​How To Afford a House These Days

[halfling]

https://mrmoneymustache.com/2024/02/03/how-to-afford-a-house/

As a resident housing curmudgeon, I was excited to get a fresh take on home ownership from the 'Stache since it's been a long time since he wrote about housing. I'm kind of disappointed that this article was mostly about moving, probably because I already moved away from home to find a cheaper cost of living and still missed the proverbial boat on housing pre-2020. But it's not like he can change the true math on rent vs buy for anyone.

However, I loved the sub-headline "House shopping with your middle finger." Indeed.

[Morning Glory]

I'm not sure how much I like "price per square foot" as a comparison tool because it can mask a shortage of smaller more affordable homes, and make cities with a greater number of small units seem comparatively more expensive than a suburb with only mega mansions.  Price per average unit might be better although not perfect because it ignores regional differences in avg family size. 

[LibrarIan]

It's funny - I just said to my wife a couple days ago that I wondered what MMM's take was on this situation.

Part of me is tired of hearing people complain about housing who aren't willing to lift a finger to change anything about their situation. Eternal victims.

The other part of me - the doom and gloom part - wonders what will happen to banks in general if housing prices and interest rates continue to go up without wages going up. The higher housing climbs and the more stagnant incomes are, fewer and fewer people will be able or willing to take out loans. As loans overall decrease, the less banks will earn on interest. Will this trend continue to the point of causing enough problems for something in the system to snap? I don't know, but I always like to think about trends like this continuing to their possible limit.

In any case, I'm in that lucky group that bought in 2019 and then refinanced in 2020. If my house was worth in 2019 what it is today, I wouldn't have been able to afford it. My interest rate is 3.25%. Not the lowest I saw people get in 2020, but nothing to complain about. And I work in tech with a high salary so I'm like the commenter's exact example.

[Log]

I’d also say this post doesn’t emphasize the “rent vs buy” question enough, and is not doing enough to challenge the American religion of home-ownership. I was glad to see one of the top comments suggesting renting for 10+ years in a high opportunity city city like Chicago, Philly, Minneapolis, Portland, or Seattle, and seeing what happens with housing prices, or retiring somewhere in Minnesota/Michigan/Wisconsin.

I have seen Matt Yglesias suggest that more foot-loose and fancy-free, young, educated people should be moving to Minneapolis, and it is a very well-reasoned take.

[GilesMM]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

[Log]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

This has pretty much already been done. Housing prices are highly correlated with two variables. First: area wages. Second: having a climate with fewer cold days out of the year.

There are obviously variations around those trends (NYC, particularly, has significantly higher housing costs than those two trend lines would predict). But for the most part, move somewhere with winter and you're getting a deal. Since research on happiness re: weather generally suggests people are happier for a short time when they move somewhere warmer, and then they get used to it and start taking it for granted.

[Cranky]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

I don’t think you can have those things- if good jobs are plentiful, people move in to take them and then housing doubles in price. Housing is only ch AP in a place where people don’t really want to live.

[Log]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

I don’t think you can have those things- if good jobs are plentiful, people move in to take them and then housing doubles in price. Housing is only ch AP in a place where people don’t really want to live.

Well, there are places that are nice, but lacking in jobs. That’s kind of the whole dynamic of places that are known as retirement destinations. (And then that influx of retireee money from elsewhere can stimulate the local economy. It’s a transfer from employment centers to places that are “nice” but not as developed.)

[Metalcat]

As a Canadian who has purchased 4 affordable homes since 2019, this post very much resonates with me.

It is very much my MMM mindset of house shopping with my middle finger and a total "FUCK THAT" attitude towards insanely expensive "normal" housing that everyone around me was buying that prompted me to buy where and what I did.

I operated from the position of considering living anywhere, looking for cheap locations, and then analyzing the fuck out of the benefits and drawbacks of those locations/units and considering if they were good or bad deals compared to more expensive options.

Granted, all 4 units are also usable as rentals, so that's a huge factor, but still, I started from a willingness to explore living just about anywhere in the country and refusing to accept the default of "Welp, the average cost of homes where I live is crazy high, so I guess I just need to spend a lot."

I was always willing to accept that spending a lot may legit come out ahead vs the trade offs of cheaper locations, especially when it comes to healthcare access in Canada. But I was equally open to discovering that cheaper locations might be a great value trade off.

The goal was to think as expansively and inclusively as possible about what options are available.

DH and I now struggle to figure out which awesome home in which awesome location we want to live in and for how much of each year.

By being creative about our thinking, we actually found that we get waaaay more bang for our buck in terms of weather, amenities, etc, by owning multiple extremely cheap residences than we would spending several times as much on one "better" unit in a "better" location.

That's just us, but that's kind of the point. The further you push yourself to be creative and think about possibilities as virtually endless, the more you tap into what you really need and want from a home/location and see more creative ways to achieve it with better value trade offs.

[PoutineLover]

As a person with a very young family, I was a bit disappointed by his take. I've already moved away from my whole family, as my parents did when I was young (provinces) and as my grandparents did before that (countries). We are geographically close to my in laws though, and we've formed really strong social circles and communities in our current city, so I really hate the idea of moving away again, changing jobs, and losing our local support system just to be able to afford a home, if it would be even possible to get equivalent jobs outside of a major metro area.

For now we choose to rent because the ideal walkable, transit-friendly neighbourhoods in our city with homes large enough for our family and with outdoor space for our dog are out of reach. I know we could make different choices (move to a suburb, add commute time, stretch our budget) but it feels like we are living in an entirely different environment from our parents, where a buying a home was accessible to two middle class professionals with kids.

I know there are no easy solutions, but I don't see any positive movement and it feels like governments are catering to the wealthier, older generations who already have homes, often larger than they need, while younger people get stuck in a cycle of rising rents and unaffordable homes.

[Metalcat]

As a person with a very young family, I was a bit disappointed by his take. I've already moved away from my whole family, as my parents did when I was young (provinces) and as my grandparents did before that (countries). We are geographically close to my in laws though, and we've formed really strong social circles and communities in our current city, so I really hate the idea of moving away again, changing jobs, and losing our local support system just to be able to afford a home, if it would be even possible to get equivalent jobs outside of a major metro area.

For now we choose to rent because the ideal walkable, transit-friendly neighbourhoods in our city with homes large enough for our family and with outdoor space for our dog are out of reach. I know we could make different choices (move to a suburb, add commute time, stretch our budget) but it feels like we are living in an entirely different environment from our parents, where a buying a home was accessible to two middle class professionals with kids.

I know there are no easy solutions, but I don't see any positive movement and it feels like governments are catering to the wealthier, older generations who already have homes, often larger than they need, while younger people get stuck in a cycle of rising rents and unaffordable homes.

I didn't get the message from the article that it's easy, but more that a lot of people are limiting their thinking.

There's no question that the situation sucks for a lot of people, but I've watched A LOT of folks I know spend absolutely batshit insane amounts on houses because they felt they had no choice, when they actually did.

I read the point to be that people should think very expansively about their options before concluding that they absolutely have to buy expensive houses in their expensive locations.

If all of your options suck, then all of your options suck and you're in a difficult position of thinking expansively just to find the option that's sucks the least. And that's not a nice position to be in.

[FINate]

I have mixed feelings about this blog post.

On one hand, I appreciate Pete's undying optimism and sense of agency. There's very little in life we "have" to do. Instead, we mostly make choices with complex trade-offs. Very few people "have" to live in a given location even if they have good reasons for being there: loved ones, career, politics, etc. But it's still a choice. DW and I were born and raised in a VHCOL CA beach town. We had many good reasons to remain there, yet it was way too expensive. So we moved to Boise right before the pandemic where we could buy a house in a safe, quiet, walkable/bikeable neighborhood with great schools, a short bike ride from a vibrant downtown, with easy access to incredible outdoor activities -- for around 1/3 what this would cost in our former location. Well-meaning loved ones thought we were crazy and tried to talk us out of it ("but it snows there!" /eyeroll). It was hard, especially missing loved ones. But with the benefit of hindsight moving was absolutely the right decision for our family, and now many of the former naysayers are also looking to relocate.

On the other hand, like Pete's city, Boise has gotten a lot more expensive over the past 4ish years. Not sure we would make the same move today, not sure I would recommend it to others. A 25% increase, per the FRED chart, on the price of a large purchase like a house is massive.  And it doesn't account for interest rates, which is why the affordability index is really bad right now. It really is a tough market for buyers.

So yeah, mixed feelings. The main reason I see remaining in a HCOL area is if this gives one a reasonable probability of career advancement that would more than offset the higher costs. Otherwise, explore options. Remain flexible and cast a wide net. Keep an open mind about other places. Use a rent vs. own calculator to determine which is more cost effective. Things may not be as easy as 2019, but a relocation may still make you better off. This isn't really about cutting costs or buying house, but instead maximizing value.

[aloevera1]

I find it both funny and annoying at how easy international immigration is offered as a solution the cost of living or home ownership. It's like people suggest it without any understanding what international migration means, the amount of effort, prep, money investment, visa, loss of social networks, overcoming language/cultural barrier, dealing with local issues, unknown unknowns, etc etc.

Sure, the move between Canada and the US is doable... given the number of factors. There is enough cultural context to feel somewhat comfortable in the new location. The language allows you at least understand and build local connections immediately. Otherwise... I find it disingenuous. It's like telling someone with no idea why their leg hurts that they could become a Doctor. I mean, sure they could but this advice misses a number of critical steps of the process. And not everyone has the aptitude to become a Doctor.

Otherwise yay for creative approach to housing, having flexibility, doing some cost/benefit analysis etc. Buying the most expensive thing available rarely makes sense.

Just don't tell me to move to Greece.

[Metalcat]

I find it both funny and annoying at how easy international immigration is offered as a solution the cost of living or home ownership. It's like people suggest it without any understanding what international migration means, the amount of effort, prep, money investment, visa, loss of social networks, overcoming language/cultural barrier, dealing with local issues, unknown unknowns, etc etc.

Sure, the move between Canada and the US is doable... given the number of factors. There is enough cultural context to feel somewhat comfortable in the new location. The language allows you at least understand and build local connections immediately. Otherwise... I find it disingenuous. It's like telling someone with no idea why their leg hurts that they could become a Doctor. I mean, sure they could but this advice misses a number of critical steps of the process. And not everyone has the aptitude to become a Doctor.

Otherwise yay for creative approach to housing, having flexibility, doing some cost/benefit analysis etc. Buying the most expensive thing available rarely makes sense.

Just don't tell me to move to Greece.

IDK, again, that's not really how I interpreted it, but more than people aren't even willing to consider those options before they reject them in favour of unaffordable housing in the area they're familiar with.

I mentioned medical care above and because the of healthcare crisis here in Canada, it's actually pushed me to think quite seriously beyond Canada. I've pretty thoroughly evaluated just about every reasonable international option from the perspective of healthcare, housing costs, infrastructure, language, culture, and immigration logistics.

Yes, relocating to another country is hard, but so is trying to pay for an insanely expensive house that you cannot afford.

The question is: are people really examining enough which hard things are actually harder??

There's an astronomical human bias towards perceiving what is familiar as superior and safer, and to disproportionately fear unknowns.

I am in no way saying that everyone can just pick up and move to Malaysia, or whatever. When people can't afford homes, the situation is hard no matter what they do. But that's when *more* openness to creative solutions is *more* valuable, not less.

[aloevera1]

I find it both funny and annoying at how easy international immigration is offered as a solution the cost of living or home ownership. It's like people suggest it without any understanding what international migration means, the amount of effort, prep, money investment, visa, loss of social networks, overcoming language/cultural barrier, dealing with local issues, unknown unknowns, etc etc.

Sure, the move between Canada and the US is doable... given the number of factors. There is enough cultural context to feel somewhat comfortable in the new location. The language allows you at least understand and build local connections immediately. Otherwise... I find it disingenuous. It's like telling someone with no idea why their leg hurts that they could become a Doctor. I mean, sure they could but this advice misses a number of critical steps of the process. And not everyone has the aptitude to become a Doctor.

Otherwise yay for creative approach to housing, having flexibility, doing some cost/benefit analysis etc. Buying the most expensive thing available rarely makes sense.

Just don't tell me to move to Greece.

IDK, again, that's not really how I interpreted it, but more than people aren't even willing to consider those options before they reject them in favour of unaffordable housing in the area they're familiar with.

I mentioned medical care above and because the of healthcare crisis here in Canada, it's actually pushed me to think quite seriously beyond Canada. I've pretty thoroughly evaluated just about every reasonable international option from the perspective of healthcare, housing costs, infrastructure, language, culture, and immigration logistics.

Yes, relocating to another country is hard, but so is trying to pay for an insanely expensive house that you cannot afford.

The question is: are people really examining enough which hard things are actually harder??

There's an astronomical human bias towards perceiving what is familiar as superior and safer, and to disproportionately fear unknowns.

I am in no way saying that everyone can just pick up and move to Malaysia, or whatever. When people can't afford homes, the situation is hard no matter what they do. But that's when *more* openness to creative solutions is *more* valuable, not less.

I agree with your interpretation. Having an open mind is definitely a HUGE help for figuring out life situations. :)

I think my point is not only international relocation is hard but it may not increase in the quality of the life factor. It's just much more than optimizing housing costs or in general cost of living. It might be great for some people and it might absolutely not be a good solution for others. Still, I see this thrown around in FIRE community (and even MMM just casually linked the international housing prices website lol). Consider it a personal pet peeve. :D

I do find the all or nothing mentality really strange. Some people are like: either I buy a super expensive house and work forever in attempt to pay it off or I rent forever and feel like a complete victim. There are a lot of in between which is where *I think* Pete was going. Just on top of my head (and I am REALLY familiar with Canadian real estate market) ---

- roommates / living with parents while saving the downpayment
- figuring out a career that allows WFH or relocation to a lower cost of living zone
- renting out basement/ part of the house (or maybe even LIVING in the basement and renting out upstairs for more money)
- reducing the list of wants from the property
- looking for an older building, apartment, etc.
- looking for different locations even within the expensive area
- really assessing the mortgage options

Probably only first 3 would apply in the ultra high cost areas but yea, I've seen a lot of helplessness in the housing conversations. It's like "if I didn't get the thing I feel like I DESERVE, then I am screwed forever and ever by the evil whoever".

It's good to challenge that.

[Metalcat]

I find it both funny and annoying at how easy international immigration is offered as a solution the cost of living or home ownership. It's like people suggest it without any understanding what international migration means, the amount of effort, prep, money investment, visa, loss of social networks, overcoming language/cultural barrier, dealing with local issues, unknown unknowns, etc etc.

Sure, the move between Canada and the US is doable... given the number of factors. There is enough cultural context to feel somewhat comfortable in the new location. The language allows you at least understand and build local connections immediately. Otherwise... I find it disingenuous. It's like telling someone with no idea why their leg hurts that they could become a Doctor. I mean, sure they could but this advice misses a number of critical steps of the process. And not everyone has the aptitude to become a Doctor.

Otherwise yay for creative approach to housing, having flexibility, doing some cost/benefit analysis etc. Buying the most expensive thing available rarely makes sense.

Just don't tell me to move to Greece.

IDK, again, that's not really how I interpreted it, but more than people aren't even willing to consider those options before they reject them in favour of unaffordable housing in the area they're familiar with.

I mentioned medical care above and because the of healthcare crisis here in Canada, it's actually pushed me to think quite seriously beyond Canada. I've pretty thoroughly evaluated just about every reasonable international option from the perspective of healthcare, housing costs, infrastructure, language, culture, and immigration logistics.

Yes, relocating to another country is hard, but so is trying to pay for an insanely expensive house that you cannot afford.

The question is: are people really examining enough which hard things are actually harder??

There's an astronomical human bias towards perceiving what is familiar as superior and safer, and to disproportionately fear unknowns.

I am in no way saying that everyone can just pick up and move to Malaysia, or whatever. When people can't afford homes, the situation is hard no matter what they do. But that's when *more* openness to creative solutions is *more* valuable, not less.

I agree with your interpretation. Having an open mind is definitely a HUGE help for figuring out life situations. :)

I think my point is not only international relocation is hard but it may not increase in the quality of the life factor. It's just much more than optimizing housing costs or in general cost of living. It might be great for some people and it might absolutely not be a good solution for others. Still, I see this thrown around in FIRE community (and even MMM just casually linked the international housing prices website lol). Consider it a personal pet peeve. :D

I do find the all or nothing mentality really strange. Some people are like: either I buy a super expensive house and work forever in attempt to pay it off or I rent forever and feel like a complete victim. There are a lot of in between which is where *I think* Pete was going. Just on top of my head (and I am REALLY familiar with Canadian real estate market) ---

- roommates / living with parents while saving the downpayment
- figuring out a career that allows WFH or relocation to a lower cost of living zone
- renting out basement/ part of the house (or maybe even LIVING in the basement and renting out upstairs for more money)
- reducing the list of wants from the property
- looking for an older building, apartment, etc.
- looking for different locations even within the expensive area
- really assessing the mortgage options

Probably only first 3 would apply in the ultra high cost areas but yea, I've seen a lot of helplessness in the housing conversations. It's like "if I didn't get the thing I feel like I DESERVE, then I am screwed forever and ever by the evil whoever".

It's good to challenge that.

yeah, that's really what I meant by "hard."

I was saying that a lot of options are hard, and that some scenarios that lower your cost of housing will absolutely make your overall life harder AKA, lower your overall quality of life.

But yeah, the "this is what I know and I need to stick with what I know" bias is insanely strong for people.

If what someone knows is a detached home in the area they know well, and that's become unattainable, it's like they short circuit.

I remember talking to a woman going through a divorce who could no longer afford to own a detached home in the city. I was helping her find an affordable rental or condo, and she was utterly HORRIFIED at the prospect of living in an apartment.

I had found her a luxury apartment building with tons of amenities that was having a promotion on their larger 3 bedroom units. This is a highly-rent controlled city, so she would lock in that discount permanently.

But no, she could not stomach the prospect of living in an apartment... a luxury apartment, in a 1000+sqft unit, in a building with security, heated indoor parking, a pool, a gym, a party room, rooftop BBQs and lounge, and a library.

Instead she decided to pay *more* for a partial basement townhouse unit where she had outdoor parking (harsh winters) and where she was responsible for snow removal for her unit, and there were absolutely no ammenities for her child.

Obviously lots of people aren't that unreasonable, but I've heard far more stories of that kind of nonsense than people willing to even consider thinking about more creative solutions to their "I can't afford the kind of house I expected to afford in the area I expected to live" dilemma.

As I've said already, for folks who are thinking expansively and still don't have good options, that sucks balls. But I'm quite surrounded by folks who have jumped into absolutely batshit insane mortgages that make me want to cry for them or slap them or something, just because they can't expand their mental picture beyond what is familiar/expected.

[PoutineLover]

As a person with a very young family, I was a bit disappointed by his take. I've already moved away from my whole family, as my parents did when I was young (provinces) and as my grandparents did before that (countries). We are geographically close to my in laws though, and we've formed really strong social circles and communities in our current city, so I really hate the idea of moving away again, changing jobs, and losing our local support system just to be able to afford a home, if it would be even possible to get equivalent jobs outside of a major metro area.

For now we choose to rent because the ideal walkable, transit-friendly neighbourhoods in our city with homes large enough for our family and with outdoor space for our dog are out of reach. I know we could make different choices (move to a suburb, add commute time, stretch our budget) but it feels like we are living in an entirely different environment from our parents, where a buying a home was accessible to two middle class professionals with kids.

I know there are no easy solutions, but I don't see any positive movement and it feels like governments are catering to the wealthier, older generations who already have homes, often larger than they need, while younger people get stuck in a cycle of rising rents and unaffordable homes.

I didn't get the message from the article that it's easy, but more that a lot of people are limiting their thinking.

There's no question that the situation sucks for a lot of people, but I've watched A LOT of folks I know spend absolutely batshit insane amounts on houses because they felt they had no choice, when they actually did.

I read the point to be that people should think very expansively about their options before concluding that they absolutely have to buy expensive houses in their expensive locations.

If all of your options suck, then all of your options suck and you're in a difficult position of thinking expansively just to find the option that's sucks the least. And that's not a nice position to be in.

I do agree with his point that examining your options to find out what you really need and how to get it is important. Jumping into an insane market without thinking about it is dumb. But it feels like he's saying that if houses are too expensive where you are, just move, and I think that's ignoring reality for a lot of people.

We have thought out our options. In my particular situation, I'll be fine if I have to rent longer, I have a pretty sweet deal for a place that meets 90% of my needs for now and is allowing me to save for when the right opportunity comes along. But there are some limitations that have me wanting to own my own place, and there's some uncertainty that comes from renting that could be alleviated by owning my own property.

Maybe I've taken too much of MMM to heart, because I don't want to spend a ridiculous amount on a house, I don't want to live somewhere that we have to use a car for everything, and I don't need a massive house and yard. For my family, a 3-4 bedroom house/townhouse/condo, ideally with 2 bathrooms and outdoor space, within walking distance of amenities and transit would be perfect. Unfortunately in this market, that costs at least 800k, and even in the suburbs, at least 600k and a longer commute.

To me it's a society wide problem that young professionals with decent jobs can't get into the housing market without massively overextending themselves, and that housing has become a for-profit enterprise with AirBnB limiting supply and predatory landlords jacking up the rent. There must be some controls that can be applied at the municipal, provincial, and federal level to rein in bad actors and make sure that rents and house prices don't spiral too far out of control.

Unfortunately, our provincial government is just making it easier for landlords to charge more and taking away what little rent control we do have, so I don't see the situation getting better anytime soon. While owners outnumber renters and are more likely to vote, there's no incentive for the government to change course.

[aloevera1]

As a person with a very young family, I was a bit disappointed by his take. I've already moved away from my whole family, as my parents did when I was young (provinces) and as my grandparents did before that (countries). We are geographically close to my in laws though, and we've formed really strong social circles and communities in our current city, so I really hate the idea of moving away again, changing jobs, and losing our local support system just to be able to afford a home, if it would be even possible to get equivalent jobs outside of a major metro area.

For now we choose to rent because the ideal walkable, transit-friendly neighbourhoods in our city with homes large enough for our family and with outdoor space for our dog are out of reach. I know we could make different choices (move to a suburb, add commute time, stretch our budget) but it feels like we are living in an entirely different environment from our parents, where a buying a home was accessible to two middle class professionals with kids.

I know there are no easy solutions, but I don't see any positive movement and it feels like governments are catering to the wealthier, older generations who already have homes, often larger than they need, while younger people get stuck in a cycle of rising rents and unaffordable homes.

I didn't get the message from the article that it's easy, but more that a lot of people are limiting their thinking.

There's no question that the situation sucks for a lot of people, but I've watched A LOT of folks I know spend absolutely batshit insane amounts on houses because they felt they had no choice, when they actually did.

I read the point to be that people should think very expansively about their options before concluding that they absolutely have to buy expensive houses in their expensive locations.

If all of your options suck, then all of your options suck and you're in a difficult position of thinking expansively just to find the option that's sucks the least. And that's not a nice position to be in.

I do agree with his point that examining your options to find out what you really need and how to get it is important. Jumping into an insane market without thinking about it is dumb. But it feels like he's saying that if houses are too expensive where you are, just move, and I think that's ignoring reality for a lot of people.

We have thought out our options. In my particular situation, I'll be fine if I have to rent longer, I have a pretty sweet deal for a place that meets 90% of my needs for now and is allowing me to save for when the right opportunity comes along. But there are some limitations that have me wanting to own my own place, and there's some uncertainty that comes from renting that could be alleviated by owning my own property.

Maybe I've taken too much of MMM to heart, because I don't want to spend a ridiculous amount on a house, I don't want to live somewhere that we have to use a car for everything, and I don't need a massive house and yard. For my family, a 3-4 bedroom house/townhouse/condo, ideally with 2 bathrooms and outdoor space, within walking distance of amenities and transit would be perfect. Unfortunately in this market, that costs at least 800k, and even in the suburbs, at least 600k and a longer commute.

To me it's a society wide problem that young professionals with decent jobs can't get into the housing market without massively overextending themselves, and that housing has become a for-profit enterprise with AirBnB limiting supply and predatory landlords jacking up the rent. There must be some controls that can be applied at the municipal, provincial, and federal level to rein in bad actors and make sure that rents and house prices don't spiral too far out of control.

Unfortunately, our provincial government is just making it easier for landlords to charge more and taking away what little rent control we do have, so I don't see the situation getting better anytime soon. While owners outnumber renters and are more likely to vote, there's no incentive for the government to change course.

I agree with you on the general gist.

However, in addition to regulatory fails (e.g. AirBnBs) there is a whole other aspect to unpack. Namely, that for certain types of careers there are very limited geographic locations available in Canada. For whatever historical reasons, there are not that many "big" or even "medium" sized cities. So the young professionals you are talking about might be locked in a specific area where most of the industry is. As much as I love Canadian small towns, unless you have a profession that fits there, you are out of luck and need to move to the big city. That's how big city become unaffordable. They have the industries which attract people which attract industries.

Sure, there are occasional jobs from these categories popping up in "non traditional cities" but the competition for those jobs is FIERCE. Everyone local wants and everyone trying to move there also wants it.

So yea, as a silver lining to the whole housing crisis I hope it would help smaller cities to grow infrastructure, encourage companies to establish offices in MCOL cities, basically help them to become more like.. cities.


Edit: ... unless you are willing to be creative with housing, adapt your career, wfh, etc. etc. basically, all the things I posted above.

[theninthwall]

I fall on the side of people who were maybe hoping for something more from this post. While not all FIRE advice is suitable for all life situations, I do think we should be doing our best to make the transition something most people see as attainable.

As someone who has moved to the other side of the world, it's incredibly difficult. Firstly, despite common belief, you can't just move to another country. You need to immigrate there legally and this is a complicated, long-term project. You are away from all of your support networks, friends, and everything you are familiar with. Even moving to another state introduces many of these issues.

I would have like to have seen more focus on:

- You may not live like your parents and that is okay. Younger generations are expecting to have the same style of homes in the same area, and that is not realistic.
- Rent as close as possible to where you work. Even if the housing is more expensive, if you can achieve the holy grail of not requiring a car there is potential for huge savings, then invest the difference to retire. The amount most Americans spend on automotive needs is obscene. Again, not practical for everyone but practical for many.
- Living at home and housemates are not dirty words. The ability to save $1000+ a month by doing this will help in the race against your peers.

I remember talking to a woman going through a divorce who could no longer afford to own a detached home in the city. I was helping her find an affordable rental or condo, and she was utterly HORRIFIED at the prospect of living in an apartment.

I had found her a luxury apartment building with tons of amenities that was having a promotion on their larger 3 bedroom units. This is a highly-rent controlled city, so she would lock in that discount permanently.

But no, she could not stomach the prospect of living in an apartment... a luxury apartment, in a 1000+sqft unit, in a building with security, heated indoor parking, a pool, a gym, a party room, rooftop BBQs and lounge, and a library.

Instead she decided to pay *more* for a partial basement townhouse unit where she had outdoor parking (harsh winters) and where she was responsible for snow removal for her unit, and there were absolutely no ammenities for her child.

Anti-apartment sentiment runs strong it seems. We are earning excellent money and choose to rent in an apartment complex. It vastly simplifies our lives. The amenities are excellent and useful and we surely would not have most of them if we lived in a SFH. One relative in particular always asks us when we are moving out, no matter how many times we explain that we like it. Some people just see apartment living as some kind of symbol of failure.

[spartana]

I have mixed feelings about this blog post.

On one hand, I appreciate Pete's undying optimism and sense of agency. There's very little in life we "have" to do. Instead, we mostly make choices with complex trade-offs. Very few people "have" to live in a given location even if they have good reasons for being there: loved ones, career, politics, etc. But it's still a choice. DW and I were born and raised in a VHCOL CA beach town. We had many good reasons to remain there, yet it was way too expensive. So we moved to Boise right before the pandemic where we could buy a house in a safe, quiet, walkable/bikeable neighborhood with great schools, a short bike ride from a vibrant downtown, with easy access to incredible outdoor activities -- for around 1/3 what this would cost in our former location. Well-meaning loved ones thought we were crazy and tried to talk us out of it ("but it snows there!" /eyeroll). It was hard, especially missing loved ones. But with the benefit of hindsight moving was absolutely the right decision for our family, and now many of the former naysayers are also looking to relocate.

On the other hand, like Pete's city, Boise has gotten a lot more expensive over the past 4ish years. Not sure we would make the same move today, not sure I would recommend it to others. A 25% increase, per the FRED chart, on the price of a large purchase like a house is massive.  And it doesn't account for interest rates, which is why the affordability index is really bad right now. It really is a tough market for buyers.

So yeah, mixed feelings. The main reason I see remaining in a HCOL area is if this gives one a reasonable probability of career advancement that would more than offset the higher costs. Otherwise, explore options. Remain flexible and cast a wide net. Keep an open mind about other places. Use a rent vs. own calculator to determine which is more cost effective. Things may not be as easy as 2019, but a relocation may still make you better off. This isn't really about cutting costs or buying house, but instead maximizing value.

And often times you don't need to move too far away from your VHCOL home to find much lower costs. I moved 100 miles away and houses were approx 1/3 the cost. Of course it's a mountain resort area so jobs are few outside of service jobs but for WFH types, or those wishing to barista FIRE or even full FIRE but don't want to move to far from family and friends it's an option.

ETA: Also many people here who still work in the city often do the commute but rentban inexpensive commuter room near their work and stay there part of the week - usually Monday night to Weds or Thursday night if working traditional hours. If it's a couple with kids one may chose to be a SAHP and/or work a resort or service job. Not ideal but one way to avoid really high housing costs but maximizing high incomes.

[ChpBstrd]

"A house" is still available to anyone who is willing to work. It's just that said house may not be anywhere near a beach, ski slope, tourist resort, scenic vista, or international airport. So what are we really complaining about, if it's not the impossibility of owning one's own house?

The reply is usually something like "yea but those are undesirable areas that aren't hip or cool". OK, fine, we can agree on that.

But let's be clear about what everyone feels priced out of: desirability and hipness in the place they live. This is what people are willing to take on an extra $400k of debt at >6% interest rates and work extra decades of their lives for. This is what they're breaking themselves down for, working multiple jobs and side gigs or living in apartments the size of hotel rooms with $2k+ rents that rise every year. This is why they can't imagine starting a family, and why they will die alone.

It's all so they don't have to capitulate and buy a nice, affordable home in Joplin, MO or Peoria, IL or Green Bay, WI. They've heard from the internet that doing so is a fate worse than death. It's deemed better to live close to a place with "amenities" that one cannot afford to visit than it is to endure the shame of piling up cash and equity in an affordable place.

It is also believed there are "no jobs" in such places. Presumably LCOL economies operate off of volunteer labor, and it is unclear how they build stuff, make stuff, or perform services for each other without anyone making any money. The statistics about low unemployment rates or houses selling for 3-4 years wages must be fraudulent.

My thought is that people are relying waaaay too much on the "amenities" and popularity of their local region to make their lives worthwhile and fun. It's especially problematic when people are working themselves into misery to live someplace popular with tourists, where there is one rare thing do do, like beaches, ski slopes, or city attractions.

I'm sure whatever it is must be great, but how often does one have to enjoy the amenity to make up for the amount of work necessary to support the lifestyle of living near it?

Also, why is life only worthwhile near this one, happens-to-be-Instagramable thing? What about the hiking trails you've never heard of? The state parks you've never thought about? The medium-sized city theaters, orchestras, art museums, history museums, and live music scenes? The lakes and bike trails and sports leagues? The dozens of meetup.com groups where you can make friends and participate in something interesting? Yep, all that is trash because it's not expensive or popular enough with the herd.

I went to a dive bar rock concert with three bands last week. Admission was $10 and beers were $3. My friends and I received 3 hours of highly engaging front row entertainment, which is the same amount of entertainment as the people paying $9,000 for nosebleed seats at the Superbowl will receive for their money in Las Vegas. Let them feel sorry for me; I feel sorry for them.

[roomtempmayo]

"A house" is still available to anyone who is willing to work. It's just that said house may not be anywhere near a beach, ski slope, tourist resort, scenic vista, or international airport. So what are we really complaining about, if it's not the impossibility of owning one's own house?

I think at least sometimes the subtext is also that it should be a house that I can buy with a bundle of very cheap leverage that's likely to appreciate quickly.

A house that you expect to bob along at more or less the rate of inflation - which is probably where most housing markets are now, best case - doesn't feel like quite the same deal.

We're still living in the Everything Bubble, of which housing is the most visible part to the typical person.

[roomtempmayo]

I know we could make different choices (move to a suburb, add commute time, stretch our budget) but it feels like we are living in an entirely different environment from our parents, where a buying a home was accessible to two middle class professionals with kids.

I hear and feel the intergenerational comparisons, but it's easy to forget that so many people being locked out of the housing market is a sign that the younger generations generally have jobs right now, good jobs.  And the comparison becomes to their parents, who are mostly Boomers and maybe a few older Gen Xers.  Compared to the Boomers, yeah, the younger Millennials and Gen Zs aren't getting it as good.

But crap, that totally overlooks that fifteen years ago there were tons of houses for sale cheap and young people couldn't afford to buy them because the job market sucked and the economy was in a borderline depression.  Nobody seems to be making the generational comparison that a young person trying to get a start by working a job and earning wages has it massively better economically today than they did in 2007-2012.  The generational comparisons that the article starts with always strike me as highly selective and leapfrog over a pretty gigantic economic disruption that many of us lived through.

[halfling]

@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram. We're all Mustachians here after all. The medium sized, normal, under the radar city you described is basically exactly what I moved to. But mortgage payments for houses are still like 90% higher than they would have been in 2020 if you're a first-time buyer. 2019 buyers have mortgage payments that are about half of what they could rent their house out for now. That's just how it is right now. But I'm also happy renting instead of buying at today's costs.

I do think a lot of people are taking the idea of leaving HCOL and moving to less popular cities seriously already. It looks like the cities with the highest rent growth last month were Fort Wayne, Yonkers, Detroit, Fresno, and Memphis.

@roomtempmayo
It's true. I'm grateful all the time that I started working in 2017 instead of 2009, no matter what housing costs. I remember all the 35-year-olds I was competing with for retail and restaurant jobs in high school. And I know it's taken a long time and a lot of sacrifice for my older cousins in their 30s and 40s to get on their feet. But I still wouldn't say no to "a house that I can buy with a bundle of very cheap leverage that's likely to appreciate quickly." Like, where do I sign up, haha.

For the record, I'm not mad at Boomers for having it "easy." It doesn't sound easy to me. Women couldn't even open their own bank accounts or attend the university that I went to until the 70s. I can't begin to wrap my head around how hard my life would have been in that world. Seems pointless to feel jealous.

[FINate]

I have mixed feelings about this blog post.

On one hand, I appreciate Pete's undying optimism and sense of agency. There's very little in life we "have" to do. Instead, we mostly make choices with complex trade-offs. Very few people "have" to live in a given location even if they have good reasons for being there: loved ones, career, politics, etc. But it's still a choice. DW and I were born and raised in a VHCOL CA beach town. We had many good reasons to remain there, yet it was way too expensive. So we moved to Boise right before the pandemic where we could buy a house in a safe, quiet, walkable/bikeable neighborhood with great schools, a short bike ride from a vibrant downtown, with easy access to incredible outdoor activities -- for around 1/3 what this would cost in our former location. Well-meaning loved ones thought we were crazy and tried to talk us out of it ("but it snows there!" /eyeroll). It was hard, especially missing loved ones. But with the benefit of hindsight moving was absolutely the right decision for our family, and now many of the former naysayers are also looking to relocate.

On the other hand, like Pete's city, Boise has gotten a lot more expensive over the past 4ish years. Not sure we would make the same move today, not sure I would recommend it to others. A 25% increase, per the FRED chart, on the price of a large purchase like a house is massive.  And it doesn't account for interest rates, which is why the affordability index is really bad right now. It really is a tough market for buyers.

So yeah, mixed feelings. The main reason I see remaining in a HCOL area is if this gives one a reasonable probability of career advancement that would more than offset the higher costs. Otherwise, explore options. Remain flexible and cast a wide net. Keep an open mind about other places. Use a rent vs. own calculator to determine which is more cost effective. Things may not be as easy as 2019, but a relocation may still make you better off. This isn't really about cutting costs or buying house, but instead maximizing value.

And often times you don't need to move too far away from your VHCOL home to find much lower costs. I moved 100 miles away and houses were approx 1/3 the cost. Of course it's a mountain resort area so jobs are few outside of service jobs but for WFH types, or those wishing to barista FIRE or even full FIRE but don't want to move to far from family and friends it's an option.

ETA: Also many people here who still work in the city often do the commute but rentban inexpensive commuter room near their work and stay there part of the week - usually Monday night to Weds or Thursday night if working traditional hours. If it's a couple with kids one may chose to be a SAHP and/or work a resort or service job. Not ideal but one way to avoid really high housing costs but maximizing high incomes.

True. We considered several places in CA that would have been 2-3 hrs away. In our specific situation this would have either meant living rural, which is often extreme fire danger in CA (and I grew up rural, not really interested in doing it again), or cities that didn't check as many boxes. But I agree, this is a good option to evaluate.

[Log]

Agree with above that stigma against apartments/multi-family housing is a major portion of the problem. People are priced out of spacious, detached, single family homes, but a nice apartment or condo would be affordable for many of these same people.

Disagree with above that restricting AirBnBs or more price controls on rentals would make more than a negligible dent in the problem. It’s supply, supply, supply. If anything, we should be subsidizing the construction of more dense multi family in high demand locales, not taxing it out of feasibility. Rent control usually has disastrous long term implications for a locale’s housing market. Price controls lead to supply issues.

The city-wide supply of AirBnBs in most cities is smaller than the amount of housing constructed in a typical year. So sure, ban AirBnBs and you’ve caught up on part of a year of supply expansion. Now what are you going to do the next year, and the next year, and the next year? Meanwhile, cutting off AirBnBs fucks up business and tourism travel to your city because hotels now have less competition and can jack up their prices. And a month-long AirBnB is often the best way to land in a new city and search for housing. Short-term housing is still housing, and it serves a vital need in the game of musical chairs.

[somers515]

. . .  It’s supply, supply, supply. If anything, we should be subsidizing the construction of more dense multi family in high demand locales, not taxing it out of feasibility. . . .

This! There are a lot of urbanist YouTube channels that do a better job explaining this stuff than I could but basically exclusive single family zoning in areas that needs more housing is a huge driver to increased housing costs, simple supply vs demand. Check out CityNerd, NotJustBikes, OhtheUrbanity, Strong Towns, etc. etc.

So while MMM's suggestion of moving to where housing costs are cheaper is voting with your feet, another solution would be to become more active in your community and try to drive change. There are many cities that now have active urbanist communities trying to do just that. And they basically line up with other MMM principles ie supporting bike infrastructure etc. Hope someone finds this useful!

[getsorted]

It's all so they don't have to capitulate and buy a nice, affordable home in Joplin, MO or Peoria, IL or Green Bay, WI. They've heard from the internet that doing so is a fate worse than death. It's deemed better to live close to a place with "amenities" that one cannot afford to visit than it is to endure the shame of piling up cash and equity in an affordable place.

It is also believed there are "no jobs" in such places.

This was especially funny to me as someone who occasionally travels through, and hires in, scenic Joplin. How can someone speak badly of the town that brought the mac & cheese shake to the world?

I should leverage my extensive knowledge of the middle of the country into a consulting business. I could match people from HCOL areas to the closest approximate Midwestern town. What is Eureka Springs, Arkansas, but an alternate-pocket-universe version of San Francisco?

[ChpBstrd]

What is Eureka Springs, Arkansas, but an alternate-pocket-universe version of San Francisco?

Wow. You're right. I never saw that before but now I can't unsee it.

[halfling]

It's all so they don't have to capitulate and buy a nice, affordable home in Joplin, MO or Peoria, IL or Green Bay, WI. They've heard from the internet that doing so is a fate worse than death. It's deemed better to live close to a place with "amenities" that one cannot afford to visit than it is to endure the shame of piling up cash and equity in an affordable place.

It is also believed there are "no jobs" in such places.

This was especially funny to me as someone who occasionally travels through, and hires in, scenic Joplin. How can someone speak badly of the town that brought the mac & cheese shake to the world?

I should leverage my extensive knowledge of the middle of the country into a consulting business. I could match people from HCOL areas to the closest approximate Midwestern town. What is Eureka Springs, Arkansas, but an alternate-pocket-universe version of San Francisco?

Sure... Make sure to include a variety of data sources for your consulting practice.

[StarBright]

"A house" is still available to anyone who is willing to work. It's just that said house may not be anywhere near a beach, ski slope, tourist resort, scenic vista, or international airport. So what are we really complaining about, if it's not the impossibility of owning one's own house?

The reply is usually something like "yea but those are undesirable areas that aren't hip or cool". OK, fine, we can agree on that.

I think part of the point is that even in these midwestern crap pockets housing has skyrocketed though. I live outside a third tier rustbelt city and wouldn't be able to afford to buy into my town now.

I will admit that I could afford to buy a house within the rustbelt city limits, but that brings its own issues - schools with no transpo, structural issues that need major investment or DIY know-how, safety, etc.

[getsorted]

It's all so they don't have to capitulate and buy a nice, affordable home in Joplin, MO or Peoria, IL or Green Bay, WI. They've heard from the internet that doing so is a fate worse than death. It's deemed better to live close to a place with "amenities" that one cannot afford to visit than it is to endure the shame of piling up cash and equity in an affordable place.

It is also believed there are "no jobs" in such places.

This was especially funny to me as someone who occasionally travels through, and hires in, scenic Joplin. How can someone speak badly of the town that brought the mac & cheese shake to the world?

I should leverage my extensive knowledge of the middle of the country into a consulting business. I could match people from HCOL areas to the closest approximate Midwestern town. What is Eureka Springs, Arkansas, but an alternate-pocket-universe version of San Francisco?

Sure... Make sure to include a variety of data sources for your consulting practice.

That was entirely tongue-in-cheek. It's got Victorian painted ladies and a witchy vibe, those are all it has in common. I thought comparing a city of 2,000 people with San Francisco would be obviously farcical.

The enduring racism in the middle of the country is not unknown to those of us who live here. Sundown laws were incredibly effective and changed the racial makeup of this area substantially (a regional paper ran an excellent and matter-of-fact history of this in February 2021, using data from their own archives, and the stir it created speaks volumes about continuing attitudes). There is definitely nationalism, racism, and religious bigotry here.

[halfling]

@getsorted I could tell you were joking. It was just a relevant qualifier and actually a useful modern database that I wanted to draw a little attention to. A lot of the generalized advice I often see (not usually here) to just move deeper south (or to large parts of the Midwest for that matter) frustrates me. Sorry to hear that about your city.

[ChpBstrd]

@getsorted I could tell you were joking. It was just a relevant qualifier and actually a useful modern database that I wanted to draw a little attention to. A lot of the generalized advice I often see (not usually here) to just move deeper south (or to large parts of the Midwest for that matter) frustrates me. Sorry to hear that about your city.

Well as long as nobody is willing to move there, guess who is left behind with the electoral college votes and senate seats?

[chops]

Some of us are willing to move there!  We moved to Iowa from the pricey East Coast in 2015 and haven't looked back.  It's been a boon to our FIRE journey as we started with big student loans, and being mustachian, weren't interested in adding a huge housing mortgage on top of that debt.  The bonus is that we've found IA to be a pretty good place to live overall, and this is coming from a lifetime East Coaster and my DW who grew up in South Asia

 - Chops

[StashingAway]

So while MMM's suggestion of moving to where housing costs are cheaper is voting with your feet, another solution would be to become more active in your community and try to drive change. There are many cities that now have active urbanist communities trying to do just that. And they basically line up with other MMM principles ie supporting bike infrastructure etc. Hope someone finds this useful!

This is one of my biggest divergences in the MMM blog and my own philosophy. I am a big fan of his "middle finger to the consensus" thinking and it has changed many parts of my life. But, at least on the blog, it is all very selfish and isolationist. Many of his complaints about society could be approached by trying to change it locally! I'm not sure how much he does in his personal life - it could be a lot with the MMM HQ. But instead of just throwing in the towel and moving to a new city, perhaps try to make your own better. Join a planning committee and reduce zoning restrictions, organize downtown events that close off main street, shovel a bike path, etc.

All the places that are desirable to live were made by the people living there, sometimes lineages of several generations have held great places together. In smaller cities/towns, you actually have more input than you'd expect as it's really only a handful of people who are pulling the strings.

No reason not to move- I've done more than MMM in my adult life. But in doing so I've also learned that having a sense of place is critical to stability and mental health.

[Tasse]

I'm pretty sure MMM has been involved in pushing for better local bike infrastructure in Longmont, at a minimum.

[StashingAway]

I'm pretty sure MMM has been involved in pushing for better local bike infrastructure in Longmont, at a minimum.

I wouldn't be surprised at all, I just don't recall ever seeing it on the blog. In many ways it keeps the message cleaner and less political, just seems to be a good option for those looking to level up past the MMM basics.

[Log]

@getsorted I could tell you were joking. It was just a relevant qualifier and actually a useful modern database that I wanted to draw a little attention to. A lot of the generalized advice I often see (not usually here) to just move deeper south (or to large parts of the Midwest for that matter) frustrates me. Sorry to hear that about your city.

Well as long as nobody is willing to move there, guess who is left behind with the electoral college votes and senate seats?

Relevant new vid from one of my fave people on Youtube: https://youtu.be/zvo-wDqEQUE?si=0wqo9zwOQSLFdkwk

[clarkfan1979]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

It wouldn't make sense to get all 3 of these criteria. However, you can get 2/3. Pick the two that are the most important.

We moved from Koloa, Hi to Pueblo West, CO in 2019 to be closer to family. The Colorado Community College system pays 25% less than the national average and at the same time, Colorado cost of living is 25% higher than the national average. As a state, Colorado is probably the least cost effective option for me personally based on my career, out of all 50 states. However, I still found a way to make it work.

I took a job 1.5-2 hours away from Denver, where the cost of living is much cheaper and still has good schools. There are less people and less traffic than Denver, which I personally enjoy. We do drive 1-2 hours for family events. However, we usually stay the night at a family members house. We have 3-day weekends every weekend, including my son. The school district is M-Th.

People from Denver and Colorado Springs are moving to Pueblo West because it's cheaper and the quality of life is pretty close to the same. The weather is slightly better (more sunshine, warmer and less snow). However, the airports are farther, so we won't get many people moving to Pueblo West who fly often for their career. The area is growing and getting more developed every year. It's been a fun process to watch.

 

[roomtempmayo]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

It wouldn't make sense to get all 3 of these criteria. However, you can get 2/3. Pick the two that are the most important.

Trying to get some balance of the three - housing, jobs, amenities - has led lots of us to regional midsize cities and college towns away from the coasts.  The wages aren't as high as NYC/SF and the houses aren't as cheap as rural Mississippi, but they're often a good balance.

For people who really want to live in a big city, Chicago should get more attention.  Wages are high, and housing is relatively affordable for a very large city.  But it does indeed snow.

[FINate]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

It wouldn't make sense to get all 3 of these criteria. However, you can get 2/3. Pick the two that are the most important.

Trying to get some balance of the three - housing, jobs, amenities - has led lots of us to regional midsize cities and college towns away from the coasts.  The wages aren't as high as NYC/SF and the houses aren't as cheap as rural Mississippi, but they're often a good balance.

For people who really want to live in a big city, Chicago should get more attention.  Wages are high, and housing is relatively affordable for a very large city.  But it does indeed snow.

Yes, by doing this you can get around 80% (my scientifically made up number) of the value of a big expensive city for around 1/3 the cost. This is just another variation of Tiny Details Exaggeration Syndrome. There's real science behind all this, e.g. Diminishing Marginal Utility. This is why. the difference between a $4 and $20 bottle of wine is somewhat perceptible to most people, whereas very few can tell the difference between a $20 and $100 bottle.*

So you're better off in a MCOL mid size city unless you really value/benefit from the top quintile of what a big expensive city has to offer.

I would say even things like climate are typically highly overrated. Our former beach town has a more "comfortable" climate, but we prefer the four real seasons here in Idaho and it doesn't get that cold or hot, and we have these things now called houses and HVAC for when we really need it.

*Even here there's debate about those who can tell the difference. Do they actually prefer the $100 wine, or do they just know the taste of a $100 bottle and prefer it because it's more expensive. I've noticed a similar thing with *some* people in expensive cities, such as former co-workers for whom the most important thing about living in NYC was telling people they live in NYC.

[roomtempmayo]

I've noticed a similar thing with *some* people in expensive cities, such as former co-workers for whom the most important thing about living in NYC was telling people they live in NYC.

NYC I kind of, sort of, get.  It's a unique place.  Not necessarily the things I value, but it's an outlier.

But, if you aren't right on the water in LA, Boston, or Seattle, I don't get it.

I'll take Savannah or Charleston over Miami or Atlanta every time, for the same money.  Santa Fe over Dallas, and Durango and Grand Junction over Denver, too.

[ChpBstrd]

Yes, by doing this you can get around 80% (my scientifically made up number) of the value of a big expensive city for around 1/3 the cost. This is just another variation of Tiny Details Exaggeration Syndrome. There's real science behind all this, e.g. Diminishing Marginal Utility. This is why. the difference between a $4 and $20 bottle of wine is somewhat perceptible to most people, whereas very few can tell the difference between a $20 and $100 bottle.*

So you're better off in a MCOL mid size city unless you really value/benefit from the top quintile of what a big expensive city has to offer.

I would say even things like climate are typically highly overrated. Our former beach town has a more "comfortable" climate, but we prefer the four real seasons here in Idaho and it doesn't get that cold or hot, and we have these things now called houses and HVAC for when we really need it.

*Even here there's debate about those who can tell the difference. Do they actually prefer the $100 wine, or do they just know the taste of a $100 bottle and prefer it because it's more expensive. I've noticed a similar thing with *some* people in expensive cities, such as former co-workers for whom the most important thing about living in NYC was telling people they live in NYC.

The perspective from the medium-sized city where I live is...

• What's the marginal utility of choosing an hour long commute over a 20-30 minute commute?
• What makes it better to pay $700k for a home versus $250k if they are physically the same thing?
• Is watching a major league baseball game from nosebleed seats for $75/ticket 7-8x better than 5th row at a minor league game for $10? (Yes, I've done both.)
• How many of the "amenities" people move for are things you see/do once or twice and then you're done? E.g. museums and theme parks.
• Why is proximity (meaning within a 2h drive) to a saltwater beach better than proximity to a freshwater lake, where there are no hurricanes, beach erosion issues, jellyfish, rip tides, tsunami risks, etc. but similar boating, fishing, swimming, etc. opportunities?

According to this mentality, people are paying more and struggling more to have an inferior lifestyle product, per objective factors. They're buying the $100 wine and assuming it is better or that they are happier because it is $100. Meanwhile they are in fact worried about money, sitting in traffic a significant percentage of their life, not having the time to enjoy the amenities they are pursuing, and thinking a baseball game with 10k people attending is a better baseball game than one with 2k people attending.   

WRT weather, there are both HCOL and LCOL areas in almost any climate in the U.S. so it's not that. NYC arguably has the same climate as Buffalo or Albany, NY. New Mexico has a similar desert/mountain climate as much of Southern California. Missouri is similar to the Washington DC area. Etc.

[GilesMM]

It is always possible to move down market to the cheapest towns in the country, but they are usually the cheapest for good reason.  Lack of decent jobs may be one of them.  What is really needed is a way to identify wonderful to live places with plentiful high-paying jobs and cheap houses for sale.

I don’t think you can have those things- if good jobs are plentiful, people move in to take them and then housing doubles in price. Housing is only ch AP in a place where people don’t really want to live.

Housing prices can rise but still be low relative to wages. For example:


Midland, Texas: ave HHI: $105k, median home: around $300k.  Plus: Great schools, community, Tex-Mex, proximity to New Mexico.  Minus: summer heat, people driving pickups, lack of outdoor space except ranchland
Rochester, MN: ave HHI: $106k, median home: around $325k. Plus: small town feel, schools, parks, healthcare, proximity to M-SP.  Minus: winter cold,


Compare to -
San Francisco: ave HHI: $135k, median home: $1,400k.  Plus: top 10 city for natural beauty, Pacific Ocean, all of California at your doorstep, amazing restaurants.  Minus: homeless issues in certain parts of city.

[sonofsven]

My take is that if owning a SFH is really important to you and you don't have the budget needed, work on developing the skills and drive to buy a fixer and live in the wreckage while you rebuild. Yes, it will suck. Yes, it will take over your life.
And yes, this is a bit of an oversimplification, because fixers are still expensive and they are sometimes harder to purchase, but it's do-able. I know young people doing it.
Start with a cheap one and sell it after three years and pay no capital gains tax on the sale, then do it again.
The only downside, besides living in a construction hellscape, is you are tied in to your location, for better or worse. All the more reason to pick a good location.
I did this in my 20's-30's when I was full of energy. My partner (bartender) and I rarely took vacations, we worked on our house in the evening, and weekends, and I would take months off from my work (self employed carpenter) to work on the house. We built up our rental portfolio and our residence instead of jetting off to wherever.

[ChpBstrd]

My take is that if owning a SFH is really important to you and you don't have the budget needed, work on developing the skills and drive to buy a fixer and live in the wreckage while you rebuild. Yes, it will suck. Yes, it will take over your life.
And yes, this is a bit of an oversimplification, because fixers are still expensive and they are sometimes harder to purchase, but it's do-able. I know young people doing it.
Start with a cheap one and sell it after three years and pay no capital gains tax on the sale, then do it again.
The only downside, besides living in a construction hellscape, is you are tied in to your location, for better or worse. All the more reason to pick a good location.
I did this in my 20's-30's when I was full of energy. My partner (bartender) and I rarely took vacations, we worked on our house in the evening, and weekends, and I would take months off from my work (self employed carpenter) to work on the house. We built up our rental portfolio and our residence instead of jetting off to wherever.

I've been there and done that to some extent. The more life energy I pour into American-style flimsy and not-durably-built SFH's the more rational it seems to live in a European-style concrete apartment building with much lower maintenance and energy consumption needs. Why don't I? Perhaps it is deeply-entrench attitudes about the value of dogs, grass, patios, and a place to work on one's car. Perhaps it's the experience of living in poorly built U.S. dorms and apartments with poor sound insulation, weird rules, and dysfunctional neighbors. Who would want to live down the hallway from an average American? To some extent, the configuration of a society affects how people choose homes, and the way we choose homes has an enormous impact on how we spend our time.

[sonofsven]

My take is that if owning a SFH is really important to you and you don't have the budget needed, work on developing the skills and drive to buy a fixer and live in the wreckage while you rebuild. Yes, it will suck. Yes, it will take over your life.
And yes, this is a bit of an oversimplification, because fixers are still expensive and they are sometimes harder to purchase, but it's do-able. I know young people doing it.
Start with a cheap one and sell it after three years and pay no capital gains tax on the sale, then do it again.
The only downside, besides living in a construction hellscape, is you are tied in to your location, for better or worse. All the more reason to pick a good location.
I did this in my 20's-30's when I was full of energy. My partner (bartender) and I rarely took vacations, we worked on our house in the evening, and weekends, and I would take months off from my work (self employed carpenter) to work on the house. We built up our rental portfolio and our residence instead of jetting off to wherever.

I've been there and done that to some extent. The more life energy I pour into American-style flimsy and not-durably-built SFH's the more rational it seems to live in a European-style concrete apartment building with much lower maintenance and energy consumption needs. Why don't I? Perhaps it is deeply-entrench attitudes about the value of dogs, grass, patios, and a place to work on one's car. Perhaps it's the experience of living in poorly built U.S. dorms and apartments with poor sound insulation, weird rules, and dysfunctional neighbors. Who would want to live down the hallway from an average American? To some extent, the configuration of a society affects how people choose homes, and the way we choose homes has an enormous impact on how we spend our time.

I've felt that same pull as I age. I recently spent two weeks in a condo and considered what it would be like to live there. My rural property takes a lot of work to maintain; it's gorgeous, but it comes with a price (in my case, time, because I don't hire anything out).
I've always enjoyed physical work but right now I'm a little hobbled as I wait for hip replacement surgery, so the work around the house is more difficult and is taking longer.
So the idea of downsizing is percolating, but it's not because of the quality of the actual structure. I take a lot of pride as a builder that my houses will be around for a long time. What's your experience with flimsy SFH's?

[ChpBstrd]

My take is that if owning a SFH is really important to you and you don't have the budget needed, work on developing the skills and drive to buy a fixer and live in the wreckage while you rebuild. Yes, it will suck. Yes, it will take over your life.
And yes, this is a bit of an oversimplification, because fixers are still expensive and they are sometimes harder to purchase, but it's do-able. I know young people doing it.
Start with a cheap one and sell it after three years and pay no capital gains tax on the sale, then do it again.
The only downside, besides living in a construction hellscape, is you are tied in to your location, for better or worse. All the more reason to pick a good location.
I did this in my 20's-30's when I was full of energy. My partner (bartender) and I rarely took vacations, we worked on our house in the evening, and weekends, and I would take months off from my work (self employed carpenter) to work on the house. We built up our rental portfolio and our residence instead of jetting off to wherever.

I've been there and done that to some extent. The more life energy I pour into American-style flimsy and not-durably-built SFH's the more rational it seems to live in a European-style concrete apartment building with much lower maintenance and energy consumption needs. Why don't I? Perhaps it is deeply-entrench attitudes about the value of dogs, grass, patios, and a place to work on one's car. Perhaps it's the experience of living in poorly built U.S. dorms and apartments with poor sound insulation, weird rules, and dysfunctional neighbors. Who would want to live down the hallway from an average American? To some extent, the configuration of a society affects how people choose homes, and the way we choose homes has an enormous impact on how we spend our time.

I've felt that same pull as I age. I recently spent two weeks in a condo and considered what it would be like to live there. My rural property takes a lot of work to maintain; it's gorgeous, but it comes with a price (in my case, time, because I don't hire anything out).
I've always enjoyed physical work but right now I'm a little hobbled as I wait for hip replacement surgery, so the work around the house is more difficult and is taking longer.
So the idea of downsizing is percolating, but it's not because of the quality of the actual structure. I take a lot of pride as a builder that my houses will be around for a long time. What's your experience with flimsy SFH's?

A short list of my nightmares with American style SFHs:

• Asphalt roof shingles that only last 25-30 years unless they are damaged by normal weather events.
• Wooden roof sheathing, soffits, and fascia that rot out and create a huge project at the first leak.
• Wood framing that is vulnerable to termite damage, water damage, and rot. See this project.
• Hollow or particle board doors and cabinets that crack, delaminate, or strip out of their screws.
• Cheaply made electrical outlets that wear out and won't hold a plug.
• Insufficiently sized foundations that settle over time.
• Flooring materials that need replacement every 10 years (carpet, vinyl, laminate, LVP, etc.)
• Sheetrock that will crack if you bump into it too hard.
• Garage door openers with plastic gears.
• Windows made in a way so that the whole assembly must be replaced if a pane is broken (no modular replacement parts or easy re-glazing possible) and that isn't easy because the flanges are behind siding or bricks!
• For crawl space homes or upstairs bathrooms, the only thing preventing the bathroom floor from rotting out are a ring made of squishy wax and a slowly shrinking bead of caulk next to the tub.
• Sheetrock that will mold if it gets too humid.
• Vinyl siding or trim that chalks and becomes brittle with age.
• Better keep those gutters cleaned or else your basement/crawl space will flood and your foundation will crack.

It's just a crap ton of work and/or money to keep one of these things operational. European buildings, with concrete-based construction and 100+ year tile/concrete roofing, seem much more durable and less of a hassle. A modern Euro-style apartment would be the minimum amount of hassle I could imagine, although I hear the Soviet built ones were drafty and uninsulated.

[iris lily]

Agree with above that stigma against apartments/multi-family housing is a major portion of the problem. People are priced out of spacious, detached, single family homes, but a nice apartment or condo would be affordable for many of these same people.

Disagree with above that restricting AirBnBs or more price controls on rentals would make more than a negligible dent in the problem. It’s supply, supply, supply. If anything, we should be subsidizing the construction of more dense multi family in high demand locales, not taxing it out of feasibility. Rent control usually has disastrous long term implications for a locale’s housing market. Price controls lead to supply issues.

The city-wide supply of AirBnBs in most cities is smaller than the amount of housing constructed in a typical year. So sure, ban AirBnBs and you’ve caught up on part of a year of supply expansion. Now what are you going to do the next year, and the next year, and the next year? Meanwhile, cutting off AirBnBs fucks up business and tourism travel to your city because hotels now have less competition and can jack up their prices. And a month-long AirBnB is often the best way to land in a new city and search for housing. Short-term housing is still housing, and it serves a vital need in the game of musical chairs.

My little tourist town has actually “ banned” Air b n b’s, it has  put a moratorium on licenses for the time being.

While I understand the sentiment, because the locals are extremely frustrated that every time a nice little house comes up for sale, out of town investor swoops in and buys it as an Airbnb. I don’t know what the long-term effects of this will be.

I don’t know if current Airbnb’s are grandfathered in if they are sold. Certainly not grandfathering in an Airbnb licensed property  would  affect the sales price.

But a definite advantage of having big bucks running Airbnb’s  around here is that they throw their big bucks at old crumbling, Victorian properties, and they renovate them. This makes my building, hugging heart happy, very happy.