
How Many Years of Life Does That House Cost? - sndean
https://nation.maps.arcgis.com/apps/Cascade/index.html?appid=de7f932e3a1d494f9c9d9a67fb0de646
======
lpolovets
I liked the visualization and data, but I don't think it makes sense to
compare home prices to wages w/o considering alternatives to home ownership.
Home prices don't exit in a vacuum. That is, if a home is 10x the median
salary, you can't really say "well, if I didn't buy a home I could work 10
years less." That's because the alternative to buying is renting, which is
also expensive. So sure, a mortgage in SF is $6k/mo. But rent might be $6k/mo
as well -- and you don't earn any equity or tax write-offs while renting.

I think what the alternative title to this blog post could be is: "How many
years of life does that city cost?" What it's really comparing is the relative
cost of having a roof over your head in different areas. Would you rather work
40 years and live in SF or work 30 years and live in rural Wisconsin? (I don't
have an opinion on those two options. I'm sure there are many people in both
of those places that are happy with their choices.)

~~~
sbenitoj
You also have to factor in the opportunity cost of what you could've done with
that down payment (e.g. What would a $100k downpayment invested for 30 years
in the stock market be worth vs how much is that worth in your home in 30
years?)

The NYT has a buy vs rent calculator that helps make some of these decisions:

[https://www.nytimes.com/interactive/2014/upshot/buy-rent-
cal...](https://www.nytimes.com/interactive/2014/upshot/buy-rent-
calculator.html?_r=0)

~~~
c22
Everyone I know in my age group with a house got help with their down payment
from parents. Either in the form of low/no interest casual loans or just
substantial gifts. It's possible this money wouldn't have been available to
them for speculation in the stock market.

~~~
CoryG89
Some of us don't have parents who have more money than we do.

~~~
c22
Neither do all of my friends. All that's required is having parents that want
to help you get a house.

For instance my girlfriend makes twice the money her parents ever did. She
still couldn't have afforded the full down payment on her house without a 4%
loan from her mother as they were entering retirement. This arrangement ends
up being beneficial to all parties.

~~~
bryondowd
I wonder how common even that much help is. That would be completely
unthinkable to anyone in my circle. I personally send about $400 per month on
average to help my mother make ends meet. I'm certainly not going to be
getting a several thousand dollar loan from anyone in my family.

For reference, this is in southern New Jersey and I'm on the older end of the
millennials.

------
sbenitoj
This is an awesome site, visually depicting how unaffordable housing has
become in so many parts of the US.

It's truly amazing how much the Fed (with perpetually low interest rates) and
local restrictions on building (making it more expensive or impossible to
build) have increased the cost of home ownership over the past 60 years.

Anyone who's seriously considering purchasing a home should read The Housing
Trap by Patrick Killelea, it's a short, amazing overview of how we arrived in
the situation we're in as well as a practical guide for when to buy vs rent
housing.

[https://www.amazon.com/dp/1479156213/ref=cm_sw_r_sms_awdb_Ki...](https://www.amazon.com/dp/1479156213/ref=cm_sw_r_sms_awdb_KiWSzbNN7T5YE)

~~~
zaroth
That's funny, my takeaway was that the vast majority of the US has incredibly
affordable housing.

But I suppose if your call center employees simply must be living in downtown
S.F. the answer must be that we just need lax zoning and higher density!

~~~
culturalzero
You clearly don't know what it's like to live on minimum wage right now. It's
extremely difficult to live anywhere even close to the Bay area on minimum
wage, which let's be real, a call center employee would be on. Public
transportation options get figured in there too. I'm very fortunate to have a
good job now, but it wasn't all that long ago I was scraping by on near
minimum wage.

~~~
zaroth
No, I understand exactly and I think we are in violent agreement.

One cannot afford to live in the Bay Area on anything near minimum wage. So
fuck "The Real Bay Area" and live _just about anywhere else_ in the
continental US.

~~~
maxerickson
Median wage is 2-3x the minimum wage.

So housing affordability on minimum wage in most of the US is closer to
California at median wage than it is to most of the US at median wage.

~~~
zaroth
TFA shows that in well over 50% of the land mass of the continental US, houses
can be bought for 1 year of median wages.

Living on minimum wage is hard _anywhere_. The question is -- is it OK if
there is 5-10% of the continental US where it's _impossible_ to live on
minimum wage? I think that yes that's probably OK...

Is it OK that for some [relatively small number of] cities, that _median_ wage
feels like minimum wage? Why is that a problem when people have the choice to
live there or not?

------
tw1010
You guys may have this or that problem in the US, but the fact that you have
people like this author who put so much effort into communicating the problems
and who care this much, that makes me envious of you all. You'd be really hard
pressed to find a good number of people in my country who cared as much about
the welfare of the rest of the people.

~~~
icu
Sorry to hear that, just out of interest which country are you speaking about?

~~~
alecco
Many, perhaps most.

------
dfrey
Cool visualization, but kind of a useless statistic. The question that matters
is: How many years will it take me to pay off my mortgage after my expenses
(food, transportation, housing maintenance, utilities, taxes) are taken into
account?

It doesn't matter how cheap a house is if you can't save any money.

~~~
autokad
how many years will it take to pay off your mortgage? thats done for you,
about 15 or 30.

how does other factors like food/transportation/taxes factor in? though not
always, but they tend to go hand in hand no?

the cost of real estate is factored into much of what we buy / spend money.

~~~
AustinG08
It is honestly worth your while to pay off your mortgage as soon as humanly
possible.

~~~
steven777400
This is an oversimplification. The average household has several kinds of
debt, and generally debt should be paid down in descending order of interest
rate.

More significantly, investment income opportunities need to have their
interest rate (or equivalent) assessed. For example, in the past 12 months,
the DIA has risen 18%. Thus, if 12 months ago I had money to spare, it would
have been better to put the money into DIA rather than make an extra principal
payment on the mortgage, unless my mortgage is 18% or more.

With the exception of bonds and CDs, it's not possible to know the investment
growth in advance, so that creates some risk of course.

~~~
crackered
Further, because of the amortization schedule, applying that extra principal
payment only shaves off the last month of the amortization schedule, which is
the smallest fraction of interest of all payments.

One would still be better off investing that money in _something_ until that
last month, then apply the payment to save the very small amount of interest.

This assumes the mortgage is like most (all?) mortgages out there that follow
an amortization schedule -- which are unlike credit cards or student loans,
where early payments have a big benefit.

------
markvdb
Be my hero and compile a similar map for the EU, from Eurostat data. One
possible starting point:

[http://ec.europa.eu/eurostat/statistics-
explained/index.php/...](http://ec.europa.eu/eurostat/statistics-
explained/index.php/Housing_price_statistics_-_house_price_index)

------
mabbo
A better metric I like to use: how many extra years of work before retiring
will this large expense cost me? (Admittedly: this does not work the same for
housing for lots of obvious reasons).

An example: a friend of mine is renovating the exterior of his house for
$100,000. He plans to live there until he dies (it's a lovely house), so he'll
never see that money again. He'll just have a nicer house. My alternative
option for him: retire 4 years early instead.

If you invest $1 now, you can expect it to double in about 14 years, give or
take. So since he has more than 14 years left until retirement, that $100,000
would be $200,000. If he plans to live off $50,000/year, then he's giving up 4
years of retirement for the sake of his house looking nicer. If he plans on
living off $30,000, then it's nearly 7 years early retirement.

It's not exact math, but it's a good metric to put things in perspective.

~~~
kowdermeister
Your friend is right. You can't put a price on the feeling that you live in
the house of your dreams.

~~~
mabbo
I'm not saying he's wrong. I'm saying it's worth comparing to other options.

And yes, you can put a price on a feeling. If it was $1,000,000, he wouldn't
do it and neither would you.

------
bufordsharkley
It goes to show that it's not construction costs that account for variances in
home prices, but rather something location based: land values.

Policies that will work to drive down land values (and utilize land values to
fund public infrastructure instead of private land speculation) would be very
useful in many overheated land markets.

~~~
JumpCrisscross
> _Policies that will work to drive down land values (and utilize land values
> to fund public infrastructure instead of private land speculation) would be
> very useful in many overheated land markets_

Supply and demand. Allowing builders to build higher, thereby increasing
density, amortizes the land's value across more living space. Turning land
into parks is nice, for people and property values, but does nothing to
reducing housing prices nor rents. (If anything, by yanking land supply off
the market such policies could actually exacerbate the problem if carried out
in a vacuum.)

~~~
timr
Land value does not stay constant as density is increased. It goes up.

Sellers are not dumb. If land is the limiting factor, increasing the density
of the buildings on the land by 10x will increase the value of the land by 10x
as well.

~~~
JumpCrisscross
> _Land value does not stay constant as density is increased. It goes up._

True. But when you measure the price elasticity of land you find that density
doesn't increase land value as fast as it creates space.

This occurs independently of the value of the new units. Consider a town with
three occupied units: one for $5,000, one for $4,000 and one for $3,000. A new
unit is built for $6,000. A simple example would involve everyone trading up,
thereby leaving an unoccupied $3,000 unit on the market, but let's be more
realistic. The person in the $5,000 unit doesn't budge, so the $6,000 unit
gets discounted to $5,500. Our top-tier renter moves, leaving their $5,000
unit open. This must now compete for the other two renters, and so on, and so
forth.

New renters will enter the market, but there is scant evidence that people
move to cities to move into specific units. Instead, people choose and city
and then find a place. New units more-efficiently use limitedly-available
land. The other benefits from density, _e.g._ environmental efficiency, faster
exchange of ideas and the resulting productivity boost, _et cetera_ , are just
cherries on top.

~~~
timr
_" But when you measure the price elasticity of land you find that density
doesn't increase land value as fast as it creates space."_

[citation needed]

------
setr
Scrolling gets really messy on mobile but otherwise a neat way to show the
visualizations.

Still can't be assed to read it fully though with my scroll being screwed by
intermediate textboxes though.

~~~
jjr8
As I understand it, this type of scrolling map visualization is something
designed and implemented by Esri specifically for arcgis.com. See
[https://storymaps.arcgis.com/en/](https://storymaps.arcgis.com/en/) for more
examples and details.

It may be that the author of this article on housing developed the analysis,
maps, and text but not the actual web UI. That might be something provided by
Esri that is common to all of these "story maps".

~~~
tardo99
The map stopped working for me about 2/3 of the way down the page... Divs
started getting resized incorrectly.

------
Clubber
That was a really nice overview. One thing to consider though, when you gain
more expertise through experience, you typically gain more income. Of course,
most of the time, homes tend to appreciate as well.

But to the point, it's best not to burden yourself too much with a home. I
bought mine in my late 20s. My criteria was that I didn't ever want to move
again (and could fit a pool table), so I bought a house big enough for a
family to live comfortably that I could reasonably afford in my late 20s. It's
worked out so far.

~~~
pjc50
> bought a house big enough for a family to live comfortably that I could
> reasonably afford in my late 20s.

Well, we'd all love to do that, but where? (That was a rhetorical question, I
personally moved to Edinburgh and bought an affordable family house in my late
30s)

I remember a website tracking London affordability that pointed out that in
some years price appreciation made it literally impossible to save for a
house: the value (maybe even the minimum deposit) went up faster than average
income.

~~~
losteric
Nowhere! If you're in SF, move out to the east bay

Besides that, hope residents use legislation to balance out the market...
progressive taxes in aesthetically pleasing areas, education/public
transportation in economically competitive areas, condos/up-zoning in popular
urban areas.

~~~
fergie
Is Oakland OK or is it really sketchy? Getting mixed messages.

~~~
danans
I live in Oakland. Oakland is composed dozens of distinct areas, with wildly
varying crime rates. Adjectives like OK and sketchy don't begin to describe
its complexity.

If crime is your major fear there are several places with crime rates that are
low. Conversely there are areas with very high crime rates.

If you don't know which is which, ask a local whom you trust for advice and
maybe a tour. It's an incredible place to live but one that will challenge any
simplistic description.

------
geff82
I always wonder why it is an unknown fact for many that in Texas houses are
still very affordable, even in metropolitan areas. I follow the market there
closely, and you can get quality homes for the cheap. Is it that the high
property taxes work their magic in that they hold the upfront purchase price
low? It would have pros and cons - while keeping your house when retired gets
more difficult, buying one when still young gets a lot easier.

~~~
rconti
I'm not sure. I know a guy in the Dallas area that works in finance, who keeps
dragging his heels because he thinks a $300k place is so unaffordable. I don't
get the dynamic -- it seems cheap to anyone in the Bay Area (Or San Diego, or
Portland, or Seattle, or LA, or New York City, or.. most cities on the eastern
seaboard). My understanding is that pay is fairly decent in Dallas. I don't
get how $300k is anywhere near burdensome.

And yet, here I am in one of the most expensive markets in the world, and I
can swing housing, but he cannot bring himself to do it. That's not to say
it's less affordable there; it could be a matter of personal psychology, but
regardless, I don't get it.

All I know is that I've noticed over the past decade or so, everyone who
argues that they can buy property far cheaper in XYZ location far away from
the bay area, and live like kings... somehow... don't.

------
elihu
High-cost cities get their high property values via network effects -- it's
the proximity of other people that makes the land valuable. I wonder if a good
way to circumvent high home prices is to create new cities deliberately in
rural land.

For instance, get a few thousand people to agree to buy a large plot of land
in a sparsely populated area. All the early-adopters get a cheap plot of land
to build a house on, with most of the lots left unclaimed and managed by a
non-profit. As people move in, the value of the land rises and the non-profit
generates revenue and pays for infrastructure by selling the remaining lots.
In the end, the citizens and town are better off financially because
collectively they only paid rural-land prices for high value urban real
estate.

This would be more practical if it's near an existing town (for basic
necessity, schooling, proximity to hospitals, etc..), and could perhaps be
helped along by partnering with a university or large employer wishing to
establish a new campus.

There's a lot of ways this could fail, but it seems at least plausible that it
could work. There's a lot of mostly-empty land, especially in those west-coast
purple areas shown on the map on the linked page.

~~~
stickfigure
This has been tried. Check out California's 3rd largest city (by area):

[http://www.atlasobscura.com/places/california-city-
unbuilt-s...](http://www.atlasobscura.com/places/california-city-unbuilt-
suburb)

[https://en.wikipedia.org/wiki/California_City,_California](https://en.wikipedia.org/wiki/California_City,_California)

Turns out it's pretty hard to create a critical mass of population.

~~~
elihu
I would expect most attempts to do this as a get-rich scheme would either fail
outright or not become the kind of place people would want to live. If done as
more of a crowd-sourced community-driven non-profit project, at least you have
everyone's interests more-or-less aligned and some basis of trust.

------
tim333
The article looks at the cost to buy which is high in places like SF but not
total cost of ownership including change in value over the time of ownership.
I bought a place in London and the initial cost was >10 wages but then it's
gone up by 1 or 2 wages per year so the TCO is negative - it pays me to own
it. It can be a mistake not to take that stuff in to account.

------
Animats
Nice visualization.

I've mentioned the median house price to median income ratio many times
before, usually in the context of "how close are we to the bubble collapsing".
Around 4:1 is about as high as it gets before something gives. It would be
nice to see that map over time.

------
magic_beans
Is it really necessary to own a home if your mortgage is going to be 20 years
long?

I get that renting is like throwing money in a hole, but people are so much
more nomadic these days. What's the big deal in moving once every 10 years
once rent gets unbearable?

~~~
pjc50
Do you want to have pets?

Do you want to redecorate to your own taste?

Can you even find anywhere to rent? Not everywhere has a liquid rental market.

Moving only once every 10 years sounds great. Renting means maybe having to
move on notice as short as one month. Back when I was renting I moved about
every 3 years, although that was also house-sharing with other young
professionals.

Rent is usually more expensive than mortgage payments, _and_ house price
appreciation is your only chance to make a leveraged investment that pays
roughly 7% annually.

Edit: also, obviously, after 20 years you have _no more payments_. Frees up a
whole lot of cashflow. Would you really want to go into retirement on a fixed
income with a variable rent payment?

Note that a "20 year mortgage" just sets the amortisation rate of the
payments; you can accelerate it, and usually will end up re-mortgaging every
3-5 years to get better rates.

~~~
FLUX-YOU
> also, obviously, after 20 years you have no more payments.

You have maintenance. And if something bad happens with the foundation, that's
very expensive to fix. Unless you just plan to die and have the house
demolished and the property sold (which is honestly preferable in some cases
of inheritance).

I had to pay $25k to have supports installed in the crawlspace and other
mitigation to avoid foundation work. I might have gotten ripped off, and the
annoying thing is that I can't know for sure because I'm not informed about
foundation work, structural engineering, or other principles.

Simply inheriting a house and trying to sell it turned me off from owning a
home in the near future due to the arduous process of paperwork, red tape,
maintenance, and a low-liquid market. I'll take a comfortable living van/RV
over dealing with real estate again if it means I can reduce the risk of
dealing with those things to zero.

~~~
bluedino
Don't forget the roof that needs replacing every 15 or 20 years. Appliances.
Furnace. Plumbing. Septic tank. Water lines on your property. Tree removal.
Re-decorating and re-modeling. Replacing windows.

~~~
sliverstorm
It's not like you avoid these expenses by renting. They're just rolled into
your rent. You get to avoid thinking about them, of course.

Although there is an economies-of-scale advantage to maintenance on multi-
family dwellings.

~~~
cableshaft
Yeah, it's basically like insurance. You're not hit with a sudden $10k+ bill,
you just have a rent that has ~$100 a month factored in for maintenance costs.

~~~
chillingeffect
Also with renting, one should be careful to avoid arguments at equilibrium.
E.g. not all landlords seek the same profit margin and rent increases don't
track improvements perfectly. Comparison shopping and moving
opportunistically, one can stay ahead of the curve. Other people already
financed the improvement ts you're enjoying!

------
anorphirith
great visualization, If he uses the skills he now has, he's hopefully making
100K+ by now

~~~
mywittyname
Still won't be able to afford a home in Duke County on that salary.

------
DesiLurker
I recall per bob shiller (of case shiller index) on an average it has taken 30
years of work to own a house throughout ages. Now try to figure out how many
years of that life were spent working for real estate agent? at 6.5% commision
if you go through 4 houses that's 25% of cost. so effectively 25% of your life
you have worked for realtors!

------
jvvw
If you are in a professional career, then it's not the median salary that
matters but the median salary for your particular profession (and indeed
whether there are any jobs in your profession in that area). You also want to
be looking at home prices for a particular class/size of home as the nature of
housing stock varies considerably from place to place.

I'm in the UK, 50 minutes by train from one of the mainline London train
stations, but prices here are a fraction of what they would be next to that
train station. Median salaries here would also be much lower, but if you moved
out here and commuted into London, your salary would effectively only decrease
by your commuting cost, not lower to the media salary in this area (although
you of course then need to commute which has its own set of disadvantages).
Other costs such as childcare are significantly cheaper here too than in
central London.

------
dbg31415
This isn't the right way to look at a home purchase. Seems like it was written
by someone who hasn't bought a house.

Homes go up in value, so in the long-run you tend to make money or at least
break even. A lot of this depends on how into "keeping up with the Jones" you
are. If you remodel your house a lot, need the latest and greatest garage door
opener and bathroom sinks... yeah, you're sinking money into the property that
you won't ever recover through sales. BUT... that's OK! Because it means you
have the house you always wanted, and y'know... we only go around once.

Buying vs. renting. Guess what, you're going to spend money putting a roof
over your head. That's life. Does it cost more to buy or rent? Over 5 years?
10 years? 30 years? In the long run it's almost always better to buy. But
short term, if you know you're only in a city for 5 years... maybe just rent.
That's fine. No harm no foul, you're advancing your career... or just living.
Don't fret it too much. If you're happy, you're happy.

What do you need? Do you need a house with lots of bedrooms for your kids /
family? Do you need a year for your dogs? Do you need quick walking access to
the coffee shop near the train station? There's no right answer, buying vs.
renting... for people who move every 2-5 years, pretty much works out even.
(Having done both I can say from experience that buying just ties up a lot of
your savings and keeps you from being able to spend it.)

Anyway a house is not "years of life" \-- it's something you live in for years
of your life. You can buy as an investment... and you'll make money. You can
trade up ever 2 years... and it's probably better to just rent. Roots are
great as long as the local economy is doing well, but if it's not... hey,
you've gotta move to keep ahead. Plenty of ways to get ahead in life, a house
can be one, or moving city to city as a consultant is one. There's no wrong
answer.

------
panic
Why is California such an outlier? Is it solely due to Prop. 13, or are there
other factors?

~~~
ghaff
A lot comes down to "perfect storm." At least many parts of California have a
long history of controlling growth for a variety of reasons including
environmental concerns and people wanting to preserve existing character.

Proposition 13 likely plays at least some role.

People like living in California. For the most part, it's just about the
perfect climate whether your idea of a perfect climate is better satisfied by
SoCal or NoCal. Lots of natural and other recreation activities of all sorts.

Finally, it's been a job growth magnet across a lot of different areas, most
recently in certain types of tech. And, with respect to the Bay Area
specifically, much of that growth has been relatively sudden on the scale that
sort of thing normally happens.

------
guesto
Fantastic storytelling! Great job.

@sndean I also have to wonder how many years home ownership is taking off my
life expectancy, due to the stress of trying to maintain the house and
associated payments!?!

~~~
sliverstorm
The real trick is to learn to enjoy it, like with cooking and car repair and
cleaning.

Also helps to be on top of things, poking around periodically to see things
are working as they should. You find yourself with fewer catastrophic failures
on a dark blustery night that way.

------
juiyout
The author took a simple price-to-income ratio and gave it a nice spin. Search
for property price index.

The US housing prices shows pretty good affordability compared to where I live
now.

------
Mankhool
Please do one of these for Canada!

------
averagewall
How can houses cost $50,000 in those two Texas counties? Don't builders cost
far more than that? If the cost of rebuilding is far more than the purchase
price, then insurance and maintenance will be expensive - how will you afford
a $10,000 new roof if you could only just afford the $50,000 house? Maybe
America really has wide salary gaps for the same jobs in different places?

~~~
chris_st
It's entirely possible that no new housing has been built in those areas for
decades... and yeah, labor's cheap, but if there's no work in the area, that
$10,000 roof is going to cost a _lot_ less.

Possibly relevant experience: my daughter attended college in a _very_ small
town in rural Tennessee. We were there to drop her off, and overheard a
painter talking to the owner of the hotel about doing painting some of the
hotel.

The painter told the owner the price, and then offered a discount _before_ the
owner could reply.

------
hajile
With houses getting larger every year, it's crazy to assume anything less than
a couple years is possible. An average house is 2.6K square feet and is going
to take at least a man-year of time to complete. Materials are about 80% of
total labor costs.

Those places with super-low housing costs require some combination of:

1\. below average wages for construction workers

2\. low standard for building materials

3\. surplus of materials to drive down costs

~~~
madengr
Hasn't the average home size always been 2400 ft^2

~~~
hajile
In the 70s, it was around 1600

[http://www.aei.org/publication/todays-new-homes-
are-1000-squ...](http://www.aei.org/publication/todays-new-homes-
are-1000-square-feet-larger-than-in-1973-and-the-living-space-per-person-has-
doubled-over-last-40-years/)

------
matrix
I like this concept a lot, but like most choropleth maps (i.e. maps that
color-code a state or county for a given value), it's misleading because the
this is really city-level, or even suburb-level data. I'm not sure what the
bedt way to represent this data is; maybe a histogram of median property value
of zip code vs population density?

~~~
cossatot
Census tracts are good because they're high resolution and still spatial
polygons but are more or less sized by population, having ~2-10k people in
each (so population density is factored out).

------
mmjaa
I've been living in a comfortable, if but small, house, about 15 years now.
Its my family home. One of my kids was born in it.

That can never be explained in terms of capital.

------
mooreds
That was a great use of maps.

Thanks!

------
pascalxus
This is an excellent post. I've always fantasized of leaving the bay area but
haven't because of job and family.

Heads up, anyone else dreaming of this, check out Zapier, i hear they like to
hire remotely!

------
xvolter
The data was very interesting, but there wasn't anything meaningful mentioned
that came out of the data, other than possibly where you should look to move
to if you have flexibility.

I personally bought a house in my early twenties. At the time it was roughly
2.5x my income. I've been there a few years and went through some changes to
my employment, I now earn more making it easier. Over the course of ownership,
in the ~20 years, I'll have paid close to $400k between the principal and
interest.

If I made more, it wouldn't change the amount I pay toward my house so it
wouldn't make me own the house faster. While I could send additional payments,
the amount of interest I'd avoid would not be worth it.

If I had $20k available to me right now and sent it entirely to my house it'd
save around $12k in interest over 15 years. Had I invested that $20k now and
received only a 5% growth, over 15 years that would have earned $22k in
compound earnings leaving me with $42k of potentially easily liquidatable
assets.

Buying a house that is close to your annual income doesn't make you own the
house faster, it just makes it easier for you to afford.

I think the guidance most people should take away is to avoid buying a house
that you cannot pay off in 10-15 years. A house at $250k at a 3.5% interest
rate would cost you $72k in interest on a 15-year mortgage or $154k in
interest on a 30-year mortgage. At that point, it is worth sending additional
payments (especially early on in the mortgage) to save on interest. This is
pretty popular advice, to not overshoot for a house you cannot afford. The
best reason is that you can still move later on. Buying a house you'll live in
the rest of your life might be a good goal (@Clubber) but it doesn't happen
for most of us. Instead, buy a house you can actually make a dent toward
ownership in, so if you want to sell it in 10-15 years you'll do so with
potential profit.

You don't need to sell your house for a profit (although we all would love
to). Had you rented like @magic_beans wants you to, you might have lost 100%
of that money and every year your rental price may go up, you might not be
allowed to have pets, you can't make improvements you want; you can lose a lot
of control with renting. If you buy an affordable house though, in 10 years
you might sell it and if you get back even 50% of the total cost of ownership
you still walk away better than someone who rented. If you got a house you
could pay off in 10 years, you might walk away with a lot of cash and some
profit (especially if the house's value went up).

You then have the choice to use the cash from your home sale as a down payment
for your next house, which would allow you to afford a slightly more expensive
house while still paying it off in 10 years. Imagine you buy a house now for
$250k, pay it off 15 years (that might cost you around $2.5k/month). You sell
it in 10 years, you could then buy a house for $500k and only mortgage another
$250k. Or you could buy a reasonably priced home in the middle, allowing you
to start investing your money elsewhere, pay off the house sooner, etc.

My plan, my suggestion: Buy a house when you're in your 20s that is
affordable. By the time you're married, have kids that need their own rooms,
and are looking to settle down a bit more you'll be able to sell that first
house and afford that house you need. It's worked out so far.

~~~
BoorishBears
>You don't need to sell your house for a profit (although we all would love
to). Had you rented like @magic_beans wants you to, you might have lost 100%
of that money and every year your rental price may go up, you might not be
allowed to have pets, you can't make improvements you want; you can lose a lot
of control with renting.

For the record, my apartment is pet friendly, you're allowed to paint the
apartment, I've been allowed to change fixtures I don't like (such as replace
their smart thermostat with a Nest), and there are amenities I could never
afford myself (a proper private theater complete with movie theatre seats, a
top quality gym, yoga studio, apartment owned cafe, etc.).

And this year want the chance to work in a new market so I'm just not renewing
my lease. It took 5 minutes of filling out a form to decide I'm allowed to
leave in 30 days with 0 financial burden.

As a 20-something year old I think buying a house in your 20s is a terrible
idea unless you're talking very late 20s (practically 30s).

A huge investment feels like it'd be adding almost as much inertia to your
life as a wife, kids, and settling down (from a financial standpoint it
certainly is). It's an age at which even some people who _think_ they have it
all figured out enough to settle down _don 't_ (not that it's not an issue at
other ages, but the early and mid 20s are a ripe time to do something about it
when it happens), and the last thing you want to to do after you decide to
make a change is to deal with a mortgage hanging over your head.

~~~
switch007
> ...a top quality gym, yoga studio, apartment owned cafe, etc.).

It's funny how different things are in different countries. I've read a few US
rent-vs-buy articles and they often mention these uber cool apartment blocks.
I think they're extremely rare and/or so expensive nobody's heard of them in
the UK (outside of small, prestigious areas of London). Here, a majority of
the flats are in blocks with just the accommodation or are converted houses in
residential areas.

City centres with purpose-built modern apartments at the upper end of the
market might have a gym, maybe a concierge and occasionally parking. :)

~~~
BoorishBears
It's definitely a trend forming in the part of my city and it feels centered
around gentrification.

The part of the city outside downtown is generally poor and has serious crime
problems. But downtown, older properties are being converted into nearly
unrecognizable modern high-end apartments priced out of the range of (most)
locals and have reached a pricing ceiling so high they can get away with 50%
occupancy and simply compete on amenities for the people who don't care about
how much they cost. To top it off the city is practically giving away the
properties to the developers to try drive growth.

I care about the price but there's a state fund I jokingly refer to as the
"Gentrifcation Fund" (I forget the real name) that will pay a part of your
rent in certain properties if your income is under a certain amount.

The problem is unlike most assisted housing the limit is based on making
_more_ than most people, not less. It's defined as 150% of the local median
income. Combine the income limit based on people making 2.5x the median income
with the high rent, and you essentially have a fund that's paying well off
people (poorer people can't afford the apartments even with the subsidy) to
live in expensive apartments, feeding the gentrification of the area. I'm
conflicted because it allows me to live in a very nice apartment, but I know
that money could be better spent elsewhere.

It's funny because I see it as "trickle down economics" in action. For
example, while I might be able to afford the apartment otherwise, the fund
frees up would could be disposable income for me. The hope is probably I'd
spend that money in the local economy.

Except instead what it does is give me more money to save, I sure don't feel
any urge to go and waste it on expensive overpriced Downtown restaurants every
night.

------
sillysaurus3
This is _really_ cool. Can anyone guess which frameworks power this article?
I'd love to try to put together something similar.

I wonder if the code is on github somewhere?

~~~
jpatokal
Ha. It's powered by ArcGIS, the Oracle of the mapping world, meaning it's all
proprietary, locked down and expensive.

If you want freer alternatives, check out CartoDB, Mapbox and QGIS.

~~~
lscharen
Except for the fact that you can sign up for ArcGIS Online as an individual
for free and _all_ of the application templates (in addition to tons of other
Esri projects) are up on github.

e.g. [https://github.com/Esri/storymap-
cascade](https://github.com/Esri/storymap-cascade)

Almost everything they release is under the Apache license.

~~~
jpatokal
Huh, color me surprised (I used to work in the GIS space, but have moved on to
cloudier pastures). Then again, Microsoft's now all gung ho about open source
at least on paper, so perhaps ESRI can change its spots as well...

------
sfbay
This is such a good representation of the data. Great Job.

------
foota
I think that the property tax and home loan interest deductions significantly
influence the better decision for most of the people on this site.

------
kentt
That was a lot of javascript for almost zero content. Is it just that people
love reading that houses are expensive?

------
zappo2938
"The price of anything is the amount of life you exchange for it"\- Henry
David Thoreau from Walden

------
tnt128
Does anyone if there is a public source for these data?

------
cwkoss
Why is that chunk of Wyoming so expensive?

~~~
mikekij
Vacation homes for the wealthy, compared to incomes of service workers who
provide services for visiting Hooli employees.

------
readhn
What i would like to see incorporated is the real estate cycle data. Real
estate prices move in cycles.

------
observation
Great article.

