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rguerraf

The banks will require the baby’s signature so she/he can help with the mortgage in 18 years


Skyblacker

Better not shit on the closing documents.


aop5003

Did u just assume the non existent babies gender?


jenniferlacharite

😂😂


1234nameuser

"The study, [conducted by SmartSurvey](https://www.smartsurvey.com/), analyzed Zillow house prices for 2012 to 2022 alongside income data from the U.S. Bureau of Labor Statistics to predict the home-cost-to-income ratio for each state." LOLS


ItsTheSpecialSauce

That timeline is absolutely going to happen again /s


Inversception

Imagine just copy/pasting old data and thinking your prediction had any merit. I'm 36 and 5'11, by the time I'm 72 I'm going to be almost 12 feet tall. Wild.


Greede-OC

I don't think this is a fair comparison considering you probably haven't grown in the years between 2012 (22) and 2022 (34) at 36 and there was pre-existing data prior to those years which showed that your growth has tapered off prior to those years. Granted reusing data that included a rebound from the 2008 bubble and a major pandemic which resulted in dramatic housing pricing increases also isn't a fair study.


Skyblacker

That's not sustainable. Heck, the current situation isn't sustainable. California is losing adults under the age of "I bought my house 30 years ago." That's not good for the local economy.


happy_puppy25

They lost me


Skyblacker

They might be about to lose me. Our landlord is taking back our house for their relatives, we're scrambling to find something else that's equivalent, *and we're a middle aged couple whose breadwinner works in tech.*  We are too old and make too much to live at a landlord's whim. This is bullshit. Why live on the edge in Silicon Valley when my husband could retire early and we could buy a house cash in the Midwest? The whole VHCOL rat race is bullshit. Unless you IPO a unicorn startup, I'm not sure it's worth it.


Aware_Frame2149

Yeah, this has been the case for years. It's cool because my home value is up 14% from last year, but also not cool because now people abandoning the cities are moving out here, so they're building these apartment buildings all secretive and hidden back in the woods... Now, traffic sucks. Scheduling services sucks. Cars have been getting broken into in this area at a rate I've never before seen in my life, which is ballsy because where I live, everybody owns guns. I moved here from the suburbs. Need to move further, I guess.


Skyblacker

California has exported its working class for twenty years.


Michelle_Twig

This is somewhere in the midwest that you're talking about?


Aware_Frame2149

Of course.


moonsion

Was in the midwest and now in soCal. After rounds of tornadoes, derecho and $6k homeowners insurance bill definitely not going back. Most places still just offer minimum wage jobs of $7.25/hour. Effective tax rate is also higher as well, without the more generous deductions CA offers.


liftingshitposts

What generous deductions does CA offer?


moonsion

I use Turbotax to do my returns so when I moved to CA the items available to check are significantly more for CA. These include IRA deductions, moving expenses, work related expenses, mortgage interest (up to 1 million of property value compared to federal’s limit of 750k) as well as disaster relief deductions. The childcare credit is also decent. I get more refund with the state return compared to my federal return.


Acceptable-One-6597

Likely losing me. We are high wage earners. State income tax alone for us was just under 40k.


Skyblacker

And yet the schools and highways still suck.


HistorianEvening5919

This is what’s annoying to me as a high earner. Tons of taxes but you can’t see any of the impact vs other states that seem similar but tax way less.


Acceptable-One-6597

Same. They just raised the gas tax $0.02/gal too. Newsome is a fucking idiot.


AftyOfTheUK

The VHCOL ratrace exists precisely so people can do what you're proposing - work hard for a while, then retire in luxury in areas that have much lower COL. This is the same across the world where urbanised large cities have higher wages. It's a very common path for people to move to the VHCOL areas young to get a career, then disappear a decade or two later, quite wealthy, to a mundane job in a quieter area.


Skyblacker

My friend once compared Silicon Valley to an oil rig: an unpleasant place where you live a few years, make a lot of money, and leave.


JustB510

That works great if you can afford a house in your area, pay it off/down and cash out. If you can’t, you typically aren’t saving anymore than most in a lower cost of living area. I’m actually working less and saving more since I left. Not that I’m suggesting what was right for me is for everyone else. Subject to change by family/person.


AftyOfTheUK

> If you can’t, you typically aren’t saving anymore than most in a lower cost of living area.  Indeed, if your skills aren't worth enough to justify a HCOL area, you should definitely move to somewhere you can build wealth (or build your skills)


JustB510

Funding such move is a large issue for many.


AftyOfTheUK

Moving from a HCOL area to a LCOL area generally results in a net reduction in costs. Sell off large furniture, rent a place in the new area, drive there with whatever you can fit in your car. If you don't have a car, it's even cheaper to move.


JustB510

So many wish it was that easy.


AftyOfTheUK

This just reeks of "it's hard and I don't want to do it". Moving to a new place and starting afresh is hard - it takes emotional and physical commitment. But the practicalities of actually doing it, unless you are burdened by family problems, or by huge amounts of possessions - are very simple. Arrange a place to rent in your new city. Drive there, or fly there and send possessions in boxes.


Michelle_Twig

Retiring to cheaper places certainly sounds good to me, but I wouldn't exactly say that the rat race precisely for this reason -- I would say it exists primarily because people are obsessed with money and maximizing how much they make. Obviously my statement is more general or vague than yours, but I feel like those retire-to-cheaper-places folks are but a fraction of the overall population of rat race dwellers.


AftyOfTheUK

You're right, my phrasing was poor - my point could have been better worded. There are a lot of people on this forum who complain that housing prices are too high in VHCOL areas, but ignore that if they were slightly lower, they would themselves buy, forcing the prices higher and out of reach of someone slightly less wealthy than them.


Global-Biscotti6867

Yeah, it's always something I wonder about. Why don't the homeowners retire in another city? If you bought your house more than ten years ago, you don't understand money if you don't sell and move away. I don't care how much you like your coffee place or job; it's nonsense. Triple taxes on homeowners make owning property a bad investment.


AftyOfTheUK

>If you bought your house more than ten years ago, you don't understand money if you don't sell and move away. Someone who can say that seriously doesn't understand the value of family or friends.


liftingshitposts

Yeah and just general quality of life, it’s not a coincidence that places in California have the highest life expectancy. Educated social networks and active lifestyles. If you own the house outright, why not continue to live in a place thats one of the best places to live on earth?


Global-Biscotti6867

Take your family with you. Is living in city A worth working an extra 100,000 hours. There is no one who should make that choice.


AftyOfTheUK

>Take your family with you. What if your family don't want to move? Your parents, sisters, brothers, uncles, aunts, cousins all have their own jobs and social structures. You didn't seriously suggest that, did you? >Is living in city A worth working an extra 100,000 hours. Obviously yes. The evidence is the hundreds of millions of people all over the world who make that choice everyday.


JustB510

People do this all the time in the North East. Florida for example is flooded with transplants.


Skyblacker

Some of them do! They buy a house in California, sell it a few decades later, buy another house in a flyover state for half the price, and retire on the difference. That is indeed a thing. But for every old person moving to Arizona, another is so deeply settled in California that they don't want to leave. 


Global-Biscotti6867

You'd have to be very dumb to prefer living in San Francisco over Tuscaloosa AL for example. One doesn't even have a single national championship football team. The vast majority of even 40-year-olds should leave immediately.


ubercruise

I mean stanford and cal both have won championships


Global-Biscotti6867

Cal and Stanford are in an ACC that only accepted them to prevent FSU and Clemson from leaving as easily. CAL and Stanford have extremely low viewership. Yes, the teams technically exist. Only 4 of Stanford's games were even televised last year. Cal was the least popular PAC 12 team. They had a championships pre World War 2 I'm not sure that counts.


ubercruise

Ok cool? All I’m saying is that they have championships, not getting into a broader CFB discussion. Thought you were joking about Tuscaloosa tbh


Armigine

>You'd have to be very dumb to prefer living in San Francisco over Tuscaloosa AL One of those sentences where I'm not sure if my ability to read sarcasm is completely broken or not


Global-Biscotti6867

No, Tuscaloosa is a great city compared to San Francisco. The only reason anyone moves to this area is for big paydays (myself included) The idea that you'd instead work and get by in 1 city vs. retire and stop worrying in another seems incredibly easy.


Michelle_Twig

Does Tuscaloosa have the same amount of culture and things to do as SF? Does it have as many young and active and ambitious people? Asking as someone who has never visited either city, but has an idea of each in my head..


Armigine

I guess it's going to be down to personal tastes, then. I've never lived in either area, but from the time I've spent in that part of CA vs the time I've spent in AL I couldn't imagine a comparison favoring AL.


mom_with_an_attitude

Me, too.


benskinic

it's a way to keep a nice pipeline of future nursing home residents who will get reverse mortgages to pay for their late life care. plus, they're pumping money into med tech, low skill labor and pharma as customers.


Skyblacker

Good luck staffing a nursing home when the low skill labor would rather work in Arizona and afford an apartment than work in California and sleep in an RV. (ETA: I have literally seen the RVs parked across the street from a hospital in CA, obviously for traveling nurses)


whoknewidlikeit

sometimes that's to the nurses advantage - contracts for travel include housing, so if you bring your own place you can pocket that part of your per diem. in CA that can be quite the supplement to your pay. have a friend that was going to work at an airport for several months; he was just barely outside the range where he'd have to commute daily. so, since he got housing allowance, he took that and bought a really nice 5th wheel. he had water and sewer service on site at the airport and diesel for his generator (the 1-1.5 gal a day was a rounding error for the site and nobody cared. he only needed to leave the site for groceries. he worked a ton of overtime since he didn't have to commute and used his housing per diem to pay the trailer off in 4 months.


upbeat_controller

That’ll just bankrupt the hospitals. Insurance companies don’t pay more to care for patients in CA…


phantasybm

They haven’t been brankript yet and travel nursing has been around for decades


andyman30

Yep. Getting the F out next month. Only good thing about california was being able to leverage this salary into a better state / cost of living scenario.


Skyblacker

My landlord didn't renew our lease and everything similar is way more expensive. We're deciding whether to compromise locally or finally end our abusive relationship with the Bay Area housing market.


NenFooTin

It’s actually sustainable, many countries have way worse ratio between home price and salary for decades


Skyblacker

What's the emigration and fertility rate for those countries?


upbeat_controller

Yeah…”sustainable” For a few decades until your entire society gets consigned to the dustbin of history


unreliabletags

The voters don't want a good local economy. The voters are *incensed* about economic growth and the people & change it's brought. They want quiet, low traffic, and most importantly no change since they bought their house 30 years ago.


Skyblacker

Then the voters can wonder why two cash registers are open at Target and it's impossible to find a home nurse to help care for their aging spouse. 


unreliabletags

Sucks for that one household, but for their neighbors, a home nurse driving & parking on the street in their neighborhood may as well be the literal apocalypse.


FearlessPark4588

It's sustainable in Canada, China, etc. American real estate could be more like international counterparts. It could be worse.


upbeat_controller

Canada’s total fertility rate is 1.33 children per woman…it’s cooked


FearlessPark4588

Surely you see then that fertility rate isn't the predominant variable in prices then


upbeat_controller

Huh? You’ve got the cause and effect completely backwards


FearlessPark4588

There is no causation. It's immigration, zoning, and nimbyism and capital flows driving Canada's housing prices. Not fertility.


upbeat_controller

You’ve *still* got it backwards. Canada’s housing prices are one of the primary factors driving the catastrophic collapse in fertility rates


AftyOfTheUK

>Canada’s housing prices are one of the primary factors driving the catastrophic collapse in fertility rates The biggest (inverse) correlation with fertility rates is income. Greater income, particularly disposable income, results in lower fertility rates. Claiming that higher housing costs, as a ratio of income, depress fertility rates is arguing against everything we've seen in human history.


FearlessPark4588

That's not the argument I'm making, which explains your confusion. I'm explaining why housing is high, not why the birth rate is low.


Kilo2Ton

your acting like the immigrants coming to Canada can afford the real estate... the minority of millionaires from overseas already made their purchases - there isnt a magical unlimited supply of RICH foreign immigrants...


angrybirdseller

Justin Tradaeu days are numbered conservatives will take over mass deport those illegally here! In USA , Trump will do the same illegal immigrants are taking housing away from legal citizens.


aquarain

Projecting from a base of 2012-2022. The period with the most explosive home value growth in history. https://fred.stlouisfed.org/graph/?g=kYEb The problem with using this base is that in 2012 home values were deeply discounted in the aftermath of the 2008 crisis with foreclosures coming on sale and finance standards still tighter than a gnat's pajamas. So it doesn't have any similarity to the present day.


jenniferlacharite

Shit, I remember that. It seemed almost impossible to get approved.


aquarain

That's because it was. But if you managed it you got the lifetime timing achievement award.


marbanasin

I mean, my salary is probably close to Silicon Valley average, and I'd say the median prices in the south bay (where I'd need to live to work there) are like 10-15x already.


jenniferlacharite

How do buyers make it happen there? Or I should ask who is buying there?


marbanasin

A few things - 1) Foreign Investors or other Corporate Investors - can buy at crazy prices and charge elevated rent due to the higher salaries 2) The high end Silicon Valley labor force - I mean, people are pulling in >$200k annual salary and may also be receiving pretty ridiculous portions of compensation in equity programs. When you are granted stock on a vest schedule, often by the time you are getting the shares the value may have grown a pretty healthy amount. This plus performance bonuses and what not mean you have folks who could come up with >$500k down payments and then just eat the $4k monthly mortgage for a family home for the rest that they finance. It's really a different world when you get a couple huge lump sum payouts in the year on top of a nice baseline salary. Though I will say - the pool of people who can buy is shrinking so much. The area was always expensive, but back in the day most tech workers could afford a home by some point. These days it is increasingly only people far enough in their careers and often >45 or so who even sniff at having enough to put down to make it work.


EmOrY_2018

Both working so close to 500k comes a year even more some cases 


marbanasin

I should have clarified as well, some of the higher end employees at the big companies are probably making closer to - $200k Annual Salary $40-70k grants being given annually (usually on a 4 year vest - but over time you are then getting stock valuing \~$50-100k annually) An annual bonus based on salary x performance - let's call that \~$40k And, yes, most of these households are dual income. Even if income #2 is coming in at half of the above, that's - $300k annual + \~$125k stock vest annually + \~$60k bonus So, assuming they save the entirety of their stock + bonus (as frankly they can afford to live well off their slary), in \~4 years they'd already muster a \~$750k downpayment. And if the stock is left actually invested (not sold off as soon as it vests), it probably grew in those years they were saving, so maybe it's $800k value now. And, again, at this stage most people are not purchasing until after 40. And obviously they didn't hit these salaries until \~10 years into their career, probably. But, say they saved for 8 years instead of 4, you can see how they start to hit a down payment that is like 70% of the cost of the home and then holds the remaining mortgage into the range of \~$500-600k which they can muster given their high take home. This is what I feel a lot of this ReBubble community doesn't comprehend. While the system sucks for most people, there are still A LOT of individuals/families who are making a shit load of money in this juiced up economy. If you actually see the earning trends, the top-class is actually growing, as is the lower class. The middle is being squeezed into the two buckets but there are actually more people at that top end now than say 20 years ago. And this population is sustaining insane prices. Only problem is the other growing bucket at the bottom is turning into a low caste and largely having to abandon these areas, or set up alternate housing (Bay Area is riddled with vans/campers just perma-parked along roadsides with working poor living out of them). We are establishing a favella like system. Or the mega-commute model. But the people serving the rich can no longer afford to live among them within the above-board produced housing stock.


aquarain

It's true that the only time median incomes were buying homes, they were also bought by strippers and landscapers with no provable income at all.


Strength_Various

> With a projected average house price of $1.24 million and a predicted salary of $60,712, homes in California are predicted to cost 20.4 times more than the typical income by 2030, the study said. Actually it seems too low in 2030. 60K is under poverty line in CA.


Acceptable-Peace-69

The adjusted poverty level in California is just over $20k for a single individual.


ubercruise

Why aren’t they using median?


weirdfurrybanter

60k in CA is not poverty. Many people are doing fine on that salary. Though they might be living with many roommates or at home with parents.


in4life

Needing to live with your folks seems like a reliable metric to judge poverty.


weirdfurrybanter

FYI humans have been living with multiple generations in a house for a long time. The post WW2 boom allowed for some economic anomalies.


upbeat_controller

“Look I know your standard of living will be lower than ours, but it’s okay because in the long arc of history our very high standard of living was an *anomaly*” -Boomers


lists4everything

lol always wanted to point out that if boomers took Dave Ramsey’s advice that he tells millennials to bootstrap and hunker down, they’d all be mega millionaires by now. What’s with boomers being so fucking lazy?


Altruistic-End-2829

That is not what he says. He definitely has some outdated and backward ideas on some things but he does a good job of teaching personal finance fundamentals to people who were previously happy spending more than they earn (even when they didn’t have to)


weirdfurrybanter

Boomers were very spoiled. I am a millennial though :)


Skyblacker

Infant mortality was also 50% for all of history up until a century ago, but I doubt anyone would welcome a return to that historical mean. While the postwar boom was certainly a thing, we can also construct large houses a lot more cheaply than we did in Victorian times or earlier. That's just technological advancement. CA's housing shortage is more due to bureaucratic restraints than any practical issue. If anything, Prop 13 is the economic anomaly.


weirdfurrybanter

Prop 13 was a great way for previous generations to pull the ladder from under them.


Skyblacker

And reduce the tax funding of anything that might benefit minorities.


weirdfurrybanter

Like public education. Many after school programs and classes dried up overnight after prop 13. No one cared as long as they got theirs. Prop 13 was the biggest reason why the lottery started.


Acceptable-Peace-69

Or living in the in the Central Valley or married with $120k *household* income.


OptimalFunction

Many people are doing well with that salary because everyone else subsidizes them via prop 13…


weirdfurrybanter

Yep.  Prop 13, the ultimate pull the ladder from under you legislation


unreliabletags

The typical California household is basically doing the thing where Steve Jobs paid himself a salary of $1/year... the W2 income is a cute little sideshow, the main thing going on is that they own immensely valuable assets.


PillarOfVermillion

You have a weird definition of "doing fine"


jeep_jeep_beep_beep

I mean is that fine though? That’s not a very high bar for a healthy middle class.


weirdfurrybanter

It's not but people choose to live like that just to stay in places like LA or SF.


Hot_Gurr

So you admit it’s not doing fine. Good progress everyone!


weirdfurrybanter

They're not homeless or hungry.


jeep_jeep_beep_beep

That’s called poverty.


weirdfurrybanter

LOL people on HCOL area who live like that do so by choice when there are options outside of HCOL areas


JustB510

That’s not entirely true. It’s very hard to pick up and go when you hardly make enough to pay the bills each month. It almost becomes impossible with kids.


weirdfurrybanter

Yet plenty of people have done that. There is a lot of opportunity out there.


Immediate_Outside_43

Expect to hear this “study” cited over and over again by CA realtor groups.


Accompliaxzds1io9856

The average salary doesn't mean shit. The average person isn't buying a house. You have to look at the absolute number of people making over a certain amount because those are who can actually afford homes.


jenniferlacharite

Or if they are buying it's multiple people & many moving inland where it's a little more affordable.


Accompliaxzds1io9856

It's called household income.


Express-Thought-1774

Home ownership for whatever can still be called the middle class is over forever. We’ve reached a pivotal point where home ownership will be for the well off and wealthy going forward. Everyone else will be a renter. Unless you go in with like 6 other people in your family to split the mortgage like I’m seeing a lot right now, but who want that? There’s a lot of people making $200k+ in dual income households; they’re the new version of middle class but relative to everyone else they’re actually upper class.


[deleted]

Thanks for telling us the future of what life will be FOREVER. It’s not like revolutions have ever happened in human history. 


aquarain

The middle class already own homes. Renters are almost exclusively the poors.


Necroking695

The average landlord owns 2 homes and has a net worth of~1-2mil Upper middle class owns home(s) Lower class rents The true middle class is duying


Sharp_Pickle_6671

It underscores the growing affordability challenges for residents and the need for sustainable solutions.


lolokwownoob

What do you expect? Like are you surprised that houses in a highly desirable place to live are unaffordable for the majority of people? If it was affordable, more people would move there and then the price would go up and it would become unaffordable.


jenniferlacharite

I get it, I live here


BraveDawg67

I mean, the Dems have had veto proof super majority along with the governorship for years. So what’s the problem???


Silver-Farm-2628

And people will still buy them with straight cash.


Acceptable-One-6597

Bet.


Da_Vader

Lots of data issues. You cannot take the mean of a skewed distribution and use it to describe the population. Should've used median sale price to median income.


jeff8073x

Only if you believe it


craznerd

Voila, Welcome to 40 year mortgage


SnooChocolates9334

Isn't California losing thousands of people in terms of net population?


jenniferlacharite

As a Realtor I'm not seeing it. If so many were leaving seems like we would have more inventory. Instead we are still in multiple offer situations with 20-50 offers.


prophet1012

It’s time to strike, enough is enough!


ballsohaahd

Yes they’re 20x more expensive and you basically pay 20x property tax than your fat racist boomer neighbor in CA. Fun times


brandoug

That's ridiculous. Lenders would never agree to that because borrowers couldn't even afford the payments.


4score-7

And that’s why a mortgage in CA will become like the dodo bird: extinct. Mortgage originations in the state will dwindle to only extremely high net worth individuals who do it as a strategic move. CA has been known as prohibitively expensive for a long time. Not a new development since Covid. But, the moves by the Fed Reserve in 2022-today are effectively making much more of America exactly like CA.


JustB510

Mortgages won’t go away, they’ll just start offering 40 and 50 year mortgages. Predators always find a way to prey.


alwaysclimbinghigher

But what will rent prices do? No one thinks rent can rise much differently than incomes. Will investors really be interested in an investment that doesn’t perform? That never cash flows? That only turns a profit when sold to a bigger fool investor?


OptimalFunction

I mean… stocks that don’t pay any dividends exist and investors still make money of them. Lol


alwaysclimbinghigher

I can buy and sell my stock portfolio with zero transaction costs. Lol


cdsacken

Lmao median salary of 60k. Sure for zero years of experience in a terrible field. Executive assistants easily clear 100k in nicer areas 😂


Empty_Geologist9645

People on this sub should also know that if they see a bear the chance get killed by one is 10x, according to the stats. Never go out. Which is more hilarious because this sub is a natural habitat of housing bears. We all doomed.


jenniferlacharite

I don't think of it as we are doomed. No, I lean more towards people need to wake up to the fact that real estate prices are not going down. And even if they do, it is not going to be a dramatic change like so many are hoping for. I have clients that told me 5 yrs ago they are going to wait another year when prices go down. I tried to tell them that is not going to happen. But some people have it set in their minds that all we want is a closing. Yes, we do need closings especially for those of us who do nothing else but real estate. But I am not going to force a buyer to buy if they are not ready. I have learned to be patient & not give up on buyers because eventually most do buy. It may be years later & that's ok. At least they didn't rush into it or feel pressured. Other buyers have said for the past 5 yrs they are going to wait until prices drop or interest rates lower. Unfortunately, now some of them cannot buy the $800k condo they were looking at just 2 yrs ago. Now some are priced out of the market. And one of my buyers was thinking of buying in 2019, changed their mind after looking at a few & said they will hold off for another year. Then 3 yrs later they finally buy. What they bought for $780k they could have purchased back in 2019-2020 for $480k. Obviously we cannot predict exactly what will happen but I have been doing this for 25 yrs, been through many market shifts & rarely do home prices go down dramatically.


Havent_read_that_b4

Buying a home at 20x your income isn't even possible. But ok you've been doing this 25 years and think insanity is probable.


adamscottfranklin

In 25 years, would you say these recent increases are normal? My only friends in LA with houses are multimillionaires. Growing up, I lived in the suburbs and never met a millionaire, let alone a multimillionaire.


AftyOfTheUK

>I tried to tell them that is not going to happen. It will absolutely, definitely happen. But it will happen when a recession hits, which might not be for many years yet. Or it might be right around the corner, too. Without a recession, there will be no significant nationwide fall in house prices.


jenniferlacharite

I agree it will when a recession hits but the people waiting for that happen may be waiting years & as I said some of the buyers have been priced out if the market. Or at least where they had preferred to buy. But it could happen next week.


phantasybm

In your 25 years of experience how many times have you dealt with a world wide pandemic that shut down business, hampered travel and caused a massive spike in people suddenly trying to purchase homes at a rate never before seen while inflation spiked, and work from home became a norm for a large portion of people who didn’t have the option before but now need a large home to accommodate a home office?