patrick.net

My dad bought a new house in Palo Alto in 1948 - after he demobilized. He paid $11,500 for that 900 square foot house on Cowper St. I'm not sure what he was making at the time but he had a good union job as a lineman for ATA&T. IIRC that was "GI bill" too even at that time, and IIRC the mortgate rate was around 3% with 20% down.

Zillow says that house sold a few years ago for $1.4 MILLION.

Zlxr says

I think what happened was that somewhere between 1955 and 1965 Developers got hold of much of the land.

Depopulation of city for the suburbs.

The .95 for a loaf of bread seems REALLY high. The hen turkey's at .53/lb seems high as well. Is this accurate? Was food that much more expensive in the 50's?

If you generally multiply everything by 10 to get to today's prices, that's $9.50 for bread, or $5.3/lb of turkey. Bread is 30% of that figure and turkey is half at my local market.

CBOEtrader says

The .95 for a loaf of bread seems REALLY high. The hen turkey’s at .53/lb seems high as well. Is this accurate? Was food that much more expensive in the 50’s?
If you generally multiply everything by 10 to get to today’s prices, that’s $9.50 for bread, or $5.3/lb of turkey. Bread is 30% of that figure and turkey is half at my local market.

Bread is made by robots/automated machinery nowadays, and the government subsidizes the wheat farmers to the point that the raw material to make the bread (wheat) is a lot cheaper now due to the mega-farms that utilize the power of mass-production.

Turkey, chickens, etc are all raised in farms where they cant even stretch their necks, all touching side by side. In the 50's they were raised in different, more costly (and humane), conditions. $5.30 per lb of Turkey would be a fair price, but we've been spoiled with artificially low food prices in the U.S. to the point that the majority of the population is overweight now.

Then:

Now:

A simple calculation will show that a price in 2010 of 1.4 M compared to a price of 11.4 K in 1948 means an appreciation of 7.74 % per year.

This is roughly in line with the 8% per year overall appreciation that I have been estimating for the neighborHood where I've live in East San Jose since the mid-1960's.

dhmartens says

Milk: $.96
Gas: $.20
Bread $.16
Postage stamp: $.03

CBOEtrader says

The .95 for a loaf of bread seems REALLY high.

I think you just saw the wrong line. It lists bread at $.16 which would be $1.60 now. That sound reasonable.

Milk at $9.60 does seem rather high though...

thomas.wong1986 says

Zlxr says

I think what happened was that somewhere between 1955 and 1965 Developers got hold of much of the land.

Depopulation of city for the suburbs.

http://en.wikipedia.org/wiki/White_flight

"White flight" is the sociologic and demographic term denoting a trend wherein whites flee urban communities as the minority population increases, and move to other places like commuter towns.

tatupu70 says

I think you just saw the wrong line. It lists bread at $.16 which would be $1.60 now. That sound reasonable.

Milk at $9.60 does seem rather high though…

You are correct on both counts. Sorry about that, and yes, that's expensive milk.

I think Mark_LA's analysis is accurate.

Zlxr says

We ate a lot of fruit and vegetables.

Your family's diet sounds VERY healthy. Was that a function of being poor, being health nuts, or both?

Interesting thing today is that poor people tend to eat complete junk as opposed to vegetables, and lentil soup.

I saw an article by whole foods stating that we now spend something like 12% of our income on food, but in the early 1900's it was closer to 25%.

They basically were trying to justify their prices, but also show how we've devalued food.

sybrib says

A simple calculation will show that a price in 2010 of 1.4 M compared to a price of 11.4 K in 1948 means an appreciation of 7.74 % per year.
This is roughly in line with the 8% per year overall appreciation that I have been estimating for the neighborHood where I’ve live in East San Jose since the mid-1960’s.

Salary increases are 3% year at the most and you think 8% year price appreciation is right. Do you see the disconnect?

8% is not "right", it just is what it is.

I dunno what is "right" and what is "wrong", but I do have an opinion about what is ridiculous: trading more than about one third of my labor for housing is ridiculous.

sybrib says

trading more than about one third of my labor for housing is ridiculous.

Be thankful it's only 1/3. Since we bid against ourselves for the scarce housing good, the price is set at what the greatest fool will pay, or what the bank will lend, whichever is less. If banks started lending at 50% DTI, prices would rise to that.

Since 1848 buying California has been a pretty good deal, making landowning a "crowded trade".

It doesn't have to be this way, but it will never change, either. Too many people with their fingers in the pie to change the rules of the game now.

Nomograph says

It always cracks me up when the so-called Conservative crowd starts crowing about government give-aways and calling for a return to “traditional American values”. The Homestead Act and similar legislation were the biggest government welfare wealth-transfer programs ever invented.

I know very little about the Homestead Act, but this type of blatant hypocrisy sounds about right. Medicare part D is the largest new welfare program created in the last 25 years--to be potentially eclipsed by Obama-care.

Free drugs=good. Free food=bad. Ain't that interesting logic.

sybrib says

8% is not “right”, it just is what it is.

It is called bubble my friend and if it is not right it has to become right in future.

Troy,

I disagree. It doesn't have to be so. People can live within their means.

For decades, my partner and I never traded more than a third of our income for housing, nor did we have any gimmicks like inheriting a legacy home nor getting a SIlicon Valley stock windfall: instead we just "bought" what we could afford. It is the reason we are both salaried folks in Cool and Hip departments of Cool and Hip tech companies living in East San Jose.

If a stock windfall ever did come along, it would have been stashed for college savings, emergency unemployment funds, that sort of thing. Not for household operating expenses which should always come from wages (or for retired folks, investment/annuity income).

We both know colleagues and former colleagues like ourselves who don't stretch themselves to pay for housing +childcare, we are out there. You just don't notice us because we don't call attention to ourselves, except perhaps to get slightly derisive "advice" about where to live, what kind of car to buy. Also know a fair number of former colleagues with similar "horse sense" who've said "f**k this" and left the area, because living Cool and Hip in The Fortress with Fortress Pricing (+childcare) meant exceedingly high portion of wages traded for housing (+child care), and alternatively living modestly in more modest housing was, well, "I didn't go to university to live like that".

Others slogging away at lower wage jobs can also limit the portion of their income for housing by doubling up, etc., which several of the folks on the street where Iive are doing now.

sybrib says

For decades, my partner and I never traded more than a third of our income for housing, nor did we have any gimmicks like inheriting a legacy home nor getting a SIlicon Valley stock windfall: instead we just “bought” what we could afford. It is the reason we are both salaried folks in Cool and Hip departments of Cool and Hip tech companies living in East San Jose

Certainly goes against the grain (the Hype and Myth in SV) since many (recent migrants from the East Coast) only think Tech People are only Cool and Hip Stanford grads (no Nerds) raking in high salaries/stock options and dont live in East SJ, or other Non-fortress cities.

1/3 is about right. For those like yourself who worked in SV for decades most likely understand how quickly the better times can turn against you. So being a uber-saver and living in with in your means makes sense. My hates off to you! :)

thomas,

It is more than just the money. Neighborhoods outside The Fortress are more real, the people are more real, their kids are more real. Makes it easier for local-yokel podunks like us to see the big picture and make personal choices since we're grounded out here in The Real World.

Nomograph says

CBOEtrader says

Free drugs=good. Free food=bad. Ain’t that interesting logic.

Elderly folks on Medicare worked and paid taxes their entire lives. They lived through a time with a MUCH higher tax structure than you currently enjoy. They paid for the hospital you were born in, the schools you attended, the building you work in, the roads you drive on, and the city you live in.
How do you equate that to “free drugs”? They paid their own way, and yours too.

Off-topic fight picking dribble. Par for the course for Patrick.net's largest troll: Nomo.

The discussion was about the hypocrisy of the Republicans, who claim that the government is the wrong entity for social handouts--unless they need to buy florida votes in a tight presidential race. The discussion was not about which social programs are justified , and which ones aren't.

However, anyone who claims to be a medical professional should understand that the $1.5 trillion from medicare part D was just a handout to big pharma more than it was about helping the elderly.

I highly doubt you are who you claim to be.

Nice try though. Fucking troll.

Nomograph says

CBOEtrader says

Fucking troll.

No thanks, but I appreciate the offer. In any case, I’m probably to old and stretched out for you.
It would be like throwing a hot dog down a hallway.

Oh my! I never knew you were so cavernous, Nomo. :o

It still astounds me that American society has degenerated so far in terms of civic responsibility since WWII.

It truly seems to me like nearly every layer of American society goes along with the program of the Uber-Corporations. Which seems to be that the Middle Class is merely another source of fuel to mine to keep the boiler going. Once it's depleted, then what?

This is starting to get interesting: On Sunday, Boehner said he would support renewing tax cuts for the middle class but not the wealthy if that was his only choice. Class warfare, this will be fun. I bet the Dems can hold the high ground.

Now there is a guy who has a grip on reality... whoa... But sadly much of it has truth in it,