[quote=kev374]Rich, my claim is substantiated by the salaries in my industry and the rents around the South Orange County area. Rents are not that much higher at all. In 2005 I moved to Lake Forest renting a 1bd there for $1,250/mo. The current rent for that exact unit, 10 years later, is $1,345/mo., it has increased 7.6% in a decade which I hardly call substantial!
However, now I live in Costa Mesa and pay $1,220/mo. for a larger apartment with a garage and I am only blocks from Newport Beach.
You can give me your statistical data all day long, which is what Economists do, but it does not match the reality on the ground. I am giving you actual data with my specific case.
I work as a Sr. Software Engineer, been doing it since 1997, pay in my industry has not increased since 2005. I am making $2,000/yr more now compared to my 2005 pay. And I am topped out in my payscale, I see job listings paying even less than what I am making for the same experience level.
You claim pay has increased substantially, let me then send you my Resume and we will see if you can get me a job for substantially more money than my 2005 income 😉
My data is real world, on the ground. Sure, it applies only to the tech industry but let me know in which other industries has pay substantially increased in the last decade?[/quote]
It probably depends very much on where one is looking. I do have to agree that pay hasn’t gone up much at all for anybody we know; for many, it is lower today than it was in 2005.
As everybody knows, I pay close attention to what’s going on in the public sector, especially as it regards state and local employers, and they have been seeing pay freezes or cuts since ~2008; only in the past year or so have public employers started to give *very small* raises. Even then, they are often still below overall 2008 compensation levels.
Other people we know who work in tech, biotech, accounting, law, leisure and hospitality, and the building trades, etc. have not seem much of an increase (if any increase at all) since the last bubble peak. Obviously, building is up from the bottom of the recession, but not above the peak in ~2005-2006…they still aren’t anywhere near the levels they were seeing in those days. Of course, this is all anecdotal, but it’s a fairly wide swath of industries.
OTOH, rents in our area are above 2005-2006 levels, but the increases pale in comparison to what we were seeing in ~2004-2007 when rents were skyrocketing in our area.
Agree that low rates are making housing prices look more acceptable because monthly PITI payments are fairly comparable to monthly rents…but even that metric is being stretched right now, at least in our neighborhood. It made absolute sense to buy in late 2011/early 2012, especially when looking at PITI/rent ratios. Not so sure it makes sense today.
