Why It's So Expensive (Phoenix: low income, real estate, rentals)

[Sno0909]

Making national headlines. Interesting read.

https://dnyuz.com/2024/03/29/why-its...ve-in-phoenix/

[sunsick]

“Most people making $45,000 to $90,000 a year can’t afford to buy a house, and that makes people feel like the economy is crummy,”

I fall within that income range and bought a house recently. By living below my means and being disciplined to save and invest as much as possible, I could make such a substantial down payment that it offset my low income. My down payment would have fully paid for a home not long ago. I did nothing special beyond exercising basic self control.

Mr. Smith is a data analyst at Amazon. Together, he and Ms. McDaniel earn roughly $200,000 a year. They figured they could afford to pay as much as $550,000 for a home,

$200k/year DINKs and can't manage to get into what they want? They are incompetent morons.


And not a single mention of the effect of short term rentals on our housing market.


Weak article.

[exit2lef]

Thanks for sharing this. Here's a link to where the article orignally appeared on the New York Times (just in case it goes away on the site that reposted it):

https://www.nytimes.com/2024/03/29/b...smid=url-share

I'm glad the role of NIMBYism is mentioned, but it's frustrating that Governor Hobbs' recent veto of bipartisan leglisation to increase housing affordability was not mentioned. Two years in a row, she has vetoed bills that would have allowed for more housing. The reason has been objections from the Arizona League of Citiies and Town. I'm normally in favor of local control, but municipal governments are dragging their feet on this, making minimal changes for fear of offending neighborhood associations. If they can't get the job done, then the state needs to step in.

[MN-Born-n-Raised]

Originally Posted by exit2lef

Thanks for sharing this. Here's a link to where the article orignally appeared on the New York Times (just in case it goes away on the site that reposted it):

https://www.nytimes.com/2024/03/29/b...smid=url-share

I stopped reading the article when two able-bodied 32-year-old made only $3.5K a month. Per the Times article: "She works at a supermarket deli counter. He stocks shelves at a convenience store. Together, they earn about $3,500 a month."

For his stocking job. They have help wanted signs at Aldi's where they pay $27 an hour. That's $4700 a month. Convenience stores pay much less per hour and are not full-time. Psst. He is working for the wrong company.
Don't shoot for BELOW average wages at a convenience store: See https://www.indeed.com/career/stocker/salaries Go for the higher-than-average positions.

Next, at the Deli Counter, you want to belong to the grocery store union. https://www.ufcw.org/who-we-represent/grocery/ In high school back in 1981, my girlfriend (now wife) was a cashier at the major food retailer Cub Foods. She made $10/hour part-time with vacations, dental and medical healthcare. Of course, they pay well over 2x that amount now. A full-time Albertson's deli counter worker makes on average around $18/hour. But with some additional certificates, the pay maxes at $23 an hour. Using the average wage and the monthly hours, we are talking $3100 a month.

Option 2. Work at the lowest end of the stores and only part-time. Then, complain that you cannot afford to live here. Sorry, nature is at work. Never mind there is this thing called overtime. Take all you can, and have a positive and friendly can-do attitude! Soon, you will become the Deli Assistant Manager and later, the Deli Manager for 2X that amount. Or instead, coast like you did in high school, don't try and better yourself, work part-time, and wonder why you are living on the side of a street.

The Times article should have been titled: "Why Study Harder: The Importance of Common Sense and Understanding Multiplication So That You Can Work a Budget." Sure. It's spendy to live and it has gotten worse! But the Times cherry-picked some not-so-bright people to make an example.

[mborner]

Originally Posted by sunsick

I fall within that income range and bought a house recently. By living below my means and being disciplined to save and invest as much as possible, I could make such a substantial down payment that it offset my low income. My down payment would have fully paid for a home not long ago. I did nothing special beyond exercising basic self control.


$200k/year DINKs and can't manage to get into what they want? They are incompetent morons.


And not a single mention of the effect of short term rentals on our housing market.


Weak article.

Yes, it seems with that kind of income they could be looking at pricier homes and still be okay. I understand, however, wanting to keep housing expenses low, especially if they're already over-extended, which, as we know, is the American way.

[Texas100]

Many people bought their houses years ago when they were pennies on the dollar compared to todays prices. In the mid 90's new homes were starting from the 60's off of Val Vista. They can feel snug and love the super high prices. Perhaps they even hope that their homes value goes up even more? Then they can think to themselves. "WOW! my home is worth a million dollars!" and "I live in the center of the known universe" 40% of homes are completely paid off.
Meanwhile new people have little chance of ever owning a home and will struggle much more to pay their house than the previous generations did. With the exception of the 1997-2006 bubble and this latest bubble
Phoenix has always been an affordable place but there has always been a lot of speculation there also. I think Phoenix is too Real Estate centric and is influenced by nearby California where Real Estate is a religion.
Ultimately Phoenix has a history of booms and busts in Real Estate more so than most of the country. They always say "This one is different"

[MN-Born-n-Raised]

Originally Posted by Texas100

Many people bought their houses years ago when they were pennies on the dollar compared to todays prices. In the mid 90's new homes were starting from the 60's off of Val Vista. They can feel snug and love the super high prices. Perhaps they even hope that their homes value goes up even more? Then they can think to themselves. "WOW! my home is worth a million dollars!" and "I live in the center of the known universe" 40% of homes are completely paid off.
Meanwhile new people have little chance of ever owning a home and will struggle much more to pay their house than the previous generations did. With the exception of the 1997-2006 bubble and this latest bubble
Phoenix has always been an affordable place but there has always been a lot of speculation there also. I think Phoenix is too Real Estate centric and is influenced by nearby California where Real Estate is a religion.
Ultimately Phoenix has a history of booms and busts in Real Estate more so than most of the country. They always say "This one is different"

Well, someone is buying these homes. Including the new builds that are adding more inventory to the market. There are the haves and have-nots. Sadly, that gap is widening. Rest assured, young professionals are buying homes.

With mortgage rates around 6.5%, the minimum amount of income to afford a $500K home (assuming 20% down) is $91K a year. Here is the math https://www.bankrate.com/real-estate...for-500k-home/ Sure, that's pushing it. But I can rattle off dozens of young people I know that blow past $91K a year. And in about 40 years, a $500K home will be a nothing burger. Then, a young person is going to pontificate on your explanation of how "new people have little chance of ever owning a home and will struggle much more to pay for their house than the previous generations did."

Solution: work smarter, save more, pay attention in K-12 and college, and outperform the competition. We are officially in a global economy. People around the world want what we have. Outperform others or expect to rent for the rest of your life. It's dog-eat-dog out there.

[ShampooBanana]

Originally Posted by MN-Born-n-Raised

Well, someone is buying these homes. Including the new builds that are adding more inventory to the market. There are the haves and have-nots. Sadly, that gap is widening. Rest assured, young professionals are buying homes.

With mortgage rates around 6.5%, the minimum amount of income to afford a $500K home (assuming 20% down) is $91K a year. Here is the math https://www.bankrate.com/real-estate...for-500k-home/ Sure, that's pushing it. But I can rattle off dozens of young people I know that blow past $91K a year. And in about 40 years, a $500K home will be a nothing burger. Then, a young person is going to pontificate on your explanation of how "new people have little chance of ever owning a home and will struggle much more to pay for their house than the previous generations did."

Solution: work smarter, save more, pay attention in K-12 and college, and outperform the competition. We are officially in a global economy. People around the world want what we have. Outperform others or expect to rent for the rest of your life. It's dog-eat-dog out there.

This exactly. Lot's of media sensationalizing and cherry-picking going on for the clicks because they know that a certain segment of the population eats up the "misery loves company" and "they took our jerbs" BS out there. Well guess what? They wouldn't take your jobs and you'd be able to make it in today's economy if you got off your lazy a$$ and actually tried to be better instead of expecting things to just be handed to you because you think you're owed something.

[MN-Born-n-Raised]

Originally Posted by ShampooBanana

This exactly. Lot's of media sensationalizing and cherry-picking going on for the clicks because they know that a certain segment of the population eats up the "misery loves company" and "they took our jerbs" BS out there. Well guess what? They wouldn't take your jobs and you'd be able to make it in today's economy if you got off your lazy a$$ and actually tried to be better instead of expecting things to just be handed to you because you think you're owed something.

But, but, but... "You had it sooooooooooo much easier." Plus, this poor couple cannot make it. It's not their fault!

[Texas100]

This assumes that the person has 100k in cash to put down? I agree that many people in Arizona make 91k+ even though incomes are lower than the national average. But how many have 100k cash to put down?

Originally Posted by MN-Born-n-Raised

Well, someone is buying these homes. Including the new builds that are adding more inventory to the market. There are the haves and have-nots. Sadly, that gap is widening. Rest assured, young professionals are buying homes.

With mortgage rates around 6.5%, the minimum amount of income to afford a $500K home (assuming 20% down) is $91K a year. Here is the math https://www.bankrate.com/real-estate...for-500k-home/ Sure, that's pushing it. But I can rattle off dozens of young people I know that blow past $91K a year. And in about 40 years, a $500K home will be a nothing burger. Then, a young person is going to pontificate on your explanation of how "new people have little chance of ever owning a home and will struggle much more to pay for their house than the previous generations did."

Solution: work smarter, save more, pay attention in K-12 and college, and outperform the competition. We are officially in a global economy. People around the world want what we have. Outperform others or expect to rent for the rest of your life. It's dog-eat-dog out there.