Yes, i feel the same when I look at houses in San Francisco. The shittiest houses are valued at almost 1mio. I'm just saying, nope, I'm not buying that. ;)
Same here. The QE+low interest rates have delayed our home purchase perhaps indefinitely. We feel a bit like migrants .. can't afford homes in the city we grew up. It used to feel very miserable ... I'm looking at it positively now that I don't have "roots" that take away my job mobility. This also means we just have cash for retirement .. no housing at all. I suspect we'll end up moving to an ultra-low cost location when that time comes , and try to stretch out our savings + social safety net. It is a raw deal people of my generation got .. but I guess it could be a lot worse when we look at history (wars, famine, etc). As an aside, it is just sad that the only popular politician calling out the Fed is Trump :/
Add it being nearly illegal to build a home in the bay area for the last several decades to the list of reasons. The supply is grossly, artificially constricted.
I'd not blame QE+low interest rates for this, because the problem is not national, but limited to very few markets. Almost anyone can afford a house in most US cities. Changes in QE wouldn't magically change demand in SF and NY.
When we look at SF, what we see is a city that has A LOT more people wanting to live there than there are houses: Heck, I'd move there if the prices weren't insane. Investors/speculators are just a sliver of demand, and they only invest there precisely because the real demand to live there is that high. When there's high demand, and no increase in supply, prices go up to the levels we see now.
If the only people that wanted to buy a house in SF were software developers, prices would still be high, and we'd have enough of those that we'd see prices go up so that mortgages are about 50% of household income, just like in every other place, ever, that had high demand. And guess what? that's the current prices already.
So while I am sure the fed would be able to lower prices across the board by doing something that craters the economy, housing prices in desirable places to live are not the problem.
As far as retirement goes, it doesn't really matter if you own a house, or the equivalent in stocks. I can't tell you if you are saving enough, you are living beyond your means, or should just move somewhere else, as I have no details in your situation. All I can say is that it's a wonderful time to be a software developer in the US, economically speaking. It's pretty possible to work remote or at a satellite office of a big tech employer and save crazy amounts of money.
But the wealthy, who are the one's who have really benefitted from this free money will buy these chit boxes, and rent them out at outragious ROI.
And so will the wealthy foreigner--with a lousy phone call.
I've given up on more building. I think we need to open up areas where people can camp without breaking the law. Or, at least allow people to legally sleep in their vehicles. The fines/fees for breaking over stringent municipal laws are just not fair.
(I don't believe lightening up municipal laws will cause the average person to sleep on the sidewalk to save money. Yes, we will always have homelessness. I have known two people who were between rentals, and were ticketed for sleeping in their cars. It's just not--what's the word--the America I thought I was proud of.)
It's really a shame that we've coerced people into earning an income to live, because the means of living that don't require money are largely becoming illegal.
Where are you allowed to sleep for free in the US? You could perhaps get a wilderness permit and live in a national park for a time, but I'm not sure what the maximum period of validity is on them. Cities will cite you under anti-camping rules. There isn't really a frontier to go to where a person can live off the land, at least so far as I'm aware.
People who do not find the system of "I have to work because I have to have money because I have to pay rent/own a home because I have to have somewhere to sleep" satisfactory no longer have a frontier to which they can escape. This is worrying if you like the idea of preserving liberty, and especially worrying if (as this article suggest) the whole monetary system on which our civilization is built rests on weak foundations.
