Gen Z I feel bad for you guys and how you can buy homes

Stop eating Avocado toasts.

Boomers didn't eat Avocado toasts. They were not invented yet. Because of that they had more disposal income for a nice house.

The best thing that could happen for Millennials and Gen-Z:

1) Rent Control - people shouldnt need more than $800/month to put a roof over their head

2) A New Deal Network and Communications Bill to provide the basics of internet and 4g/5g coverage on the House.

Today's world aims to extract all disposable income of consumers with recurrent monthly bills.

Let's use Microsoft Word as an example. Pretend your job is dependent on Microsoft Word.

Microsoft Office 360 isnt simply $9.99/mo. It's $1750/mo rent, $100/mo electricity and $120/mo internet too (for those 6 HD cam zoom feeds). Plus the seemingly necessary student loans to even know how to use it and get the job. Then, after you pay all those things, then MS 360 is $9.99/mo. All these dependencies create red tape for average people. They have zero propensity to save because they cant and then we dig them in a long term hole just to keep up.

The housing market is the student loans scheme all over again.

I understand the grief of those priced out of the housing market in So Cal, but it is not a particular generation's fault. In SoCal, there has always been high demand for limited resources, even more so now due to much less buildable land, declining water supply, increased fire risk, increased population, and overseas speculators buying up many properties for cash. On the west coast, most urban and suburban areas are experiencing the same effect. It's not going to get any better unless it becomes economically disadvantageous to live in a particular area.

Can't afford to buy where you live? Move. Plenty of affordable homes in the midwest.

Here's a great 3 bedroom 2 bath in Kalamazoo Michigan for $100k.

zillow.com

1517 March St, Kalamazoo, MI 49001 | Zillow

Zillow, Inc.

Zestimate® Home Value: $110,000. 1517 March St, Kalamazoo, MI is a single family home that contains 1,700 sq ft and was built in 1913. It contains 3 bedrooms and 2 bathrooms. The Zestimate for this house is $115,000, which ha...

Link:www.zillow.com/homedetails/1517-March-...

No, not 'really'. Salaries were FAR lower in the late 80's than they are now, Dumas. I paid 90K for my first place in 1985 in San Jose. I made $28K/year as a new college grad electrical engineer. Think that's what a recent EE grad gets in the Bay Area now? I struggled to buy that house. 37 years later after having moved a few times I live in a house in the Bay Area that zillows at 3mil. I ain't moving or selling, it's my home for the duration. Git busy, just like we did.

It is pretty rough for this generation but at least you have remote work going for you, that should make things more manageable. You don't have to live in SoCal, you can go find a suburb with good schools and low housing costs and still collect a big paycheck. That wouldn't have been possible in prior generations.

When I bought my first house in '82 the interest rate was 16%, and salaries were much lower than they are now.

1) Well, first of all, salaries weren't the same in the late 80s. In 1989, I was a newspaper reporter, and I made $14,500.

2) I actually don't think younger people are wasteful at all...quite the opposite actually. Many of them are not having children (which adds to waste), tiny houses and van life is a thing, even for those who could afford more, and even new housing developments have tiny yards even if the house is big. Many of them are being quite conservative with spending...some out of necessity, but going big with cars and homes isn't a thing with the younger group, so props to them.

You needed schooling to learn how to use word…

So you paid ~3x your yearly income for your home? If we look at today, the average EE in SF makes ~$105,000 per year:

glassdoor.ca

Salary: Electrical Engineer in San Francisco, CA

1,050 Electrical Engineer Salaries in San Francisco, CA provided anonymously by employees. What salary does a Electrical Engineer earn in San Francisco?

Link:www.glassdoor.ca/Salaries/san-francisc...

GOOD LUCK finding a shoebox for $300k in SF these days.

You are proving his point.

How about you just don't move to calish1tfornia?

It’s more than California. Median price in my neighborhood (FL) was less than $150K twenty years ago. Now it’s about $600K. My neighbor paid $130K within the last 15 years and just sold for $835K

Median income has not increased by a factor of 4 or 5.

That said, work from home is a big advantage. 45min North or East of me, homes are 1/2 the price. A lot of cheap real estate in GA as well.

Mortgage rates are creeping up to 4.5%. I think there will be an opportunity to get back into certain markets, but super desirable areas will probably hold pretty firm.

until there aren't

So you paid 3x your salary for a house in 1985. And it sounds like that was pretty normal. What percent of the population in the Bay Area can pay 3x their salary for house in San Jose in 2022? Maybe the top 1%?

I got to the part where you said salaries were the same and I will not read on from there.

I moved to Silicon Valley in '83 after graduating from LSU. Loved the weather and running atmosphere, but the home prices were already insane then. Making $24K as a new developer; top software developers were making about $40-45K at that time based on the surveys and people I talked to. Bought my first car with a 21% rate loan and paid that off asap... Mortgages were going for 10% and higher. That drove the industry to create Adjustable Rate Mortgages to lower the entry rate into home ownership.

Regular homes in the Palo Alto, Mountain View, Cupertino area were $400K (and higher) in the mid-80's and I realized you'd need to get lucky cashing in a lot of stock options to afford a home, unless you were making C-Level or SVP salary. Owners who bought in the 60's and 70's got in at a good time. I knew four single guys in their 30's that joined together to buy a home, splitting the equity, as it was the only way they could afford a home... The Directors/Sr. Mgrs I knew that bought homes, lived in the East Bay (Fremont,...) and had a helluva commute. You knew home prices would keep going up but the salaries weren't moving fast enough to catch up, so job hopping was critical if you didn't have a big options package at your company.

The dot com boom and resulting stock options in the 90's kept the housing prices on a steep upward trend. Now Silicon Valley is basically Software Valley, and it's not much different than what's happened to Seattle (lived there from '95-2010): if you can cash in on big options, there's your home down payment, else your housing options are limited unless you accept a long commute. With so much green space not open to development in the Bay Area, I don't see the prices there ever dropping back.

The Bay Area traffic was bad then and is horrendous now, based on my last visit. So many SV workers living in SF and commuting down each day; even with the Google and FB shuttle buses, that's just insane traffic. Throw in the state taxes, gas prices,... I couldn't imagine living there today.

*chuckles in Ohioan*

Hah losers.

They had more income because they got married at 25 to the first person they met and then over 50% ended in divorce. Emotionally scarring millennials to not want to get married seeing their parents fight for years and years and eventually get divorced. If over half of boomer marriages ended in divorce, that means at least one person in almost all millennial relationships had a divorced family. The real key to home ownership is a dual income household.