The number of US cities where first-time homebuyers are faced with at least a $1 million price tag on the average entry-level home has nearly tripled in the past five years, according to new research.
A Thursday report from Zillow indicates that a typical starter home is now worth $1 million or more in 237 cities, up from 84 cities in 2019, underscoring America’s ongoing home affordability crisis.
“Affordability has been strained across the board,” Orphe Divounguy, a senior economist at Zillow, said. “We see the largest number of million-dollar starter homes in expensive coastal markets. We see them in markets with very low homeownership rates and we see them in markets with more building regulations.”
"A Thursday report from Zillow… "
Fuck you Zillow! You are mostly at fault as to why the housing market is such shit
Nobody knows what a “starter home” is anymore anyway. Sellers play them all up through the roof anymore
Most homes are simply out of reach for most Americans at this point, particularly if you live in a city. Even renting one is extremely expensive unless you move into a smaller town.
In the (rust belt here) midwest it’s almost reversed, homes in the rural areas cost much more than they do in the city. But our cities are car centric wastelands, where whole city blocks have been turned into parking lots.
Good news and bad news…
Good news is everyone in the Middle Class is a millionaire!
Bad news is there is no middle class anymore.
Precovid houses I could afford with a weeks pay. Now it’s the whole pay check. Ridiculous. Wanna fix the birth rate fix this. I’m tired of being born at the wrong time for everything. It’s always some bs.
Precovid houses I could afford with a weeks pay. Now it’s the whole pay check.
You mean rent, right? Right?
No, it was ultra cheap in my region. Cheaper than rent. I begged my partner to by a house since it was HALF our rent for a decent 2014 built house with acres of land. But nooo they want to rent for life. Now that I finally convinced them otherwise I can’t afford it. It causes alot of resentment for me.
Your partner is a fucking idiot lol.
I’m wondering what a “starter home” is in this case.
For me that’d be about 40sqm and 150k €
Are people buying bigger homes than they need?
A side effect of sky rocketing housing prices is the annual tax liability also goes up, so people on a low or fixed income may no longer be able to afford the home they’ve lived in for decades. It’s the same problem that happens when neighborhoods are gentrified.
That’s just how life is in a society. Don’t fall for the stupid Prop 13 trap that ruined so much in California.
Edit: how TF does this get downvoted to heck but my reply one down is upvoted even higher even though they say the same thing. Are you all just bandwagoners here? I thought I got away from redditors but I’m having second thoughts now.
As long as people are selling and buying houses what’s the problem?
People aren’t selling, because their tax bill will 10x at whatever place they downsize to. The older generations are all living in 5+ bedroom homes with 1 or 2 people while young people are raising families in 1br apartments. It means that across the state communities are dying out and young people just aren’t having families anymore. On top of this, suburban sprawl is completely out of hand because all the people who bought before prop 13 was passed were living in the metropolises since they were working age. Now that they are retired they still live where the jobs are, and the young working people have to commute 2+hrs each way to get to their jobs.
The people with a 5 bedroom house could sell for so much money they wouldn’t care about the tax bill at the new place. Going from 5 bedrooms to two bedrooms means you could outright buy the new place and have 2 million dollars left over. At that point you’re crying into your Scrooge sized bank account about property taxes.
And if you’re worried about the people who bought condos or other small city homes staying there until they die, that’s the point. The entire point was to prevent people being pushed out of their homes.
It never stopped people from buying a smaller house or moving for new jobs. Not building enough housing to cover the natural rise in population is the reason we are here. Insisting that all new housing be single family detached housing in suburbs is why we’re here. Those are far more impactful things than the people who just never move.
This is wildly incorrect in many cities, likely the ones the article of talking about.
Size has so little relevance to cost these days that there is no logical way to downsize. The mortgage doubles whether they sell and buy a house of the same size or one half as big.
What are you talking about? Here’s 4 bed houses in La Jolla, San Diego.
And here’s 2 bed houses in the same community.
Size very much has relevance. Where people are locked in is they got a starter home in the past decade, (or 2) and the price to move into a larger house is so much that not only are they wiped out on any windfall, they’re also back on another full 30 year mortgage at a higher rate, and higher total payoff amount.
Downsizing is easy.
Literally cannot downsize. By that I mean people will be in a house that’s 2500+ sqft and their mortgage might double moving to literally any house in the city regardless of size. Most people don’t actually want a (poorly made cheap pos) mansion twenty or thirty minutes further from civilization, but that’s all that’s legal to build.
You’re just wrong. Even the worst places for housing allow for downsizing. There’s always the possibility that someone couldn’t pay the higher monthly amount for another reason, like having structured debt payments. But generally speaking downsizing is easy. The windfall from selling covers the new house, in the same neighborhood, and literal decades of taxes and maintenance, longer than you will live unless medical science makes a breakthrough.
Some localities limit the increase in taxable value to a fixed percentage, which can combat that. The taxable value of my home is something like 25% of the actual value.
Which has the downside that it locks people into their current home because moving would mean losing their favorable rates.
Rising prices are bad for everyone.
What happens when you sell it?
New owner gets taxed based on what they pay for it, so they county will end up collecting more.
20 years ago, my mother bought a house for just under 50k. Houses in my hometown, of the same rough location and type, now go for 4x that.
Insane that housing prices have outpaced inflation by such a ludicrous degree. It’s almost like the system is broken, the ultra-rich and corporations have found all the good tricks and loopholes and are exploiting them to the detriment of both ordinary citizens and the nation as a whole.
I cannot recommend the book “Escaping the Housing Trap” highly enough. It talks a lot about the funding and financial products around housing and some of the fundamental flaws in the system. It’s quite easy to blame institutional owners and they’re certainly partly at fault, but it’s vastly more complex than that. It’s a really great scary read that genuinely had my mouth hanging open at times.
Tldr?
You can’t exactly just tl:dr an entire book, lol
20 years is enough to double twice which would be 4x the price. That is how appreciating assets work.
Housing shouldn’t be an (in real-terms) appreciating asset. In the long run that just leads to feudalism.
Imagine if everything keeps appreciating for 200 years… now only cyborg Elon musk can afford to buy a house.
With finite land, it’s never going to not be appreciating.
What about income…?
Mine more than quadrupled in 20 years.
Try this: when you first started working, what were people with 20 years of experience making in your industry? How does that compare to what you make with the same 20 years of experience now?
My income has not doubled in the 10 years I’ve been working full time. But, more importantly, the amount of money people with 10 years of experience were making when I first started is not drastically different from what I am making with the same experience now.
California?
(checks notes)
More than 100 of the 200 are in California. :) Next closest is New York at 31.
Seems like a mostly California problem.
this reminds me of the then they came for me thing. I remember when you could pick up a cheap home if you moved to like iowa. Its not as expensive but its not cheap like before.
Yep. I’m about as smack-in-the-middle as you can get and our home has doubled in value since 2016.
I bought my house a year ago and its estimated value has gone up 50% since then (and the estimate isn’t even aware of all the renovations I’ve been doing). It’s meaningless since I bought it for cash and I’m not going to sell it (mainly because I then wouldn’t be able to find any other house to live in for a reasonable price), but it’s kind of nice to know personally even if it is a symptom of an ongoing social calamity.
don’t your taxes go up if you valutation goes up? I personally want housing in general to just keep up with inflation so I can buy and sell as needed and basically have it hold the value I put into it. If it goes up faster then I might get priced out. Slower and I will lose what I put in.
don’t your taxes go up if you valuation goes up?
Not really where I live, anyway. Here, the total tax burden is determined and then the relative burdens are apportioned to individual homes based on their relative values. My home’s value went up because everything in this township went up by about that percentage. It is an incentive against improving your property, though, since if your house’s valuation increases relative to other homes, you will get hit with a bigger share of the total tax burden.
My township has an additional issue: the local school district is allowed to collect whatever total amount of money they want each year, not subject to approval by the council (and the school tax by far makes up most of the total tax burden). The only thing preventing them from raising the school tax to absurd amounts is that the school board is re-elected every year and too much school tax would get them voted out (most of them get voted out every year anyway, largely because of the school tax as it already stands). I’m not bothered by it because our schools are among the best in the state, and are the primary reason houses here are in such great demand. As a school bus driver, it’s also what pays my own salary.
Even then. If housing goes up faster than inflation and this is especially bad if its faster than your pay, then if you want to buy a place down the line and then sell your current place. Its going to be harder to swing or impossible.
Lol my pay goes up 2.8% per year and the Teamsters act like they won us a victory with that.
where did all this extra money come from to pay for these homes at these rates?
Large-scale investors buying up housing stock to rent out.
and where are they getting this extra money?
edit: c’mon people the bush and trump tax cuts were trillion dollar gifts to the worst people on earth and their heirs. These people need to be taxed.
The best way to make money is to already have money invested. You take the proceeds from your earlier investments and invest in MORE assets.
In this case it’s real estate.
Rent payments
Rich people have money.
Rich people buy things us poor can’t. Or more of those things.
Rich people control the markets.
Rich people squeeze the lifeblood out of us peasants.
Only rich people can afford homes.
Rich people raise rents the servants must pay because being homeless is illegal.
EAT THE RICH
From rent
COVID and free money.
Working poor people. Money always comes from working poor people.
