Priced-out America

[djc]

thoughts?

https://medium.com/@MikeRosenberg/priced-out-america-e7a117f2c61d

Detailing how soaring rent and house prices — and flat wages — have made virtually every big city less affordable
With lists of the Top 10 cities for fastest-growing rents and home prices, and the Top 30 most expensive cities for renters and home buyers.
Could it be possible that the average American living in a city has actually gotten poorer during the current economic recovery? It may sound crazy, but it’s not — because housing prices have skyrocketed recently while wages have barely budged….

[spdrun]

Then here’s to a good old-fashioned correction in 2016! To chaos! *clink*

[The-Shoveler]

Yea I am not saying that they may have Chosen the numbers and dates to make the situation look a lot worse than it really is or anything like that, but 2011 was the bottom of the housing bust and the recession.

[Anonymous]

How can cities be big if no one can afford to live there?

[fun4vnay2]

How can cities be big/grow if the cost of living is too high and the jobs are not high paying ?

[FlyerInHi]

I expect the big/glamour cities to be more expensive than the lesser cities. Because of the internet and more knowledge people are moving.

At one point Cincinnati was the same price as San Diego. No longer the case.

First Tier in USA would be NYC, LA, SF, Washington, DC. (Orange County is borderline).
Second Tier: San Diego, Chicago, Miami, Portland, Seattle.
Third Tier: Houston, Dallas, Phoenix, Las Vegas, Tampa/St Pete, Atlanta, Raleigh, Charlotte, Austin.

[spdrun]

B…but…the Internet was supposed to remove the importance of place.

DC has gone up in price in the last 15 years, but NYC and SF have been expensive since at least the 90s. I recall my sister wanting to move to SF after college and complaining about it being more expensive than New York.

And NY was never cheap. My father said he paid $500/mo for a 2-bedroom near Columbia University around 1970. Not the safest area at the time — local yoots would sit on their steps with baseball bats and watch for people from further uptown, so to speak. That’s probably equivalent to about $2500/mo right now.

[FlyerInHi]

You’re right sdp. DC has gone up a lot. So has San Diego.

I think back in the 1970s SF was much cheaper than NYC. Silicon valley was small manufacturing.

NYC has always been the place to be since the founding of America. There was a period of decline and White flight, but the city overcame that.

I think the Internet made place more important. People are more aware of national and international news and the smart people want to be near the action. Back in the day, people watched the locals news, read the local newspaper, and watched Network news. But they didn’t have Internet friends all over the world.

I hear places like Montana are encouraging telecommuters to relocate there for peace and quiet, and quality of life at a low price.

[spdrun]

My point was that livable neighborhoods of US cities were never cheap. The only “cheap” tended to be scary.

The parts of DC that are still scary remain cheap.

[The-Shoveler]

I actually expect the Blue collar workers to do some catching up to the high tech workers over the next 10 years.

There does not seem to be that many people interested in trade work so I expect the Trades to do a lot better over the next 10-20 years.

Seems most were pushed through college and expects a desk Job, so knowledge worker desk jockey workers will be a lot easier to find than they were during the last 20 years.

anyway IMO.

[FlyerInHi]

Well, I think that American real estate was cheap (in relation to wages) before globalization. Now we have wealth from around the world chasing glamour cities.

London is the best example. The run up in prices benefited a small minority of Brits. But local people cannot afford London anymore on local wages (not if they are moving with nothing but a job from Manchester).

Think of it this way. Back in the day, immigrants came to America with nothing and had to work their way up (less competition for real estate) But now we have immigrants with wealth and education coming here. They are not rich, but they are solidly middle class with downpayment money to buy houses (more demand for real estate).

People can sell a house in China, Slovakia, Mexico, etc… and have $100k. Families can pool resources together and achieve that.

[FlyerInHi]

[quote=The-Shoveler]I actually expect the Blue collar workers to do some catching up to the high tech workers over the next 10 years.

There does not seem to be that many people interested in trade work so I expect the Trades to do a lot better over the next 10-20 years.

Seems most were pushed through college and expects a desk Job, so knowledge worker desk jockey workers will be a lot easier to find than they were during the last 20 years.

anyway IMO.[/quote]

I agree Shoveler.

But being a successful plumber is not easy.

A lot of blue collar folks don’t have the wherewithal to make it because along with low education they have problems such as addiction and family issues.

The guy who owns the plumbing business will do fine; but he will cycle through tons of workers who don’t make it.

Managing blue collar workers is not a piece of cake either. You have to speak their language and be of that class to build respect and cooperation.

[poorgradstudent]

Housing costs have definitely gone up while wages have remained quite stagnant. The rich have really gobbled up the lion’s share of this recovery, at least so far, although wages do tend to be a lagging economic indicator.

Of course, looking at 2011 is going from peak affordability, the bottom of the crash, up through the normalization to whatever we’re currently in. More accurate would be to look at something like 2007, after the bubble had deflated, but much closer to “normal” prices.

Not all metros are created equal. San Francisco has fully developed its landmass. There’s really no where for it to build out anymore. So even if incomes aren’t able to support the demand side of the equation, there’s no way supply can help fix the problem.

I’m starting to see SOME upward pressure on wages. If unemployment can stay fairly low that’s likely to help push salaries up, finally.

[mixxalot]

True one must speak Spanish to work or manage blue collar workers! ALL or 99% of them are illegals from Mexico and Central America who demand constant supervision and even then they fuck things up on construction projects.

[bewildering]

[quote=FlyerInHi]Well, I think that American real estate was cheap (in relation to wages) before globalization. Now we have wealth from around the world chasing glamour cities.

London is the best example. The run up in prices benefited a small minority of Brits. But local people cannot afford London anymore on local wages (not if they are moving with nothing but a job from Manchester).
[/quote]

I agree housing in the US is cheap for what you get. Even in San Diego. I come from the UK, and the houses are tiny.

I would also say that people expectations change with rising prices. When I looked at living in London I did not expect a Single family home, or even a terraced house. My expectation was a apartment, or even a room. And I was willing to pay a lot for that room. Because it was ‘London’.

My takeaway from the OP’s link is that San Diego has had relatively small increases in Rent and House prices compared to other cities. I would LOVE it if Rich did an analysis of SF housing similar to his San Diego ‘Shambling Towards Affordability’. My feeling is that SF is now well beyond even the last bubble.

I would query the use of average wage. We know there is massive inequality in the USA. I certainly can’t afford a house in Birdrock, but there are plenty of lawyers and doctors that can. Starting Doctors wages (in some specialities) are increasing at 10% per year.

[Author]

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