I'm kind of surprised the article didn't mention the role of dual-income households. For generations, a single income was the norm and generally able to provide a better quality of life (by standards like home size, discretionary spending, etc...) than your parents' generation.
Over time, two incomes went from providing far more than a family needed to being a practical necessity in many markets. I can't imagine buying the type of home I'd like to live in on even my relatively high (by national standards) Bay Area salary alone, and yet many families still choose to live here.
Once a family relies on two incomes just to pay the rent, it becomes harder to pick up and move to a different part of the country unless both partners can do it at the same time. Even intra-county moves are more difficult when two partners are working full-time and don't want to deal with the stresses of moving on top of their regular jobs.
Maybe the pendulum will swing back as a result of changing expectations (about where to live, how much home to buy, what kind of job you need to have), or maybe remote work will save us all and let us move out of the expensive areas where our jobs are. But for now, I think the rise of the dual-income household is among the biggest factors keeping us in place.
bko 1589 days ago [-]
> I'm kind of surprised the article didn't mention the role of dual-income households
The number of single/no earner households has actually increased since 1980.
If you look at Table H-12. Household by Number of Earners by Median and Mean Income [0], you'll see in 1980 the percentage of households that have 2+ earners was ~44%, and now its ~40% and has steadily decreased over that time.
This is an interesting point and worth looking in to more. Thanks for making it a Google sheet (I don't have Excel.)
I'm no demographer, but my intuition is that the shift from 44% to 40% is not likely due to an increase in single-income households that are also buying homes. I think over the last 30 years that number would get squeezed a bit on both ends:
* Boomers are retiring causing some dual-income households to become 0-income households. Indeed, the proportion of 0-income households has gone up about 4% over the same period.
* Millenials are marrying later, causing them to be reported as "single income households" far later in life than in previous generations. For instance, I'm still single at an age when my father owned a home and had 3 kids (on a single income). As mentioned previously, I'm in no position to buy a home right now.
While I constitute a "household" under the census designation, my original comment was more referring to a traditional marriage or domestic partnership that would be in the market to buy a home. If we could normalize the data to such couples (say working-age partners in a relationship) I think we'd see the trend of dual-income households that matches my anecdotal observations.
sturgill 1589 days ago [-]
I saw this play out several times when I lived in NYC. Many friends would hit that point where kids were now a consideration and one of the partner’s was ready to transition to a new job. They’d talk about moving, and usually the spouse in a transition phase was ready to go elsewhere. But rarely were both spouses ready to go at the same time.
This isn’t a normative statement, but two income families are inherently less mobile (absent one spouse working remotely). It’s a world of trade offs...
mdorazio 1589 days ago [-]
On top of this, once you're reliant on two incomes to pay the bills and you want to have kids, you're also dependent on your local support network (often parents) to raise your family. I have several friends who can't move because either one of them would have to stop working to take care of the kids or they would have to pay a near equivalent amount for a nanny.
tropo 1588 days ago [-]
Single income: Move to a new job. There is 1 short commute per day. It can be in a small city with little traffic, so the commute time is short and low-stress and there is little fuel burned. Childcare is sort of free, and the house is big, so having a big family is easy.
Double income: Stay put, even if the jobs change. There are 2 long commutes per day. In order to find 2 suitable jobs, urban life is required. The commute burns lots of fuel, even if by bus. Childcare is expensive, especially if not of dreadful quality, and the apartment is tiny. Having a family is not really practical.
AnIdiotOnTheNet 1589 days ago [-]
Sadly I can't hold out much hope for remote work saving us. We've been able to do a whole lot of jobs remotely for over a decade now and companies still demand butts in seats.
pontifier 1589 days ago [-]
Real estate is so overpriced now, and so difficult to purchase that it's no wonder that people want to stay where they are once they find a place that they can actually afford. It almost feels like the choices are stay or be homeless.
I recently decided to move to a new state on the other side of the country, purely because of the low cost of real estate there. It feels like the tipping point was recently reached, and having zero opportunity to have the place I wanted in Utah or California, pushed me to look elsewhere. Elsewhere being Arkansas.
skohan 1589 days ago [-]
Everyone is talking about healthcare, but I think affordable housing needs to be the next big public issue to tackle. It seems like this is acting as a lever in wealth inequality, since less and less young people are even able to imagine owning a home in their lifetime, and many in the position to buy treat it as an investment instrument, and thus have the incentive to drive the price up rapidly, putting it farther out of reach of everyone else.
I'm not against profit, but with something like housing which is a fundamental need, it seems like some effort must be made to build a system which makes it attainable for average people.
nemo44x 1589 days ago [-]
The country is made up mainly of affordable housing. It’s certain areas that are so expensive because you’re competing with many high earning professionals. In many cases a pair of them.
Not everyone can live in NYC or SF.
Saying that, people need to consider the low interest world we live in. When their parents bought their home years ago, the interest rate was very likely 10% or higher. Today it’s 3.5% and even lower. This drives prices up. The biggest issue is getting a down payment.
I believe a combination of lower standard down payments and new mortgage terms of 40-50 years would make housing more attainable for a lot of people. I also agree, more development is needed.
pharke 1589 days ago [-]
> not everyone can live in NYC or SF
Reads more like "naturally the poor should be displaced from wherever the rich choose to live" considering that both cities have been heavily gentrified. There's a lot more than just higher income couples putting pressure on the market, there is a lot of distortion coming from developers seeking to squeeze every penny of margin from the jump in prices
skohan 1589 days ago [-]
Exactly. Vienna, for example, has tons of public housing which is affordable and is also a nice place to live. You can achieve that, even in a capital, if you have the political will to make it a reality.
jdhn 1589 days ago [-]
I'll agree with almost everything you say, but I can't agree with the lower standard down payments. That is one of the reasons that we got into such a mess in the mid 2000's, along with lower underwriting standards.
nemo44x 1589 days ago [-]
I hear you. The issue is, to me, that because interest are so low (and appear to continue to get lower) this has caused the list prices of homes to increase in proportion. Because of this, a 20% downpayment has become even more difficult to achieve for more people.
To be sure, the down payment doesn't protect the buyer at all. It simply exists to protect the lender in the case of an early default. They can still sell the foreclosed home, possibly under market or in a depressed market, and be made whole since they only lent 80% of the original price.
In fact, the average Joe would be better off in today's climate by putting 0 down and using what they would have put down into different financial instruments that will likely out perform the 3.x% interest rate they are likely receiving, considering they wouldn't have other penalties like PMI.
The financial crisis had a lot of inputs and bad banking was a part. That is, banks giving loans to those who were not financially able. However, a big part of this was due to government interference in the free market pushing President Bush's "ownership economy" policy which forced banks to give loans to people they probably wouldn't have otherwise. And then the whole thing went to hell.
A 0% down loan to a vetted individual with sufficient net worth wouldn't be a bad thing. I do believe there is a calculus we are missing between interest rates, inflation rates, and what a viable down payment should be.
danabrams 1589 days ago [-]
Competing with high earning professionals AND using the levers of local government to slow the construction of new housing far below demand.
The first part would not be an issue except in the short term without the second.
euroclydon 1589 days ago [-]
You can find affordable housing, it’s just just the densely spaced spec homes that deteriorate quickly. We’d be better off from a value perspective if developers could only carve out subdivisions but had to sell the lots to, home buyers who could then choose the house style and materials. Get rid of the HOAs and their covenants requiring uniformity. The builder extracts a huge margin by using the cheapest materials. A home is the worst purchase to do this way, since the economic lifetime is 75 years but the actual lifetime can be longer.
zip1234 1589 days ago [-]
We should not allow developments in such a style as the lack of allowed change in such neighborhoods means that a neighborhood can never move up. The density and walkability is permanently fixed at a low level. Single family zoning and such home owners associations and cities don't allow, for example, people to turn a house into a duplex, which would increase affordability for all involved.
1589 days ago [-]
helen___keller 1589 days ago [-]
I think the biggest problem is that solutions we've used to subsidize middle class homeownership in the 20th century don't work anymore. Think mortgage interest rate deductions, things of that sort.
In cities surrounded by cheap farmland waiting to be developed, this money can be funneled into housing development. In the modern city that's already at "peak suburb", homeowner subsidies just contribute to bidding wars, driving up prices.
What we need is better utilization of land in desirable location.
Also, we need transit to connect neighborhoods to city centers. Hellish driving commutes could be pleasant train commutes with modern infrastructure.
The options have always been build up, build closer together, or build further out. The first two have been illegal in most places for decades, and at peak suburb we've reached the limits of the third one in terms of car infrastructure
bluGill 1589 days ago [-]
The best time to build affordable housing is 20 years ago. The second best time is now. Unfortunately zoning rules mean you cannot build in places where there is demand, so supply and demand result in high prices. However if you already have a house this works in your favor: when you do sell out your house has gone up in value a lot more than inflation, while if your neighbor had built a large apartment next door your house value wouldn't be as high.
skohan 1589 days ago [-]
> when you do sell out your house has gone up in value a lot more than inflation, while if your neighbor had built a large apartment next door your house value wouldn't be as high.
This is an example of the issue I was talking about: it functions as an inequality accelerator. People who are already "in" have the power to set the rules of the game to be even more advantageous to themselves.
burfog 1588 days ago [-]
People don't want to live next to a neighbor who builds a multi-family 3-story apartment complex out of wooden shipping pallets, blue tarps, and extension cords. We don't even want that anywhere, because it is a death trap fire hazard.
Cheap living is thus prohibited, though some large California cities look the other way sometimes when the homeless build homes of that nature.
You can't even build a new home without arc fault interrupters and centrally wired fire alarms. In some places, you'll even need to install solar. Of course this isn't cheap! We have simply banned cheap construction.
nemo44x 1589 days ago [-]
Real estate will always be priced at what buyers in an area can afford per month when factoring in home price, mortgage interest, and taxes.
Areas of CA and UT have appreciated faster than other locations mainly due to the popularity of living there for professionals. But a big part of the real estate price boom has been declining interest rates.
When you’re looking at property that costs many hundreds of thousands and into the 1m range, even a single interest point can have a dramatic effect. Because interest rates have fallen so much, value has moved into the cost of the real estate.
If interest rates were to rise to 8% for example, you’d see the pricing of these homes cut in half. It’s what the market can afford monthly that sets the price.
Of course if interest rates were to rise like that, an all cash purchase begins to make sense.
pjmorris 1589 days ago [-]
> Real estate will always be priced at what buyers in an area can afford per month when factoring in home price, mortgage interest, and taxes
This was the model that led me to believe there were problems in the housing market in ~2005. Well, technically, it was the concrete evidence that this model was being violated. House prices in South Florida, where I lived at the time, tripled in ~5 years, but incomes did not. Robert Shiller had a graph of housing prices normalized to income from 1890-2005 in the NYT in 2005. Price-Income generally stayed flat, with the exception of a bump after WW2, the S&L crisis in the late 80's, and an enormous launch in the early 2000's.
As I see it, current housing prices are being forced out of the traditional model by the effects of the Fed's QE efforts.
nemo44x 1589 days ago [-]
> As I see it, current housing prices are being forced out of the traditional model by the effects of the Fed's QE efforts.
Very likely true. The financial crisis messed everything up. Driving interest rates down and QE stemmed the bleeding but it is only prolonging the pain. Possibly we are in a new normal of low-to-negative interest rates for the extended future. If this is the case, expect homes to continue to rise in value and for people with access to cheap capital to continue to pull away from everyone else.
I'm not optimistic interest rates will rise as inflation stays low. They tried raising rates last year and it shook the markets and there just doesn't seem to be a stomach for a prolonged reckoning.
pjmorris 1589 days ago [-]
> I'm not optimistic interest rates will rise as inflation stays low.
I agree that interest rates are likely to stay low.
I find it ironic to think of as inflation as low, given that housing is way out of its historical pricing band relative to the model factors.
AnimalMuppet 1589 days ago [-]
I think it's because most people don't decide how much house they can afford based on the purchase price. They decide based on the monthly payment. Obviously, as the interest rate declines, they can buy more for the same monthly payment. Therefore house prices go up, because everyone can pay more for the same monthly payment.
I remember when interest rates fell from 9% to 7% (early 90s). We had just bought a house for about $60K. Then interest rates fell, and house prices jumped, and suddenly our house was worth 90K. But if we had bought the same house at 90K at 7%, our monthly payments would have been the same.
pjmorris 1589 days ago [-]
I agree that monthly payment is the key factor people consider. I think there's more to it than interest rates, though, let me demonstrate:
I took a generic mortgage calculator and ran the numbers (30 year mortgage) on your house (first two rows), and on a South Florida townhouse that used to be mine (second two rows), to illustrate:
Price Rate Monthly Lifetime
60000 9 483 173798
90000 7 599 215558
142000 7 945 340000
309000 3 1303 468992
Note that the monthly payments are 24-37% higher in their after scenarios, even with a low, low interest rate for my townhouse. I see this scenario playing out over and over again and people assign the difference to interest rates when crunching the numbers suggests there's more to it.
nemo44x 1589 days ago [-]
Money is cheap. Homes in particular rely a lot on financing. Goods that don’t rely on financing are relatively cheap since inflation has been so low. I believe in part because money is so cheap currently that businesses are able to sell bonds cheaply to finance their operation. Because of this the savings are passed down to consumers.
But house prices have more to do with interest rates than inflation currently I suspect.
HammockWarrior 1589 days ago [-]
Even if you didn't purchase all cash, with a lower house price you can more easily pay off the house early by paying extra each month. The way it works now keeps people paying monthly way longer.
trianglem 1589 days ago [-]
You found it hard to find a cheap place in Utah?
pontifier 1589 days ago [-]
Yes. The difference in price is truly unbelievable. I had to call the agent to make sure they hadn't left a zero off of the asking price. Equivalent places I was looking at in Utah were going to cost several million dollars.
drewmate 1589 days ago [-]
Your story sounds like those of Californians who moved to Utah a decade ago. Before you know it, people in Little Rock coffee shops will be complaining about the influx of Utahns selling their modest West Jordan homes to buy mansions in Arkansas.
Utah has remained a hidden gem for years, but external market pressures are driving up prices, and supply is surprisingly constrained by the local geography (mountains and bodies of water constricting available land in the SLC metro.) Utah doesn't enjoy the same wide open space of many inland states, at least in the developed areas where people want to live.
So... I'm getting over 200,000 sqft of warehouse and office space. I'm planning on living there which will actually make it, by far, the largest private home in the entire US.
I need that much space for prototyping some of my inventions and intend to open the worlds largest Makerspace, hackerspace, and artist commune.
nitrogen 1589 days ago [-]
You also have to consider distance to the city center or recreational areas, lot size, neighborhood type, architecture, etc.
nitrogen 1589 days ago [-]
Real estate in Utah is very expensive now by local standards.
xfour 1590 days ago [-]
In California you have Prop 13 causing people to stay put. If you bought a house anywhere close to the coast more than 6 years ago you’ve likely seen 50-100% in value increase. Therefore if you move you’d pay that same increase proportionally in property tax.
In addition you have 6% Realtors fees to sell plus staging and being out of the house for open houses etc. the math just doesn’t add up.
MuffinFlavored 1590 days ago [-]
> 6% realtors fee
I have a feeling that will get automated away in the next 5-10 years something fierce. More than it already is being by Redfin, etc.
Realtors don’t deserve more than $25-40/hr in most cases, let alone 6% of my home value.
JamesBarney 1589 days ago [-]
On avg they make $24.18/hr, so $25-40 would actually be a pay bump.
Heh, yes that's what they get paid. As usual, it's the middleman that makes all the profit. So the profitable thing is to own the real estate agency, then you pay the agents as little as possible and charge customers 6% as you exploit the network effect.
aquadrop 1589 days ago [-]
That's because most of those hours are inefficient A lot of time spent coordinating meetings and walking with people showing the things they could see/read themselves. In most cases you only really need realtor at the very end, after you spend lots of hours seeing or showing homes, and now it's time to make the deal. It's not 1980s anymore, you can use internet to search for places yourself or to advertise your property yourself. If you remove those inefficient hours, there should be 5x less realtors but they might earn more and do better job.
pixl97 1589 days ago [-]
And those 5x less realtors will pay far higher taxes to pay for UBI.
Broken_Hippo 1589 days ago [-]
Not only that, but an actually hourly rate would allow folks to have more financial security. Unfortunately, folks in a range of sales positions can have weeks without pay if they don't sell anything. This is especially bad with car and house sales - thousands one pay period and absolutely zero the next.
sliken 1589 days ago [-]
Had a friend doing real estate for awhile. The owner knew damn well which were the easy sales and which were hard, slow, and/or required a ton of work.
As a result a few favorite agents made a ton of money, drove luxury cars never more then 2 years old, and worked minimal hours.
The large majority of the agents made minimal money and had to fight of the scraps.
pram 1589 days ago [-]
The glengarry leads are for closers only.
chongli 1589 days ago [-]
That’s one of the best movies of all time! Somehow I knew it would come up as soon as we started talking about real estate agents.
rchaud 1589 days ago [-]
> As a result a few favorite agents made a ton of money, drove luxury cars never more then 2 years old, and worked minimal hours.
> The large majority of the agents made minimal money and had to fight of the scraps.
This mirrors the structure of the broader economy so in a perverse way, it makes sense.
scarejunba 1590 days ago [-]
Wouldn't you want to say "My Zillow prediction is $1.2 million, you get 20% of any more than that if you sell by June but only this low rate otherwise"? Anyone with true ability would take the deal.
Aligning the incentives etc.
If you flatrate it, they don't have an incentive to find you a big buyer.
matt_morgan 1589 days ago [-]
There's something in here but 1) Zillow/Redfin predictions bounce all over the place based (I think) on recent local sales 2) Good real estate agents are good at estimating actual selling prices. I don't know if "ability" in a real estate agent results in a house being sold for more than it's worth.
perlpimp 1589 days ago [-]
Not sure how many purchases go for cash only but I gather that bank won't give mortgage if price of the house higher than appraised one, since it won't recover the value in case of the default ?
evanpw 1589 days ago [-]
They won't loan you more than X% of the appraised value, but you can make that up with the down payment (or pay the whole thing in cash, as you say).
scarface74 1589 days ago [-]
But magically, if you know the right collection of real estate agent, appraisers, and mortgage brokers, the house always appraises for what you need it to in order for the loan to go through.
bluGill 1589 days ago [-]
True, but that right collection will also ensure the price you need isn't unreasonable. If the house is worth $300,000 and you need $301,500 that is in the margin of error (which I doubt is statically calculated, but if it was). If you need $500,000 on the same house you won't get it.
scarface74 1589 days ago [-]
Maybe they will post 2008. But you would be surprised at how those same combination of people would be complicit in the loan process far outside the margin of error back then.
AnimalMuppet 1589 days ago [-]
homie.com is already doing that.
Hydraulix989 1590 days ago [-]
This is a rather unique situation that only benefits a small fraction of people in the US. The article is mostly focusing on trends in the American midwest, and the effects of people being priced out of superstar cities and forced to stay where they are where the CoL is still reasonable because they did not get in on the bubbly pyramid scheme soon enough.
sliken 1589 days ago [-]
Heh, that's exactly why I'm not moving. I bought in 1998, a small "first" home. I paid it off pretty quick. Now I'd have to pay 3-4X what I paid for a noticeable upgrade (1000 ft^2 to 1400 ft^2), which I could afford. But the increase in taxes would be pretty substantial.
Seems whacky that two neighbors with identically valued homes could easily pay different property taxes by 10x. That seems to be the real problem, nobody wants to move and get nailed by the increased taxes.
tropo 1588 days ago [-]
This is also clogging the roads with traffic, wasting our time in traffic, and polluting the air. If you can't afford to move closer to a new job, you'll have to commute.
grandmczeb 1590 days ago [-]
Rent control has a similar effect as well.
skohan 1589 days ago [-]
Yes I live in an European capital with fairly strong rent control, and a competitive housing market, and everyone I know is pretty convinced they will die in their current apartment.
freddie_mercury 1589 days ago [-]
Are realtor fees higher now than the were in the past? If not, that's not an explanation.
Do Californians move less than people from other states? If not, Prop 13 isn't an explanation.
tonyedgecombe 1589 days ago [-]
It was quite a few years ago now but I think I paid 1.5% on the sale of my previous house in the UK. I'm always surprised you don't have a more competitive market in the US.
pjc50 1589 days ago [-]
The US has cartelized markets and an inefficient title system.
sk5t 1589 days ago [-]
US title insurance really is the worst. Who exactly has ever collected on that contract for a residence--maybe one in 10,000?
combatentropy 1590 days ago [-]
Someone once said, "A one-way trip to Mars would actually be okay if it had smoking-hot Wi-Fi." Do you think that the Internet has made people feel more content, wherever they are?
Broken_Hippo 1589 days ago [-]
I think that is a mixed bag. I think it is really easy to feel objectively worse about your surroundings because if you are poor, you more easily see how much your are missing. You are continually surrounded by images of folks who have enough space, who are lucky enough to own a place, whose place looks clean when they clean (you can't always clean the cockroaches away nor paint away the dingy walls).
But on the other hand, you are more likely to be able to keep in touch with people. You are more likely to have some entertainment without leaving the house. You are more likely to be able to fix the loose table leg with the basic, cheap tools that you have or mend your clothes if you need really need to. When I was poorer, I would eat cheaper food to be able to afford internet just because it could distract me from my life. If you are lucky enough to have some weed as well, it makes for a much more comfortable life, even if imperfect. (Weed/hash makes me more OK with what I have and I can generally afford it before I could afford a monthly, steady rise in general household bills).
In other words: Only if you have a certain life satisfaction in the beginning.
I think the quote about mars is more indicative of the entertainment and communication that the internet brings and its innate ability to help time pass more quickly.
sysbin 1589 days ago [-]
I’m not sure about that. A lot of friends from poor families that couldn’t get out are turning to suicide or the drugs that will lead them to it eventually. This era is likely the worse one for the poor.
Broken_Hippo 1589 days ago [-]
I did mention weed/hash, and explained the effects it has on life. Alcoholism is an option, but harder drugs generally are more expensive. A lot of poor folks don't do drugs simply because they can't afford them.
IIRC, poor folks do drugs at the same rate as better off folks, though. Sometimes you are more likely to get caught because of the situations you use them in... plus the businessman has more to lose so tends to be more secluded unless you are trusted.
As far as worse, I don't know, man. The depression was pretty bad. The 1800's were pretty bad. The US is worse than Norway, just because of the lack of safety net, and both of these places are better than anywhere facing near-famine or actual active war. And so on. It is really hard to say, "worse".
sysbin 1589 days ago [-]
There will always be people somewhere around the world that are suffering from famine or living in extreme poverty. I’ve noticed in the USA specifically from where I grew up (that wasn’t a huge city), that all friends from families that were not well off have an even harder time leaving parents. Even the lower middle class people seem to nowadays stay with parents until late 20s and even with decent degrees; so they can afford a home. Upper class has parents that are loaning a couple hundred grand to their kids to purchase a home. The poor are aware of their situation more so because of the internet and see no escape contrary to the previous generations. I disagree about access to drugs from affordability. Somehow there is always a way from what I’ve observed.
throwaway0x69AF 1589 days ago [-]
> Alcoholism is an option, but harder drugs generally are more expensive.
Are you sure? In my experience, a tab of acid costs $5-10, and the effects last about 5 hours. That's way cheaper than alcohol. [1] shows a breakdown of cost per hour for a bunch of drugs I've never touched, and most of them look to be pretty cheap under this metric. Compared to movies, sitting around in coffee shops, etc., they're remarkably cheaper than a lot of legal forms of entertainment.
For occasional use, drugs give a lot of bang for the buck. I've met lots of folks doing them recreationally from time to time, but 1) it isn't just low-income folks and 2) Some personalities just pass completely, and lots of folks 'grow out' of some of them. I certainly have done more drugs, both illicit and legal, when I've had spending money compared to when I didn't. And then, it was generally a bottle of $5 wine. I can have a glass or two after work but certainly not drop acid after work and expect to go to work in the morning. You can quote that 5 hours, sure, but you probably need to have 8 hours free. (I have lots of experience with acid: I have completely lost track at how many hits I've done over the years).
There is also difference between that sort of recreational use and addiction, though. Even if you do acid as much as possible for it to really be effective, you aren't doing it that much. Heroin? Sure. Alcohol? Definitely.
And it depends on, say, the type of alcohol you buy. When I lived in the states, I worked at a pharmacy for years. We regularly sold a half gallon of vodka (and whiskey, gin, etc) for $10 or less. now, I don't know about you, but I could get me and a few friends pretty drunk from that one bottle. Heck, we could get fairly drunk on less than that - a 750ml bottle would do pretty well with 2-4 of us. Plus, alcohol is readily available. Not everyone knows where to get illicit substances, nor is everyone willing to risk losing their children over it. Acid carries a fairly tough penalty and your price is per person. Per experience. Isn't always available, even to those that use lots, unless you are in the right part of the world in a large enough city. There is a liquor store in most towns.
kryptiskt 1589 days ago [-]
The interplanetary internet will not be smoking hot with latencies counted in minutes. I guess we will need another protocol too, at least for the CDNs.
I want to move, so badly. It's been my singular goal for over a year now and I've cut back my spending nearly entirely except for rent+groceries to try to save up enough to do so, and I've sold most of my belongings to save more and make the eventual move easier. Moving is what I think about when I wake up and before I go to sleep.
I have severe seasonal affective disorder and pretty bad driving anxiety. I've seen mental health professionals for both of these and everyone's just said I should move. I have cognitive techniques for both of these that help a little, and been recommended medications to help, but really the solution is to move and be car-free. On days where I don't have to drive and it's above 65F outside, I genuinely feel like a totally different person.
The only place in the US where you can be a first-class citizen without a car and feel the sun every day is San Francisco. It's a nice bonus that SF is a fantastic place to be a hardware engineer too. I've been on a plan of sending out 10-15 applications every week for about a year and have at least 1 phone interview each week. I've been in the interview pipeline with around 60 companies over the past year, and so far received zero offers. Usually it's "we're looking for someone already local".
If it ever happens, getting a job in SF and moving there will have been the hardest thing I've ever done. My bank account is at $13k now, so once it hits $20k I'm just going to risk it and move without a job.
elipsey 1589 days ago [-]
My spouse has simillar issues, and we have really loved not driving since moving to (downtown) SF. Some people think it's cold and foggy here, but compared to places I lived in the northwest or northeast, it's almost like there is no weather at all. The vast majority of the time, it's in the 60's or 70's, and rarely more than partly cloudy. Also, because of the relatively lower lattitude, it's light more in the winter than other places I have lived, which I would expect to be the most important factor for S.A.D. People who think it's cold here think cold means 60F. This is a legitimate point of view, but nothing like where I come from.
Consider that noise, impersonalization, aggressive people, and a certain amount of urban squalor will likely weight on your mood and cause some degree of anxiety if those things bother you. It will take time to adjust your expectations and habits to avoid the worst of that. I slipped into the habit of wearing headphones and sunglasses when I'm out walking to dull the noise, and make it harder to for people to hassle me (I used to find this mildly anti-social; now I'm one of them). There are plenty of natural green places you can go on public transport to unwind from the city, but you have to go through it to get there. I suggest finding an apartment building with a gym in it, or nearby if you can.
Also, moving here without a job is a risky proposition. 20k$ sounds like about 4-6 months runway at best, if you live by yourself, with no car, and _very_ modestly. OTOH, it seems like employers were suddenly more willing to talk me when I got here just because I had an SF address. Good luck, I hope it works out.
rubidium 1589 days ago [-]
If you want sun and warmth you should do San Diego, not San Fran.
nwvg_7257 1589 days ago [-]
Agreed. I am also carless, but I wouldn't want to move to San Fran. as it's much too expensive.
You should for sure consider other places in Cali. like San Diego, which has perfectly good public transit, but I would also consider the DC area, Austin, Chapel Hill (free and frequent bus service), etc.
PascLeRasc 1589 days ago [-]
Thanks. I've thought about San Diego a lot, but I heard from a friend that it's incredibly car-centric there. Good to hear another perspective.
diehunde 1589 days ago [-]
Same in Austin. Don't go there if you are looking for a walkable place. I can't even take my dog for a walk to a nice place.
bretthoerner 1589 days ago [-]
There are very walkable parts of Austin.
spartas 1589 days ago [-]
Jump. That $7k won't make a difference in SF and you're never going to get back the time.
You're already getting (and doing well with) interviews. Negotiate yourself an offer (maybe even with relocation expenses) with one of these companies and then move.
Understand that time is a much more scarce resource than money.
jjav 1589 days ago [-]
When you say San Francisco do you literally mean the city of San Francisco, or the bay area in general?
San Francisco is cold and foggy. A day warmer than 65F and brightly sunny is the exception. Also, hardware companies are generally not in San Francisco.
Silicon Valley proper (about an hour south of San Francisco) is generally sunny and often warmer than 65F, so can work for you. Still chilly in the winter though.
soared 1589 days ago [-]
There are a million alternatives to SF that fit your needs FYI. Austin, Texas is probably the best, but plenty of towns in the southwest and south are hot year round and can be viable without a car. Even Denver is a decent choice.
diehunde 1588 days ago [-]
I disagree. Winters can get very cold here in Austin. Also is impossible to get around without a car even if you live downtown. Is not a walkable city.
bretthoerner 1588 days ago [-]
> Also is impossible to get around without a car even if you live downtown. Is not a walkable city.
This isn't true. Where do you live?
diehunde 1587 days ago [-]
There's a bunch of walkability scores for cities in the US online. Austin ranks pretty low for what most people think.
bretthoerner 1586 days ago [-]
Walkability scores of downtown Austin are very high.
1585 days ago [-]
turk73 1589 days ago [-]
You going to live in a closet or what? The amount you have saved up seems insufficient to take on a HCOL area. Any hardware gigs in Austin or RTP?
I kind of think your specialty is being globalized out of existence in the US, but I don't follow that area much, so I could be speaking out of turn on that.
Also, what is "driving anxiety?" Does that mean you're a bad driver? How about a Skip Barber school?
freddie_mercury 1589 days ago [-]
Moving isn't always a good thing. Maybe in the past it simply represented high search costs. The only way an Okie could find out if California was the right home for them was to pack up and actually move there. You get to Sacramento and decide that's not right for you, so a year later you move to Fresno.
Nowadays you go online and can research local economies, local hiring, local real estate, local churches, etc. You're more likely to move fewer times.
1589 days ago [-]
VLM 1589 days ago [-]
Consider mergers, aside from the very small number of people working in coastal tech jobs, its not like an insurance guy working in Des Moines at an insurance company HQ can consider moving to, perhaps, Milwaukee Wisconsin, because due to endless mergers there is less competition meaning fewer jobs meaning fewer jobs to move to.
On the opposite side, if you've got a contractor / gig job, other than the weather during the commute, it doesn't really matter if you move to a new city. You might have to move inside a city for demographic socioeconomic change reasons. Outside very few fields temporarily, the job market is efficient and being a car salesman in kentucky isn't any better than being a car salesman in rhode island, other than very general stuff like weather and quality of life and affordability is somewhat better away from the coasts and similar things probably not worth moving for.
paulcole 1589 days ago [-]
>being a car salesman in kentucky isn't any better than being a car salesman in rhode island
Have you worked as a car salesman in either of those places?
someguydave 1590 days ago [-]
The US is an aging nation. Old people don't move.
For millennial, they have a tough starting position and a long time to wait until the corporate hierarchies above them clear out from the surplus of boomer management. It makes sense that they must "wait their turn" for a longer time than in the past.
rchaud 1589 days ago [-]
The boomer management you refer to were likely the elite of their time, as they could afford to get an advanced degree when it wasn't common. These days you need a Bachelor's for just about any entry-level office job.
There aren't enough jobs for all the degree-holders out there. That's why higher education gets hit with the "scam" allegations. They're selling a vision of higher lifetime incomes that was true 25 years ago.
trowawayfornow 1589 days ago [-]
Oh man, I'm going through a real mental tug-of-war with myself right now about a potential move. In my late 30s, married, newborn. I have an incredible job right now in almost every way. But we live in an area that neither of us love, right at the time we are finally thinking about actually putting down roots (I've moved a lot in the last 15 years).
I have an opportunity to move "back home" where my family and my lifelong friends are. The job would be good enough, though certainly not as great as my current one. Wife works remotely so it doesn't matter for her. That's a major bonus as I make this consideration.
This is a tough one, moving for personal/family desires vs. a better work environment. I'd actually be downgrading my work life. And we're not unhappy where we live, just not thriving and it isn't long term for us.
nonford150 1590 days ago [-]
If you sell your house you have to move farther out from the city to afford something nice.
dzhiurgis 1590 days ago [-]
Surely remote working has had at least some impact?
toomuchtodo 1590 days ago [-]
Probably not as much as needing to stay close to family for childcare. Childcare is hella expensive.
leethargo 1589 days ago [-]
Or insufficient / unsatisfying. In Berlin, the day care is paid by the city for all children older than 1 year. But I still plan to move away (to the countryside) to be closer to family, regardless of financial benefits.
PunchTornado 1589 days ago [-]
that may work for some people. I prefer to not pay for other people's childcare costs.
technick 1589 days ago [-]
As a remote worker, I would move to the cheapest area while still collecting big city money. Sadly I'm sitting on a future gold mine that I won't sell until it triples in value, which it's half way there in under 3 years of ownership.
blaser-waffle 1589 days ago [-]
As a remote worker, I've done this. Mixed bag.
Rural Alberta is far cheaper than, say, Vancouver, but it also means I'm married to the remote gig. Freelancing is an option, but that's very hard remotely -- in-person networking is effective, as is word of mouth, and that's hard to get a timezone away -- and it leaves me beholden to my current job.
Rendered at 20:23:49 GMT+0000 (Coordinated Universal Time) with Vercel.
Over time, two incomes went from providing far more than a family needed to being a practical necessity in many markets. I can't imagine buying the type of home I'd like to live in on even my relatively high (by national standards) Bay Area salary alone, and yet many families still choose to live here.
Once a family relies on two incomes just to pay the rent, it becomes harder to pick up and move to a different part of the country unless both partners can do it at the same time. Even intra-county moves are more difficult when two partners are working full-time and don't want to deal with the stresses of moving on top of their regular jobs.
Maybe the pendulum will swing back as a result of changing expectations (about where to live, how much home to buy, what kind of job you need to have), or maybe remote work will save us all and let us move out of the expensive areas where our jobs are. But for now, I think the rise of the dual-income household is among the biggest factors keeping us in place.
The number of single/no earner households has actually increased since 1980.
If you look at Table H-12. Household by Number of Earners by Median and Mean Income [0], you'll see in 1980 the percentage of households that have 2+ earners was ~44%, and now its ~40% and has steadily decreased over that time.
I made it into a google sheet:
https://docs.google.com/spreadsheets/d/1Vm8d-XTuGu_ilbK0xn_r...
[0] https://www.census.gov/data/tables/time-series/demo/income-p...
I'm no demographer, but my intuition is that the shift from 44% to 40% is not likely due to an increase in single-income households that are also buying homes. I think over the last 30 years that number would get squeezed a bit on both ends:
* Boomers are retiring causing some dual-income households to become 0-income households. Indeed, the proportion of 0-income households has gone up about 4% over the same period.
* Millenials are marrying later, causing them to be reported as "single income households" far later in life than in previous generations. For instance, I'm still single at an age when my father owned a home and had 3 kids (on a single income). As mentioned previously, I'm in no position to buy a home right now.
While I constitute a "household" under the census designation, my original comment was more referring to a traditional marriage or domestic partnership that would be in the market to buy a home. If we could normalize the data to such couples (say working-age partners in a relationship) I think we'd see the trend of dual-income households that matches my anecdotal observations.
This isn’t a normative statement, but two income families are inherently less mobile (absent one spouse working remotely). It’s a world of trade offs...
Double income: Stay put, even if the jobs change. There are 2 long commutes per day. In order to find 2 suitable jobs, urban life is required. The commute burns lots of fuel, even if by bus. Childcare is expensive, especially if not of dreadful quality, and the apartment is tiny. Having a family is not really practical.
I recently decided to move to a new state on the other side of the country, purely because of the low cost of real estate there. It feels like the tipping point was recently reached, and having zero opportunity to have the place I wanted in Utah or California, pushed me to look elsewhere. Elsewhere being Arkansas.
I'm not against profit, but with something like housing which is a fundamental need, it seems like some effort must be made to build a system which makes it attainable for average people.
Not everyone can live in NYC or SF.
Saying that, people need to consider the low interest world we live in. When their parents bought their home years ago, the interest rate was very likely 10% or higher. Today it’s 3.5% and even lower. This drives prices up. The biggest issue is getting a down payment.
I believe a combination of lower standard down payments and new mortgage terms of 40-50 years would make housing more attainable for a lot of people. I also agree, more development is needed.
Reads more like "naturally the poor should be displaced from wherever the rich choose to live" considering that both cities have been heavily gentrified. There's a lot more than just higher income couples putting pressure on the market, there is a lot of distortion coming from developers seeking to squeeze every penny of margin from the jump in prices
To be sure, the down payment doesn't protect the buyer at all. It simply exists to protect the lender in the case of an early default. They can still sell the foreclosed home, possibly under market or in a depressed market, and be made whole since they only lent 80% of the original price.
In fact, the average Joe would be better off in today's climate by putting 0 down and using what they would have put down into different financial instruments that will likely out perform the 3.x% interest rate they are likely receiving, considering they wouldn't have other penalties like PMI.
The financial crisis had a lot of inputs and bad banking was a part. That is, banks giving loans to those who were not financially able. However, a big part of this was due to government interference in the free market pushing President Bush's "ownership economy" policy which forced banks to give loans to people they probably wouldn't have otherwise. And then the whole thing went to hell.
A 0% down loan to a vetted individual with sufficient net worth wouldn't be a bad thing. I do believe there is a calculus we are missing between interest rates, inflation rates, and what a viable down payment should be.
The first part would not be an issue except in the short term without the second.
In cities surrounded by cheap farmland waiting to be developed, this money can be funneled into housing development. In the modern city that's already at "peak suburb", homeowner subsidies just contribute to bidding wars, driving up prices.
What we need is better utilization of land in desirable location.
Also, we need transit to connect neighborhoods to city centers. Hellish driving commutes could be pleasant train commutes with modern infrastructure.
The options have always been build up, build closer together, or build further out. The first two have been illegal in most places for decades, and at peak suburb we've reached the limits of the third one in terms of car infrastructure
This is an example of the issue I was talking about: it functions as an inequality accelerator. People who are already "in" have the power to set the rules of the game to be even more advantageous to themselves.
Cheap living is thus prohibited, though some large California cities look the other way sometimes when the homeless build homes of that nature.
You can't even build a new home without arc fault interrupters and centrally wired fire alarms. In some places, you'll even need to install solar. Of course this isn't cheap! We have simply banned cheap construction.
Areas of CA and UT have appreciated faster than other locations mainly due to the popularity of living there for professionals. But a big part of the real estate price boom has been declining interest rates.
When you’re looking at property that costs many hundreds of thousands and into the 1m range, even a single interest point can have a dramatic effect. Because interest rates have fallen so much, value has moved into the cost of the real estate.
If interest rates were to rise to 8% for example, you’d see the pricing of these homes cut in half. It’s what the market can afford monthly that sets the price.
Of course if interest rates were to rise like that, an all cash purchase begins to make sense.
This was the model that led me to believe there were problems in the housing market in ~2005. Well, technically, it was the concrete evidence that this model was being violated. House prices in South Florida, where I lived at the time, tripled in ~5 years, but incomes did not. Robert Shiller had a graph of housing prices normalized to income from 1890-2005 in the NYT in 2005. Price-Income generally stayed flat, with the exception of a bump after WW2, the S&L crisis in the late 80's, and an enormous launch in the early 2000's.
As I see it, current housing prices are being forced out of the traditional model by the effects of the Fed's QE efforts.
Very likely true. The financial crisis messed everything up. Driving interest rates down and QE stemmed the bleeding but it is only prolonging the pain. Possibly we are in a new normal of low-to-negative interest rates for the extended future. If this is the case, expect homes to continue to rise in value and for people with access to cheap capital to continue to pull away from everyone else.
I'm not optimistic interest rates will rise as inflation stays low. They tried raising rates last year and it shook the markets and there just doesn't seem to be a stomach for a prolonged reckoning.
I agree that interest rates are likely to stay low.
I find it ironic to think of as inflation as low, given that housing is way out of its historical pricing band relative to the model factors.
I remember when interest rates fell from 9% to 7% (early 90s). We had just bought a house for about $60K. Then interest rates fell, and house prices jumped, and suddenly our house was worth 90K. But if we had bought the same house at 90K at 7%, our monthly payments would have been the same.
I took a generic mortgage calculator and ran the numbers (30 year mortgage) on your house (first two rows), and on a South Florida townhouse that used to be mine (second two rows), to illustrate:
Price Rate Monthly Lifetime
60000 9 483 173798
90000 7 599 215558
142000 7 945 340000
309000 3 1303 468992
Note that the monthly payments are 24-37% higher in their after scenarios, even with a low, low interest rate for my townhouse. I see this scenario playing out over and over again and people assign the difference to interest rates when crunching the numbers suggests there's more to it.
But house prices have more to do with interest rates than inflation currently I suspect.
Utah has remained a hidden gem for years, but external market pressures are driving up prices, and supply is surprisingly constrained by the local geography (mountains and bodies of water constricting available land in the SLC metro.) Utah doesn't enjoy the same wide open space of many inland states, at least in the developed areas where people want to live.
https://www.zillow.com/homedetails/14455-S-Muirwood-Cir-Herr...
I need that much space for prototyping some of my inventions and intend to open the worlds largest Makerspace, hackerspace, and artist commune.
In addition you have 6% Realtors fees to sell plus staging and being out of the house for open houses etc. the math just doesn’t add up.
I have a feeling that will get automated away in the next 5-10 years something fierce. More than it already is being by Redfin, etc.
Realtors don’t deserve more than $25-40/hr in most cases, let alone 6% of my home value.
https://www.bls.gov/ooh/sales/real-estate-brokers-and-sales-...
As a result a few favorite agents made a ton of money, drove luxury cars never more then 2 years old, and worked minimal hours.
The large majority of the agents made minimal money and had to fight of the scraps.
> The large majority of the agents made minimal money and had to fight of the scraps.
This mirrors the structure of the broader economy so in a perverse way, it makes sense.
Aligning the incentives etc.
If you flatrate it, they don't have an incentive to find you a big buyer.
Seems whacky that two neighbors with identically valued homes could easily pay different property taxes by 10x. That seems to be the real problem, nobody wants to move and get nailed by the increased taxes.
Do Californians move less than people from other states? If not, Prop 13 isn't an explanation.
But on the other hand, you are more likely to be able to keep in touch with people. You are more likely to have some entertainment without leaving the house. You are more likely to be able to fix the loose table leg with the basic, cheap tools that you have or mend your clothes if you need really need to. When I was poorer, I would eat cheaper food to be able to afford internet just because it could distract me from my life. If you are lucky enough to have some weed as well, it makes for a much more comfortable life, even if imperfect. (Weed/hash makes me more OK with what I have and I can generally afford it before I could afford a monthly, steady rise in general household bills).
In other words: Only if you have a certain life satisfaction in the beginning.
I think the quote about mars is more indicative of the entertainment and communication that the internet brings and its innate ability to help time pass more quickly.
IIRC, poor folks do drugs at the same rate as better off folks, though. Sometimes you are more likely to get caught because of the situations you use them in... plus the businessman has more to lose so tends to be more secluded unless you are trusted.
As far as worse, I don't know, man. The depression was pretty bad. The 1800's were pretty bad. The US is worse than Norway, just because of the lack of safety net, and both of these places are better than anywhere facing near-famine or actual active war. And so on. It is really hard to say, "worse".
Are you sure? In my experience, a tab of acid costs $5-10, and the effects last about 5 hours. That's way cheaper than alcohol. [1] shows a breakdown of cost per hour for a bunch of drugs I've never touched, and most of them look to be pretty cheap under this metric. Compared to movies, sitting around in coffee shops, etc., they're remarkably cheaper than a lot of legal forms of entertainment.
[1] https://www.addictionresource.net/blog/cost-of-illegal-drugs...
There is also difference between that sort of recreational use and addiction, though. Even if you do acid as much as possible for it to really be effective, you aren't doing it that much. Heroin? Sure. Alcohol? Definitely.
And it depends on, say, the type of alcohol you buy. When I lived in the states, I worked at a pharmacy for years. We regularly sold a half gallon of vodka (and whiskey, gin, etc) for $10 or less. now, I don't know about you, but I could get me and a few friends pretty drunk from that one bottle. Heck, we could get fairly drunk on less than that - a 750ml bottle would do pretty well with 2-4 of us. Plus, alcohol is readily available. Not everyone knows where to get illicit substances, nor is everyone willing to risk losing their children over it. Acid carries a fairly tough penalty and your price is per person. Per experience. Isn't always available, even to those that use lots, unless you are in the right part of the world in a large enough city. There is a liquor store in most towns.
I have severe seasonal affective disorder and pretty bad driving anxiety. I've seen mental health professionals for both of these and everyone's just said I should move. I have cognitive techniques for both of these that help a little, and been recommended medications to help, but really the solution is to move and be car-free. On days where I don't have to drive and it's above 65F outside, I genuinely feel like a totally different person.
The only place in the US where you can be a first-class citizen without a car and feel the sun every day is San Francisco. It's a nice bonus that SF is a fantastic place to be a hardware engineer too. I've been on a plan of sending out 10-15 applications every week for about a year and have at least 1 phone interview each week. I've been in the interview pipeline with around 60 companies over the past year, and so far received zero offers. Usually it's "we're looking for someone already local".
If it ever happens, getting a job in SF and moving there will have been the hardest thing I've ever done. My bank account is at $13k now, so once it hits $20k I'm just going to risk it and move without a job.
Consider that noise, impersonalization, aggressive people, and a certain amount of urban squalor will likely weight on your mood and cause some degree of anxiety if those things bother you. It will take time to adjust your expectations and habits to avoid the worst of that. I slipped into the habit of wearing headphones and sunglasses when I'm out walking to dull the noise, and make it harder to for people to hassle me (I used to find this mildly anti-social; now I'm one of them). There are plenty of natural green places you can go on public transport to unwind from the city, but you have to go through it to get there. I suggest finding an apartment building with a gym in it, or nearby if you can.
Also, moving here without a job is a risky proposition. 20k$ sounds like about 4-6 months runway at best, if you live by yourself, with no car, and _very_ modestly. OTOH, it seems like employers were suddenly more willing to talk me when I got here just because I had an SF address. Good luck, I hope it works out.
You should for sure consider other places in Cali. like San Diego, which has perfectly good public transit, but I would also consider the DC area, Austin, Chapel Hill (free and frequent bus service), etc.
You're already getting (and doing well with) interviews. Negotiate yourself an offer (maybe even with relocation expenses) with one of these companies and then move.
Understand that time is a much more scarce resource than money.
San Francisco is cold and foggy. A day warmer than 65F and brightly sunny is the exception. Also, hardware companies are generally not in San Francisco.
Silicon Valley proper (about an hour south of San Francisco) is generally sunny and often warmer than 65F, so can work for you. Still chilly in the winter though.
This isn't true. Where do you live?
I kind of think your specialty is being globalized out of existence in the US, but I don't follow that area much, so I could be speaking out of turn on that.
Also, what is "driving anxiety?" Does that mean you're a bad driver? How about a Skip Barber school?
Nowadays you go online and can research local economies, local hiring, local real estate, local churches, etc. You're more likely to move fewer times.
On the opposite side, if you've got a contractor / gig job, other than the weather during the commute, it doesn't really matter if you move to a new city. You might have to move inside a city for demographic socioeconomic change reasons. Outside very few fields temporarily, the job market is efficient and being a car salesman in kentucky isn't any better than being a car salesman in rhode island, other than very general stuff like weather and quality of life and affordability is somewhat better away from the coasts and similar things probably not worth moving for.
Have you worked as a car salesman in either of those places?
There aren't enough jobs for all the degree-holders out there. That's why higher education gets hit with the "scam" allegations. They're selling a vision of higher lifetime incomes that was true 25 years ago.
I have an opportunity to move "back home" where my family and my lifelong friends are. The job would be good enough, though certainly not as great as my current one. Wife works remotely so it doesn't matter for her. That's a major bonus as I make this consideration.
This is a tough one, moving for personal/family desires vs. a better work environment. I'd actually be downgrading my work life. And we're not unhappy where we live, just not thriving and it isn't long term for us.
Rural Alberta is far cheaper than, say, Vancouver, but it also means I'm married to the remote gig. Freelancing is an option, but that's very hard remotely -- in-person networking is effective, as is word of mouth, and that's hard to get a timezone away -- and it leaves me beholden to my current job.