Home Ownership

[John.S.Mill]

I think part of the problem why “rich” people don’t feel rich is that our wealth is pretty leveraged.

We’re all just one catastrophe away from bankruptcy. Even Elon Musk probably thinks that way too. So we never feel like we are truly rich.

[twig93]

@MayanActuary

Upper-Middle as between $85K and $125K
Upper class as > $125K

Eh, maybe for a single person living in the Po. A family of 4 with a household income of $85,000 is definitely not upper middle class. They’re middle class.

For a family I would say middle class goes up to around $140K or so, and then upper middle class to $250K.

I wouldn’t say you’re upper class until you’re at least above $250K.

[SredniVashtar]

@John.S.Mill

” people don’t feel rich is that our wealth is pretty leveraged.

We’re all just one catastrophe away from bankruptcy. Even Elon Musk probably thinks that way too. So we never feel like we are truly rich.

I don’t think Elon Musk is a good example…

For literally anything.

[Cooke]

@knoath

I think a big issue with NIMBYism is with the preponderance of single family zoning in the inner suburbs of cities. Most cities in Europe, Asia and Australia/New Zealand will have medium density housing in the inner suburbs and if you want to have a house with a decent sized backyard you need to move further out. This makes for more efficient traffic as the bulk of the population lives closer to the city.

North America suffers from the missing middle. Compared to other countries there is a relative lack of medium density - duplexes, rowhouses or 2 to 4 storey apartment blocks. Often these are in desirable inner city neighborhoods in other countries and is not seen as slumming it.

Most large Canadian cities have zoning closer to European cities than US cities. Lots of 4 storey apartment blocks in inner suburbs of Vancouver.

Not sure what you consider a decent sized backyard but 1/10 of an acre is considered large for an inner suburb in Vancouver and that often includes a lane house on the back of the lot.

[SpaceLobster]

Boat= bring out another thousand.

My boat has been pretty maintenance free for 15 years. But I keep it well maintained. Had some hull problems but they fixed it under warranty.

The only real ongoing maintenance outside of a once a year winterization and check are props. I loan my boat out to pretty much anyone that wants it and it comes home about once a year with a dog eaten prop. I just keep a couple props in the shed and treat them as maintenance items lol.

[MayanActuary]

@twig93

For a family I would say middle class goes up to around $140K or so, and then upper middle class to $250K.

This boggles my mind. I can see arguing $125K… but to say over $200K is still upper-middle class… that is insane. Over $200K is rich. Regardless of family size.

[John.S.Mill]

I don’t think anyone making less than 100k can live comfortably in any of the major US cities.
With dual income it becomes 200k. I think that’s reasonable.
And that’s not even rich, that’s just “not miserable in the city”.

[MayanActuary]

Define major US city, because I certainly did that (less than $100k combined) early in my career in Denver. And I know many people who do.

[MayanActuary]

And we currently make less than $200k family income. Family of 4. We live a life of luxury. Denver.

[knoath]

@NormalDan

The houses are worth a lot because they’re scarce. When you make it easier to move into the town you’re increasing the supply of housing in that town, so you’d expect the price to go down on the remaining houses, all else equal. You could argue that you’ve created new demand because of the apartment building being so desperate to get in there, I think that’s debatable.

The bigger issue is the quality of the town itself will degrade as lower income people move in and the schools have to provide for more students with only marginally more resources. The quality of the school system is one of the biggest predictors of the value of the houses in suburban towns.

I should preface that when the multi zoning is successful, it’s often accompanied by a robust public transportation system. LA is starting to add light rail networks, which should help.

[procrastinator]

Agree with MayanActuary. For some reason, people don’t like to admit they are rich. Maybe then it would be a character flaw to not be happier? Not sure, does not really make sense to me. I definitely consider our household rich.

[John.S.Mill]

I think I appear rich, but I don’t feel rich.

Maybe people equate rich to being stress free, which will never happen in all likelihood.

[Vorian_Atreides]

@John.S.Mill

If you 're in the US, you’re “rich”

ITA. I’ve been to communities in Panama (back in the '90’s) where the sign of wealth was not only having a pair of socks, but wearing them everyday.

[Vorian_Atreides]

@MayanActuary

I asked him why he kept going back and he said “it’s better to be poor in the US than to be poor in Mexico”. And that is 100% true.

I would also point out that it’s this sort of thing that immigration regulations need to take into consideration.

[twig93]

@MayanActuary

to say over $200K is still upper-middle class… that is insane. Over $200K is rich. Regardless of family size.

I feel rich, but I don’t feel like I’m “upper class” even though by my own definition we are. I still feel upper middle class.

Upper middle class is a good place to be and I’m not complaining. Having spent time in the 3rd world… we are SO rich by comparison. But yeah, the yachts, the vacation homes, the mansions, the private jets… these are all things that are beyond my reach. I’m fine not having those things and I’m not complaining. But to me, that’s what upper class means. Not just rich… stupidly rich.

Here’s a source that lists the dividing line between upper middle class and upper class for a family of 3 at $373,894, using 2019 dollars, so pushing $400K today.

https://money.usnews.com/money/personal-finance/family-finance/articles/where-do-i-fall-in-the-american-economic-class-system

[Cooke]

@NerdAlert

My husband wants to die in our house. It’s not feasible, unless we get full time help and have food brought up to us and never leave the home, as we have one bathroom and it’s upstairs, no first floor master, and no room to add on.

But we will stay here until our kids move out. He’s sad that our kids won’t necessarily have their childhood home to come back and visit, but maybe one of them can have it to live in I guess.

Don’t know how old your kids are but they may not leave as soon as you think and may come back for long unexpected visits.

When we moved from Toronto to Vancouver 20 years ago I toyed with the idea of downsizing as we only had our youngest daughter living with us at that time. Since then our oldest daughter and husband and their daughter returned lived with us for three months and our 40 year old son just finished living with us for two years while partially recovering from a horrendous cycling accident. Our youngest daughter (now 34) and her husband and two daughters just moved into our basement and are there indefinitely until they sell their condo and move into larger digs. After they move out, hopefully this fall, my 39 year old London daughter will move in for a few months with her new baby while she and her partner try to buy a London flat.

The point of the preceding narrative is just to point out that life throws curves at you and there may be no such thing as an “empty nest” situation until much later than you think!

We would love to pass our family home on to one of our children after we have to leave it but none of them could buy out the others to own it on their own. Only possibility would be that two or more of them cohabit here after we are gone.

[Rastiln]

@MayanActuary

The problem is you often move into neighborhoods and associate with those around your class level. And there are always people richer than you, many much richer.

I’ve only lived in one “nice” area but my experience is that half the people around me are just living beyond their means.

Of the 5 houses closest to me:
1 (in their 50s with many trailers, quads, etc. totaling >$150k) just had to sell and move to an apartment.
1 either underwent foreclosure or sold just before, no idea what they’re doing.
1 had to pick up a side hustle/second job.
1 seems fine, they’re chill and no red flags.
1 who owns more trucks than household members is in credit card collections and I suspect they’re selling soon.

I know some of them looked down on us for having our 1 vehicle per person and no boats, but whatever, we have a house. However from the outside they did look rich.

[John.S.Mill]

@Rastiln

I’ve only lived in one “nice” area but my experience is that half the people around me are just living beyond their means.

This is me.
50% of my income goes to mortgage, because yolo.

[J0EBL0W]

@twig93

Well, I didn’t go super nuts or anything. A 1900 sq ft 3 bed / 2 bath house in the burbs.

My house is over 3,000 sqft and I live by myself…

@twig93

Are you saying that people object to additional housing near them even in a similar price range?

Or for allowing more dense housing in expensive areas.

@John.S.Mill

I think it also has to do with the parents’ willingness to give money to their kids.
Asian parents are quite willing to do this. Sacrificing their own happiness for their children’s happiness. American parents less so I think.

I’ve specifically told my parents to spend their money. They earned it and I don’t need an inheritance.

@Vorian_Atreides

This assumes that the “future buyer” is the “younger generation”.

I’m talking in aggregate. Just because in one specific transaction the buyer isn’t of the younger generation, doesn’t change the effect the market as a whole has.

@Vorian_Atreides

I’ll agree that current market and social expectations can be disproportionate for some buyers; but it’s not an inherent aspect of real-estate-as-wealth-building.

The wealth has to come from somebody else. So it is an inherent aspect.

@Vorian_Atreides

The buyer has to agree to the sale price and all other related conditions for the sale to be complete. The buyer also has the power to set some of those conditions for the sale to be complete. So I fail to see where disparity has to be present for any sale.

What? The market sets the price of the house. Some minor negotiating can happen, of course, but that doesn’t change much.

@Vorian_Atreides

How many properties turn into rentals instead of continue as owner-occupied dwellings? I have a source for this (close relative) that indicates that in many localities, demand for (quality) rentals is starting to exceed supply.

Irrelevant to the conversation.

@twig93

Sure, I’ve just never seen people up in arms about new housing developments in similar price ranges to their own.

Any new construction lowers the value of their house. Any increase in the supply of housing hurts their home value. It’s that simple.

@knoath

I think a big issue with NIMBYism is with the preponderance of single family zoning in the inner suburbs of cities.

Yup. Think San Francisco.

@twig93

That I agree with. Is that due to NIMBYism though?

The Left-NIMBY canon

@twig93

Yeah, that I understand more than wanting to prevent like housing that will increase the supply of housing similar to your own.

It doesn’t actually matter if the housing is like yours or not. Increasing the total supply of available housing will drive house values down.

@John.S.Mill

50% of my income goes to mortgage, because yolo.

Less than 20% of my take home income goes to my mortgage. Is that unusual?

[John.S.Mill]

@J0EBL0W

Less than 20% of my take home income goes to my mortgage. Is that unusual?

no that’s normal.

I demand a certain standard of living to not be depressed.