News for hackers. Stuff that matters.

A comment on Homes in 97% of U.S. cities are overvalued, Moody's says. Parent comment

Re:Homes in 97% of U.S. cities are overvalued, Moody's says by Gh0stRAT on Friday May 06, 2022 @03:51AM (#31282523)
$350k in 1997-dollars means that 25 years ago, it was worth $627k in today-dollars.

Adjusting for inflation, it's doubled in real value over 25 years, which works out to <3% APR. It's a decent return, but we've also ignored 25 years of property tax and maintenance. (on the other hand, we've also ignored 25 years of effective rent)

I guess the point I'm trying to make is that $1.3M isn't worth what it used to be but it sounds big in our head because we remember a time when a dollar went a lot further than it does today.

[ Parent | on HN ]
Re:Homes in 97% of U.S. cities are overvalued, Moody's says by frumper on Friday May 06, 2022 @02:04PM (#31288113)
Just running some numbers into affordability calculators. Buying a house at $350k probably had your annual income between 70-80k which was about the top 1/3 of households 25 years ago. That was middle class. To afford $1.4M you're looking at an annual income around 350k. That's about the top 2%. Even if you stretch your budget more and have a hefty down payment you're still going to probably be in the top 5% of income to buy that house.
[ Parent | on HN ]