Hmmm. The top 1% nationally is somewhere between $500k and $700k annually. Even here in SF, you can live in a nice house for that kind of dough.
Did you mean top 10%? Now you're down to about $150k. I do think a two income household at that level can manage it, but it's surprisingly difficult and maybe not worth it when you have kids and both parents have demanding jobs.
I hope that's not a nitpick. I agree with your list and what you've said, I just think that the top 1% isn't the threshold.
Americans especially have a very skewed expectation when it comes to housing. Many people here are like "I have an upper middle class professional income, my family should have no problem affording a 3-4 bedroom single family house on a quarter acre lot with a big backyard for our dogs to run around in right in the middle of one of the most desirable metropolitan areas on the planet! Oh btw the free public schools should be excellent too!".
Saying something like that would make you sound insane in pretty much all developed countries. U.S. is a big exception due to historical reasons, but people really need to adjust their expectations going forward.
Thing is: It was doable 10-30 years ago (depending on region).
I have neighbors who bought their $3m homes when they weren't even $800k (adjusted for inflation). And since salaries + stocks have grown much faster than their property tax burden (basically frozen) - they're all retiring early.
People have expectations based on what they grew up with or what their parents grew up with or what they saw people achieving as they grew up. Can't blame them when they get out into the market and finally start saving that they're gonna be 10 years behind for the rest of their life...
And 150 years ago you can probably buy a few acres of land in SF Bay Area for less than the inflation-adjusted price of a townhouse in Mountain View these days.
Real estate is one thing that does not scale infinitely. Population grow, things change.
>can't blame them when they get out into the market and finally start saving that they're 10 gonna be 10 years behind for the rest of their life...
That's the thing about Americans. The speed of change in this country has finally increased after decades, especially when comparing to many fast developing countries. A lot of people just don't know how to adjust for that.
Wouldn't be such a big issue if housing policy kept up with the change. That's the biggest issue for young people. They want the change but young people aren't in control. (And for whatever historical reasons - young people still don't vote enough to enact the change they wish to see)
I'm not sure if there is any policy that would lead to everyone being able to afford the same amount of real estate as if it were 30 years ago. That's just impossible given the context and population growth.
We could easily build more high density. There are a lot of young people who are interested in high quality high density housing - but it's just not available. Not everyone wants or needs a SFH. We don't build up in this country almost at all and that would solve a lot of the pressure. (It would also allow for people to use other means of transport that they actually prefer - many young people don't want to drive!)
There are a ton of people who are interested in living in densely populated big cities but the issue is that there isn't enough high rises or tall residential buildings to offset the demand.
There's definitely policy that could be done but it'd destroy the existing value for homeowners and landlords. That's why it doesn't get passed - obviously.
Also what the SF Bay Area lacks is family oriented high density housing. High density housing is built for the young and single. Family oriented means easy access to fenced in playgrounds and parks, small but numerous bedrooms with large living rooms, etc.
You've gotta admit, it's pretty messed up if you're making 3x the national median household income and your only options are run-down dumps on the wrong side of a 45+ minute commute
>it's pretty messed up if you're making 3x the national median household income
3x national median income would actually mean something if real estate costs the same nationally, but obviously it doesn't. Many areas in the country costs far more than 3x in terms of real estate prices.
If you make the 3x the median income of the area you live in, then it would be a stronger argument.
Maybe Americans should consider an apartment. I make only a small amount over the average and with my bf we can easily afford a nice 2 bedroom apt anywhere.
Every time I propose this people think I’m on another planet but the lifestyle is really great tbh.
Considering how poor soundproofing standards in America are, and how inconsiderate the average American is, apartments are not a consideration for anyone who can half afford a SFH.
This is not inherent to apartment buildings and is probably mostly an issue with the smaller wooden ones. I live in a 30 level building and haven’t heard a single sound from any neighbours. Turned my music up to what I used to in a house, went in to the hallway and could hardly hear a single thing from directly outside my door.
Probably the easiest way to find out before buying is to just stand in the lobby and ask the next person who walks past what they think.
Where do you find properly built apartment buildings with a soundproofing barrier in the underfloor and brick party walls?
My in-laws lived in a mid-height (4 floors) concrete-and-brick building that went up under Salazar. An equivalent building in the US would be built in wood and sheetrock pretty much everywhere. Even 5000 square foot doctors' palaces that go for half a million dollars are stick-and-cardboard. Solid construction you'd only find in highrises in urban centers, and even then it's not guaranteed that the walls aren't made out of cardboard.
You see these sprawling neighbourhoods of SFH's with 1.50 m separation between buildings and very much the whole lot paved over. Everywhere else there would be mid-rise multifamily buildings, but the American insists on an SFH, because soundproofing.
To be honest, I'm not sure what the appeal of mid height buildings are. They have all of the downsides of an apartment with none of the upsides of a high rise like better quality construction and better location.
To find out what the quality of a building is you are best off just asking people who live there what they think. Apparently you can also request that strata give you information like owner complaints which may bring up noise disputes.
The point of mid-height buildings is that you can line a road with it and get sufficient density so that all the urban amenities (parks, playgrounds &c) are within 15 minutes of walking. That was Salazar's explicit goal when he built the post-war Lisbon neighbourhoods - church and primary school were the focal points and had to be within walking distance. His architects did an admirable job.
But what's the appeal of a high-rise? It requires too much space around it, it's not made for the human scale.
Depends what the definition of high rise is I guess. I live in a 30 level building that I consider pretty high and it sits on the entire space of the block it is on with only walk ways between it and the next building. I'm more talking about these 4 level apartment buildings which seem pointless to me.
Around Mountain View, 150k a year would let you buy a run-down dump of a condo 45 minutes away, or rent a crappy apartment and gradually become poorer every year as housing prices continue to inflate out of control
Ok, but then I think it’s just as many people think “I have enough money in my paycheck to cover that mortgage payment so that means I can afford this home”.
When they aren’t considering the rest of their finances or what they would do if our of a job for multiple months, etc. Not unrelated, the number of first time home buyers that buy a new car within 3 years is like 75%.
We do a really really bad job at teaching finance in schools.
Not in all schools, mind you. Americans are bred and battered to exist as consumers, to work to consume, to work more and more, to wade deeper and deeper into the sunk cost of lost opportunity and useless industrial waste made useful only by measuring its bulk in third party business income from storage units leased.
Did you mean top 10%? Now you're down to about $150k. I do think a two income household at that level can manage it, but it's surprisingly difficult and maybe not worth it when you have kids and both parents have demanding jobs.
I hope that's not a nitpick. I agree with your list and what you've said, I just think that the top 1% isn't the threshold.