There is some gap there. But it’s not as wide as many would have people believe. As a ratio it’s maybe, generously... 20% harder to buy real estate in general. But in the details, outside of the urban hell holes, there’s actually quite decent deals.
Problems include urbanization and this odd idea that as a city grows by multiple millions of people that nobody is going to have to commute, and everyone is going to be within walking distance or a cheap Uber to everything.
I swear the whole “walkable community” was a Boomer developer who came up with that to raise the rent in their crappy old apartments near city centers until they could renovate them and charge double that even. LOL. Big cities you’ve always had to go further and further from city center to find affordable livable new housing.
In “popular” cities like Denver the gap percentage is higher but average wages have also grown significantly. We’re just repeating California. Sure you have a six figure job, but your house cost $1M. If people can’t figure out ratios they will keep moving here. It’s dumb. And why the Metro now spreads from nearly Wyoming to Colorado Springs. Because guess what they’re actually doing? Commuting. Through a city center that hasn’t added significant traffic lanes in two decades. It’s beyond retarded to want to move here for that, but they keep coming.
Pensions were gone when I entered the workforce in the late 80s. Not sure who revised that history, but GenX doesn’t have them unless we worked for government. One of my folks had one and it was bought out in an early retirement pitch. Here’s hoping they invested it well. The other one never had one and had to save it all in IRAs. Didn’t even have a 401k. He retired at 53. So he really got after it. Eventually he went back to work out of boredom and needing to have a little cash to pay for medical coverage until 62. And then he didn’t make it to that even.
Have to agree here. Our first “starter house” was a two bedroom condo and it was over $150 at the time. We rented for years to save up a down payment for THAT real estate, and there weren’t any “no money down” loans. Even an FHA was 10% down and that was non-conforming and cost you a couple of interest rate points. I believe our first was pushing 8%.
Our second property was a 1968 built brick thing, two stories with unfinished basement and an attached one car garage you couldn’t have ever fit a 1968 car into, it barely fit a compact of today. The owner had hand built a detached two car in the back yard which is what sold it to me. It was up past a quarter million bucks and it was a streeeeeetch for us. Fiscally we overbought by a good chunk. We had to hustle to pay for that place and also work on paying it off.
There was absolutely nothing modern inside it that we didn’t install or work on ourselves. The only good news was when it came time to rip out the carpets, we found the standard red oak hardwood that builders used and hid in the 60s. Never finished. That was thousands to finish it, but worth every penny. No A/C, just an 80s vintage furnace and kitchen and baths. One bath was still 60s light blue. And it was great. Bought it in August of 2001 and was out of a job by November. Ha. We somehow managed to not miss a mortgage payment while I hunted for a job for a full year.
We were pretty frugal before that but that’s when we learned how to be REALLY frugal. And happy at the same time. Our awakening to not having ANY debt came from that layoff. So we got after it.
I took eight years off of flying to pay for all of the housing and life stuff. Really the opportunity to co-own was when I got serious about it again, and I bought into the airplane in 2008 or 2009 I think it was. A photo came up of me washing it that was ten years old on FB last week.
LOL. I liked the detail.
Denver again has that “popular” curse and it just kills people but they keep coming. Median house is almost $500K, and median salary is $76K. So the gap is wider.
The stupidity is that people keep paying the half a million bucks for the houses. The Californians moving here have been extra stupid in that they’ll scrape a 100 year old house off a tiny lot and replace it with a $2M McMansion eyesore pushed to within inches of the lot setback. Frosted windows on the sides required or someone will be watching you take a dump from theirs next door. The suburban builders are doing it also. Three story things that you can’t fit a lawn mower between.
And these will all sit empty during our next real economic bust here. It’ll happen.
But yeah. Different values for lots of younger folks and that’s fine, but I do think they then get surprised when folks say “So now you want a house and it’s not going to be a pretty one, and you’re going to have to dump the $2000/mo city center apartment with all the amenities and move into a much cheaper one for about four years to save up a down payment on the old small starter house way out of town. You’ll also be needing a reliable couple of inexpensive cars to make that commute... And if you want to go out regularly it’s going to take a few big promotions or you’ll be cooking...
To go from that relatively nice condo to that first house took a BIG hit on aesthetics and a commitment to doing a bunch of work on it ourselves. And no, as much as I would KILL to still have that condo as a rental property today... we couldn’t afford not to roll every penny out of it into the house either. That condo would be making us a small fortune if we could have held on to it.
It’s all in priorities and expectations. I should drive through the neighborhood they built on top of the old Stapleton airport and shoot some pictures of how crowded the little townhomes are, and then shock folks with their price tags. Insanity.
I work in an office that’s a converted warehouse a quarter mile away. Ha. We have fifteen year old ORANGE indoor/outdoor carpet. Because we all know putting new carpet in means someone we can’t hire or pay better.
My desk literally sits on the north end of the old 35R runway.
