S/o what changed since the 80’s that makes life so expensive

amother

↑ Burntblack ↓

Thu, Sep 26 2024, 11:26 pm

pause wrote:

It's simple: The proportion of average salary to average housing price. The gap has been getting wider and wider. The typical American dream of owning a home with a white picket fence is out of reach for the average American. In 1980 the average price in the US was 47,200 while average income was 12,413 . As of May 2024, average price of a home in the US is 440,000 while average salary is 63,795. The percentage of one's salary that goes towards housing is completely through the roof.

Obviously rental prices reflect purchase prices.

Throw in Jewish prices on everything from tuition to food to housing, and you have something totally unsustainable.

You're missing one small detail... one small detail that changes everything. Interest rates in 1980 were like 12%. Maybe more. So monthly payments were much higher for a similarly priced home.

Also, housing prices are very high right now, but that reflects the fact that supply is low because people are not selling (and giving up their 2% mortgages) unless they absolutely have to. This is a temporary situation and will likely change soon. Housing prices just five years ago were not that high.

I'm not touching frum pricing which is a category of its own...

amother

Darkblue ↓

Fri, Sep 27 2024, 6:51 am

amother Brown wrote:

How about the cost of everything went up and you just can’t compare. Also why do you feel the need to spend on things you think aren’t necessary?

Salaries have also gone up. I started teaching in 1985 for a grand annual salary of $6000 - and that was considered good. Other schools paid $5000 for first year teachers. How many teachers do you know who work for that amount?

amother

↑ Darkblue ↓

Fri, Sep 27 2024, 6:59 am

amother Cobalt wrote:

What community are you talking about? I don’t know anyone except very wealthy business owners with a summer home.

We make choices as to whether we partake in these norms. I don’t partake in any of these except for having a real hair wig, and I’m the norm in Lakewood.

That's the point, isn't it? 40 years ago the norm in Lakewood was a $200 half-and-half (human/synthetic) wig. Today it's a $3000 wig. 40 years ago the norm in Lakewood was a jalopy that you bought for $800; today the norm is a $800 per month leased car.

The problem is the distorted norms of today's society.

amother

Tanzanite

Fri, Sep 27 2024, 7:10 am

amother Darkblue wrote:

except you can’t even get a full synthetic for $200 now (I’ve tried), and it won’t last more than a year or two, while my $2k sheitel is going strong 5 years later. and a jalopy that passes state inspection is at least 5k. Prices have risen. I can’t send my kids sandwiches for lunch for $1 because a loaf of bread is already $5. Even cheese is a fortune!

amother

Lavender ↓

Fri, Sep 27 2024, 8:15 am

The dollar had much more value, wages kept up. Now the cost of EVERYTHING rises by the second. Housing, childcare, groceries, healthcare, utilities, energy, education- all hyperinflated. Industries have gone overseas, college was never so necessary and never so expensive, taxes are also higher and there is no return for most people. Dollar is worthless. As for the ridiculous "standards " it really only exists in the frum world and me and everyone I know (we're oot seeing NYers changing our city) have NO idea how or WHY they afford their crazy lifestyles

amother

↑ Lavender

Fri, Sep 27 2024, 8:31 am

amother Darkblue wrote:

Seriously? When you account for inflation and value of the dollar, wages today are a joke. It's not hard to do this research. Omg do you know how low housing prices were in 85 too. Omg. It's terrifying that you teach

amother

↑ Burntblack ↓

Fri, Sep 27 2024, 8:32 am

amother Lavender wrote:

Housing prices were lower but interest rates were 12%. Do the math. Think things through before you post.

ETA just googled and the interest rates were actually 16.6% in 1981! My memory is obviously faulty.

Inflation is killing all of us though, even people like us who are "older".

imaima

Fri, Sep 27 2024, 8:35 am

amother Lavender wrote:

Yes
Btw didn’t read the whole thread. The 80-s are before the introduction of euro, dollar was stronger than most of other currencies.

amother

DarkKhaki

Fri, Sep 27 2024, 9:32 am

amother OP wrote:

4 year olds didn’t need $60 swim coverups.
6 year olds didn’t need $100 worth of knee socks and $40 long sleeve t-shirts.
12 year olds didn’t need $60 jewish t-shirts with necklines 1/2 higher than the $12 gap tee.
14 year olds didn’t need $400 worth of stockings.
Boys didn’t need $80/hour extracurricular lessons, they could play sports for free.
Kids didn’t need $28 poorly written “jewish” books, they had a whole library of free books.
Families didn’t need to buy $15 bags of wilted bodek lettuce.
30 year old men didn’t need tens of thousands of dollars of communal kollel tzedaka a year.
40 year old women didn’t need to have babies.

I could go on for much longer but I need to get a headstart on running from the tomatoes.

See the thing is, no one needs that now either.
If you're frustrated at your community's needs, that's ok. But what's it got to do with the '80s?

↑ pause

Fri, Sep 27 2024, 9:43 am

amother Burntblack wrote:

That small detail doesn't change everything. It's a factor, but obviously my post was pretty simplistic and broad and did not acknowledge every tiny detail.

But let's take your point and discuss it:
High interest rates don't impact the down payment which means if people were earning more proportionately to the price of their house, they could afford to put down a larger chunk. Google tells me the average down payment percentage was 28% of the home price in 1980 while in 2024 it's 13%. In the 1980s and even up until the 2000s most people I know were able to swing a 15 year mortgage. How many people can do that it today's market?
So yes monthly mortgage payments within the same exact circumstances would have been more expensive in 1980, but considering the house cost way less percentage-wise to salary, and thus they were able to put down more, and therefore could afford a shorter mortgage (so less total interest).

Also, if we're getting nitty-gritty, 1980 had a particularly high interest rate. After 1981 it began dropping, so refinancing a mortgage was an option too.

justforfun87

Fri, Sep 27 2024, 11:36 am

amother OP wrote:

I don't buy any of these things, none of it and it is still really tight even with a "good" salary. For us, student loans and tuition are our BIG issues more than like 70% of our take home pay from our regular jobs, maybe more as I am bad at math. BH we have a very very cheap home and other sources of income that keep us at bay.

amother

↑ Darkblue

Fri, Sep 27 2024, 11:45 am

amother Lavender wrote:

You'll be happy to hear that I don't teach math. Or economics. LOL

But wages today are 4-5 times what they were then and prices are not 5 x higher. Except housing - but then again, you were paying sky high interest rates - that's why housing prices were lower. 6% interest that you might pay today is not so much compared to 16%.

Lady A

Fri, Sep 27 2024, 11:47 am

I think many people are missing the point.
Why are we driving up the gashmius standards?
Why are we insisting, as a community, that certain things are a must and everyone has to have them?
Inflation is real, I get that. But the standards of fancy clothing for children, teens, and the like is not realistic or even healthy.
I realize this is not EVERYWHERE , but many communities have significant peer pressure and it’s driving parents mad.

amother

↑ Cantaloupe

Fri, Sep 27 2024, 11:54 am

I don’t see from the 80s to today life is so crazy expensive.

(As the Sheitel example given. I’m still buying sheitels today the similar price I paid 20 years go as a kallah. Most of my peers are not buying the expensive sheitels. The increase in price is much lower then the salary increases that have happened the past 20 years).

However what I am feeling is the yearly increases now.
Like last year to this year basics - not extras - have jumped like crazy. Meat, chicken, basic ingredients, produce, clothing, gas, babysitting. Everything has jumped over the past 1,2,3 years tremendously. That is hurting me. Not the living on a higher level of gashmius. We live so simple and make large salaries. But the every day purchases have jumped so suddenly. I track a lot of things snd I’m seeing the increase so clearly.

amother

↑ Milk

Fri, Sep 27 2024, 12:24 pm

I'm not sure this was mentioned but one major difference between today and the 80s is the cost of simchas. Back then a standard vort was usually in conjunction with the L'chaim in the kalla's house. It was acceptable to not make all four weekday sheva brochas or have one or two as small time thing in one of the parents house. Shabbos sheva brochas was usually again in the kalla's parents house with maybe a shalos suedes sheva brochas in the shul her father davened. Nobody hired party planers for simchas. etc.

↑ PinkFridge

Fri, Sep 27 2024, 12:45 pm

amother Milk wrote:

Aufrufs were simpler too.