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I have an old smartphone I paid off awhile ago, no car payments, own a house. Saving money is for losers, you need higher income, not barely scrape by. Anything else? In the old days, you can be in the middle class w/o a degree. Hell even burger flippers can afford a house and a staying at home wife.
yes, burger flippers could and can... but ask mcdonalds how many actually flip burgers now. real burger flippers are now chefs, and make good money.
It isn't that people made more in the past, people today do less and for some reason expect to be paid the same as someone who actually did more.
the jobs today that "kept" up with inflation also "kept" up their skills too with technological inflation/advancement...
Suppose that I bought a house in the year 1986 for $100K. Today its market value is $70K, but because I've neglected maintenance, found mold and so forth, the house is basically worthless. But it's paid off. So I decide to walk away from it. I just sign the title over to the county, giving my house away free and clear, instead of attempting to sell it. I have a $100K loss – but how do I deduct that?
In sum, for the inveterately apartment-bound, there's a powerful urge to graduate to home-ownership. But for those who've been homeowners for quite some time, it's been decidedly a mixed blessing.
Today, there are lots of areas in this country, where cost of owning a home, is no harder for the average person than it was in 1955-1956 era when we bought our first home, in the heart of the Silicon Valley (Cupertino, Ca). Cost $13,750 with a $0 down with a VA loan. 10 years ago, the same houses on that street were selling for $850,000 when they were 50 years old. Today in that same area of the Silicon Valley median (Cupertino Ca.) median home sells for $1,765,900. This cost raise is absolutely ridiculous.
In some parts of the country, you can still buy a decent home in a decent part of the town for $60,000 or so.
And the thing is the Silicon Valley pays high wages, but after adjusting for cost of living, it is not so high any more, with the reduced buying power of a dollar. Many people with a lower income, can buy homes in their area of the country, and live better than they can in the Fabled Silicon Valley where we raised our children.
Sounds like a personal problem. Here in MN the VAST majority of people are home owning, middle class people, who are living as well as anyone ever has here AND the weather is great! Beautiful fall day today.
Permabear is one of the Bay Area folks who have little real life experience outside of a few square miles. With him, even less since he lives in his parents' house. LOL.
I don't think we're worse than 1955... better technology, instant communication, safer vehicles, better entertainment.. a lot of people put a nostalgic view on the past. Working conditions were more hazardous, people were more racist.. they were perhaps a bit more "moral" if you want to call having casual sex and getting divorced more frequently being not moral, but overall I see society as the most peaceful and tolerant it's ever been. We were a pretty barbaric species throughout most of our history. People get this idea that the world is going to hell, but really it's been MUCH worse if you study history...
The wages of the working class have declined relative to the past particularly in factory work, however. Due to automation, a strong dollar leading to outsourcing, among other things... you just have to look harder to find work and not settle for meager wages. There are record job openings that can't be filled in some areas because employers refuse to pay a decent wages, which is why politicians really try to get all these refugees and foreigners into the country... to fill the factory work they know americans don't want to work $10/hour to do. On the other hand, you can't compare paying what they paid in 1980 for houses with interest rates at 12% with today's mortgage rates of 3% or so.. the difference is HUGE...
My situation is pretty good. I originally had a longer post detailing it so just look at the post revisions if you're curious. lol
Which is one reason I wouldn't be so quick to write off Gary - it's within commuting distance of Chicago (and contrary to the OP's assertions, the Chicago metropolitan area is doing well). What's holding Gary back right at the moment is a crime problem; get that under control and the real estate prices there may well start to rise.
Since there are some fairly nice suburbs near Gary but not in it, such as Munster, which is actually a little closer to Chicago, I wouldn't bet on Gary itself "coming back" any time soon.
Since there are some fairly nice suburbs near Gary but not in it, such as Munster, which is actually a little closer to Chicago, I wouldn't bet on Gary itself "coming back" any time soon.
The South Bronx in New York, which used to be called "Fort Apache" is back. Large similar chunks of Brooklyn are back.
Back then the price for a new home was $10950 ($98408 adjusted for inflation). A working class man with a decent middle class job made 4130 dollars a year. He was able to afford a home on one income and was able to either do this as a single person or have a wife/girlfriend who maintained the home and care for the children. Nowadays this is impossible especially with houses in places like the Bay Area where most of the jobs are concentrated costing 1 million dollars for a crappy 2 bedroom in a bad neighborhood (it's 248000 nationwide which is more than 2x higher than it was back then adjusted for inflation). Many people are living in poverty. Life was better when you only need 100,000 to retire comfortably and drive Cadillacs.
Not to correct you but...
in 1955, it was rare that a couple would be living together with a family, if they weren't married.
Back then, the majority of the population had morals...
From the perspective of blacks, women, gays, non-Christians, immigrants, and so forth, those 1950's morals might not have been very moral, but folks did have them alright.
Otherwise, the 50's were a dark, gray, and dreary decade. Three recessions, the Red Scare, and the Soviets beat us into space, making us look and feel like a weak and declining second-rate power.
Though Perma Bear has been widely excoriated for a petulant refusal to adapt and to manage his expectations, something in his lament resonates with me. 20-25 years ago, I was in a position similar to his. I exchanged a vibrant coastal locale for a sleepy Heartland burg, not to chase cheap real-estate, but to pursue my career. Now I find myself trapped. Sure, the 401K is doing alright (assuming that the stock market doesn't crash again!). But other aspects of life haven't exactly blossomed. There's much to be said about broadening oneself, taking risks, accepting temporary reversals in favor of longer-term gains, and so forth; let the platitudes and bromides accumulate. There's certainly an aspect of truth to them. But it's also true, that low-cost places are low-cost for a reason; and that reason isn't merely fashion and caprice and the herd-mentality of so-called elites and their hipster spoiled offspring.
So, yes, folks earning $70K in the Bay Area would need to relocate if they insist on buying a house. But there's a tradeoff in all such moves. Is there net benefit in buying your little piece of heaven, in the middle of hell?
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