This snapshot posted recently of a 1959 Buick in the driveway of a fairly commonly-sized newish house of the times provoked some interesting comments about the growth of new houses as well as a question from one of our Australian readers: “Would someone with a fairly ordinary house like that in 1959 really buy a Buick?” The simple answer is yes, but the reasons — there are several — as to why are a bit more complicated.
The quick and easy one has to do with the price of the ’59 Buick LeSabre, whose base price ($2925) was only 5% more than a Chevy Impala V8 4-door hardtop. Add in a few options (automatic, radio, tinted windows and whitewalls, let’s round that up to $3600, which in 2023 adjusted dollars is $38k That’s right about same as the price of a fairly nice new car today, including a top trim Buick Encore GX.
But the really big difference is of course in the price of the house, which in 1960 was about $12k ($126k adjusted). That’s only two times the median annual wage in 1960 ($5600, or $59k adjusted). Today, that very same house in Cody, WY, now very obsolete (check out the kitchen, above), is valued at $310k, or 6.5 time the current median annual wage ($48k). That’s up 250% in inflation adjusted dollars.
So yes, given that, these folks in 1960 had plenty of money left over to buy a new Buick. Let’s run the numbers, using all 2023 inflation adjusted dollars: If the head of the household made the median wage ($59k), their monthly pay was $4916. The monthly payment on the 5% mortgage (assuming a 20% down payment) would have been $690. That’s a mere 14% of their paycheck. So there was plenty of money left to buy a Buick, or even something more expensive. Assuming they got $8,000 in trade in, the $30k 3 year car loan would have had monthly payments of $912. That’s quite a bit more than the mortgage payment, but it still leaves $3314 per month left for taxes and all other household expenses.
This particular house was built in 1954. Quite likely the owners bought it new then, and it would have cost even less then, right around 100k adjusted (or even less). That means their payments were only $400/month (adjusted). And lots of folks paid off their mortgages faster; they might well have already paid it off by 1960.
Today, the US median house price is $420k (up 330% since 1960, in adjusted dollars), which is equal to almost 9 times the annual median income. With a 20% down payment, and a 30 year loan at 6.9%, that comes to a monthly payment of $2,240. At the current median income of $4,000/month, that leaves only $1760/month for taxes, insurance and all other expenses. So much for a nice new car in the garage.
In Wyoming, where house prices are bit more moderate ($340k median), that wage would go a bit further, but it would still be a stretch. But this particular tired old house would still cost some $1900/month in interest, principal, property taxes and homeowner’s insurance with 20% down.
Americans who had at least a fairly decent job had a remarkably high standard of living back then, due mostly to very low housing costs. That’s what’s changed more than any other single economic factor. Other expenses have gone up (education, medical) and others down (food, all sorts of consumer goods, electronics, etc.). Car ownership has actually gotten cheaper, considering their vastly greater reliability, durability and improved economy, although that trend has reversed some in the past couple of years due to higher prices, interests and insurance. So housing costs are the single biggest change.
Too bad there wasn’t a car in the driveway of that house when Google drove by in 2019. It’s a rental now (it last rented for $1150 in 2020). Given the cargo trailer in the driveway, we can be pretty safe in assuming that it’s a full size pickup. If it’s a nice new one, the monthly payments and insurance could well be close to about what the rent on the house is.
Related CC reading:
The Cost To Own And Operate A Car Has Fallen 25% Since 1968 – Update: That’s Still The Case In 2021
“…Assuming they got $8,000 in trade in, the $30k 3 year car loan would have had monthly payments of $93…”
I think you forgot to apply inflation to that $93 car payment.
Yes, I blew that. I’ve updated it now. The car payments are actually $912 (adjusted) which is actually quite a bit more than the house mortgage payment! But that just goes to show how cheap houses were and how relatively expensive cars were, given that 3 year loans on them was the maximum, and that many folks traded in after 3-4 years.
This is a major reason people are keeping cars longer; at least those who see the economic benefit in that.
Excellent analysis, the context is everything to understand what is going on now and then. Very expensive housing and low wages. A recipe for poverty.
It does not look to me like that 1959 Buick will fit into the one-car garage.
That’s probably due to camera perspective. Since this house and garage were built in 1954, it most likely fits.
This is also why we sometimes see new Lincoins in the driveway of a mobile home in a park not very far from a large urban area like here in the southern suburbs of Montréal . A mobile home on a rented lot sells from 250k cad $ there. Real estate prices are crazy everywhere even without a basement and without lot that belongs to you.
This was an interesting read, Paul—fun that the very same house was tracked down. Whole chunks of Wyoming have turned into “hot market” spots (as with Montana, Idaho) said to be partly due to influx of “California money”; my Idaho neighbors complained of that 40 years ago.
The less-hot markets (Cleveland suburb I grew up in) always come up well on “affordability” rankings, ’cause the same-house price rise since mid-1950s has been far less dramatic. This one is a bit bigger house/lot than Cody; I’ll guess it was $15K in 1955, but can be had for $170K today:
https://www.realtor.com/realestateandhomes-detail/5527-Elizabeth-Ave_Parma_OH_44130_M37798-21524?from=srp-list-card
^^^^But the above wasn’t written to quibble with you. Though U.S. homes have gotten bigger overall, what you’ve illustrated about affordability and that house+Buick are a fact of life.
Thanks, BTW, for the reminder about auto ownership overall being *more* affordable overall. Those of us old enough to remember $2000-4000 cars can forget what the dollar’s worth was back then!
My grandfather (1922-2012) moved around a lot for work, with his housewife and two kids in tow. NC to NY, then to FL, back to NC, then to NJ, and finally back to NC. They always bought a “nearly new” house wherever they moved, much like the one in Cody, WY, and he always bought a new Buick every three years.
I think he did well (he usually was a Controller or Accountant in the trucking/shipping industry), but they weren’t “rich”. My grandmother never worked outside the home, and they had a pretty good life on that sole income.
Even his last new home in NC was a modest three bedroom ranch with a carport and eat-in kitchen. Just different tastes and styles across the years, and generations.
He proudly explained many times that he never financed a car; he made a “car payment” to himself every month, and then every 36 months paid the trade difference in cash. Another generational difference, though I am sure some people (though many fewer) do this today.
Also, they only had one car until the late 60’s, when he began keeping the “old” Buick for my Grandmother, and he bought the next one. One car, four person households are pretty much a thing of the past overall.
The kitchen in Cody, WY also reminds me of my wife’s late aunt (1933-2017). She lived in the same two bed, one bath house from the 50’s until her death, and that is her kitchen, down to the fluorescent tube and washer/dryer in the kitchen (except she never had a dishwasher, such frippery!). Her older husband was WW2 disabled, so she was pretty much the breadwinner as a secretary for a steel mill. She bought a new Chrysler of some sort every 3-4 years (a succession of Furys, then an Omni, then minivans, and her last new car was a 2004 Jeep Grand Cherokee). They too afforded everything they needed and more.
It is really hard to imagine how different our economy was when this house and car combo was located in Cody Wyoming.
Most homes had only one income shared among much larger families.
Most manufacturing jobs were union based.
The good and services were domestic, so money remained within the US.
Your auto purchase was American, as was services and maintenance.
The majority of purchases were local as was manufacturing.
Business hours were dawn to dusk, six days a week.
If you couldn’t get it in town or out of a catalog, a product wasn’t known or bought.
In short, it was a smaller, more locally connected world, prices for goods and services were more impacted by the local economy.
If you weren’t white, your economic world became dramatically smaller.
In today’s global economy, your wages compete globally. Your products are often from overseas. Your family is smaller and you have two incomes or more.
The photo with the 1959 Buick looks like a simpler life, because it was – but that didn’t make it any easier than life today. (Not that anyone is making that claim.)
In Cody that may be a cargo trailer. Here in Santa Cruz, California it’s another rental unit. The rule of thumb here (anecdotally, I’m not a landlord) is that students pay $1000/month for a bed. Two beds to a room, so rent for the typical 3 bedroom house is $6000.
Nice analysis and similar to my parents’ situation in 1953 when they bought their brand new house. My dad made $262 a month as an accountant and the house cost $9,000 (payments of $86 a month including insurance and taxes). The key is staying in the same house – payments over 25 years didn’t move nearly as much as income.
A nit-pick… I wouldn’t describe that kitchen as “obsolete.” Dated certainly, but it still appears to do everything we want a kitchen to do.
In real estate terms, “obsolete” means a layout and aesthetics that are not within current expectations or standards (not remodeled). That very much applies to this kitchen. It still works, but it’s clearly not a very attractive kitchen.
You’d know better than I, Paul, but I believe there was a dramatic change in the economics of owning rental housing properties about 20-25 years ago.
At least around here, 90% of the dwellings that hit the market are sold within a day to “investors” for cash before a potential homeowner can even get a bid in. A new development near my home sold out all 24 units for cash before the first foundation was poured.
I am in no way blaming small, private landlords like Paul. But it’s the big, faceless corporate investment entities that only see housing as a source of profit that have pushed home ownership beyond the means of the working person that have destroyed the American Dream of home ownership.
There’s a number of reasons why housing prices have increased so much in recent decades, but this is definitely one of them. Where I live, neighborhoods with smaller, more affordable homes, have higher proportions of investor-owned properties in general. And these are the types of neighborhoods that in prior decades would have been relatively affordable ownership stock. One way of looking at is is that each investor-owned property is a house that’s taken off the market for potential homeowners.
But of course there’s lots of other factors at play as well, and these tend to vary greatly by locality.
This investment trend accelerated quite a bit during the housing bubble when individual investors saw opportunity for rapid price gains, and then afterwards the corporate investment entities that you mention heavily entered many regional markets. Here in Northern Virginia corporate purchases are still pretty rare, but in many places (Sunbelt / Southwest particularly), that’s a huge factor contributing to escalating housing purchase prices.
The economics of owning rental houses has fluctuated some over the decades depending on interest rates, tax laws, demand, the economy, and various local factors. There was a big boom in real estate investing in the 1970s, and then again in the 1980s, interrupted by recessions.
The financial crisis/recession of 2008 was the biggest event in recent history. the price of real estate took a huge hit and there were massive foreclosures. That really started the corporate wide-scale buying of single family rental houses, which was something quite new. Private equity and even just large and small investors took the risk that prices would come back, which of course they did. FWIW, these investors actually helped the market come back up, by buying so much at or near the bottom.
They did so well that they decided that they liked the business, and it has expanded greatly since then. The painful reality is that many folks are just not able to save enough for a down payment to buy. And then there’s some that actually prefer to rent, investing the difference between rent and home ownership costs, which can add up with maintenance, repairs, taxes, insurance, etc.. If they invest the difference wisely, they have found that they can accumulate enough for a comfortable retirement.This avoids the issue of what to do with one’s equity in a house at retirement, as the options are not that attractive to many.
As to cash buyers, don’t assume these are all corporate or large investors who are going to rent those new houses up. Quite likely most are folks selling more expensive houses in CA such. LV is of course a huge magnet for Californians.
Although I’m not a fan of corporate buying of residential property, the causes of price increases are much than just that. Prices have been increasing for decades, and are fundamentally a reflection of supply and demand. There’s obviously a lack of supply and there’s a lot of folks with money.
There are programs available for buyers to use a lender and buy a house for “cash” and then re-fi it into a conventional mortgage immediately after closing. Sometimes it is using family (i.e. parents) money but there are also lenders that do that too (lend their cash for closing and then the loan and all its parameters gets worked afterwards.) There’s obviously a cost to doing that but then again if you get the house and lender gets a mortgage from it then it sounds like a win in the end for both parties vs sitting on the curb. It won’t be your local Chase Bank on the corner but it’ll be someone subject to the same rules and regulations that very likely closes more deals than the guy at the Chase Bank desk and then sells the loan anyway, just like Chase does…
If 90% of the real estate in a given area sells in one day for cash to purely “investors” then your overall market is underpriced and the real estate professionals selling that real estate are doing a very poor job (in my opinion). Or it’s so overpriced that there is no actual contingent of normal buyers looking or able to afford it. While the main job for a listing agent or a developer is to sell the house, a large part of doing that task is to get the maximum return for a client, if nine out of ten homes really do sell within 24 hours it appears a lot of money is being left on the table. Note that most cash buyers do not require an appraisal and Realtors aren’t all stupid, someone will look at that stat you mention and suggest to their seller to add 10 or 20% to their next offering to see if some investor bites that lost out on the last tranche. It’s far easier to drop the price once it hits the market than to raise it. Don’t assume that listing prices are market value, they can easily be lower to generate more interest. Market value is whatever someone is willing to pay for something.
Investors with cash are able to move quickly but generally do not overpay what they consider market value, usually they will offer and pay less than someone who intends to live in a property themselves. What they are though is usually knowledgeable about the market, the property, and far less likely to get cold feet during the process or waffle on a minor point or flaw of the property which is a huge plus for a seller. Inventory nationwide is low, but rates are (considered) high-ish at least in recent memory; now is an excellent time to buy, those waiting for rates to drop are going to be competing with even more people when (if) they do and they aren’t going back down to 3% unless there’s another global pandemic or similar. And many “cash investors” don’t actually have cash in their pocket, they borrow it from elsewhere by encumbering other assets (or not and paying a higher rate), when rates go down that becomes even easier for them.
People that complain that they have no time to write an offer before a property goes under contract are people that aren’t seriously looking or have extremely poor representation. Or both. Most any seller will stall a first buyer if there is a chance of another, perhaps better, offer coming in soon thereafter. But if you wait to see something on Zillow or Trulia, then think about it over the weekend, and then reach out to your Realtor on Tuesday to maybe look at in in a few days, yeah, you’re gonna miss that boat. Your Realtor should be taking you to see it the minute it’s available to see or ideally is working their contacts and knows when something that fits your criteria is going to hit the market in advance and pre-scheduling it. And your financing needs to be 1000% in order before you go and look at the first one.
That new development that sold out 24 homes for cash I can virtually guarantee that not all closed with their “original” buyers. There was likely a waiting list of other interested and qualified parties and at least some of the original 24 dropped out during the build process and were replaced by wait-listers. Although if they sold out that quickly then they were underpriced to begin with but more likely the buyers were people on a previous waiting list from that developer’s last phase or similar project. Any good Realtor has contacts within every local developer or at least the major players and knows what projects are coming up for their potential buyer. Those that do a few deals and do a good and fair job with that developer sometimes can gain an inside track vs someone’s cousin that got her license and sells a house or two every couple of years to mainly their own family. The reason there are so many crappy real estate “professionals” is that generally the barriers to entry (and to remain) are very low. Realtors’ biggest complaint is probably that there are so many crappy and low-quality buyers that either have no credit, have already used all their credit on keeping up with the Jones’ instead of planning for their future, or are just too busy on the lake when their dream house comes on the market and then miss out. And then blame them when they don’t get what they want..
It’s like selling your car, put it on Craigslist and the guy that calls immediately, shows up with cash in hand, doesn’t kick the tires too hard, and looks thrilled by it is the one you are going to hand the keys and title to. You aren’t gonna wait for the guy that says he’ll come by in a couple of days and needs to borrow the money from his cousin. Make the price the lowest one on offer and you’ll have more people waiving their money at you, and if it’s a really good deal some will offer you more to get it.
We too own rentals in a couple of states, in every case we purchased them well after they hit the market and always for less than the listing price except for one that we paid over asking but less than we were willing to in order to “win” it. We used reputable local representation that knew the market and the market players and just as important the market players knew them. Yes they are an “investment”, all have increased in value, all generate positive cash flow from rents, but in none of the cases was there any competition from people wanting to purchase them to move in to them. I’m willing to sell any one of them at any time but the price needs to be right). You want it, it’s not going to be cheap, it’s an investment that is paying off (on paper anyway) and when I bought them, someone else made some money off of me, it’s certainly work to keep it all going as Paul and anyone else with tenants can tell you. There is not a single home/house I have looked at or purchased for my own family’s residence or investment purposes since I purchased the first one in 1998 that has not increased in value significantly over that time to today. Sure there were dips along the way but not over the long term. And we played the game with some of them for us to live in ourselves (paid more and/or competed) and it’s always worked out over time.
Housing IS a source of profit. Either for a corporation, or for a mom-and-pop landlord or for an individual homeowner. The only person it is generally not a source of profit for (over the long term) is a renter. The “American Worker” needs to stop feeling entitled and either do something different, learn a new skill, or move somewhere different. This country gives its occupants more opportunities than any other with less barriers than most others, but people also have to go and get it instead. There is no right to be able to afford to live in any one place. Our first home was 38 miles outside of San Francisco where I worked, across a bridge. On a rainy day that was a two hour commute each way. It sucked. But eventually that starting point got us to within walking distance of work, four houses and 10 years later with a value 4.5x that first one.
But without it we’d still be renting and paying more every year. In the end we moved away for good 14 years ago this summer and started over, crucially with our credit intact. That was the best decision we ever made but it is unlikely to be our last move which is fine too (and exciting!). We’ll never be able to move back to California but there are plenty of other places that we like that cost far less that we can make money in as well. We can’t imagine living in one place for our entire lives if we weren’t happy and/or able to afford it. It’s a big country, there’s always a cheaper place to live and opportunities to take advantage of with positive aspects to every place as well.
Wow that’s rather entitled. Move, or work harder or smarter, just pull on those bootstraps people, whether or not you have any, or whether you’ve had the luck or opportunity to provide yourself with the kind of education or a job with the kind 6 figure income needed to buy housing in many areas. Most people just want a decent place to live and to call their own, not an investment, even if it is one. It’s not a business opportunity to them, it’s a home that is becoming far more unattainable thanks to the “business opportunities” being taken advantage of by private equity 0.01 %ers.
I can talk to the Denver market specifically. Our son who moved with a US gov’t job (master’s level) from NY to CO 2 yrs ago rented a 3 br single home in a nice newer development owned by a PE investment group. Their rent was jacked up 500 after just one year. When they found a grossly overpriced house in Golden, on the first day of viewing there were 12 bids, and many cars from CA, at the open house. They were lucky to get it only by making an offer waaay over asking. Our daughter’s house in Applewood has appreciated 400k in 3 yrs. With limited supply the enhanced demand by business investors has gross effects. In some markets 30% of sales are to cash PE buyers. This kind of market is not healthy for anyone.
Most people just want a decent place to live and to call their own, not an investment, even if it is one.
I agree with the first part very fully; it’s a basic human right. And one that the government can and should play a greater role in providing, although not necessarily the ownership part.
Vienna has by far the lowest housing costs of any major city (in terms of percentage of income) due to the fact that 77% of the housing stock is socialized, owned by various agencies/non-profits. That means that even those with inherently modest-paying professions can have the dignity of living in a very decent apartment.
It’s not realistic to expect everyone to have the innate resources to “pull themselves up by the bootstraps” and make the kind of money it takes nowadays. There’s always going to be a huge need for the kind of lower-wage work that provides essential services of all kinds, quite often to those with higher incomes. We cannot all be rich; that’s a simple and obvious reality.
Given the massive problem of housing shortages and high cost, which actually affects lower income folks being priced out of apartments and such, there really is only one solution: more socialized housing, where the profit motive has been stripped away.
I realize that’s not very likely in the US on a major sale, especially as earlier experiments in that often failed (although some turned out to be successful), but if we want to deal with the massive homeless situation as well as provide for some dignity for low wage service workers, I don’t see any other obvious solution.
I feel for my tenants, and I am keeping my rents below market rates because I have more than enough. I have good tenants as a consequence who appreciate that, and that has reduced turnover and eliminated tensions and conflict. I am actually pondering some ideas as to how my rentals might be able to continue doing that after I’m no longer able to care for them (or want to own them). There are some interesting ideas out there that are being used, like community land trusts.
https://en.wikipedia.org/wiki/Community_land_trust
I couldn’t agree more, unfortunately US views towards these things typically differs radically from that of many Europeans, including my own Swedish and Irish relatives. You sound like an awesome landlord (I hate that term) Paul, your tenants are fortunate indeed.
You misunderstand me. My point is that not everyone can afford to live exactly where they want and not everyone is automatically entitled to own a home in whatever location they most prefer, it would be nice if it could be so but it never has been that way and life is not and never has been a fairytale. We moved to Colorado as it was far more affordable than where we were at the time. We started out with absolutely nothing in California and struggled to amass a 5% down payment totaling $11,600 by scrimping, saving, driving beater cars, eating in, not relying on our parents who didn’t have any to give us and bought in a (then) undesirable area realizing and hoping it would not be our “forever” home. And it wasn’t. But it did provide a stepping stone, we worked our asses off, improved the place, and moved to another area that was better but still not great, did the same again, and kept moving. Then eventually we topped out where we realized we could never have what we wanted so decided to get out and start over. If we were doing the same thing today we would perhaps not move to Colorado.
Golden is a highly desirable area, your son apparently wanted to live there and made it happen. Good for him that it was a possibility for him to do so.
12 other people apparently did not think that his house was grossly overpriced…I’m sure he’ll be very happy when the time comes for him to sell it, I doubt he will sell it for a penny less than the highest offer he receives for it, never mind what you think it’s actually “worth”.
I personally would love to live in Manhattan, NY, however I will not be able to attain that, so I live somewhere that I can be happy and I can afford.
Note that I exhibited zero attachment to a particular area and did not rule any place out, we looked at over a dozen cities/regions before deciding where moving to made the most sense.
There are areas in the United States that virtually anyone can still afford. They may not be the most desirable places to live but they can provide a roof and a place to call your own. Today offers far more ways to provide a living to people without going to an office, working for someone else, or being required to live in one particular location over another. The days of lifetime employment at one place are long over.
If people are not open to living any place but their current location and then cannot afford it, then that is on them.
And yes I fully realize there are people that are in ill health, or have no education, or have other issues that are causing a problem, well, that’s on this society as a whole in this country that much of their plight is ignored and I do NOT believe that is right either. I am not speaking of those people, their situation really sucks. But plenty of other able-bodied and intelligent people have closed their minds to do anything other than what they do where they do it and then choose to blame “the system” for their problems. Believe me, I have plenty of complaints about “the system” myself, not everything is working out anywhere near how I would prefer. But, we adapt.
“then it is on them”…
Many cannot just pick up and move whenever they feel like it, or have the kind of jobs that would enable them to do so the way some lucky folks, like our own “kids” for example, may have had. Many may have family they don’t wish to leave behind, caregiving for a parent to provide, closeness to family, so many reasons that are not for us to judge or excuses to begrudge. We live in a sink-or swim society that doesn’t choose to provide support on so many levels, so it often falls to those with few resources.
I’d submit that remaining near family may be a good thing for a society, our very American tendency towards transiency (the highest in the industrialized world), is not always a net positive. Working 2 or 3 jobs in order to get by on the abilities one has to work with also greatly discourages movement. People are often unable to move but they are still entitled to have a decent place to live, regardless of where they may be, by choice or not. There should be decent affordable housing in all communities or help with finding it, unsympathetic nimbys or self-help proseltyizers notwithstanding.
The “American Dream” of the postwar period was an aberration in human history, made possible only by low extraction-cost cheap energy, but we are back to what really was the norm, and the dream is no longer attainable for a vast % of the working class. Even that little 900 sq ft house in Wyoming (the same size as our current small home in upstate NY btw) will remain a pipe dream for many, much less a new car of any kind.
Paul has hit a major sociological, economic and automotive nail square on the head here. It’s pieces like these that keep me coming just as much as the great car stuff. We go deep here at CC. That picture says so much, our current conundrum summed up in 1 photo. Placing much of the onus of the current lamentable housing situation onto those affected, in essence blaming some of the victims, to me shows a marked lack of understanding the plight of many of our fellow citizens
(getting off soapbox now on this topic!)
PS looove ’59 Buicks, GM’s “Forward Look”!
“Placing much of the onus of the current lamentable housing situation onto those affected, in essence blaming some of the victims, to me shows a marked lack of understanding the plight of many of our fellow citizens”
Reread the first part of my last paragraph, you are still misunderstanding me or just choosing to misunderstand, whatever. I think we are in far greater agreement than you believe. There are lots of people that are stuck in bad situations through no direct or self-curable fault of their own. But there are also lots of people that “think” they are stuck and simply refuse to consider anything but that they should be able to do and live exactly where and as they wish no matter their current situation.
I had responded to Evan’s comment which simply doesn’t pass the smell test. Reread that one too. Evan might want to consider loading up his pickup truck and moving somewhat further away from his current location. Sure, driving further to work sucks, renting probably sucks worse (assuming a desire to not rent was the point of his comment).
That little 900sq ft house in Cody is not cheap for what it is, Cody is a tourist town, if the house was fifty miles south of where it is the price would be a fraction thereof. There are PLENTY of places even in Wyoming that have that same house for half, a quarter or less of that price. But perhaps not in Golden, Colorado, granted. And Golden is a screaming bargain compared to Los Gatos, CA and Madison, NJ, my personal preference is Golden but the market apparently doesn’t agree if you compare what people are willing to pay for each of the three places.
I will tell you a recurring sight though – people who complain that they can’t afford the median priced home in this country which is currently at or around $412,000. And they feel that a place they CAN afford is “beneath them”. Yet they roll up and had no problem seemingly affording a new $60,000+ pickup or Chevy Tahoe. THOSE are the people i have a hard time feeling sorry for, not the guy band-aiding his Lumina to get his kids to school during his break at his first job of the day. The system here works on building equity and eventually trading up, it wasn’t my generation that started that concept. A renter of a condo is often unwilling to purchase an equivalent condo to start with, instead they often want to move directly into the 4bedroom dream house with 3car garage but can’t afford it and then complain about it.
The usual idea that Buick was second to Cadillac isn’t generally true. From 1935 to 1954 or so, Buick had its own parallel hierarchy, spanning from upper Pontiac to lower Cadillac. After 1955 Buick was mostly below Olds in the hierarchy, except for the top Limited models.
If I remember well from my Buick book (I don´t have it at hand), under Harlow Curtice (I think by the early 40s) tried to have a line of custom built cars by Brunn, and he’d be driven in a Buick, not a Cadillac. I think I remember HQ vetoed the customs, He was later GM’s boss, but that was around the time you mention-
Wow, fascinating, if dispiriting. Access to housing is such a basic need, even if, at minimum, if you want a functioning decent society.
It’s been not only quite similar in Australia – and no, I’m not the one who asked the Buick question, let’s call him, say, “Peter Wilding”, for the sake of argument – but even worse. Lots of factors here mean that today, in a very broad sense, median wages are higher than the US, at (supposedly) AUD$94K currently, with taxes a bit higher, but no medical (universal free coverage) and for nearly 40 years now, compulsory employer contrib to retirement of 10% (the last leading to a huge $3.5 trillion pool of money available to retirees to buy kid’s houses, etc). All very well, but years of poor policymaking in housing (both sides, long story) has resulted in the national average median house being close to $800K! Good god, there’s only 26 million of us here at the bottom of the world, not 320 mill smack bang in the action like the US! In Melbourne, 10 times the median wage will get you something most ordinary indeed for its $1million median. The figures are madness, and quite how anyone gets any sort of new car as well (and they do) is beyond me.
Actually, when Pete – I mean, the anonymous Australian guy, sorry – asked about the Buick, I get it. Back then, houses may well have been cheaper like they were in America, but the economy was essentially closed, cars pricey, and Aussies just didn’t do credit; it’s not until we became super-rich in the last 25 years that it seems folk are quite happy to drown in it.
I turn 60 this year and what I have seen over the last 40+ years is the concerted attack on workers and small businesses. We have market domination by a couple of corporations, companies that more often than not don’t pay any taxes at all. That means the money needed to maintain a city comes directly from tax payers, half of whom are a paycheque from homelessness. It is almost impossible for a small business to compete with a giants like Amazon and Walmart. Yes, he have some lower prices due to this but we have also seen declining wages, so it is a wash.
Here in Canada, various governments have given corporations massive tax cuts, which are then downloaded onto the working poor. On top of that, the corporate propaganda has been decrying unions for decades. The 1950s saw a peak of union membership, along with better pay and working conditions. The media that should be reporting this kind of inequality is also corporate owned so it remains largely silent, while at the same time worshiping the rich. Heck, they even buy media outlets to spread their propaganda, which is eagerly lapped up by people making scarcely more than minimum wage.
The way out of this is complicated. In my opinion, companies like Amazon are too large an powerful and need to be broken up, like AT&T was broken up in 1984. That made telecoms much more competitive and gave lower prices for consumers. How people respond to corporate media is also hard to change because the influencers the corporate media employ. Even governments run propaganda operations. The province of Alberta spent C$22m in 2023 to shill for the oil industry, complete with anti-EV propaganda.
I could go on for hours about this and provide numerous examples but suffice to say inequality is causing major social problems and hopelessness, evidenced by the massive amount of homelessness in North America, which in my opinion is a scandal all of its own.
I recommend you read The Shock Doctrine by Naomi Klein. She outlines how western oligarchs use global-scaled crisis, to transfer wealth upwards. 9/11, the Economic Crisis of 2008, the Pandemic. Walmart and Amazon, made billions more in additional revenue, during the pandemic. As you indicated: small business, the working class, and middle class, were hurt the most. Julian Assange and Wikileaks, providing evidence to support this. Corporate media, used as a firewall, to support the narrative.
Note how our corporate, American owned media has ramped up influencer hatred towards the CBC, and how PP says he’ll abolish the CBC.
Poilievre, trying to appear populist, to get elected. When he’s a corporatist. As is Trudeau. I recall PP hurting the poorest seniors, as Minister of Employment and Social Development, under Harper. Unfortunately, both major parties are corporate-controlled.
10 minute misconduct for the both of you….
Old cars good.
Politics bad.
Relax! A brief pocket between two Canadians.
Lots of uncertainty for average Canadians. And people around the world.
Only chance I get to communicate with Canucknucklehead.
I post about cars, almost daily here, for ages.
Hope to support Paul’s site!
I’ll get back to talking cars, in the meantime. 🙂
(Re)tiredoldmechanic is right. It’s not welcome here.
Paul, with all due respect (and I do mean it), this article begs asking certain questions. This is your site and you make the rules so I’ll be terse and say it’s becoming very hard not to ask those questions, questions which would have been within the realm of wild-eyed conspiracy theory only 10 years ago. I see similar developments here in Austria (a very different place from the one you left, believe me); that the kind of Gleichschaltung described above, now visible all across the Western world, is not coincidental should be clear to any reasonable person.
But I’ll leave it at that.
I recommend this by HG Wells, from 1928:
https://ia601600.us.archive.org/13/items/22664022HGWellsTheOpenConspiracy/22664022-H-G-Wells-The-Open-Conspiracy.pdf
That is an excellent book, highly recommended. Not very popular with the predatory capitalist types however, making it all the better.
My grandparents had a similar house and a Buick during that same time period. I’m not sure if this was common, but they had one car for everyone to share.
My family didn’t have two cars until 1972. That was when my parents bought our neighbor’s low-mileage, mint condition 1967 Oldsmobile Delmont 88 Holiday sedan, and kept our 1965 Chevrolet Bel Air station wagon.
We lived in a new subdivision, and we weren’t the last family in the neighborhood to become a two-car family.
My family got a second car in 1973, a used 1970 Toyota Corona, for my mom. This was her requirement for moving to Montreal. My brother got his licence in 1974 and proceeded to destroy it.
Both my mother and father grew up in the Bronx and Manhattan. howevere, in 1957 they were living someplace where it was a long drive up a mountain with no public transportation. My mother wouldn’t tolerant that and insisted on driving lessons. Moving to New Jersey, in 1958, she got her wish for lessons. The first teacher was my father and those lessons didn’t go well. Go figure! Then a family friend stepped in and she got her license. By 1960 she had a new 1960 Comet station wagon, I hung out the back window, while my father had a company car from the Carnation Milk Co.
Our first 2nd car in Towson was an oil-burning black 1950 stovebolt Chevy 6 with PowerGlide (Mom couldn’t shift) in 1961. Within less than a year a year the head cracked, and this just about a week after the back door flew open going around the corner at the intersection of York, Joppa, and Delaney Valley roads, right in front of “Jimmy’s Cab” stand, causing my 3 yr old brother, standing on the back seat, to roll out into the middle of the road near it’s busiest around 4PM. The car following us stopped immediately and the alert driver scooped up my brother, who was none the worse for wear, and in the process probably saved his life. Mom was hysterical, while I thought it was highly entertaining. The following week that heap was traded in on a new ’62 Fairlane 500.
“Car ownership has actually gotten cheaper,”
Of course it was. However, I don’t believe anyone should use 2020-2021 as a benchmark,because the economy was locked down, and interest rates and inflation were at record lows after four years of strong economic growth that suddenly ended. Many auto manufacturers were praying for any auto sales and the prices of gasoline and general maintenance was rock bottom.
Remember that the situation was so unusual, auto insurance companies actually sent out refunds because the number of miles driven had plummeted so fast and and fallen so low.
Those two years aren’t normal.
brilliant article. Now I can explain all of this to my son and daughter, who have been wondering what happened while they were growing up.
Thank you, Paul
In summary, people had more modest wants and needs. Those wants and needs were provided predominantly by the other Americans working in the US. Many more Americans lived in conventional families–two biological parents with their 2.x kid, though families with 4,5,6, even 8 kids were not unheard of. (Divorce is very expensive).
People didn’t travel nearly as much; my sense is that families ate out less. They had to pay their taxes, mortgage/rent, car, utilites/clothes. Nice cars didn’t have to compete with cellphones, computers, swimming pools, bigger house, college tuition, health care, etc.
In general, most Americans earned enough to be able to live a decent life, raise a family, often on ONE one income.
That was the golden era, 1948-63. Starting in the the mid-1960s, many factors, mostly internal, but also external, disturbed this nice balance.
Internally, the US government tried to have both guns and butter, leading to inflation. And taking on more and more individual debt (longer car loans, charge accounts) became acceptable. Corporate America and the media encouraged consumption, a lot of it excess–buying stuff one didn’t need to impress people one didn’t know. More “wants” became “needs”, a pattern that would last another 50 years.
Externally, the 1940s/50s rubble of post-war Germany and Japan was replaced with new factories, newer than the US and often better, making better products for less with cheaper labor. Free trade was harsh. The Japanese dumped color TVs (sold them for less in the US than in Japan) and took out the TV industry. Good for consumers, bad for US TV manufacturers and their workers. That pattern repeated all over.
So slowly, middle Americans began getting squeezed–by these techtonic shifts, and often THEIR own choices. Plus they wanteed/needed more and more stuff their parents and grandparents did not.
Plus they lived longer (good, thanks to better, and more costly, medical). That increased the size of health care and introduced a new, important, but very expensive (and still growing) “product”.
More people went to college. College tuition skyrocketed.
So, as people wanted/needed more stuff, many of the better manufacturing jobs that paid relatively well (though many were difficult, monotonous, even dangerous and dirty) vanished.
People want ‘more stuff’ but have ‘less money’. Even though families are smaller. People I know just MUST buy their 18, 17, or even SIXTEEN year old a late model, or new car.
The gap between what many people want and what they can afford today is probably as big as it’s ever been.
One big positive–the air and water are a lot cleaner now than they were in 1930-70.
My son will get his license March 2025 and the school he goes to has just what you talk about. All drive fairly new cars except one girl who drives a 77 Corvette. I know because the Corvette was her brothers, who is a patient, and now out of school he finds the gas mileage doesn’t make sense for commutes. My son? He’ll drive a 98 Sable wagon to school when needed. How cool is that!?
Just saw this analysis this morning (8:15am here). Thanks for this, Paul.
While we ‘knew’ Americans were ‘rich’, I had no idea the situation was so very different to my own country, nor that the Buick cost so little more then the Chevy. Don’t think ol’ Sloanie would have liked that!
My grandparents (of Prussian/German descent) sold the farm in ’48 and built a house about the size of that one, but with a much nicer garden. Roses everywhere, and the back yard was all fruit trees and vegetables. Many happy memories. Grandpa may have kept the ’25 Chevy tourer for a while (I don’t remember it), but Auntie Merle (who lived with them) drove a Standard Eight tourer, replaced in ’56 by an Austin A30, their first sedan.
Definitely not Buick people. Not even Holden people.
Meant to show pic. My grandparents car ca. 1948. (net photo)
No Buick!
Many Canadians, were like my dad. He had a decent job as a Master Warrant Officer in the Canadian Forces. But only drove a 1960 VW Bus, a Chevy II, and a 1969 Ford Ranch Wagon through the 1960’s and early 1970’s. As our higher taxes, supported our strong social safety net.
Tommy Douglas, the father of universal health care in Canada, was voted the greatest Canadian ever in a CBC national poll. That’s how much Canadians valued our Medicare for all.
Bankruptcy due to medical expenses, unheard of in Canada.
Funny; I didn’t see any comments from anyone who lives in or knows Wyoming.
Jim, from Fort Collins, knows it well but we did not hear from him. I live in Cheyenne and know Wyoming well.
Cody is not just an anywhere town like Grand Island or Indianapolis or Jefferson City or wherever. It is also not like the rest of Wyoming – to include more ordinary (but larger) places like Casper, Cheyenne or Gillette. After Jackson (where the Cowboy State Daily in April reported that the average home price was $7M), Cody is now the strongest real estate market in Wyoming. It is the eastern gateway to Yellowstone and is a very desirable place to live. If you don’t buy that house for $310K today someone else will do so tomorrow for $400K.
People want to live in Wyoming and most especially in northwest Wyoming. Not only does the area have spectacular beauty, great hunting/fishing/skiing and snob exclusivity, but the state has no state income tax, has strict enforcement of laws and the right to carry and is very encouraging to business. It is safe to live here and we are not burdened by too much government. So it is desirable and the price of real estate, especially in the northwest but also around Sheridan, reflects this.
It is unreasonable to compare the current price of an ordinary and obsolete house in Cody to any other economic measure elsewhere in the country. Cody and NW Wyoming are exceptional and very different from anyplace else in the country. That was not the case for Cody and Jackson back in 1959 when that Buick was new but things have changed. Compare that Buick’s price to real estate in Flint for a completely different picture.
It is unreasonable to compare the current price of an ordinary and obsolete house in Cody to any other economic measure elsewhere in the country. Cody and NW Wyoming are exceptional and very different from anyplace else in the country.
Did you miss where I wrote that the median price of a house in the US is now $420k? That makes Cody look cheap.
This 1046 sq.ft. house built in 1951 a few blocks from mine just sold for $461k. And it’s kitchen is largely original too.
https://www.zillow.com/homedetails/1945-Friendly-St-Eugene-OR-97405/48411069_zpid/
Of course there’s areas of the country where prices are much lower. “Location, location, location”.
Very interesting read all around. One big challenge is in the larger older metros there isn’t a ton of room to build new houses (at least single family). This artificially inflates the price of older housing and makes what little new housing there is very expensive.
The income data was interesting. I guess real family income is higher now but fewer women worked so one more income families.
This is a wonderful article. I was born in 1963, the fifth of five kids. Two had moved out. Mom never drove. Dad worked as an engineer at North American Aviation in Columbus Ohio. The first car I remember was his slick maroon Buick Invicta convertible.
I don’t what the home cost new, but they sold it in 1970 for $32000. From that home we went to a new custom built ranch, and from that 62 Buick came a 67 LeSsbre 400 convertible. It was stolen off the driveway. Then dad moved to a 1970 Cadillac Calais coupe and left NAA.
I asked one time why GM and he said that GM owned NAA. So maybe some kind of discount?
Anyway, it helps me understand where we’ve come from
The American Postwar Period (1945-1970)
was never the NORM.
If you bought everything with silver in 1960 and now, most things actually cost the same.
We had a surplus in 1964, not a debt.
Vietnam and worldwide military presence squandered most of it
Welfare and food stamps get the blame from most wealthy flag wavers, but the amounts pale in comparison to the military’s.
(I’m no liberal, I admit those programs failed)
Very interesting article. From the PoV of someone who grew up in Israel and now lives in Austria, it was never thus back in the day; in fact it was not unlike what the Aussie commentators described above: cars were expensive and houses (relatively) cheap, and nobody took huge loans because it was not needed. Then things started developing similarly to the US with the financial crisis of 2008 bringing in big investors who got burnt on the stock exchanges and looked for a safer avenues to invest their capital in. On or about the same time leasing was “invented” so that people had a path to getting a car about 2 segments above what they’d have purchased in the 50s-00s.
Currently however – at least in Austria – the market is in a slump due to our high inflation and interest rates, so you see a lot of flats and houses advertised for months with no takers and then comes a price reduction, which I’m not complaining about, as I’m looking at a property with a garage for my hobby. And there’s a huge difference between what you’d pay in say Vienna and Lower Austria, particularly if you’re prepared to move to the sticks. Am surprised there has not been a bigger move out of the cities given remote work, but again I won’t complain! Israel is, of course, Israel so even with the war prices have not yet dropped as one would expect – unless you live next to the border but that’s obvious.
Corporate buyers, VRBO, Air BNB and the like have certainly made housing more competitive and difficult for the individual buyer.
But homes, and cars, have both changed as well. We expect them to do much more then they did – homes are larger, and have more features that require replacement and maintenance. That 1954 house likely did without AC, and the clothes dryer was a line in the backyard.
The Buick was the same big metal tub that wore Chevrolet badging. You got a more robust engine with the Buick badge, and a well equipped car in 1960 had an automatic, heater, and radio. On a deluxe Chevy like the Impala, figure another option, maybe power steering. The Buick buyer probably went for power steering and brakes.
What is the most comparable car today to a 1960 full size car? A base Camry is probably close in some respects, but it doesn’t offer near the basic hauling utility.
Whatever modern vehicle you choose, you are going to have a lot of expensive to buy and repair features – truly overwhelming for a lot of people.
It’s getting harder to compare today with 1960, just as it was hard to compare 1960 with 1896. What was normal is no longer reality.
Yes. IMO, however, 1960 is a much closer to 2024 than it was to 1896.
A new 2025 Camry LE Hybrid (they are all hybrids) costs $30,000 today, gets 50mpg, has everything one requires for comfort and convenience as standard equipment and is likely to last 200,000 miles or more with extremely minimal maintenance and very possibly zero actual “repair” costs and then is likely to still be worth at least 20% of its initial cost. Overall it’s almost certainly FAR better than a 1959 Buick from a cost, maintenance, repair, and resale standpoint. Or any Buick sedan ever made, for that matter. Maybe the Buick could tow a trailer once a year, eh, that doesn’t seem to bother the 300,000 or so people that still buy a Camry every year.
All 100% true, except the Buick looks cool and the Camry, and most cars now, look like crap. The price we pay for function.
My wife and I drove to Cody in ’94.
We jumped off cliffs just outside town into the Shoshone River, near a big dam. At 30 foot high you hit the water fast enough to sting your feet. I put my shoes on after awhile.
Then toured Yellowstone, with all of the wonder of nature and yadda yadda yadda.
At a grocery store in town we saw an immaculate ’57 Chevy convertible, top down, keys in the ignition.
I thought that we’d never see that at home in northwest Indiana.
Then I noticed the Indiana plate with the same prefix as ours. Highland/Hammond area. So it went all the way there starting probably just a few miles from our house.
Small world.
On the way there along US80 we kept seeing a lot of the same motorcycles on their way to Sturgis (It was August and they were doing all that bike-y stuff)
One homemade -looking bike with an out-of-round front rim kept pace with us most of the trip. Dude looked like an extra from “Easy Rider” and this was in ’94.
Good memories.
My parents bought a home a couple years before I was born, let’s just say in the mid ’70s. It was not new, not fancy, not large, but it had all that a family with 2 kids needed. The yard of that home is bigger than my yard now, which is another bonus of those older homes. Beck in those days, my dad worked for a grocery store, my mom worked at a restaurant, and they were able to afford the home and 2 modest cars. My aunt and uncle lived – literally – right down the street, uncle worked at an ag equipment manufacturing plant and they also lived a modest but good life. The reality of today, regardless of the reason, is that housing costs are out of reach for an awful lot of families now. A couple would not be able to own a home in most American cities today working at a grocery store and a restaurant. The wages have not kept pace with inflation, and the housing prices, especially since the pandemic, have gotten outrageous. I predict we’ll see a massive homeless explosion within the next few years if something doesn’t happen to correct it.
Very interesting read, including the comments. In 1959, I was 5 years old. I was a very smart kid, and I paid attention to things around me but didn’t concern me. My parents moved to Southern California in 1958. In 59, they bought their first house in California. The San Fernando Valley to be more exact. To be precise, the house was in West Van Nuys, almost Reseda. They paid $12,950 for it. We lived in that house for 16 years and sold it in 1975 for $49,000. We moved to Northridge, an upscale area of the north valley. They paid $75,000 for a beautiful big house, on a 1/3 acre corner lot. It had a beautiful big pool shaped like a lake with rock trim and a waterfall. The house was built in 57 and sold for around $30,000. After my parents passed in the early 2000s, the same house was appraised at $950,000. We had friends in the local real estate business that it was the realtors themselves that raised the value of the homes each time a house in the neighborhood was sold. There was no way that house was worth $950K. In 1976, they bought a new Lincoln Town Car. The MSRP for that Lincoln was $11,995. In 1990, they bought a new Lincoln Town Car Signature Series and it’s MSRP was $31,000. Everyone knows that the price of houses in Southern California are off the charts higher than most anywhere in the US, save for New York City, Chicago and San Francisco. Actually everything is more expensive in Southern California, cars, food, clothing, you name it. I retired from the IBM Corporation in 2005, with an annual gross salary of $495,000, plus commissions. I was living in a beautiful big Town House in Chatsworth that I paid $150,000 for in 1995. I sold it for $450,000 in 2007. My family was wealthy. My brother and sister were both doctors, and my middle brother was also an IBMer, so we were living large. Even with our high incomes, we knew we would never be able to buy our properties at the current prices. California is a beautiful state, the weather is perfect and better than most places in the country so paying more to live here is worth paying a premium for. But read the papers, people are running out of California, at a rate of 500,000 a year. The main reason, the over the top price of living. People are finally getting tired of it, and they realize the rest of the country cost of living is much lower. But as this article points out, the feeing Californians are raising costs in Wyoming, Montana and Idaho. Even with all these people leaving California, it’s still really crowded here. The point of my post is to say the examples given in this article do not apply to California.