Housing Affordability 2010-2021 by North American Metros (chapel, home sales)
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It's a common misconception. Houston has long been the wealthier area on a per capita basis and in the last 20 years it has usually been bigger on a total GDP basis as well, despite having ~500K-600K less people. Houston is a beast, though the DFW economy has grown a bit faster in the past 5-6 years or so and closed that gap significantly (and now has an overall bigger economy than the Houston area, but is still slightly behind on a per capita basis). The distribution of income is a little different too, with Houston having more rich people and poor people and DFW having a bigger middle class.
The 2020 numbers between these two should be most interesting when they are released. I expect DFW to get quite close to Houston on a per capita basis, as the economy there has been nuts lately. Houston has been growing at a pretty good clip as well, but DFW overtaking it in that metric would not shock me at all.
A weird quality of the Houston economy is the cyclical nature of O&G.. it can toggle between an industry that pays extremely well to everyone involved to laying off 50% of staff once or twice per per decade. DFW has lower highs and higher lows.
Correct, that old argument was based on the assumption of high interest rates limiting purchasing power. Those metros that poster listed also have much poorer long term appreciation rates even though they are affordable.
"Pittsburgh (2.6), Rochester (2.6), Buffalo (2.9) and St. Louis (3.0)." All places with a combination of slow growing economies, surplus of undesirable old/small housing stock, high property taxes, and less than desirable locations.
I mean we paid $54,900 for our home in Pittsburgh in March 2020, and it appraised for exactly that much at the time, too.
Our current appraisal is $75,000 a year-and-a-half later.
I will take $20,100 appreciation in a year-and-a-half anyday.
It's a common misconception. Houston has long been the wealthier area on a per capita basis and in the last 20 years it has usually been bigger on a total GDP basis as well, despite having ~500K-600K less people. Houston is a beast, though the DFW economy has grown a bit faster in the past 5-6 years or so and closed that gap significantly (and now has an overall bigger economy than the Houston area, but is still slightly behind on a per capita basis). The distribution of income is a little different too, with Houston having more rich people and poor people and DFW having a bigger middle class.
The 2020 numbers between these two should be most interesting when they are released. I expect DFW to get quite close to Houston on a per capita basis, as the economy there has been nuts lately. Houston has been growing at a pretty good clip as well, but DFW overtaking it in that metric would not shock me at all.
People don't realize this, but the U.S. Government pays a 'locality pay' bonus to Federal employees by CSA-ish boundaries, and it's based on how competitive wages are in that area. Essentially, "how much do I have to pay this person so we aren't losing them to other companies or because cost of living is so high"
This isn't exhaustive by any means, but here are some notable locality pay bonuses:
Atlanta: +22.16%
Austin: +18.17%
Boston: +29.11%
Charlotte: +17.44%
Chicago: +28.59%
Cincinnati: +20.55%
Cleveland: +20.82%
Dallas: +24.98%
Denver: +27.13%
Detroit: +27.32%
Houston: +33.32%
Kansas City: +17.13%
Las Vegas: +17.68%
Los Angeles: +32.41%
Miami: +23.51%
Minneapolis: +24.66%
New York: +33.98%
Philadelphia: +26.04%
Phoenix: +20.12%
Pittsburgh: +19.40%
Portland: +23.74%
Saint Louis: +17.65%
San Diego: +29.77%
San Francisco: +41.44%
Seattle: +27.02%
Washington: +30.48%
Areas not located within a locality pay zone: +15.95%
So a GS-13 (~Master's Degree working for 5 years) whose Federal job is in Fargo, North Dakota, would make $92,143. That same person in Kansas City would earn $93,081 if they moved to the Kansas City field office.
If they went to Washington HQ, they'd make $103,690 (a $10k raise!) but Houston would ensure a $105,947 salary. Essentially, the Fed pays more for Federal employees in Houston than in Washington or Boston or Chicago, because wages are high and Feds can easily improve their salary by switching over to a local company.
Of course, move to San Francisco and you'd make $112,400. But I don't think that extra $10k salary bump over Houston is worth paying $25k more in rent -_-
People don't realize this, but the U.S. Government pays a 'locality pay' bonus to Federal employees by CSA-ish boundaries, and it's based on how competitive wages are in that area. Essentially, "how much do I have to pay this person so we aren't losing them to other companies or because cost of living is so high"
This isn't exhaustive by any means, but here are some notable locality pay bonuses:
Atlanta: +22.16%
Austin: +18.17%
Boston: +29.11%
Charlotte: +17.44%
Chicago: +28.59%
Cincinnati: +20.55%
Cleveland: +20.82%
Dallas: +24.98%
Denver: +27.13%
Detroit: +27.32%
Houston: +33.32%
Kansas City: +17.13%
Las Vegas: +17.68%
Los Angeles: +32.41%
Miami: +23.51%
Minneapolis: +24.66%
New York: +33.98%
Philadelphia: +26.04%
Phoenix: +20.12%
Pittsburgh: +19.40%
Portland: +23.74%
Saint Louis: +17.65%
San Diego: +29.77%
San Francisco: +41.44%
Seattle: +27.02%
Washington: +30.48%
Areas not located within a locality pay zone: +15.95%
So a GS-13 (~Master's Degree working for 5 years) whose Federal job is in Fargo, North Dakota, would make $92,143. That same person in Kansas City would earn $93,081 if they moved to the Kansas City field office.
If they went to Washington HQ, they'd make $103,690 (a $10k raise!) but Houston would ensure a $105,947 salary. Essentially, the Fed pays more for Federal employees in Houston than in Washington or Boston or Chicago, because wages are high and Feds can easily improve their salary by switching over to a local company.
Of course, move to San Francisco and you'd make $112,400. But I don't think that extra $10k salary bump over Houston is worth paying $25k more in rent -_-
I do think one thing that’s gets lost in median wage discussions is that that’s not really accurate on an individual or industry level.
One major reason Seattle or Boston have high wages compared to Dallas or Atlanta is because of a concentration of high wage industries. Working for Alaska Airlines in Seattle vs Delta in Atlanta vs Jet Blue in Boston vs Southwest in Dallas pick Atlanta. The wage gap for comparable jobs is not the same as the wage gap between metros.
High concentrations of Tech in Seattle and Biotech and Finance in Boston ruse the metro median high above Atlanta or Dallas. However, doing the same job in the same industry doesn’t have the same gap.
I mean we paid $54,900 for our home in Pittsburgh in March 2020, and it appraised for exactly that much at the time, too.
Our current appraisal is $75,000 a year-and-a-half later.
I will take $20,100 appreciation in a year-and-a-half anyday.
That's all well and good, but it pales in comparison to price increases in most other areas of the country, so moving from a low housing price area to a higher housing price area is far more difficult than it used to be- unless you can more easily transfer higher paying remote jobs to different areas.
That's all well and good, but it pales in comparison to price increases in most other areas of the country, so moving from a low housing price area to a higher housing price area is far more difficult than it used to be- unless you can more easily transfer higher paying remote jobs to different areas.
That's true, but the alternative argument is that a $54k home in Pittsburgh can be paid off in 2 years with $2,500 payments.
Then you can spend the next 30+ years of your career not worrying about housing costs and can just shove that $2,500 every month into the stock market. That's $30k a year invested, $300k the first decade alone. And with the historical doubling of the stock market every 7 years, your $300k becomes nearly $900k by retirement.
I can definitely see the allure of cheap housing, though I do agree that high housing costs alone isn't as bad as people think it is (you are paying yourself rent, after all).
I do think one thing that’s gets lost in median wage discussions is that that’s not really accurate on an individual or industry level.
One major reason Seattle or Boston have high wages compared to Dallas or Atlanta is because of a concentration of high wage industries. Working for Alaska Airlines in Seattle vs Delta in Atlanta vs Jet Blue in Boston vs Southwest in Dallas pick Atlanta. The wage gap for comparable jobs is not the same as the wage gap between metros.
High concentrations of Tech in Seattle and Biotech and Finance in Boston ruse the metro median high above Atlanta or Dallas. However, doing the same job in the same industry doesn’t have the same gap.
I actually don't agree with this at all. In tech for example FAANG in pays literally 3-4x more for a given role that would some random enterprise company in Dallas. And those FAANG roles are by and large in tech hubs.
People don't realize this, but the U.S. Government pays a 'locality pay' bonus to Federal employees by CSA-ish boundaries, and it's based on how competitive wages are in that area. Essentially, "how much do I have to pay this person so we aren't losing them to other companies or because cost of living is so high"
This isn't exhaustive by any means, but here are some notable locality pay bonuses:
Atlanta: +22.16%
Austin: +18.17%
Boston: +29.11%
Charlotte: +17.44%
Chicago: +28.59%
Cincinnati: +20.55%
Cleveland: +20.82%
Dallas: +24.98%
Denver: +27.13%
Detroit: +27.32%
Houston: +33.32%
Kansas City: +17.13%
Las Vegas: +17.68%
Los Angeles: +32.41%
Miami: +23.51%
Minneapolis: +24.66%
New York: +33.98%
Philadelphia: +26.04%
Phoenix: +20.12%
Pittsburgh: +19.40%
Portland: +23.74%
Saint Louis: +17.65%
San Diego: +29.77%
San Francisco: +41.44%
Seattle: +27.02%
Washington: +30.48%
Areas not located within a locality pay zone: +15.95%
So a GS-13 (~Master's Degree working for 5 years) whose Federal job is in Fargo, North Dakota, would make $92,143. That same person in Kansas City would earn $93,081 if they moved to the Kansas City field office.
If they went to Washington HQ, they'd make $103,690 (a $10k raise!) but Houston would ensure a $105,947 salary. Essentially, the Fed pays more for Federal employees in Houston than in Washington or Boston or Chicago, because wages are high and Feds can easily improve their salary by switching over to a local company.
Of course, move to San Francisco and you'd make $112,400. But I don't think that extra $10k salary bump over Houston is worth paying $25k more in rent -_-
That pay scale is not necessarily accurate. The reason why Houston is so high is because of NASA primarily, which is the biggest federal employer in Houston IIRC - they absolutely need people in Houston and need to offer competitive wages to federal employees so they don’t jump over to the private sector. It’s basically a bonus for all other federal agencies in Houston.
People don't realize this, but the U.S. Government pays a 'locality pay' bonus to Federal employees by CSA-ish boundaries, and it's based on how competitive wages are in that area. Essentially, "how much do I have to pay this person so we aren't losing them to other companies or because cost of living is so high"
This isn't exhaustive by any means, but here are some notable locality pay bonuses:
Atlanta: +22.16%
Austin: +18.17%
Boston: +29.11%
Charlotte: +17.44%
Chicago: +28.59%
Cincinnati: +20.55%
Cleveland: +20.82%
Dallas: +24.98%
Denver: +27.13%
Detroit: +27.32%
Houston: +33.32%
Kansas City: +17.13%
Las Vegas: +17.68%
Los Angeles: +32.41%
Miami: +23.51%
Minneapolis: +24.66%
New York: +33.98%
Philadelphia: +26.04%
Phoenix: +20.12%
Pittsburgh: +19.40%
Portland: +23.74%
Saint Louis: +17.65%
San Diego: +29.77%
San Francisco: +41.44%
Seattle: +27.02%
Washington: +30.48%
Areas not located within a locality pay zone: +15.95%
So a GS-13 (~Master's Degree working for 5 years) whose Federal job is in Fargo, North Dakota, would make $92,143. That same person in Kansas City would earn $93,081 if they moved to the Kansas City field office.
If they went to Washington HQ, they'd make $103,690 (a $10k raise!) but Houston would ensure a $105,947 salary. Essentially, the Fed pays more for Federal employees in Houston than in Washington or Boston or Chicago, because wages are high and Feds can easily improve their salary by switching over to a local company.
Of course, move to San Francisco and you'd make $112,400. But I don't think that extra $10k salary bump over Houston is worth paying $25k more in rent -_-
Does this mean Houston is more expensive than DC???? Hallelujuh!!
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