Posts Tagged ‘cost of living’

While rereading letters dated early 1968 from California to my New Zealand parents, I discovered a conversation about the cost of housing and the cost of living generally. If you’ve seen the current astronomical real estate prices in the San Francisco Bay Area you will be mind-boggled at the numbers. For that matter, housing prices have also risen dramatically in New Zealand cities. (To take inflation into account, multiply the US 1968 numbers by 7.2)

The conversation started with mention that friends in the apartment complex where we lived had bought a house.

2 Jan. 1968
On Sunday we spent the afternoon at the J___s’ new house – they have managed to acquire a lovely rural acre running down to a creek – we are very envious.

26 Jan. 1968
You asked about the price of housing. Well, the J___s got theirs extremely cheaply, because of some easements on the property – power lines restrict building on one corner, and a road may possibly go down the side of it. Normally such a place would go for between $45,000 and $50,000 – they got it for under $35,000. Housing is generally pretty expensive here. If you want a genuine or potential slum you only have to pay about $18,000, but the vast majority of ordinary middle class suburban houses – about equivalent to the typical NZ suburban house – come in the range $22,000 to $28,000. New houses in this area, that is, the west side of the [Santa Clara] valley, are all $35,000 and up. Down payment is between 10%–25%. Which puts us out of the housing market for some time.

Just for comparison, what would an equivalent house in NZ cost now? The outer suburbs of Auckland or Wellington, for instance. It would also be interesting to compare costs of living – could you find out for me how much it would cost per week to keep house for a family like ours, for instance?

27 Feb. 1968
Thank you for the list of prices etc. Costs certainly seem to be fairly high. Your power bill is about the same as ours, and so is the telephone. Houses in NZ seem to be about half our price, but rents considerably lower – we are paying $160 a month, or $40 a week, and this is pretty reasonable for this area. To get a house we would have to pay $225 or more.

A 1968 grocery ad from the archives of the San Luis Obispo Tribune.

Your food bill is certainly much cheaper than mine. I have $40 a week for housekeeping, of which about $20 goes on groceries, $4 on fruit and vegetables, $5 on meat (and this is pretty frugal – we practically never eat steak, for instance. In fact, our standard of living hasn’t changed much from what it was in England.) The rest goes on miscellaneous sundries – sewing notions [I sewed all my own and the children’s clothes], postage, haircuts – at $3 a go for an ordinary cut it’s just well I don’t go in for sets, perms, etc., and the boys’ hair I cut myself.

…This seems to be turning into a grouch about costs, which is not really fair, as salary levels are comparably higher. At present we are managing to save about 10% of Tony’s salary, which is better than we have ever done.   

Those new houses in Cupertino that in 1968 were selling for $35,000 are now listed at over $2,000,000. That’s eight times the inflation rate. Economists might say that’s the law of supply and demand.