Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
$1.6M seems rather high for Seattle. To be clear, I wasn’t just talking about SFHs, I was also referring to townhouses, apartments, etc..
The median house price in Seattle is around $850K, so most of the homes will be within the 700K - 1M which should be pretty attainable for a couple with an income in the 200s with no kids.
The bougie Eastside suburbs are a different story.
I think the disconnect is that there's such a fetishization of six-figure-earning professionals on C-D, but there's such a skewed perspective about median salaries, even for a metro like Seattle.
The ACS 2021 estimates place median household income in the Seattle area at $101,721.
Granted, that's much higher compared to the national median HHI, but a far cry from $200K. We're talking about affordability for the masses here, which is clearly not just software engineers.
And I'm not trying to pick on Seattle. I'm only using it as an example. But there was a suggestion that the affordability crisis is "overblown," which is patently false. If anything, it's likely to get worse.
I think the disconnect is that there's such a fetishization of six-figure-earning professionals on C-D, but there's such a skewed perspective about median salaries, even for a metro like Seattle.
The ACS 2021 estimates place median household income in the Seattle area at $101,721.
Granted, that's much higher compared to the national median HHI, but a far cry from $200K. We're talking about affordability for the masses here, which is clearly not just software engineers.
And I'm not trying to pick on Seattle. I'm only using it as an example. But there was a suggestion that the affordability crisis is "overblown," which is patently false. If anything, it's likely to get worse.
The median household isn't buying a median SFH. Looking at median household income and median SFH prices and arguing that home prices are overpriced is a fool's errand. You can do the same exercise in much cheaper places like Houston or Chicago and still feel like there's an affordability problem.
My street in Seattle is about 1.5M-2M and most of my youngish neighbors (30s-40s) aren't software engineers. They are physician couples, a few mid-level executives, an architect with his own firm, a high-end interior designer, a real estate developer, a guy with a ranch business in Idaho, a couple of lawyers in local firms, and one guy who works at Meta as a SWE. The rest are old people in their 70s, many former Boeing white collar employees who bought when prices were 1/5th of what it is today. But what you will realize very quickly is that there are actually a lot of millennials who make serious money in an assortment of jobs when you live in a major metro area with good jobs.
Software engineers in Seattle seem to like living in the Eastside suburbs instead, which I've always found to be rather soulless and bleh.
But what you will realize very quickly is that there are actually a lot of millennials who make serious money in an assortment of jobs when you live in a major metro area with good jobs.
I know it’s not your intention, but you act like Seattle has a patent on high paying jobs. Yet the sub-conversation you’re having is with a couple millennials from Boston. We get it - The whole thing. Trust us.
What you should say, and what I already alluded to upthread, is that you very quickly realize the upwardly mobile are upwardly mobile. And regardless of high income levels, buyers buying $2M homes largely did it through means not found on a W2.
Look at the difference between Vermont and New Hampshire.
Not surprising. The southeastern part of New Hampshire is part of the Boston metro. It has economic opportunity. Vermont has service sector jobs for tourists and wealthy people fleeing the cities. Vermont and New Hampshire have been like that for 50 years.
The median household isn't buying a median SFH. Looking at median household income and median SFH prices and arguing that home prices are overpriced is a fool's errand. You can do the same exercise in much cheaper places like Houston or Chicago and still feel like there's an affordability problem.
I guess I'm not sure why you think that comparing median income to median housing prices is not a helpful way to assess affordability. It's apples-to-apples and frankly the only way to assess affordability accurately.
And you're right. You can certainly have this exercise in any city/metro area. I underscored the fact that Seattle is only an example. The lack of affordable housing (in a state-of-good-repair) is a national, and in many cases, global crisis. But it is beginning to be much worse in some places more than others.
We can all provide anecdotes about Millennials who do extremely well for themselves. You can find that in Wichita, KS, too. But anecdotes are not comprehensive data.
Quote:
Originally Posted by mwj119
What you should say, and what I already alluded to upthread, is that you very quickly realize the upwardly mobile are upwardly mobile. And regardless of high income levels, buyers buying $2M homes largely did it through means not found on a W2.
And regardless of high income levels, buyers buying $2M homes largely did it through means not found on a W2.
Look when I was a young millennial, I thought the same as you (I lived in Boston). How can anyone without inheritance afford these prices in Boston? But wages do go up, opportunities come and there will be a sizeable amount of people who will eventually be able to afford it. Current rates and prices are little crazy, I grant you that. But I don't think two high W2 earners or 1099 businesses have that much trouble affording 2019-2021 prices at 3-4% interest rate. This group of people is not a miniscule minority compared to people with inheritances. After all most of us don’t have a huge inheritance or pot of money from our parents, especially with cost of health care and assisted living facilities.
I still say looking at median household income to make a statement about what median SFH prices in major metro areas should be is a silly exercise and completely misleading. People were using this math as early as 2013 in Boston during the first ramp up from the Great Recession to say prices were a bubble. Imagine listening to them then when one could afford it.
Historically the rule of thumb has always been that your monthly rent or mortgage costs should be a maximum of roughly 33% of your gross monthly income. When did this ideal become "absurd" to expect or suggest?
If the median household income in a given city is $72,000/year, then that is $6,000/month (gross). That means one should not be spending more than $2,000/month, roughly, on their rent or mortgage. If the median rent or mortgage payment in a city with a median household income of $72,000/year is >$2,000/month, then why is it absurd to imply that such a city has an overpriced housing market?
"Median" means that there are literally HALF the people there in that city who earn LESS than that amount. If a disproportionately high percentage of available-for-sale and/or available-for-rent properties in that city exceeds a threshold where those earning the median household income or lower can afford them, then how is that NOT an unreasonably expensive housing market?
City-Data obviously skews more affluent than the national norm if so many of you have not experienced housing insecurity and/or don't know many people who are currently experiencing housing insecurities. Some of you should check your privilege on the socioeconomic front if you were derived from affluent backgrounds where your parents were/are able to help with your housing. I live in a very affordable metropolitan area, yet our population of people experiencing homelessness is rising meteorically. I work in the Downtown of our city and have seen this firsthand over the years. I can only imagine how much worse housing insecurity must be in more expensive cities where >75% of properties are unaffordable to those earning at or below the median household income.
Median sale price will never affect median income. First you have to delete the renters. Then you add the move-up equity, parental gifts, non-income earnings, etc.
As for the 33% (or 30%), that's assuming a standard baseline of other costs. If the baseline changes, so can the percentage. For example not having a car might take the figure to 50% very reasonably. Same with not having kids, housepets, debt...
Median sale price will never affect median income. First you have to delete the renters. Then you add the move-up equity, parental gifts, non-income earnings, etc.
As for the 33% (or 30%), that's assuming a standard baseline of other costs. If the baseline changes, so can the percentage. For example not having a car might take the figure to 50% very reasonably. Same with not having kids, housepets, debt...
But we're not talking about giving up a latte, here. Foregoing a car, pets, and children, start to get into major life decision impacts. And in the vast majority of metro areas (yes, even transit-heavy ones), most people will prefer to have a car as a backup, especially with increasing unreliability of transit systems (and they're all facing a fiscal cliff, but that's another topic entirely).
I'm genuinely surprised folks are still seemingly defending the astronomical levels of home prices as though they're sustainable, when clearly they're anything but.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
