seeing the majority of their monthly pay going toward rent, food, transportation, etc in the place they came from.
That chance to finally get ahead a little bit is a huge motivator, and in fact many wouldn’t be moving at all if it weren’t for that. This group is not at all like the wealthy property owners in HCoL areas, who could live practically anywhere with zero financial concerns.
All this means is that the delta between what people are getting paid and cost of living is far too slim across the board and is in dire need of fixing. The system is broken. People shouldn’t have to move across the country just to be able to have something left to put into savings.
No disagreement from me on that front, you're 100% right. It won't stop me from being bitter about it though. Im already mad at the system as a whole, it's done nothing but dash my mental health...
No disagreement from me on that front, you're 100% right. It won't stop me from being bitter about it though. Im already mad at the system as a whole, it's done nothing but dash my mental health and financial security against the rocks over and over and over for my entire adult life.
I know I'm jumping around your comments but again, their friends are likely from Greenville, South Carolina or Corvales, Oregon, or Oshgosh, Wisconsin. If they are bragging about it to their...
then brags to all their friends back home
I know I'm jumping around your comments but again, their friends are likely from Greenville, South Carolina or Corvales, Oregon, or Oshgosh, Wisconsin. If they are bragging about it to their friends who live in California, they are rubbing salt into an open wound. We are just as mad about this as you. The next time you meet someone from California, NYC, or Florida ask where they were born. I'd bet money it isn't in one of those places.
I'm sorry but that's just not my personal experience, though it definitely doesn't prove that it's not true. Most of the people I've met from the demographic we're discussing have lived in those...
I'm sorry but that's just not my personal experience, though it definitely doesn't prove that it's not true.
Most of the people I've met from the demographic we're discussing have lived in those wealthier states for the majority of their lives or are even natives. Again this doesn't mean that you aren't right, it just hasn't been my personal experience or the experience of my friends and family.
This is probably because most of these people I've met are retirees (the reason I started this whole discussion in the first place) so it's more likely that they're going to have lived in California, New York, etc for a longer period of time.
I can see that being a thing. I'd also like to call out that people often "change" where they are from if they percieve there is a cache to the other area. I have a friend who did exactly what...
I can see that being a thing. I'd also like to call out that people often "change" where they are from if they percieve there is a cache to the other area. I have a friend who did exactly what we're talking about: Moved from Greenville SC to San Francisco, made his nut, first moved to bend (saying he was from San Francisco), and then back to Charleston SC when he had kids to be close to family (and now claims to be an SC native - which he is - and go on tirades about what a cesspool California is). When we met he told me he was from Nashville because that is where he had been living before SF. I didn't learn he was from South Carolina until I met his mom at his wedding.
Playing devil's advocate, I don't think it's necessarily wrong to identify as being from somewhere if you've lived the majority of your life there. Obviously in this specific situation this guy...
Playing devil's advocate, I don't think it's necessarily wrong to identify as being from somewhere if you've lived the majority of your life there.
Obviously in this specific situation this guy just seems like an asshole who likes to change his story to fit his narrative, but I imagine if you were born in Alabama, then moved to California for 30 years, you're more likely to identify with Californians than other people from Alabama.
Yeah, I suppose that's true. I guess the question is what makes someone "from" somewhere. I'd like to add a caveat you might agree with. If someone moves somewhere for money rather than interest...
Yeah, I suppose that's true. I guess the question is what makes someone "from" somewhere.
I'd like to add a caveat you might agree with. If someone moves somewhere for money rather than interest they are likely to hang out with others who have done the same, so they won't actually absorb much local flavor. Thinking of the folks you're talking about - they move into an area and inflate the prices so only other new transplants can afford it and can quickly change the neighborhood. They don't actually integrate with the local community, they kind of create their own within yours.
Yeah that's an excellent point too, I think its very common with these retirement communities that are popping up all over the place around where I live. They're basically rich person enclaves...
Yeah that's an excellent point too, I think its very common with these retirement communities that are popping up all over the place around where I live. They're basically rich person enclaves where they never have to leave the area if they don't want to. My brother's in-laws are from New York and moved down here over Covid and I've visited her family with him a few times. The people in these neighborhoods are often completely and egregiously dismissive and disdainful of the locals to the point where I overheard one loud grandma shouting to her friend in the lazy river (yes the neighborhood had a lazy river) that she was "surprised how smart her handyman who grew up here was." That memory has been burning a hole in my head ever since.
Ha! Yes so much. I have so many similar memories. I remember sitting in the airport flying home to SF and listening to two women talking about how SF would be nice if they just got rid of all the...
Ha! Yes so much. I have so many similar memories. I remember sitting in the airport flying home to SF and listening to two women talking about how SF would be nice if they just got rid of all the locals and just let tech take over. I'd ask "why do you live here?!?!" but I know why: money.
I totally believe that some people might “change” where they’re from, but it feels… not great and isn’t something I’ve done despite having roots in a heavily stereotyped Appalachian state, which...
I totally believe that some people might “change” where they’re from, but it feels… not great and isn’t something I’ve done despite having roots in a heavily stereotyped Appalachian state, which is something people will judge you for (unconsciously or otherwise).
I grew up there and spent the first twenty years of life there, so even if I’ve been changed dramatically by the places I’ve been since, that’s where I’m still “from”. I don’t think that will really change until I’ve lived somewhere else for an even longer period of time.
Totally, I'm not saying it's wrong to do, it's like code switching and there are lots of reasons to do it. I'm just frustrated when this collective new identity ends up representing my identity...
Totally, I'm not saying it's wrong to do, it's like code switching and there are lots of reasons to do it. I'm just frustrated when this collective new identity ends up representing my identity and behaving in ways which damage it.
Freedom of movement isn't the issue. There are lots of "simple" ways to fix the housing crisis, e.g. by limiting personal wealth or removing the concept of ownership and only lease it instead. Of...
the only way around it is to restrict freedom of movement
Freedom of movement isn't the issue. There are lots of "simple" ways to fix the housing crisis, e.g. by limiting personal wealth or removing the concept of ownership and only lease it instead.
Of course, it's not that simple because, for some reason that is beyond me, civil war would break out if idols like Musk and Bezos were given the social status of mere fellow humans. I'm just saying that freedom of movement has nothing to do with this issue and there are, in theory, other ways to fix it without limiting anyone's freedoms so drastically.
It's because aspiring to become filthy rich is one of the pillars of the collective mindset and is seen as an extension of sorts to the American Dream. People defend the ultra-wealthy because they...
Of course, it's not that simple because, for some reason that is beyond me, civil war would break out if idols like Musk and Bezos were given the social status of mere fellow humans.
It's because aspiring to become filthy rich is one of the pillars of the collective mindset and is seen as an extension of sorts to the American Dream. People defend the ultra-wealthy because they believe that they might be able to join their ranks one day, despite the chances of that ever happening being extremely low. The overall sentiment towards that class isn't, "that shouldn't be possible," it's instead "I want to be them".
Just to pipe in, most of the folks who move to other states from New York or California are not actually from there. They move there, made an oversized bag of money while contributing very little...
Just to pipe in, most of the folks who move to other states from New York or California are not actually from there. They move there, made an oversized bag of money while contributing very little to the local community and then fuck off back to where they were born with their new gains to fuck up their old local economy. I'm sick of hearing that it is "Californians" moving to your states, it isn't, it's people who lived here for 5-10 years and left. They fuck up affordability here too.
Edit: This is anecdotal, but if someone has data that could actually parse between emigration separating "Californians" who were born here and "Californians" who lived here for less than 10 years that would be awesome. My friends who are from here have pretty much stayed, those who moved here in their 20s have all returned to be close to family or buy a McMansion in Bend, Bellingham, or Boulder. The amount of people we had to put up with going on and on about how much they hated San Francisco who lived and worked in the city was ridiculous. I'm pretty over hearing from other states how much they hate what "we're" doing to them.
I grew up in Mountain View before Google. My parents bought our childhood home for $100,000 and it's now worth $4.5 million. Yall fucked up affordability here too. All of your points below to Streblo apply just as strongly here as it does for you.
I don't like the idea of trying to distinguish "real Californians" from everyone else. It's not just outsiders who contribute to rising prices for housing. It's more like everyone in a crowd is...
I don't like the idea of trying to distinguish "real Californians" from everyone else. It's not just outsiders who contribute to rising prices for housing. It's more like everyone in a crowd is making it crowded and everyone in a traffic jam is contributing to traffic. (That is, if you can afford to own a home at all. I will leave renters out of it.)
It's fair to say that, for any crowd, it's mostly other people causing the problem, but we all contribute a little to crowding, and it adds up. The only people not contributing are those who moved away.
I'm sure that's true, but the only thing we have to judge it off of is the Californian (Or New Yorker and Floridian, I keep including these even though other people aren't) license plates on shiny...
I'm sure that's true, but the only thing we have to judge it off of is the Californian (Or New Yorker and Floridian, I keep including these even though other people aren't) license plates on shiny new BMWs and Teslas moving into our neighborhoods.
That and the old fucks from NYC loudly shouting at the grocery store about how nasty everything is down here.
Edit replying to your edit:
At the end of the day you're right, it's not where someone is from that's the issue, it's how irresponsibly they're spending their money and ruining things for those less fortunate than them. That being said humans are pattern seeking monkeys and it's much easier for us to latch on to what we've personally seen and experienced, and for a lot of us it's the examples I've already over-documented in this thread. I know for a fact that most of the people I've met moving into my area from other, wealthier states, are longer term residents from said states, if not natives.
I think we're screaming into the same void for the same reason. Everything your experiencing matches my experience but in reverse, and I grew up in the silicon valley. There is a real hate between...
I think we're screaming into the same void for the same reason. Everything your experiencing matches my experience but in reverse, and I grew up in the silicon valley. There is a real hate between the folks born here and the folks who moved here and created this bubble. We're expected to be grateful that they made our parents houses worth so much money. We're supposed to be grateful that their taxes are putting money into schools or trails, but the truth is we can't afford to live in those areas now anyway. Even our friends who did everything right - who went to Berkeley, became software engineers at FANNG companies, when through IPOs, even they can't afford to move back to where we were raised. And I'm not talking mansions and gardens, I'm talking 4 bedroom ranch homes and strip malls. It's fucked!
So just to mirror this back at you: I know for a fact that most of the people I've met moving into my area from other, less wealthy states, are longer term residents from said states, if not natives. They have now made their nut, fucked up affordability in our communities, and are now taking their ill gotten good back home to fuck things up there.
Yeah, I never meant to invalidate your experiences, I know you're right about everything you are saying. It's just not what I've experienced so it's harder for me to have that empathy and...
Yeah, I never meant to invalidate your experiences, I know you're right about everything you are saying. It's just not what I've experienced so it's harder for me to have that empathy and relatability to it.
We've both seen the same patterns of fucked up economics decimate our local areas, it's just a little more wide spread for the rest of the country.
Thanks and totally, I also want to validate how frustrating your experiences are. I think the culprit is wealth inequality. That you can have folks just roll up with cash and completely upend the...
Thanks and totally, I also want to validate how frustrating your experiences are. I think the culprit is wealth inequality. That you can have folks just roll up with cash and completely upend the area for everyone else.
I still don't entirely how it happened so quickly during Covid. We have the same thing here, houses doubled in price between 2019 and 2022. I don't understand what happened as things were already pretty expensive relative to everywhere else. like a one bed house went from 600k to 1.4 million. Who is paying for that?!?!
I’ve read that a big factor was private equity and companies like Zillow buying up huge numbers of houses, which would make sense because money is no object to those entities, especially where VC...
I’ve read that a big factor was private equity and companies like Zillow buying up huge numbers of houses, which would make sense because money is no object to those entities, especially where VC money is involved.
My impression (which may be false) is that some of these companies were VC-funded, with the VCs having been sold on the potential return on investment.
My impression (which may be false) is that some of these companies were VC-funded, with the VCs having been sold on the potential return on investment.
Private equity is its own type of investment fund - VCs would not invest in another investment fund (what would be the point?) Zillow’s situation was different - they had a brief stint trying to...
Private equity is its own type of investment fund - VCs would not invest in another investment fund (what would be the point?)
Zillow’s situation was different - they had a brief stint trying to be a market maker for houses. In that case the point wasn’t to buy and hold properties but to skim money from the spread.
Thanks for saying that, I hope I didn't come off as too aggressive or dismissive in my earlier comments (something something I didn't have my coffee), its an easy topic for me to get worked up...
Thanks for saying that, I hope I didn't come off as too aggressive or dismissive in my earlier comments (something something I didn't have my coffee), its an easy topic for me to get worked up over and I probably was too aggressive towards where people were from vs the type of people who were doing it.
Yeah, no worries! And not at all, I completely understand the frustration you're feeling and just wanted to add an additional perspective (which is one I get worked up about too!). It's all...
Yeah, no worries! And not at all, I completely understand the frustration you're feeling and just wanted to add an additional perspective (which is one I get worked up about too!). It's all frustrating and I'm also at a loss with what to do.
Just batten down and weather the storm I guess, doesn't seem to be any hope for large scale federal reform and even getting changes to happen at a local or state level seems almost impossible....
Just batten down and weather the storm I guess, doesn't seem to be any hope for large scale federal reform and even getting changes to happen at a local or state level seems almost impossible.
Companies aren't giving out raises to match the price increases (I get 2%~ raises every year, so I've lost probably 30%~ of my salary over the last 5 years) and between utility prices, groceries, insurance, and rent I'm spending quite literally twice the amount of money on absolute essentials than I was in 2019. It's so depressing because my salary would have been considered amazing for where I live even just a few years back, and now I'd need to spend 50% of my net pay for a mortgage to live in a home 2 hours outside of the city.
Prices are quite literally 2-3x what they were in 2019 in most areas of my state. During the height of the market it wasn't uncommon for a house to not even be on the market for a day before it...
Prices are quite literally 2-3x what they were in 2019 in most areas of my state. During the height of the market it wasn't uncommon for a house to not even be on the market for a day before it had a cash offer 30-40% over list price. This lead to list prices increasing at insane rates.
It's not different at all, its the main cause of the housing crisis for the lower class in my area. A "windfall" for whoever was lucky enough to own a home before the insanity happened is not a...
It's not different at all, its the main cause of the housing crisis for the lower class in my area.
A "windfall" for whoever was lucky enough to own a home before the insanity happened is not a benefit for people who were stuck renting because they had to scrimp and save to afford a home before. This ensured they will never, ever be able to buy a house within 2 hours of their city. They can't even afford to rent anymore.
Before the interest rate hike some markets were extremely hot. Where I now live, it was common for prospective buyers to have to not only bid $100k+ in cash over asking, but also waive inspections...
Before the interest rate hike some markets were extremely hot.
Where I now live, it was common for prospective buyers to have to not only bid $100k+ in cash over asking, but also waive inspections to even be considered by the seller. Absolutely insane, and this market was considerably cooler than many others across the other parts of the US.
I managed to luck out and find a home that didn’t get much interest due to poorly staged photos and was the only bidder, allowing me to squeak by at a bit below asking price with my FHA loan, but my situation was rare.
If it's any consolation, I was 32 before I was barely able to scrape together enough for a down payment to buy a house with an FHA loan in 2016 in a really bad school district. We then were able...
If it's any consolation, I was 32 before I was barely able to scrape together enough for a down payment to buy a house with an FHA loan in 2016 in a really bad school district. We then were able to step up during the housing bonkerness, but I can promise you that 'old broke-ass home in a good school district' is still pretty much peak ability for the foreseeable future. Maybe when my parents kick the bucket in 25 years it'll trickle down to Alpha.
Similarly, at 32 I was able to scrape together ether a minimal (5% I believe) down payment for an FHA loan to buy a house, but it was back during the pandemic in 2021 not too long before interest...
Similarly, at 32 I was able to scrape together ether a minimal (5% I believe) down payment for an FHA loan to buy a house, but it was back during the pandemic in 2021 not too long before interest rates took a hike. It was a bit of a stretch and required debt consolidation via a personal loan just to reduce my monthly payments for a while to help to accrue that cash, cashing out what little I had in the stock market, etc. I just barely made it before the lease on my apartment expired.
Thankfully in my situation school district doesn’t matter (no kids, at least for now) which helped, but a key enabler in my case was remote work, with my company going full remote, which opened up properties in places with lower housing prices. Had I been required to return to office I would still be renting in an HCoL area now.
I wish this opportunity had arisen in 2016-2018 but one takes what they can get.
3.5% actually. I know because I did the same thing in 2020. And their interest rates are usually a little more forgiving for younger people without much credit history. The main catch is that you...
minimal (5% I believe) down payment for an FHA loan
3.5% actually. I know because I did the same thing in 2020. And their interest rates are usually a little more forgiving for younger people without much credit history. The main catch is that you are forced to pay a mortgage insurance premium for the life of the loan. On a conventional loan (i.e. regular mortgage) you might still be forced to pay for mortgage insurance if you put down less than 20%, but then when you hit 20% equity in the house, that mortgage insurance goes away. On an FHA loan, once you hit that 20% equity, you still have to pay the mortgage insurance unless you refinance into another type of loan (because then you'll essentially be 'putting in' more than 20% on that new loan, hence no mortgage insurance).
I went and looked up it up and yeah you’re right, the down payment was 3.5%. Crazy to think that even pulling together 3.5% of the purchase price was a challenge! And yeah the PMI isn’t great, but...
I went and looked up it up and yeah you’re right, the down payment was 3.5%. Crazy to think that even pulling together 3.5% of the purchase price was a challenge!
And yeah the PMI isn’t great, but even factoring that in the deal is still a lot better than what’s possible with current interest rates. I’m glad I moved when I did, but hope I interest rates come back down soon so other people have a chance… if I were buying today on the same budget as I was back then, I’d have to settle for a house in considerably worse condition further out from a major metro. Elevated interest really stings.
Well to be fair, 3.5% of $300,000 is still $10,500. Add in closing costs and most people don't have ~10-20k in cash laying around to buy a basic house. And then factor in that insurance rates are...
Well to be fair, 3.5% of $300,000 is still $10,500. Add in closing costs and most people don't have ~10-20k in cash laying around to buy a basic house. And then factor in that insurance rates are pretty high right now. Oh and home insurance rates (in some states) are through the roof thanks to all these powerful hurricanes and fires that keep getting stronger and more frequent for some totally unknown reason...
As others have mentioned, those that bought a house 5-10 years ago really lucked out. And those that bought 50-100 years ago REALLY lucked out. For everyone else, the collective response from banks and governments has been "that's rough, buddy".
While I won't deny the timing of that window worked out, I consider it a "I'm sorry" from the economy getting utterly tanked in 2007. A lot of us were just getting our start in life (much how I...
While I won't deny the timing of that window worked out, I consider it a "I'm sorry" from the economy getting utterly tanked in 2007. A lot of us were just getting our start in life (much how I feel for you youngsters who are getting their starts now).
Yep, had to gather some extra for those things, but was able to reduce that amount by negotiating the house price down to compensate for the water heater and furnace being old and not having much...
Yep, had to gather some extra for those things, but was able to reduce that amount by negotiating the house price down to compensate for the water heater and furnace being old and not having much useful lifespan left.
[H]ome equity seems to have emerged as the wealth-creation hero. The eldest millennials — now in their early 40s, old enough to sue for age discrimination — boast about twice the median home equity a Gen Xer did at that age. They also enjoy a substantial lead over boomers.
...
And millennials were perfectly positioned to maximize their benefit. Many had only recently entered the housing market; suddenly, the biggest financial bet of their lives had paid off with unprecedented speed. They’d leveraged their 5 or 15 percent down payment into a claim on record appreciation of their home’s entire value.
But all flavors of assets aren’t created equal. The wealth created by rising home prices exists mostly on paper and is very hard to tap — which means it may not translate to a higher standard of living, said Jeremy Horpedahl, a University of Central Arkansas economist who closely tracks millennials’ fortunes.
...
Then there’s the harsh reality — as we’ve previously established — that many millennials have been entirely shut out of the housing market. That often leaves them renting. And the net worth of the typical American renter is just $10,400, a number that more or less vanishes when charted alongside the $396,500 in net worth claimed by the typical American homeowner.
...
[F]olks living with their parents or roommates aren’t counted in this data, at least not the same way as those who have gone off on their own.
Due to the difficulties of disentangling a family’s holdings, the Fed combines the wealth of “financially interdependent” household units and effectively assigns it the demographics of the head of household (or more accurately, what the Fed calls the “economically dominant single individual or couple” in the home’s “primary economic unit”).
So, when we say millennials have record wealth for their age, we’re really saying millennials who have become financially independent are doing well for their age.
If we could correct for this, millennials wouldn’t look so hot after all — financially, at least.
...
It sounds an awful lot like survivorship bias [...]
I'm quite sure this is not the general experience (at least in Canada). On a single salary as an engineer, housing is basically out of reach in any of the cities I would want to live in. Until my...
I'm quite sure this is not the general experience (at least in Canada).
On a single salary as an engineer, housing is basically out of reach in any of the cities I would want to live in. Until my wife is allowed to work in Canada (or more of my relatives die), we will be renting with little savings for the foreseeable future.
I'm curious how much bitcoin has contributed to this. I know a decent number of people who did very well for themselves (on the upper end, pretty much printing money) through cryptocurrency over...
I'm curious how much bitcoin has contributed to this. I know a decent number of people who did very well for themselves (on the upper end, pretty much printing money) through cryptocurrency over the years.
About as much as being a day trader, youtuber, or star actor I'd imagine. Probably less. Like any gold rush there are going to be winners. Their key metric is home equity. Yeah, anyone who bought...
About as much as being a day trader, youtuber, or star actor I'd imagine. Probably less. Like any gold rush there are going to be winners.
Their key metric is home equity. Yeah, anyone who bought a house before ~2019/2020 has seen the value skyrocket. They touch on it a bit but that's not easy to see real benefit from, and it's hardly the norm.
It's like pointing out that average wages are up because Bezos is making more money. It's true, but the median is probably more meaningful.
But they do use the median here. And for overall net worth, not just home equity. So it is literally that at least half of millennials are worth more, adjusted for inflation, at this point in...
But they do use the median here. And for overall net worth, not just home equity. So it is literally that at least half of millennials are worth more, adjusted for inflation, at this point in their lives over the two generations preceding them. "Hardly the norm" is false.
But the article also mentions that the gap in wealth between those that own homes and those that do not has grown 70% in the last 33 years and that is incredibly concerning.
I know a couple of guys that did well there. One made at least half a million. The other much less but still a good chunk of money. Both took off work for over a year in their 30s.
I know a couple of guys that did well there. One made at least half a million. The other much less but still a good chunk of money. Both took off work for over a year in their 30s.
Yeah, they also don't talk about people who did well by working in tech or investing in the stock market. Some tech stocks went up a lot over a similar time period.
Yeah, they also don't talk about people who did well by working in tech or investing in the stock market. Some tech stocks went up a lot over a similar time period.
I found out about bitcoin in like 2011, but my machine wasn't powerful enough to mine anything of consequence. I had considered building a tower to mine with, but couldn't justify the few hundred...
I found out about bitcoin in like 2011, but my machine wasn't powerful enough to mine anything of consequence. I had considered building a tower to mine with, but couldn't justify the few hundred dollars that'd costed at the time. If only I'd known where the value of those coins would be at now…
Hooray, if you bought a house in 2018, it's now worth 2x!
Unfortunately, if you try to liquidate that value, you'll be homeless. Less of a hooray.
Oh, and all of the people younger than you have been left holding the bag, unable to afford even a starter home.
Anyone interested in buying a bridge? I promise, it'll 2x in value in just 5 years!
For California at least, I see it as retirement savings. The way to cash out will be to move somewhere cheaper for retirement.
The rest of the country really doesn't appreciate this mentality. This is a main part of the reason why things are so expensive in other states now. Tons of New Yorkers, Californians, and Floridians moving to our states and paying 2x the price for homes because it's what they're used to.
This mentality isn’t great either — the idea that being born somewhere entitles you to being first in line for a particular region.
I live in a popular area and I understand the sentiment but you realize prices are so high in California and elsewhere is because people from all over the country move there?
I don't give a shit if they want to move to my state, that's not the issue. I care that they're inflating the market so heavily by bringing in far more capital than anyone in the area can afford to match and used it to bid cash offers over asking price on every house in the market which drove up prices insanely fast.
For the area where I grew up, it's basically the equivalent of Americans moving to developing nations in Asia/Indonesia and living like kings because of the difference in the cost of living. A few people may end up being a net positive for everyone. But the more people that end up coming in, the worse it ends up being for the locals; until eventually they're completely priced out of living in the place they were born.
Do you want to know the worst part about this? They can't afford to move AWAY in a lot of these situations. Moving is expensive and is often a last resort for poor people. You can't just up and leave your job and move to an even more cheap area because there's no opportunities for work there (something rich retirees don't have to worry about) and even in insanely rural areas the price of housing has increased heavily. So not only have rich homebuyers come in and destroyed any chance of locals owning a home (often with extreme disgust/prejudice against the very people they're displacing) locals don't even have a chance to continue renting in that area and serving as the serf class for the rich aristocrats coming in, and they can't leave either.
It’s the fundamental issue though — the only way around it is to restrict freedom of movement and you can make the same arguments all the way down to the local level with gentrification.
I just think it’s a bit rich for people to complain now when people living on the west coast have been dealing with inflated costs of living for the better part of a century from people wanting to move there and now only when some of them want to move back it’s apparently an issue.
Rich people moving to poorer areas will always be a bitter pill for people to swallow. I don't think it's "rich" at all to complain about it. You're fixating on the west coast too which is telling because I never limited my comments to them, I included 3 major parts of the country.
Again, I reiterate that I have nothing against people moving wherever they'd like to, the issue I have is when someone with 10x the net worth of my states average comes in and purchases a home for far over listing price and then brags to all their friends back home "how cheap everything is in X!!!" Obviously there's no realistic solution to fix this issue and I can't really offer one. That doesn't stop it from being frustrating and I have the right to get upset over.
If anything the people who didn't move to the west coast or wherever have the most right to complain about it because they never contributed to the issues of inflated cost of living in those "desirable" areas at all, and now they're feeling the effects of it in their previously "undesirable" homes.
What sucks more about all of this is that many of these people moving into LCoL areas are not actually wealthy even if they’d been getting paid much higher salaries prior, with some having been seeing the majority of their monthly pay going toward rent, food, transportation, etc in the place they came from.
That chance to finally get ahead a little bit is a huge motivator, and in fact many wouldn’t be moving at all if it weren’t for that. This group is not at all like the wealthy property owners in HCoL areas, who could live practically anywhere with zero financial concerns.
All this means is that the delta between what people are getting paid and cost of living is far too slim across the board and is in dire need of fixing. The system is broken. People shouldn’t have to move across the country just to be able to have something left to put into savings.
No disagreement from me on that front, you're 100% right. It won't stop me from being bitter about it though. Im already mad at the system as a whole, it's done nothing but dash my mental health and financial security against the rocks over and over and over for my entire adult life.
I know I'm jumping around your comments but again, their friends are likely from Greenville, South Carolina or Corvales, Oregon, or Oshgosh, Wisconsin. If they are bragging about it to their friends who live in California, they are rubbing salt into an open wound. We are just as mad about this as you. The next time you meet someone from California, NYC, or Florida ask where they were born. I'd bet money it isn't in one of those places.
I'm sorry but that's just not my personal experience, though it definitely doesn't prove that it's not true.
Most of the people I've met from the demographic we're discussing have lived in those wealthier states for the majority of their lives or are even natives. Again this doesn't mean that you aren't right, it just hasn't been my personal experience or the experience of my friends and family.
This is probably because most of these people I've met are retirees (the reason I started this whole discussion in the first place) so it's more likely that they're going to have lived in California, New York, etc for a longer period of time.
I can see that being a thing. I'd also like to call out that people often "change" where they are from if they percieve there is a cache to the other area. I have a friend who did exactly what we're talking about: Moved from Greenville SC to San Francisco, made his nut, first moved to bend (saying he was from San Francisco), and then back to Charleston SC when he had kids to be close to family (and now claims to be an SC native - which he is - and go on tirades about what a cesspool California is). When we met he told me he was from Nashville because that is where he had been living before SF. I didn't learn he was from South Carolina until I met his mom at his wedding.
Playing devil's advocate, I don't think it's necessarily wrong to identify as being from somewhere if you've lived the majority of your life there.
Obviously in this specific situation this guy just seems like an asshole who likes to change his story to fit his narrative, but I imagine if you were born in Alabama, then moved to California for 30 years, you're more likely to identify with Californians than other people from Alabama.
Yeah, I suppose that's true. I guess the question is what makes someone "from" somewhere.
I'd like to add a caveat you might agree with. If someone moves somewhere for money rather than interest they are likely to hang out with others who have done the same, so they won't actually absorb much local flavor. Thinking of the folks you're talking about - they move into an area and inflate the prices so only other new transplants can afford it and can quickly change the neighborhood. They don't actually integrate with the local community, they kind of create their own within yours.
Yeah that's an excellent point too, I think its very common with these retirement communities that are popping up all over the place around where I live. They're basically rich person enclaves where they never have to leave the area if they don't want to. My brother's in-laws are from New York and moved down here over Covid and I've visited her family with him a few times. The people in these neighborhoods are often completely and egregiously dismissive and disdainful of the locals to the point where I overheard one loud grandma shouting to her friend in the lazy river (yes the neighborhood had a lazy river) that she was "surprised how smart her handyman who grew up here was." That memory has been burning a hole in my head ever since.
Ha! Yes so much. I have so many similar memories. I remember sitting in the airport flying home to SF and listening to two women talking about how SF would be nice if they just got rid of all the locals and just let tech take over. I'd ask "why do you live here?!?!" but I know why: money.
I totally believe that some people might “change” where they’re from, but it feels… not great and isn’t something I’ve done despite having roots in a heavily stereotyped Appalachian state, which is something people will judge you for (unconsciously or otherwise).
I grew up there and spent the first twenty years of life there, so even if I’ve been changed dramatically by the places I’ve been since, that’s where I’m still “from”. I don’t think that will really change until I’ve lived somewhere else for an even longer period of time.
Totally, I'm not saying it's wrong to do, it's like code switching and there are lots of reasons to do it. I'm just frustrated when this collective new identity ends up representing my identity and behaving in ways which damage it.
Freedom of movement isn't the issue. There are lots of "simple" ways to fix the housing crisis, e.g. by limiting personal wealth or removing the concept of ownership and only lease it instead.
Of course, it's not that simple because, for some reason that is beyond me, civil war would break out if idols like Musk and Bezos were given the social status of mere fellow humans. I'm just saying that freedom of movement has nothing to do with this issue and there are, in theory, other ways to fix it without limiting anyone's freedoms so drastically.
It's because aspiring to become filthy rich is one of the pillars of the collective mindset and is seen as an extension of sorts to the American Dream. People defend the ultra-wealthy because they believe that they might be able to join their ranks one day, despite the chances of that ever happening being extremely low. The overall sentiment towards that class isn't, "that shouldn't be possible," it's instead "I want to be them".
The people complaining were those who stayed when all those others moved west and inflated costs there.
Just to pipe in, most of the folks who move to other states from New York or California are not actually from there. They move there, made an oversized bag of money while contributing very little to the local community and then fuck off back to where they were born with their new gains to fuck up their old local economy. I'm sick of hearing that it is "Californians" moving to your states, it isn't, it's people who lived here for 5-10 years and left. They fuck up affordability here too.
Edit: This is anecdotal, but if someone has data that could actually parse between emigration separating "Californians" who were born here and "Californians" who lived here for less than 10 years that would be awesome. My friends who are from here have pretty much stayed, those who moved here in their 20s have all returned to be close to family or buy a McMansion in Bend, Bellingham, or Boulder. The amount of people we had to put up with going on and on about how much they hated San Francisco who lived and worked in the city was ridiculous. I'm pretty over hearing from other states how much they hate what "we're" doing to them.
I grew up in Mountain View before Google. My parents bought our childhood home for $100,000 and it's now worth $4.5 million. Yall fucked up affordability here too. All of your points below to Streblo apply just as strongly here as it does for you.
I don't like the idea of trying to distinguish "real Californians" from everyone else. It's not just outsiders who contribute to rising prices for housing. It's more like everyone in a crowd is making it crowded and everyone in a traffic jam is contributing to traffic. (That is, if you can afford to own a home at all. I will leave renters out of it.)
It's fair to say that, for any crowd, it's mostly other people causing the problem, but we all contribute a little to crowding, and it adds up. The only people not contributing are those who moved away.
I'm sure that's true, but the only thing we have to judge it off of is the Californian (Or New Yorker and Floridian, I keep including these even though other people aren't) license plates on shiny new BMWs and Teslas moving into our neighborhoods.
That and the old fucks from NYC loudly shouting at the grocery store about how nasty everything is down here.
Edit replying to your edit:
At the end of the day you're right, it's not where someone is from that's the issue, it's how irresponsibly they're spending their money and ruining things for those less fortunate than them. That being said humans are pattern seeking monkeys and it's much easier for us to latch on to what we've personally seen and experienced, and for a lot of us it's the examples I've already over-documented in this thread. I know for a fact that most of the people I've met moving into my area from other, wealthier states, are longer term residents from said states, if not natives.
I think we're screaming into the same void for the same reason. Everything your experiencing matches my experience but in reverse, and I grew up in the silicon valley. There is a real hate between the folks born here and the folks who moved here and created this bubble. We're expected to be grateful that they made our parents houses worth so much money. We're supposed to be grateful that their taxes are putting money into schools or trails, but the truth is we can't afford to live in those areas now anyway. Even our friends who did everything right - who went to Berkeley, became software engineers at FANNG companies, when through IPOs, even they can't afford to move back to where we were raised. And I'm not talking mansions and gardens, I'm talking 4 bedroom ranch homes and strip malls. It's fucked!
So just to mirror this back at you: I know for a fact that most of the people I've met moving into my area from other, less wealthy states, are longer term residents from said states, if not natives. They have now made their nut, fucked up affordability in our communities, and are now taking their ill gotten good back home to fuck things up there.
Yeah, I never meant to invalidate your experiences, I know you're right about everything you are saying. It's just not what I've experienced so it's harder for me to have that empathy and relatability to it.
We've both seen the same patterns of fucked up economics decimate our local areas, it's just a little more wide spread for the rest of the country.
Thanks and totally, I also want to validate how frustrating your experiences are. I think the culprit is wealth inequality. That you can have folks just roll up with cash and completely upend the area for everyone else.
I still don't entirely how it happened so quickly during Covid. We have the same thing here, houses doubled in price between 2019 and 2022. I don't understand what happened as things were already pretty expensive relative to everywhere else. like a one bed house went from 600k to 1.4 million. Who is paying for that?!?!
I’ve read that a big factor was private equity and companies like Zillow buying up huge numbers of houses, which would make sense because money is no object to those entities, especially where VC money is involved.
Why would there be any VC money involved in either of those two situations?
My impression (which may be false) is that some of these companies were VC-funded, with the VCs having been sold on the potential return on investment.
Private equity is its own type of investment fund - VCs would not invest in another investment fund (what would be the point?)
Zillow’s situation was different - they had a brief stint trying to be a market maker for houses. In that case the point wasn’t to buy and hold properties but to skim money from the spread.
Thanks for the correction!
Thanks for saying that, I hope I didn't come off as too aggressive or dismissive in my earlier comments (something something I didn't have my coffee), its an easy topic for me to get worked up over and I probably was too aggressive towards where people were from vs the type of people who were doing it.
Yeah, no worries! And not at all, I completely understand the frustration you're feeling and just wanted to add an additional perspective (which is one I get worked up about too!). It's all frustrating and I'm also at a loss with what to do.
Just batten down and weather the storm I guess, doesn't seem to be any hope for large scale federal reform and even getting changes to happen at a local or state level seems almost impossible.
Companies aren't giving out raises to match the price increases (I get 2%~ raises every year, so I've lost probably 30%~ of my salary over the last 5 years) and between utility prices, groceries, insurance, and rent I'm spending quite literally twice the amount of money on absolute essentials than I was in 2019. It's so depressing because my salary would have been considered amazing for where I live even just a few years back, and now I'd need to spend 50% of my net pay for a mortgage to live in a home 2 hours outside of the city.
Someone is bidding double the asking price? That seems bizarre if true.
Prices are quite literally 2-3x what they were in 2019 in most areas of my state. During the height of the market it wasn't uncommon for a house to not even be on the market for a day before it had a cash offer 30-40% over list price. This lead to list prices increasing at insane rates.
That’s different, though it amounts to the same thing in the end.
It’s also quite a windfall for whoever is selling.
It's not different at all, its the main cause of the housing crisis for the lower class in my area.
A "windfall" for whoever was lucky enough to own a home before the insanity happened is not a benefit for people who were stuck renting because they had to scrimp and save to afford a home before. This ensured they will never, ever be able to buy a house within 2 hours of their city. They can't even afford to rent anymore.
Before the interest rate hike some markets were extremely hot.
Where I now live, it was common for prospective buyers to have to not only bid $100k+ in cash over asking, but also waive inspections to even be considered by the seller. Absolutely insane, and this market was considerably cooler than many others across the other parts of the US.
I managed to luck out and find a home that didn’t get much interest due to poorly staged photos and was the only bidder, allowing me to squeak by at a bit below asking price with my FHA loan, but my situation was rare.
If it's any consolation, I was 32 before I was barely able to scrape together enough for a down payment to buy a house with an FHA loan in 2016 in a really bad school district. We then were able to step up during the housing bonkerness, but I can promise you that 'old broke-ass home in a good school district' is still pretty much peak ability for the foreseeable future. Maybe when my parents kick the bucket in 25 years it'll trickle down to Alpha.
Similarly, at 32 I was able to scrape together ether a minimal (5% I believe) down payment for an FHA loan to buy a house, but it was back during the pandemic in 2021 not too long before interest rates took a hike. It was a bit of a stretch and required debt consolidation via a personal loan just to reduce my monthly payments for a while to help to accrue that cash, cashing out what little I had in the stock market, etc. I just barely made it before the lease on my apartment expired.
Thankfully in my situation school district doesn’t matter (no kids, at least for now) which helped, but a key enabler in my case was remote work, with my company going full remote, which opened up properties in places with lower housing prices. Had I been required to return to office I would still be renting in an HCoL area now.
I wish this opportunity had arisen in 2016-2018 but one takes what they can get.
3.5% actually. I know because I did the same thing in 2020. And their interest rates are usually a little more forgiving for younger people without much credit history. The main catch is that you are forced to pay a mortgage insurance premium for the life of the loan. On a conventional loan (i.e. regular mortgage) you might still be forced to pay for mortgage insurance if you put down less than 20%, but then when you hit 20% equity in the house, that mortgage insurance goes away. On an FHA loan, once you hit that 20% equity, you still have to pay the mortgage insurance unless you refinance into another type of loan (because then you'll essentially be 'putting in' more than 20% on that new loan, hence no mortgage insurance).
I went and looked up it up and yeah you’re right, the down payment was 3.5%. Crazy to think that even pulling together 3.5% of the purchase price was a challenge!
And yeah the PMI isn’t great, but even factoring that in the deal is still a lot better than what’s possible with current interest rates. I’m glad I moved when I did, but hope I interest rates come back down soon so other people have a chance… if I were buying today on the same budget as I was back then, I’d have to settle for a house in considerably worse condition further out from a major metro. Elevated interest really stings.
Well to be fair, 3.5% of $300,000 is still $10,500. Add in closing costs and most people don't have ~10-20k in cash laying around to buy a basic house. And then factor in that insurance rates are pretty high right now. Oh and home insurance rates (in some states) are through the roof thanks to all these powerful hurricanes and fires that keep getting stronger and more frequent for some totally unknown reason...
As others have mentioned, those that bought a house 5-10 years ago really lucked out. And those that bought 50-100 years ago REALLY lucked out. For everyone else, the collective response from banks and governments has been "that's rough, buddy".
While I won't deny the timing of that window worked out, I consider it a "I'm sorry" from the economy getting utterly tanked in 2007. A lot of us were just getting our start in life (much how I feel for you youngsters who are getting their starts now).
You also need to make sure you have a few thousand in cash for out of pocket expenses, like home inspections and initial repairs/improvements.
Yep, had to gather some extra for those things, but was able to reduce that amount by negotiating the house price down to compensate for the water heater and furnace being old and not having much useful lifespan left.
Nowadays with these high interest rates that'll almost assurdly be mandatory in 4-6 years.
Luckily refinancing is a relatively painless process.
From the article:
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I'm quite sure this is not the general experience (at least in Canada).
On a single salary as an engineer, housing is basically out of reach in any of the cities I would want to live in. Until my wife is allowed to work in Canada (or more of my relatives die), we will be renting with little savings for the foreseeable future.
I'm curious how much bitcoin has contributed to this. I know a decent number of people who did very well for themselves (on the upper end, pretty much printing money) through cryptocurrency over the years.
About as much as being a day trader, youtuber, or star actor I'd imagine. Probably less. Like any gold rush there are going to be winners.
Their key metric is home equity. Yeah, anyone who bought a house before ~2019/2020 has seen the value skyrocket. They touch on it a bit but that's not easy to see real benefit from, and it's hardly the norm.
It's like pointing out that average wages are up because Bezos is making more money. It's true, but the median is probably more meaningful.
But they do use the median here. And for overall net worth, not just home equity. So it is literally that at least half of millennials are worth more, adjusted for inflation, at this point in their lives over the two generations preceding them. "Hardly the norm" is false.
But the article also mentions that the gap in wealth between those that own homes and those that do not has grown 70% in the last 33 years and that is incredibly concerning.
I know a couple of guys that did well there. One made at least half a million. The other much less but still a good chunk of money. Both took off work for over a year in their 30s.
Yeah, they also don't talk about people who did well by working in tech or investing in the stock market. Some tech stocks went up a lot over a similar time period.
Really wish I had had the wealth to invest at a younger age. I still don't have the wealth to do so, but I wish I did!
I found out about bitcoin in like 2011, but my machine wasn't powerful enough to mine anything of consequence. I had considered building a tower to mine with, but couldn't justify the few hundred dollars that'd costed at the time. If only I'd known where the value of those coins would be at now…
Mirror: https://archive.is/xLE6P