Real estate blogger John takes a look at the latest wage numbers and concludes that Boston’s housing is expensive “[b]ecause people make a lot of money, and are willing to spend a lot of money.”
True enough, and I think - and have written as much - that critics of the high prices tend to overlook the demand side of things. But of course, part of the gripes come because of sectoral wage directions. If the average (or median) wage goes up for the city but your wage stays more or less stagnant, that doesn’t do you a lot of good. In fact, you’ll tend to get priced out of the running. It’s a problem facing municipal workers, though some have good unions on their side, and it’s definitely a problem facing those in nonprofit or in whatever slice of the culture industry Boston has.
And, too, there’s the distribution of wages across the area. More wealthy and comfortably-well-off people are deciding to live in the city, relative to their counterparts five, ten, fifteen years ago. The Bureau of Labor Statistics has this fun custom-chart feature where you can look not only by Metro area but by county. Here’s the average wage in Suffolk County:
Year Annual Avg. Salary
1997 $44,425
1998 $47,062
1999 $50,820
2000 $56,699
2001 $58,906
2002 $58,253
2003 $59,972
2004 $66,321
That’s a 6 percent increase per year on average, compared to 4.5%/year statewide, with a hefty hike recently of over 10 percent. So yes, the wages in Boston are pushing up housing prices. But the wage distribution across the area also means people who used to live in the city are being displaced in a fairly short span of time.
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