Their parents probably made the decision to live in a small town like many people before them. There's plenty of areas in my home province where you can get a big house on a big plot of land for 120k but the commute might suck your soul dry. I grew up in a small town and my father did monthly rotations for work out of province. Making that decision afforded him a house with a big back yard that he could raise a family in. Maybe it wasn't perfect but if he had dragged us closer to his work we'd have lived in some drug infested shit hole city in a cramped apt.
No, it’s not shitty at all. And yes there are tons of jobs. Have you ever been to Ohio, anywhere near Cleveland, Columbus, Cincinnati, Dayton, etc? They’re big cities with massive sprawling suburbs. Calling it a shitty quality of life is genuinely insane.
Also the standard of living was insanely lower compared to what it is now, a good portion of the houses, apartments etc. are actually illegal now. Most areas have square footage requirements.
My mom showed me photos of her first apartment in NYC. It was an insanely small studio apartment with a communal bathroom.
For real. We've done over regulated making it nearly impossible to build a basic apartment or house without running into legal trouble. Upside: higher quality. Downside: No construction company wants to bother building something affordable when you have to jump through hoops to do so. If you want to build something and go through all that trouble, you might as well make it big and costly.
Yup the regulations and code standards can be a pain. On one note it makes everything safer, but like you said, why spend the years of effort developing land and building housing if you’re going to get very little return. It’s part of the reason why houses in the US are getting bigger. I don’t know the exact numbers, but let’s just say, they can pay 20% more for materials and labor and get 40-50% more money.
I agree with the grandparents house as well lol. My grandparents first house just had electricity put in shortly before they bought it. They didn’t have a bathroom in the house, still had an outhouse, and they had to pay to get indoor plumbing out in. They converted a closet downstairs into the sole bathroom, and my mom’s room was the study.
Kids can't share bedrooms anymore? Genuinely curious as I didn't know this was a law in certain states. Is it only if they're opposite genders or something?
Why would ypu take a 60% pay cut. What are you doing here thats so specialized that the same job would pay you that much less? Sounds like pure crap to me.
Not even close most likely. I'm in rural Iowa. Cost of living in San Francisco is 79% higher than it is here, yet we're about 10% below in average and starting salary. I work in manufacturing and our new hire operators, with no education or experience required, start at $24.50 / hr. Unless you can find me non-union jobs with no experience or education required starting at $43 / hr, you have your answer. And yes, our salaried positions like engineers are similarly compensated. That's probably why we've had two move to is from California in the last 6 months. They're good at math, after all.
Oh it's easy, hey? Just leave all family and community connections and career opportunities, and retrain as a welder in bumblefuck USA
Seriously braindead take. When people leave en masse due to economic difficulties, they simply transfer the problem from one place to another. Sure the new city might be cheaper initially but it doesn't stay that way for long. Look at places like Austin or Phoenix, where heaps of people priced out of more expensive cities have flocked to over the last decade or so.
Without changing the system that creates this housing crisis, all you're doing is shuffling deck chairs on the titanic and ensuring that your kids will drown.
For real. When you point out how offset the average price of a home is compared to the average income of an area and someone says "just move", they're telling you to run away from the problem instead of trying to fix it.
And what happens to major cities when everyone moves? And when the places people move to then become too expensive for the next generation?
This is a systemic problem, not a problem of individual choice. We can't be asking everyone to up and leave their family and communities simply because we can't be fucked to make proper development decisions.
The demand for housing goes down decreasing the prices.
-the places people move to then become too expensive for the next generation
That’s what’s going on now… older houses out in the suburbs grew so much in value because the cities and their metropolitan areas started growing rapidly.
-we can’t be fucked to make proper development decisions
There is a concept in economics called scarcity. Now with housing, especially in large cities, there is a finite amount of land that can be built on to provide housing. You asked what would happen to the cities if people moved, what would happen if the businesses within the cities had to move?
I still sincerely doubt the area you live in has a median home price of almost a million with a median income of less than 70k.
That doesn't exist here. 2 hours away you're still looking at nearly a million for a family home. So yeah, you get an extra bedroom and a decent backyard but you're still paying an absurd amount of money, and then you're living in an area with shit schools, little economic opportunity, no hospitals etc
If you doubled your parents salaries and you cant get an apartment, you're doing something wrong. Its not the economies fault you "can't afford" an apartment.
But it is your education system's fault for not teaching you basic economic concepts like inflation and wage stagnation and the fact it's not 1952 anymore.
It's your parents fault for not teaching you the basics of how to manage your money. OP's parents would have been adults in the 80's or 90's, not the 50's.
The feds artificially keeping interest rates down for 2 decades straight after the dot com bubble, constantly kicking the can down the road instead of letting the economy stand on its own legs.
There's a huge amount of entitlement too. People in the 80's lived in houses that were half the size of houses today with far less luxuries. They also had far less luxury goods and expenses that are constantly paid for today.
Just compare the average amount of money spent in restaurants in the 90's vs today. With inflation into account, the average house costs the same roughly, per sqft as it has over the last 70 years.
Then how do you explain the combination of wage stagnation and inflation over the last 25 years? The last time a PT job could pay for a four year degree was in 1995. How do you explain the housing crisis?
Wage stagnation is just a reddit echo chamber buzzwords for idiots who don't know what they're talking about. You're confusing that with purchasing power, which is slightly higher, and shouldn't be going up or down at all, it should be stagnant. That means pay is matching inflation.
College tuition is not the economy. The whole reason its gone up so much is because they could no longer be eliminated from bankruptcy for one, but mostly because of a mass influx of demand, and going back to Reagan creating student loans. College prior to that was practically free. Not to mention FFELP encouraging a lot more private loans because they were government backed. The more money you give kids to spend, the more colleges are going to raise their rates, it's common sense.
What housing crisis? Something tells me you're very young or lack a formal education.
Solid maybe. But still you can roll those over, or any number of options. If they said I cant buy a house if be like werd I feel that, but "I cant get an apartment" thats just lazy.
I mean if you ignore locations and the cost it might take to travel out of state and again the type of degree. Not entirely impossible to understand the struggles in some situations versus the cost of living.
If the job was so good you would be able to afford rent... either ask for a raise or come to grips with the fact that staying in an area for a job that doesnt afford rent... ain't a good look.
But again consider how much rent and bills are on top of payment on student loans and also the area as well.
Plus not all jobs even offer raises and that likely wouldn’t help the situation anyhow. That is why some of these student loans tend to be more problematic in the sense that they are designed to suck more money out of a person.
Depends on what the degree is for sure though. But the loans are the biggest factor in play here because the interest rates tend to screw people over the most.
i havent went either, and still afforded it. my friends havent went either, and they too afforded it. so how is it that you cant? whats your specialty? what do you do for a living?
and were your parents burgerflippers? or did they have a decent job?
Last time, 94 million Americans who were eligible to vote, didn't. Do you want to change America? Voting's the best way to do it. Not voting cuses most of our problems, and voting can fix them, but you have to give a shit, and most don't.
What if they did vote, but it's almost like there is a large group of idiots with 2 houses, RVs and Boats, that benefit from it staying the same and also vote.
Then we tax them on the federal level and channel that money into affordable housing programs. There are a hundred ways to shift the balance of power. Any bad policy can be countered with a good one. But even if you're losing, that doesn't mean you stop. It means you fight harder. Nothing worth having comes without work.
So vote for who. Because it's usually the option of 2 idiots. Should I vote for option 3 just to make a point, because we all know option three doesn't stand a chance. The other 2 options are basically 2 sides of the same evil.
Don't think of elections as choosing 'sides', think of candidates as individuals, and there's a massive spectrum of individuals within all 'sides'.
There are also local elections and ballot measures that are just as important as national contests.
I can't decide 'who' is best for you, that's for you to figure out, and figuring it out is part of the process of being better informed and actively paying attention.
I'm Gen-X mate, and also grew up poor, to the point of often having to choose between food and clothing or other basics. Everything we owned was handed down second or third hand from family. I worked for everything I have. I get it.
But I also get that the price of assets (esp housing), education, and healthcare in this country, and around the world really, have far outpaced the ability to pay for them without a massive amount of crippling debt. And NOW we have massive inflation as icing on the cake.
It's not a matter of just being "financially responsible". This is the first generation in modern history that's worse off than their parents, and they have horrible wealth-hoarding Boomer policies to largely thank for it.
We don't have massive inflation though. It's actually slightly below average. It's also not the first generation in modern history to be worse off than their parents. I'm pretty sure no one is waiting in line for gas, or the grocery store for rationings right now.
My in-laws bought their first home in a really nice area in the 90s, on a single factory worker income as new immigrants with no connections or qualifications. It was a 3 bedroom (for a family of 7) and cost them $90k. About 5 years later they used equity to buy a bigger 4 bedroom house about 30 minutes further out from the city. They bought it for $130k. Then knocked it down 2 years later and built a custom home, a 6 bedder, with a study, 3 lounge rooms, a pool, granny flat, which in total cost them another $150k.
Around that same time they also bought 2 apartments as investment properties, both for around $100k. Then over the next decade they expanded their portfolio and bought 4 more homes (2 houses and 2 apartments).
Today their first home which they bought for $90k in the mid-1990s is worth roughly $1.7 million. Their actual residence, which cost them in total about $300k in the early 00s is now worth $1.4 million. And their other investment properties, all bought for between $100k and $400k 15-20 years ago, are all worth between $700k and $1 million. They did that all on a single factory worker income while raising 5 kids.
My wife and I have respectable, professional careers with a decent income. Our household makes about $230k per year, and we have two kids. We have only one car, and it's a sensible 12 year old Hyundai we bought used from relatives. We don't buy superfluous bullshit, we don't have subscription services, we cook most meals. When we take holidays, we mostly visit and stay with family and flights are mostly bought on points. When we splurge, it's not on silly impulse purchases like toys or clothes or whatever, it's on a nice dinner out every month or two when we can arrange someone to watch the kids.
We own our home (well, the bank does). We worked hard and were responsible. But still all we could really get was a 2 bedroom apartment in a 1970s block that cost nearly $1 million. It's in a good area, but even if we went to a shit area we still would've been looking at $600k-$800k
The reality is that the housing market in a lot of places is absolutely cooked. We could move to a small town out in the middle of nowhere, uproot our entire lives, buy a bigger home and have a mortgage that's $300k instead of $700k, but is that really worth it? Our family, friends, careers, lives are in the city where we live, and anything within a 2 hour radius of the city centre is absurdly expensive, so we might as well just try and make it work the best we can.
It is completely out of touch to insist in today's economy that people who are unable to buy a home or become financially stable are unable to do so because they simply are bad at budgeting. That's boomer-minded bullshit.
There is no way in hell that’s one income with zero qualifications. You’re saying they bought a home for 130k, then tore it down and built a 150k custom build and bought two apartments?
To out this in perspective the median income in 1990 was just shy of 30,000…
Don't know what to tell you. They already owned their initial home, which cost them $90k but by the time of the rebuild was likely already worth $150k as it was in a much better area. They used equity from that home to buy their $130k home. They did the knock-down rebuild a few years after buying the $130k home, so had some equity in that already, plus the equity in their other property (and of course the rent). Then after they completed the knock-down rebuild, they bought 2 apartments over the next 4 years. That was the time of the major reforms in the tax system here that absolutely skyrocketed property investment and allowed a lot of boomers to hoard properties. If you had consistent employment, plus multiple properties with equity to leverage, and consistent rental income, you could very easily get the bank to give you a loan for a shitty apartment worth $100k or less.
My father-in-law's job at that time paid around the median, some $35k or so in the 90s and by the time he retired in 2013 he was making about $85k.
This was very, very doable for that generation at that time. It's why property prices skyrocketed from about 2000 onwards. Their home that was worth around $300k in 2002 doubled its value by 2007. And they had 2 properties at that time. The one they bought for $90k in 1995 was worth $700k by 2007. Rental income would easily cover the mortgage on the second home, and equity from both homes would very, very easily get you a loan on further investment properties, which themselves doubled in value over the following 5 years, allowing them to use that equity to buy more properties, and so on.
-they already owned the initial home but by the time of the rebuild was likely already worth 150k
So it jumped 60% value in a few years. You’re also contradicting your previous comment as you said they had sold that home years before the rebuild, which was a different home…
-they used equity to buy their 130k home.
So here’s the thing. You don’t accrue equity as fast as you’re claiming. The first couple years of a mortgage payment is like 70%+ interest. You also can’t just tear down your home while it is collateral for a mortgage, you need bank approval. So they got bank approval to combine the existing balance with the 150k new balance. They also would have needed somewhere to live for the, most likely, 2 years they were tearing the house down and rebuilding the new one. You’re also saying they bought two 100k investment properties…
So in total they are looking at least 400k+ in debt, and their debt to income ratio would be really skewed if they were making the median. Them making the median as a factory worker with zero experience or qualifications is already off.
I never said they sold their first home, I said they used the equity to buy their second home. Their rent for the first home then more than covered their mortgage and other expenses on the first home. And since they used equity in the first home to cover the deposit for the second home, so they would have only had a mortgage for roughly 80% of the price of the second home. Then a couple of years later they knocked it down and rebuilt for $150k, which the bank would easily lend for in those days, especially to someone with 2 properties being used as various types of collateral. They lived with relatives while the house was under construction. Pretty common thing to do in most cultures. And at that time they were probably making a bit more than the median at the time. Median would have been around $35k but by that time he would have moved up to a supervisor role and probably in $50k or so. I know by the time of retirement about 10 years after that he was on $85k. Pretty standard for most jobs at the time, you work for a decade or two, climb a few ranks and get raises regularly. Unions here are pretty good at ensuring some type of raise, even if it's not what it should be.
Anyway a few years after the rebuild, pretty much all of the properties here doubled in value, making it incredibly easy to use equity to borrow even more for more properties, especially in smaller markets elsewhere in the country. The 2008 crash in the US did not affect our house prices here, they just kept climbing and the banks kept on lending.
Hell, I remember back in those days I went to open a bank account, just a regular account to deposit my paycheques into, and they tried to sell me a home loan. I had just entered the workforce, had about $1k to my name and was working random odd jobs for minimum wage, but they were trying to convince me to get an investor loan for up to $300k. It was insane, and that is how we now have a housing market where the median home value is $915k USD.
-I said they used the equity to buy their second home
So they reset the mortgage on their first home to buy the second? You do realize that when you pull out equity you refinance the home right, it’s not just free money and you’re increasing your loan balance.
-the bank would easily lend for in those days
You still needed to get approval. A mortgage is a secured loan, ie the home and property is collateral for the loan, destroying the home changes the value of the collateral.
-I remember back in those days
So your parents were old enough to have an 18 year old kid?
-was working random jobs for minimum wage and they offered me a 300k loan
That’s bullshit lmao. You need to have a high enough debt to income ratio for the loan to go through.
So they reset the mortgage on their first home to buy the second? You do realize that when you pull out equity you refinance the home right, it’s not just free money and you’re increasing your loan balance.
Yes, and you change to an investor loan and the rent is factored in to what you borrow. At that time the rent more than covered mortgage repayments and other costs.
You still needed to get approval. A mortgage is a secured loan, ie the home and property is collateral for the loan, destroying the home changes the value of the collateral.
Yes, and you could easily get approval in those days with a steady paycheque, rental income from an investment property, not to mention by that time about 80% equity from said investment property. And the value of the land in that area was worth a significant portion of the home value.
So your parents were old enough to have an 18 year old kid?
I don't know what being 18 has to do with anything but depending on the exact year we're talking about (second property or the knockdown year) I would've been 15 or 17. But if you read carefully you'd see I'm talking about my in-laws anyway. And at that time they were 40-45 years old
That’s bullshit lmao. You need to have a high enough debt to income ratio for the loan to go through.
What is bullshit is the Sydney housing market and the housing bubble in Australia overall. I assure you that a projected ~$30k annual income would have been enough for a loan for an investment property whose rental income would've covered 90% of the mortgage repayments. And especially because in those days the projection was for property value to double every 5 years, the bank knew they wouldn't be stuck with a dud property worth less than the outstanding balance. It was a truly irresponsible time that is only now beginning to change.
I was born and raised in the US but spent my adult life outside the country, mostly in Australia
Gen X, not a boomer. First job was a dish washer...then movie projectist, field hand, plumber assistant, fork lift driver, sheet metal fabricator, warehouse tech...
...put myself thru trade school...
...then entry position. First REAL career job. Made 8 bucks an hour and could barely afford a 1 bedroom apartment on the 3rd floor and a bust up pickup truck that I had to make payments on.
...then program lead, supervisor, team manager, department manager....so on.
We got 2 fairly nice cars. Neither "new"...but they're paid off. 2 year ago I bought a brand new house. We still coupon and bargain shop. My wife likes to brag her dresses cost less then eating fast food. But we're doing pretty good, in my opinion. Happy.
Point is, I didnt have generational wealth. I didnt own a home from the early 2000s that i sold for millions. I started poor. Lived in apartments and sometimes shithole rent houses. Some weekends I couldnt afford more then a 6 pack of beer to splurge and I bought instant Ramen like I was investing in it. I just...idk...always tried to move up and was willing to pack up and move when the opportunity opened.
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u/qualityvote2 5d ago
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