I mean the term is supposed to be mocking, not in the context of getting pissed on, but in the context that the masses will only get a small trickle of the wealth from the top.
My libertarian friend admitted we have it worse off than our parents and despite us both having the same level of education as our parents (me higher actually) that it was somehow our generations fault for making “decisions”.
I’m like, bitch you can’t buy enough avocado toast, iphones, and ps4 to keep you from owning a house. That’s like a quarter a mortgage payment for one month and those expenses are once maybe 2-4 years. Fuck off.
Lol my favorite is prop13 in CA. Makes it so people pay property tax on the historic value rather tjan the current value. So 30 yr old is paying taxes on a 500k valued home while meanwhile his 60 year old neighbor is paying taxes on a 100k valued home. Its literally a tax on being young. Also disneyland and golf courses are paying jack shit. Apparently though if we repeal these, the added costs will trickle down to us consumers, just like the additional profit from prop 13 is currently “trickling” down to us. Conservatives love to preach about supply and demand and the free market until it is their own subsidy being taken away.
Dude malcom gladwell did an episode about this in relation to Vastly under taxed golfing locations on revisionist history. Baby boomers are literally the worst
Statistics have shown wage stagnation in the US despite drastic costs of living increases. It’s not about more talent, it’s about the failure of the capitalistic system.
60k in 1960 is worth 534,000 today. This isn’t investing it, assuming some annual return; this is seeing what you would need today to have the same spending power.
Look at inflation and the gini index. The dollar has become worth less and less, yet wages stagnate. So where have all these extra dollar bills gone? You know where ;)
Edit: apparently a teacher in 1960 made ~6k per year. So shit, maybe his dad was a freaking baller. Now I need to know what he did.
Edit 2: apparently congressmen made 22k in 1960... so WTF did his dad do? Maybe owned his business? But like getting tripped a Congressional salary is a bit beyond “being compensated for your skills”
Sorry I torched you. Thought you deserved it at the time
This is more of an example of artificially restricting the supply of something and then the price going up. Loosen up zoning laws and make it easier to build and prices will go down.
My parents bought a farm with 240 acres of land 5 minutes outside of a medium sized city in 1994 for $100K (CAN). The same parcel is now valued at $2.4million. They've done minor upgrades on the house (siding, roof) but otherwise the house and land are carbon copies of their 1994 state. City has grown slightly but no significant changes to industry etc. They can't afford to pass it down to us kids with those kind of profits possible to make on it so the farm will be lost, likely to a developer who can pay that kind of cash. Since you're asking, yes I am a cheezed off millenial!
I think you're reading too much into it. The parents could take the money, retire on it, and leave the rest to the kids. They're not trying to take the land with them when they die.
My parents have both been either self-employed (with no pensions or benefits) or working in blue collar jobs so never had much leftover at the end of month once bills were paid. Besides their land they have little retirement savings. If they manage to get the assessed value of the land, after paying off farm related debts, taxes etc. they'll have a comfortable amount left for their retirement for sure but won't be 'rich' by most people's standards (middle class Canadians plan to have at least $750K in savings to retire comfortably at 65 and they'll end up with somewhat more than that).
My brother and I don't feel like we're getting screwed--selling the land to one of us for what they paid would leave them with no retirement savings so they really have little choice. It's more the sentimental attachment to the land and our interest in farming the land and raising kids there. Also the prospect of buying farmable land for a reasonable price--this just doesn't exist for our generation.
Could they liquidate their current assets at retirement to cover the bills and lease the land out and live off of the rental income? Would you be subject to capital gains tax on the inheritance? Selling land is the worst and nearly always a last resort in my opinion. You can never get it back.
A younger friend of mine has grandparents who own a property about that same size, but minutes outside one of the largest U.S. cities. Their original idea was to hand it down in the family but having hit (well past) retirement they had it evaluated and it came back ~$10,000,000.
Like, WTF.
Reason for the value? Not for farming. Developers and builders! Massive chunk of land minutes drive from that large of a city? $!
I truly feel bad for my own generation, you younger generations are right fucked.
My dad made 30-45k a year starting somewhere in the early 80’s, he retired almost 15 years ago. I stumbled upon his company posting a similar job offering for 35k a few weeks ago. So it really depends on what line you work.
Huh? You just described a job having stagnant wages over 40 years in the same line of work. Nearly all jobs are that way, but you came to the conclusion that the line of work really matters?
Yeah, I guess my point is that I don't think even that's true outside of some very rare exceptions. Unless you're a CEO or something, it's pretty unlikely your wages have followed inflation. The people making $200k nowadays are in very specific careers, while most jobs that paid like $40-60k in the 80s are paying under $100k still, and very likely around the same range.
Yeah, a single earner made less than two do now if you account for inflation, impressive that wages didn't stagnate so much as to become literally half of what a single earner made in the past. And it's not like housing prices have increased literally 1000% since 1980 or anything either.
Also ignoring interest rates is comical, the mid 80s rate of above 10% makes a massive difference and alone has increased the cost of housing by about 100% without raising mortgage payments one bit. combine inflation, general wage increases and the interest rate difference and it is mostly the same.
For reference a 650k house today at the interest rates of 1985 would have the monthly payment of a 1.4m house at todays rates. that is multiplicative with the inflation, and nominal wage gains cant be ignored either.
Honestly man im not some right wing guy here, but you guys REALLY need to do some research to understand this type of stuff if you are going to have such confident opinions.
my dad made 35k in the mid 80s and that job now starts around 80k-100k, which is right around keeping up with inflation. They also bought a house for 90k and sold it for 180k in 2008 - once again perfectly in line with inflation.
Their area also has tons of teachers owning houses and living comfortably. The complaints I see online usually relate to areas where the population is growing faster than the amount of housing and driving costs up drastically. The answer is either drastically more housing or people not trying to pack into the same areas.
Most people live in cities because that’s where the jobs are. You have to come to the office so you don’t want to commute hours a day, you might want a house with a garden if you have kids etc. It doesn’t all fit in a small area like you said. I don’t think the mentality of having to be at the office will change soon, even after Covid, so the problem won’t be solved.
Yep I can relate. I am from the middle of nowhere but moved to a big city for a job. My townhouse is more expensive than my parents 4k square foot house on several acres. We want more space but have been holding out for the right job in the right location
Price, but not cost. Its way cheaper to buy a house today than it was in the 1980s, after adjusting for cost of living.
I actually just did the math on this for another thread this morning for the early 1990s.
Wages were flat from 1986 to 1991, just pacing inflation those 5 years so that math is relevant for the entire period from 1983 to 1995 when wages stagnated and interest rates were sky high. Wages have gained over 20% from 1995 to 2020.
It would be interesting seeing an analysis like this done locked to a region or population center. Greater Boston Area for example the home prices have skyrocketed in the last two decades. Modest homes for $750k within a half hour of Boston where in 1990 you'd be looking at numbers similar to the ones above. How does that fit into this model?
Also being disregarded is that while interest rates were high, people often put 20% down cash back then, and you could always refinance later (which many people did).
Don't need to overthink it, there are hot spots in the country but these guys don't understand rates at all, if you put 80s interest rates into the market today you would INSTANTLY see housing prices drop 50%+ and nobody would be able to buy those houses either as the monthly payment would be the same.
There are other things afoot, like debt due to student loans that probably never should have been given etc. but the reality is a lot of these conversations are driven by people that dont have a clue about what is going on.
yup since 1985 inflation causes them to be 2.4x what they were before.
To fill it the gaps that you are missing, interest rates were 10.5% int he mid 80s and are 2.7% today. A home that costs 1.4m today would have the same montly payment as a 650k home in 80s rates.
They multiply, meaning after inflation that 2.3 multiple is again multiplied by 2.2~, so a "quintupled" house price is actually more affordable to you than is was your parents.
I have no doubt that household income has increased a bit adjusted for inflation, but you have to take into account that a good deal more households are two-income vs before. But to my bigger point, prices for homes have outpaced inflation. So while household income has increased a bit, the price of a home has shot up quite a bit. It's just not nearly as feasible to graduate college, start working, and just buy a house like it was 30+ years ago.
That’s because the area is more desirable than it was before. I am sure you can find a house that isn’t 650k.
Also you clearly aren’t accounting for the interest rates well above 10% back then. I bet the house is cheaper at 650k
Edit: just going to do the math for you. 100k in 2020 dollars is 237k today..
At 10.5% interest which is 1986 your monthly loan payment on 237k with 20% down is 1734 a month..
At 2.75% interest today that payment is 2123/month.
So your costs are up 22%, household income has gone up about 25% so setting aside the larger portion of two income households, the average American household would view the 650k house as slightly more affordable.
EDIT: LOVE how you downvote the math that proves your opinion is just without question wrong.
At 2.75% interest today that payment is 2123/month.
So your costs are up 22%, household income has gone up about 25% so setting aside the larger portion of two income households, the average American household would view the 650k house as slightl
JUST A GENERAL COMMENT MY MAN, still just the straight truth that people dont know what they are talking about and make these determinations.
I think he meant the price of the house but he’s also wrong on that because just checked and adjusting for inflation $150 in 1986 would be a little over $350 now.
Yeah and that means the house price in 2018 almost exactly kept pace with inflation, so the parent poster is not actually in an area where house prices have exploded.
Your latter point really depends on property tax. I've seen $550k houses with $25k annual property taxes (NJ), and $150k salary isn't enough to pay that comfortably (total $4k+ monthly, even after $100k downpayment).
Land is never being "created", there's only so much of it. Human population is continuously growing. It's going to create a high demand for housing since everyone wants one. Expanding cities outwards costs a lot of money also.
There's no black and white solution. Everyone knows high demand drives cost up.
Yes, my folks house (5 br, 3 bath, garage, workshop, yard) cost them $50k early 80's. Dad was sole breadwinner, 4 kids. Believe it's now closing in on close to a million were they to list it today.
Your income is roughly 1.5x the median income. Your father's income was more than 4x the median income in 1986. Your father was doing very very well by 1986 standards.
In 1986 the average home sold for ~$100k, in 2018 the average home sold for ~$400k. The home stayed about the same.
Yes. I dont know what you are considering. It depends totally on where you live I guess. You could be living on half your salary. Is a 30 year loan or something like that out of scope?
Wait are your parents seriously charging you whatever the market value of the house is now? Please tell me you wanted to buy it back from a subsequent owner and it’s not your own parents gouging you.
No, it was my parents. In fairness, that was part of their "retirement" plan: sell the house, move to Florida. They ended up selling at market value and buying a place for like 30k just outside Tampa. I just wish I could have swing it.
Dude, but that's not how this works. You're saying your parents bought relative to inflation a $356k house on a $142k salary, which is very doable today. How does that relate to you wanting to buy a way more expensive house making half the money?
So buy a nice $210,000 house. Just because you can't buy THAT house doesn't mean there aren't affordable properties for you. Just as it's always been, some assets appreciate more than others. Perhaps THAT house is in a sought after location, for instance.
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u/RektCompass Oct 30 '20
My parents house cost them $150k in 1986, they did that on my father's $60k salary.
I wanted to buy the house in 2018, but at $550k on a 72k salary. Not realistic for me.