Re: Remember the Housing "Bubble"?

<rkshullat@xxxxxxxxxxxxxxxxx> wrote:
For the ones I could quickly pull from the BLS, change from Jan 1977
to Feb 2007 for the U.S. city average of:
All items +251%
Housing +275%
. . .

From census.gov, median individual income change for age 15+ from
1977 to 2005 is +278%. In 2005 dollars, it's a gain of 33%.

If income has increased by 278% and costs have increased by 251%, how
is that a gain of 33% rather than of 278/251 = 10.8% ?

Also, I suspect that census.gov is implicitly assuming that even
though the cost of housing has increased more than the cost of other
essentials, that it continued to consume the same proportion of one's
income. That's not realistic.

Housing is about 80% of my spending. I believe this is average,
or below average, for renters living alone and for single-income
families, as my income is about average, and my apartment is one of
the least expensive ones available. (*Buyers'* costs are all over the
map, as many bought decades ago when housing was cheaper. Someone
buying today would of course pay considerably more then a renter,
though they do get some of that difference back as a tax deduction.)

Since I moved into this apartment in 1979, my rent has not gone up by
275%, but by 359%. And it's only that low because, as a I'm long-time
trouble-free renter, the landlord is willing to give me a discount. A
new renter today here pays 391% more than I did in 1979. And these
apartments are, if anything, more run down. And we lost our storage
rooms. So they're worth less in absolute terms.

Other apartments in the DC area have gone up similarly.

My income since 1979 has increased by a slightly lower percentage,
so I'm paying more of my salary for rent today than when I moved
in in 1979. My tax rate is considerably higher, so I'm paying a
considerably greater proportion of my take-home pay for rent than
when I moved in.
--
Keith F. Lynch - http://keithlynch.net/
Please see http://keithlynch.net/email.html before emailing me.
.

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