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Comment by Waterluvian | Hacker News Reader

This is a very complex subject and I'm not trying to reduce it to something simple. But a big smell to me that something's just plain messed up is this fact:

I make more money (inflation adjusted) than my parents did combined when they bought the house I grew up in. I would have to double my salary to afford buying/maintaining that house today.

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Exactly. And thats largely because the boomers pulled up the ladder behind them via zoning rules to greatly restrict redevelopment and density of new development, thus denying adequate housing supply to their kids.

There could be lots of reasons for that, however. Since you have not provided enough information to make speculation possible, I will mention my own to illustrate my point:

My parents bought their house in 1970, when my dad was making about 15K. The house was about 30K. To buy that same house today you would need to make about 150K. Inflation adjusted, my dad's income then would only be about 100K now or maybe a little less.

But ... what changed? In 1970, we lived in a remote area, where it took close to an hour to get there from the nearest city of any size. But about 10 years later the freeway was built and the nearest city expanded, now the property is still technically rural but it's 15 minutes from the city. It would be hard to argue that the value of the property hasn't been significantly increased as a result. Not many people wanted to live that far out in 1970; my dad's coworkers at IBM all told him he was crazy. Today that area is very popular.

Which town is this? Real estate is so much tied to location, its almost pointless to discuss a house's value without location.

It is about five miles outside the urban growth boundary of Portland, Oregon, in unincorporated Clackamas County.

Housing prices has risen more in some areas than others for sure, but the trend of housing rapidly outpacing wages still holds when looking at much larger data sets.

The last time this topic came up on HN, I recall someone bringing up numbers that show that if you control for house features, in particular size, the price actually hasn't gone up that dramatically. Average house used to be about 1600sf houses 40 years ago, now the average is 2600+.

That just shows profit margins on builds haven't changed. It doesn't matter if you are technically getting the same price per square foot on the house if you can't afford the homes available on the market.

Isn't that an argument that the inflation adjustment isn't suitable for this comparison?

Or that housing prices are too high.

It's an argument that vanilla inflation does not capture the changing costs of housing specifically. Considering housing is the #1 expense on most peoples' budgets, then yes, inflation alone is not appropriate. I believe that's the point the parent comment is making, and there is an implicit comparison there to all the economic analyses which compare childrens' incomes to their parents via inflation without accounting for housing.

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