Housing Prices Skyrocketing
Any of you other young guns freaking out about housing prices? My parents home has appreciated like 30% in one year and I don't know how to process being unable to afford anything remotely close to what they achieved despite them making nothing like what I'm making.
Overall I'm just finding it really challenging to figure out what the point is of pursuing this challenging career if my one goal has become so unattainable because idiot boomers can't run reasonable fiscal and monetary policy.
Curious all of your thoughts on this and any input on what keeps you going.
It's a tragedy that this is happening. We must pass a $10 trillion bill immediately to research the cause of rising prices. Once we find out that it's because of greedy corporations, I propose we tax them at 97% and use the proceeds to build a housing unit for every American citizen. The remaining funds will be used for reparations, which will stimulate Black and Brown spending in the broader economy. Also, climate change is bad so the houses will run on solar.
Our generation is going to save the planet!!!
Edit: I was just kidding folks.
Or you know... Sustained low interest rates is disproportionately helping the wealthy and exacerbating the wealth gap every year. Couple that with terrible fiscal policy and tax breaks and you've got yourself a middle and even upper middle class that are fucked.
4 people don't understand sarcasm...
On the market for a house in SoCal.
My wife and I do pretty good.
My friends and their wives do pretty good.
Little success amongst all us.
Very discouraging but its the world we live in.
Move to Texas.
Looking to buy in 3-4 years. Are you in LA? What areas are you looking at?
you want to be in the market, not on the market. not surprised you haven't found anything up there
House prices have risen recently because of monetary/fiscal policy decisions, but also lifestyle choices of people moving out of the cities and into the burbs. Once you take the latter out of the equation, hopefully things will be a little more manageable in the long-term. Also, once the boomers die, there should be some nice houses available. Maybe you'll even inherit one...
Agreed here, only thing I find disconcerting is the lack of significant price movement downwards in the centrally located real estate. Given that the masses are investing in residential real estate based on comparables I'm quite concerned that these escalated prices across the board become the new normal and people just live worse lives to afford their homes, myself included should I choose/have the opportunity to action the goal.
What is the one goal that is not achievable? Owning a house? Your title says you work in PE, I’m pretty sure you’ll be able to live a comfortable life.
Interesting, maybe I'm in a different bucket because I'm Canadian. Toronto housing has escalated at 6% unlevered over the last 20 years. Current median detached house in Toronto metro is 1.7m. That's reasonably like 17x my post-tax income. It is a bit disconcerting the amount of achievement that will be required to even saddle the median detached house if historical trends maintain.
Depends if you think Toronto home prices are correct or a massive bubble. Case1, its NYC/SF trend and is just globally becoming a more desirable place to live. If that is the case, SHOP is not the first company of its kind and possibly in 10 years there is more than 50 more SHOPs.
Now you as an Asso1 says homes are 17x your post-tax income. Do you expect your income in 3-5 years to grow faster than interest rates? If so you are at an advantage in society to lever a mortgage with low down payment and enjoy the price boom higher (we are assuming here house prices keep rising).
Case2, home prices bubble crash so interest rates never go higher. Still in this scenario your income probably grows with seniority but the unlike case1 its less rapid possibly. I assume in this case the math will come back to 3-5x in 5 years for you.
You good man...
Yeah comp in Canada is different (lower) than the US. But making $100k all in after taxes early in your career (assuming based on your title) seems like you are well on your way to be able to afford this lifestyle. Will depend on how your career progresses, etc but mid/late 20’s at a few hundred thousand pre taxes is a great start.
6% “unlevered” wtf lmao
We work in finance friend...inflation = goood...Relax you aint in the middle class.
Unless this is a post about deep philosophical debate about affordable living.
Interesting take, I hope you're right. On the latter point, this wasn't the intent. On the point of being in the middle class, it depends where you're planning to live. Seems like in Canada that in the vast majority of front office finance jobs all-in compensation has stagnated. After the significant (and likely to rise) taxes, from a wealth perspective you're pretty middle class but maybe I've just set my hopes too high / am out of touch. It's just bizarre for me to see many formerly middle class area turn into ultra wealthy suburban enclaves that I will be unlikely to be able to participate in because I was simply born too late.
Personally I think the tax hikes are about to slow. They are on a tear right now but inflationary environments politicians get fired due to taxes in longterm. You cannot tax more and spend more unless gdp/incomes grow over time. Guess better question is why you see wage stagnation are these people leaving the industry?
The other aspect of this is the huge increase in "active adult" communities. Boomers benefit from big gains in home equity, and then they can turn around and buy housing that is legally set aside for them only. So the supply of housing available to them is increased by law, which reduces the prices they need to pay, and the supply available to younger people is constrained by law, increasing the prices for them.
And these developments have only been allowed since the late 90s, so boomers didn't face this issue when they themselves were young.
Meanwhile age is a protected category in other contexts: a 56-year-old can sue a tech company if he's fired by his 40-year-old boss due to his age, but he can live in a 55+ community that the 40-year-old isn't allowed to live in. I don't understand why this isn't a political scandal.
Really fortunate to have bought 5 years ago, but worried about what I'll be able to afford when I have a family in 3-5 years.
Bravo, a guy who ostensibly works in PE but thinks himself a victim of housing prices. A good reminder of how naïve and out of touch some of the personalities you find on this forum are.
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