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Comment by closeparen | Hacker News Reader

That’s not a lot for a 2BR with a reasonable commute to New York.

$700k+ is objectively a large amount of money to spend on housing, more than double the median US home price. Even if it's a middle class home in its local market.

In California we have Prop 13 which is the polar opposite of the situation in NJ.

$700k is half what I'd need to buy a place and still end up with an hour long freeway commute.

Also our schools are a joke compared to NJ.

But at least taxes are low here. Wait...

Yes. What Prop. 13 has done is taken all the tax money that would go to fund local services, and instead given it to former property owners. From a cash flow perspective, there's no difference between paying a large mortgage and small property tax, or a smaller mortgage and larger property tax that total to around the same amount. But the difference to the local economy is that the tax money would stay in it, while the mortgage payment effectively funds a large payout to the previous owner, who then most likely takes the money out of local circulation.

> From a cash flow perspective, there's no difference between paying a large mortgage and small property tax, or a smaller mortgage and larger property tax that total to around the same amount.

Not initially. When you pay off the mortgage around the time you retire and have no more steady income, it's night and day difference.

> $700k is half what I'd need to buy a place and still end up with an hour long freeway commute.

Yeah, but that’s because you live and work in a place that is ridiculously expensive by California standards. (I'm guessing SFBA.)

Housing is inherently local. You can't aggregate over multiple commute sheds and have your conclusion mean anything.

Is there some way to look at $700,000 and not think, "Holy shit that's a life changing amount of money for nearly any American."?

FOMO is the biggest reason I find not to sell and rent for a while. If I want to buy again in a few years, there is no way to know if the equivalent house would be out of my price range. And I can't think of too many places I would feel safe investing that amount of money given current asset price inflation.

Becoming a landlord while renting out something new may be a good option though. Or moving to a low cost of living area.

Life-changing would be living in nicer arrangements, consuming more stuff, doing less work, being more secure.

That’s not what’s going on here.

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