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.”

84 points

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.

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38 points

Precovid houses I could afford with a weeks pay. Now it’s the whole pay check.

You mean rent, right? Right?

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48 points

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.

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37 points

Your partner is a fucking idiot lol.

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1 point

You’re not making sense. What is the difference between “a weeks pay” and a “whole pay check”?

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6 points
Deleted by creator
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8 points

I hate you. Not really but we’re looking at 4 times that if we want to buy.

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-25 points

This smells like bullshit. I mean, if they define “Beverly Hills” as a city, I can see where it might be literally true, but I wouldn’t call even the cheapest house in Beverly Hills, Scarsdale, or Paradise Valley a “starter” home. There’s homes in the LA, New York, and Phoenix metros under $3-400k, if you’re not so choosy about the neighborhood.

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20 points

From a canadian perspective, it sounds believable. About 10 year ago, you could get a new build on half an acre for 350k in my hometown. Today the oldest, run down, needs lots of renovations houses in the city on a quarter acre are going for over 400k. Those 350k new builds are easily into 700-900k range.

My biggest mistake in life was not buying a house fresh out of high school, but i was an “idiot” who looked at housing as a place to live, not an investment.

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5 points

Im pretty old but I often think about how much better off I would be if I got an associate degree and some certs and then bought a house asap.

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4 points

Yes and no. We own a house and we would love to move to another city, but since we live in a less desirable city, we can’t afford a house anywhere else. So if you don’t want to be stuck somewhere forever, be glad you didn’t.

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8 points

Stupid millennials, should have saved up our lunch money for a down payment and spent recess house hunting. If only we had known we were supposed to start saving for retirement ten years before we were born…

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17 points

Beverly Hills is literally a city. It is autonomous from the Los Angeles city government. It has its own government and its own laws.

And do please show me where the L.A. homes under $400k are. There weren’t L.A. homes that cheap outside of Watts when we lived there over a decade ago and I’m not even sure about Watts.

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-8 points

https://www.zillow.com/homedetails/20159-Cohasset-St-UNIT-9-Winnetka-CA-91306/68991194_zpid/ I’m sorry if that doesn’t fit your criteria for a “L.A. home,” but it is a place you can live, in Los Angeles, under $400k.

But that’s my point: some cities do not have any “starter” homes, at all, and defining a “starter home” as just the bottom third of every municipality is misleading bullshit. It implies that you need $1M to buy a home, and you don’t.

I agree that home prices have gotten crazy and unaffordable for many. I just want to have a realistic discussion of what that means so we can work on realistic solutions, and “you need $1M mortgage just to get your foot in the door” doesn’t help.

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15 points

Oh, okay. Sure. If you want to live in the middle of the SFV and are okay with a 3-hour commute, it’s doable. I don’t think you realize how big L.A. is. It took me well over an hour to get from NoHo, which is in the SFV, to the guy I bought weed from in Canoga Park, which is next to Winnetka. But sure. Go out far enough and the homes get marginally cheaper.

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4 points

It’s almost like we’ve let a ton of rich neighborhoods become cities so they don’t have to pay as much in taxes and they can prevent their staff from living near them. Unless of course they want to live in the “staff quarters”.

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-46 points

If that’s even true, then that only means that most people can afford it. If nobody could afford it, then the prices wouldn’t be this high.

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29 points

People going massively into debt isn’t affordable.

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27 points

Corporations are buying up these houses faster than individuals and are pricing everyone out of the market. Then they offer them as rentals.

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-13 points
*

Someone paying the rents? Seems like it’s priced well then. This is how the free market works.

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7 points

The “free market” has resulted in an average of 27 empty homes per homeless person in America.

https://www.self.inc/info/empty-homes/

Guess it isn’t priced well.

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2 points

It is how the free market works yes, the problem is that the free market itself is fundamentally broken

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9 points

The areas where these starter homes are so expensive are areas with big disparities in income. Let’s look at the Bay Area, with all that tech money. There must be some people who can afford those prices. They are probably the ones making good money in the tech sector there. But then all their local services are provided by lower-paid people who can’t live there.

What happens when all those tech workers have kids? No matter where they send their kids for school, the teachers at that school can’t afford to live there and probably have 90 min commutes each way just to find one of those “starter” homes to live in. Ditto for the librarians, and bus drivers, and day care providers. Even the grocery store clerks can’t make enough to afford to live there.

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7 points

This is the opinion of someone completely unfamiliar with the current situation of housing, how we got here, or quite frankly economics in general.

If the beginning and end of your understanding of this issue is supply/demand, you need… NEED to understand that you are objectively incorrect through lack of info. It is not a difference of opinion, you are flat out spittin some stup’ rn

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2 points

I mean it is supply and demand, it’s just ignorance of the extreme imbalance that’s been created.

In the rental market there’s a cartel that needs to be dismantled but for buying homes it’s more to do with the vacuum that is wall street investing in those homes as rental properties.

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40 points
*

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.

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2 points

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.

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2 points

Tldr?

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2 points

You can’t exactly just tl:dr an entire book, lol

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-9 points

20 years is enough to double twice which would be 4x the price. That is how appreciating assets work.

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3 points

What about income…?

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-2 points

Mine more than quadrupled in 20 years.

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6 points
*

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.

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2 points

With finite land, it’s never going to not be appreciating.

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57 points

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.

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13 points

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.

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1 point

What happens when you sell it?

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7 points

New owner gets taxed based on what they pay for it, so they county will end up collecting more.

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8 points

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.

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-12 points

Obviously it sucks if they have to move, but it’s hard to feel too sorry for people that have become incredibly wealthy…

Also, municipal expenses don’t scale directly with property values… So while local taxes are often based on home values, they are adjusted to the level that meets the municipal budget. If everyone’s house doubles in value one year, taxes stay the same, not double…

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-13 points
*

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.

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1 point

As long as people are selling and buying houses what’s the problem?

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10 points
*

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.

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0 points

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.

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