8 ms·

It'll be a large problem. The issue is that the concept of ownership is changing in the "millennial" generation. There isn't a drive to own a car, a house or ot

It'll be a large problem. The issue is that the concept of ownership is changing in the "millennial" generation. There isn't a drive to own a car, a house or other large purchases so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation. So as the technology folks from other cities move into these newly labeled "tech hubs" they'll drive the rent up because the costs seem so much lower than they actually are. It's a hard concept for some reason to grasp that they can pay $1500/month for a 1 bedroom in other tech cities that's $2800/month in SV/SF. However, what they don't realize is that it used to be $1100/month but landlords take advantage of the fact that $400/more/month is not an issue for someone coming from SF/SV

pjc50 10y ago
There isn't a drive to own a car, a house or other large purchases Isn't it more the lack of spare cash for those, especially the large deposits required for housing? so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation I think you underestimate the extent to which people have looked at the mortgage costs and would love to own a house if they could afford to.
- jahewson 10y ago
  No, it's not a spare cash problem. The modern world is full of credit. Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge. There's a demographic difference, for example I'm constantly being asked by members of the prior generation why I don't own two cars and how we possibly cope. Actually I have no interested in owning any cars at all but one is necessary. The same goes for housing - why don't you buy? Because I don't need to... Now, we millennials do care a lot about housing but only to the extent that the previous generation has made it unaffordable.
  - pjc50 10y ago
    There were a few years in London recently where (annual increase in deposit requirement) > (average annual salary); I don't think it's true that everyone can save for deposits in these kinds of conditions of house price inflation.
  - x3n0ph3n3 10y ago
    > The modern world is full of credit. I'm sure a generation of young people who watched their parents go into crippling debt has made people wary of credit. > Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge. Funny, I can handle the mortgage, but not the down payment (even with $100K+ in the bank).
  - chimeracoder 10y ago
    > Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge. Affording monthly mortgage payments is easy. Actually having enough cash in the bank to make a down payment, and having a high enough income for a long enough period of time to convince a bank to underwrite your mortgage is the hard part. > No, it's not a spare cash problem. The modern world is full of credit. For people in their 30s and 40s who already have a credit history, yes. For people who turned 18 after 2008, it's dramatically harder. After 2008, banks were terrified of providing lines of credit (such as credit cards) to people who didn't have a credit history. Since the fastest way to building a strong credit history is to have prior credit, this quickly becomes a self-perpetuating problem. I had many friends who found it literally impossible to get a credit card as recently as 2010 or 2011, despite having high incomes, because they couldn't prove their creditworthiness. Banks have since recovered somewhat from this fear, so it's no longer quite as difficult to get credit cards, but the same fear exists to getting a mortgage. And even before 2008, banks were always particularly hesitant to extend mortgages to young people due to the extra perceived risk.
intopieces 10y ago
>There isn't a drive to own a car, a house or other large purchases It's not that millennials don't want to own these things, it's that they see them as out of reach. It's an uncomfortable economic reality that gets abstracted into "kids these days just want different things" like they're hoarding stockpiles of money and refusing to spend it unless the thing-makers read their minds.
- cmdrfred 10y ago
  I believe that the truth is somewhere in between. I'm 27 and own my own home. Where I live it's actually more economical to own if you can accept living outside of the city. Many people my age refuse to make that compromise and instead pay a few hundred extra a month to rent 15 minutes closer to the city.
  - goostavos 10y ago
    I'm 29 and I pay the extra couple hundred each month. I don't need or want a large home. Living closer to everything and cutting commute time is worth waaaaaaay more to me than having a ton of space to store my junk.
    - cmdrfred 10y ago
      I like owning dogs and having a yard for them to play in. I also like equity and having room for servers in the basement and my fiancé and I both having our own offices. I really like not hearing my neighbors parties or seeing random weirdos hanging out in the hallways. To each their own. Nothing in the city really excites me. Quite frankly I find the noise and bustle annoying.
  - intopieces 10y ago
    Unfortunately, the truth is not somewhere in between. "The drop in homeownership is largely due to a delay in homebuying by the millennials, who have the lowest ownership rate of their age group in history. Millennials are not only burdened by student loan debt, but they have also delayed life choices like marriage and parenthood, which are the primary drivers of homeownership. " http://www.cnbc.com/2016/07/28/millennials-cause-homeownership-rate-to-drop-to-lowest-level-since-1965.html http://www.cnbc.com/2016/07/28/millennials-cause-homeownersh... Can Millennials Afford The American Dream? http://www.forbes.com/sites/kerrizane/2016/01/24/will-millennials-afford-the-american-dream/#6f09feeb7379 http://www.forbes.com/sites/kerrizane/2016/01/24/will-millen...
deleted 10y ago
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user5994461 10y ago
On top of the 2 other comments stating that buying a place to live is out of reach, I'd add that it's impossible to keep a job in the same place for more than a few years, and a mortgage needs 30 years of payments u_u
- muzz 10y ago
  Towards the end of those 30 years the mortgage payment would be tiny compared to rent at the time, and often well before that.
  - user5994461 10y ago
    Wrong. Just because a property value increased steadily in the past 15-30 years doesn't mean it will continue to increase in the 15-30 years. There are lots of cities where prices stopped moving and some where prices went going down compared to the past 5-10 years. Buying a place is far from risk free.
yolesaber 10y ago
It's not about drive, it's about what can be afforded. In 1972, at the age of 27, my dad bought a house for around ~$20,000 in a nice neighborhood outside of Boston - $115,097.32 today. Try finding a house for less than 120k anywhere that isn't in the middle of the country, miles from anything or in a run-down neighborhood (not that those are necessarily bad things, just inconvenient). I know a fair amount of people whose student loans are more than that. The people I know in my generation who buy houses now (as in, just getting a mortgage) are, in my anecdotal experience, - Several are just plain rich, one of them was the son of a very wealthy man and then worked for a startup that actually took off - One went into the armed forces for six years and saved up enough money to buy a house in our hometown (because where he wanted to live was too expensive) - Couples who have high earning jobs but are drowning in student loan debt (a dentist and a doctor, in my case) The rest of my friends are renting. I know maybe...seven people under the age of 35 who are paying mortgages. I'm sure most millennials would buy a house or own a car if they could. But the reality is that straight up many cannot. It's not necessarily a matter of "drive".
chimeracoder 10y ago
> The issue is that the concept of ownership is changing in the "millennial" generation. There isn't a drive to own a car, a house or other large purchases so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation. Speaking as a so-called "millennial", when it comes to home ownership, this is completely wrong and downright insulting. I would love to own a place instead of paying rent. Except, guess what? The smallest down payment possible for a flat anywhere close to where I live is roughly equal to my annual gross salary. And that'd be for the smallest, hole-in-the-wall flat that would likely be a money pit of necessary repairs. Yes, I could move to a less-expensive state, but that'd require a massive upheaval in my life, not to mention the fact that a different job in that area would pay a much lower salary after COLA. Oh, and also, if you're working in tech? You're in for a surprise when you try to get a mortgage. If you're in your 20s and working a six-figure salary, in a competitive real estate market like SF and NYC, you'll be expected to pay an even larger downpayment due to the "volatility" of your employment and annual earnings. (ie, you're employed at-will with a short employment history in an industry known for rapid change, so they want more of their money up front).
closeparen 10y ago
>The issue is that the concept of ownership is changing in the "millennial" generation. There isn't a drive to own a car, a house or other large purchases so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation. Bullshit. We own less stuff than our predecessors because 1) College costs quite a bit more minimum wage labor-hours than it used to. 2) Entry level work pays quite a bit less (in real terms) than it used to. 3) When we do find good jobs, they're in the urban parts of expensive metros where parking is a luxury good and starter homes cost 3-6x the homes we were raised in. Attributing the artifacts of having less purchasing power to a character flaw instead of, you know, less purchasing power is not helpful.

pjc50 10y ago

There isn't a drive to own a car, a house or other large purchases Isn't it more the lack of spare cash for those, especially the large deposits required for housing? so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation I think you underestimate the extent to which people have looked at the mortgage costs and would love to own a house if they could afford to.

jahewson 10y ago
No, it's not a spare cash problem. The modern world is full of credit. Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge. There's a demographic difference, for example I'm constantly being asked by members of the prior generation why I don't own two cars and how we possibly cope. Actually I have no interested in owning any cars at all but one is necessary. The same goes for housing - why don't you buy? Because I don't need to... Now, we millennials do care a lot about housing but only to the extent that the previous generation has made it unaffordable.
- pjc50 10y ago
  There were a few years in London recently where (annual increase in deposit requirement) > (average annual salary); I don't think it's true that everyone can save for deposits in these kinds of conditions of house price inflation.
- x3n0ph3n3 10y ago
  > The modern world is full of credit. I'm sure a generation of young people who watched their parents go into crippling debt has made people wary of credit. > Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge. Funny, I can handle the mortgage, but not the down payment (even with $100K+ in the bank).
- chimeracoder 10y ago
  > Anyone can save a deposit given enough time, affording the monthly mortgage payments is the challenge. Affording monthly mortgage payments is easy. Actually having enough cash in the bank to make a down payment, and having a high enough income for a long enough period of time to convince a bank to underwrite your mortgage is the hard part. > No, it's not a spare cash problem. The modern world is full of credit. For people in their 30s and 40s who already have a credit history, yes. For people who turned 18 after 2008, it's dramatically harder. After 2008, banks were terrified of providing lines of credit (such as credit cards) to people who didn't have a credit history. Since the fastest way to building a strong credit history is to have prior credit, this quickly becomes a self-perpetuating problem. I had many friends who found it literally impossible to get a credit card as recently as 2010 or 2011, despite having high incomes, because they couldn't prove their creditworthiness. Banks have since recovered somewhat from this fear, so it's no longer quite as difficult to get credit cards, but the same fear exists to getting a mortgage. And even before 2008, banks were always particularly hesitant to extend mortgages to young people due to the extra perceived risk.

intopieces 10y ago

>There isn't a drive to own a car, a house or other large purchases It's not that millennials don't want to own these things, it's that they see them as out of reach. It's an uncomfortable economic reality that gets abstracted into "kids these days just want different things" like they're hoarding stockpiles of money and refusing to spend it unless the thing-makers read their minds.

cmdrfred 10y ago
I believe that the truth is somewhere in between. I'm 27 and own my own home. Where I live it's actually more economical to own if you can accept living outside of the city. Many people my age refuse to make that compromise and instead pay a few hundred extra a month to rent 15 minutes closer to the city.
- goostavos 10y ago
  I'm 29 and I pay the extra couple hundred each month. I don't need or want a large home. Living closer to everything and cutting commute time is worth waaaaaaay more to me than having a ton of space to store my junk.
  - cmdrfred 10y ago
    I like owning dogs and having a yard for them to play in. I also like equity and having room for servers in the basement and my fiancé and I both having our own offices. I really like not hearing my neighbors parties or seeing random weirdos hanging out in the hallways. To each their own. Nothing in the city really excites me. Quite frankly I find the noise and bustle annoying.
- intopieces 10y ago
  Unfortunately, the truth is not somewhere in between. "The drop in homeownership is largely due to a delay in homebuying by the millennials, who have the lowest ownership rate of their age group in history. Millennials are not only burdened by student loan debt, but they have also delayed life choices like marriage and parenthood, which are the primary drivers of homeownership. " http://www.cnbc.com/2016/07/28/millennials-cause-homeownership-rate-to-drop-to-lowest-level-since-1965.html http://www.cnbc.com/2016/07/28/millennials-cause-homeownersh... Can Millennials Afford The American Dream? http://www.forbes.com/sites/kerrizane/2016/01/24/will-millennials-afford-the-american-dream/#6f09feeb7379 http://www.forbes.com/sites/kerrizane/2016/01/24/will-millen...

deleted 10y ago

[deleted]

user5994461 10y ago

On top of the 2 other comments stating that buying a place to live is out of reach, I'd add that it's impossible to keep a job in the same place for more than a few years, and a mortgage needs 30 years of payments u_u

muzz 10y ago
Towards the end of those 30 years the mortgage payment would be tiny compared to rent at the time, and often well before that.
- user5994461 10y ago
  Wrong. Just because a property value increased steadily in the past 15-30 years doesn't mean it will continue to increase in the 15-30 years. There are lots of cities where prices stopped moving and some where prices went going down compared to the past 5-10 years. Buying a place is far from risk free.

yolesaber 10y ago

It's not about drive, it's about what can be afforded. In 1972, at the age of 27, my dad bought a house for around ~$20,000 in a nice neighborhood outside of Boston - $115,097.32 today. Try finding a house for less than 120k anywhere that isn't in the middle of the country, miles from anything or in a run-down neighborhood (not that those are necessarily bad things, just inconvenient). I know a fair amount of people whose student loans are more than that. The people I know in my generation who buy houses now (as in, just getting a mortgage) are, in my anecdotal experience, - Several are just plain rich, one of them was the son of a very wealthy man and then worked for a startup that actually took off - One went into the armed forces for six years and saved up enough money to buy a house in our hometown (because where he wanted to live was too expensive) - Couples who have high earning jobs but are drowning in student loan debt (a dentist and a doctor, in my case) The rest of my friends are renting. I know maybe...seven people under the age of 35 who are paying mortgages. I'm sure most millennials would buy a house or own a car if they could. But the reality is that straight up many cannot. It's not necessarily a matter of "drive".

chimeracoder 10y ago

> The issue is that the concept of ownership is changing in the "millennial" generation. There isn't a drive to own a car, a house or other large purchases so the concept of paying $200-500/more a month for leasing an apartment isn't as cumbersome as it was for the past generation. Speaking as a so-called "millennial", when it comes to home ownership, this is completely wrong and downright insulting. I would love to own a place instead of paying rent. Except, guess what? The smallest down payment possible for a flat anywhere close to where I live is roughly equal to my annual gross salary. And that'd be for the smallest, hole-in-the-wall flat that would likely be a money pit of necessary repairs. Yes, I could move to a less-expensive state, but that'd require a massive upheaval in my life, not to mention the fact that a different job in that area would pay a much lower salary after COLA. Oh, and also, if you're working in tech? You're in for a surprise when you try to get a mortgage. If you're in your 20s and working a six-figure salary, in a competitive real estate market like SF and NYC, you'll be expected to pay an even larger downpayment due to the "volatility" of your employment and annual earnings. (ie, you're employed at-will with a short employment history in an industry known for rapid change, so they want more of their money up front).

closeparen 10y ago