In 2009, the median home price was $220,900, according to the Federal Reserve, and a new car cost an average of $23,276, according to the Energy Department. Had prices increased at the rate of the consumer-price index, the average house would cost $322,000 today and a car would cost $34,000. Instead, the Fed reports an average house goes for $412,000 today, and a typical new car is $48,000, according to Kelley Blue Book.
The national going rate for a babysitter 15 years ago was $10.50 an hour, according to Care.com. Now it’s $18.38, 20% more than if the cost had tracked the consumer-price index.
Budget-conscious HENRYs tell me it’s often hard to find midtier options in, well, anything, as companies push luxury versions of everything from high-end water bottles to $1,000-a-night hotel rooms.
File under: “Not only do things not cost what they used to, they don’t cost what they’re ‘supposed’ to cost now.”
And I’ve commented on the last paragraph to the Mrs. for about 5-10 years now: Business pricing strategy has all but eliminated the ‘middle option’ for anything from home supplies, to cars, to pencils. You either go with uber cheap from China, or you go for super high-end (which in many cases, still isn’t that good - you’ve just paid for the feeling of premium without the actual premium; like the $425 pair of Bose headphones I splurged on 3 years ago that starting tattering after a year-and-a-half of gentle use at the office).
My takeaways: Be happy with less and what really matters, be resourceful, and stand on the sidelines long enough so supply-side gets the signal.
UPDATE 11 Oct 2024: In related news, WSJ reports today, “After Years of Increases, Companies Are Rolling Back Prices” via @WSJ