{"id":8000,"date":"2015-05-11T05:27:40","date_gmt":"2015-05-11T10:27:40","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8000"},"modified":"2015-05-11T05:27:40","modified_gmt":"2015-05-11T10:27:40","slug":"how-soaring-housing-costs-maul-the-real-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8000","title":{"rendered":"How Soaring Housing Costs Maul the Real Economy"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/05\/11\/how-long-to-save-for-down-payment-on-home-mortgage-in-these-top-10-most-impossible-cities-for-first-time-buyers\/\" target=\"_blank\">How Soaring Housing Costs Maul the Real Economy<\/a><\/h3>\n<p>How many years would it take first-time homebuyers, earning a median household income, to save enough money for the standard 20% down payment on a median home? Are you sitting down?<\/p>\n<p><em>In many cities an impossibly long time<\/em>, Lindsay David of LF Economics (and a contributor on\u00a0<a href=\"http:\/\/wolfstreet.com\/author\/lindsay-david\/\" target=\"_blank\">WOLF STREET<\/a>)\u00a0found. His\u00a0<a href=\"http:\/\/www.lfeconomics.com\/reports.html\" target=\"_blank\"><u>report on mortgage stress<\/u><\/a>\u00a0looked at 30 large US cities, using their local median incomes and median home prices. It assumed that young households could accomplish the tough feat of saving 5% of their income, year after year, through bouts of unemployment, illness, shopping sprees, family expansions, or extended vacations.<\/p>\n<p>The results are stunning \u2013 if just a tad discouraging for first-time buyers.<\/p>\n<p>In my beloved and crazy boom-and-bust town of San Francisco, where a median home (for example, a two-bedroom no-view apartment in a so-so neighborhood) costs $1 million, it would take \u2013 are you ready? \u2013\u00a0<em>37 effing years<\/em>.<\/p>\n<p>Given its higher median income, San Francisco is only in second place. The winner by a few months is another Bay Area city, San Jose. In San Diego, it would take 33 years. In Los Angeles, 32 years. First-time buyers might be retired before they scrape their theoretical down payment together.\u00a0<em>Theoretical<\/em>, because in reality, too many things change, and they\u2019re chasing after a moving target.<\/p>\n<p>So lower your expectations and step down to buy a below-median home? Here is what<a href=\"http:\/\/twistedeconomix.com\/2015\/05\/08\/epitome-of-a-housing-bubble-in-siliconvalley\/\" target=\"_blank\"><u>TwistedPolitix<\/u><\/a>\u00a0found on the market in that price category:<\/p>\n<blockquote><p>Yes folks, step right up and get your 700 sq. ft. home in Redwood City, California, heart of the Silicon Valley, for just $649,000! The American Dream! 1 bedroom, 1 bath for just $3,154 per month on a mortgage with super low interest rates if you put down 20%.<\/p>\n<p>If you pay the mortgage back according to the standard 30-year schedule, in April 2045 you will have paid $1,135,721 for a tiny little [bleep] shack.\u00a0<em>Brilliant!<\/em><\/p><\/blockquote>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How Soaring Housing Costs Maul the Real Economy How many years would it take first-time homebuyers, earning a median household income, to save enough money for the standard 20% down payment on a median home? Are you sitting down? In many cities an impossibly long time, Lindsay David of LF Economics (and a contributor on\u00a0WOLF [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5314,2340,5315,4320,4254,4255],"class_list":["post-8000","post","type-post","status-publish","format-standard","hentry","category-economics","tag-housing-costs","tag-housing-market","tag-median-income","tag-real-economy","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8000","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8000"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8000\/revisions"}],"predecessor-version":[{"id":8001,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8000\/revisions\/8001"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8000"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}