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re: Wall Street Journal - 100k not enough anymore for home ownership
Posted on 10/16/19 at 3:38 pm to frankthetank
Posted on 10/16/19 at 3:38 pm to frankthetank
I do but the explanation makes no sense.
0
Posted on 10/16/19 at 3:48 pm to baldona
quote:
I'll agree to disagree. I think there are more then you think, they are just not in neighborhoods you'd consider desirable for people that make $100k or more so most just don't even look.
Yes, we will have to agree to disagree.
The market develops a huge surplus of 3-4 bed, 2-3 bath, 2.5-3k sq ft McMansions over the last 20 years, then the market criticizes lower income potential home owners for not buying 1-1.5k sq ft starter home that literally doesn’t exist.
Posted on 10/16/19 at 3:50 pm to deeprig9
quote:Exactly!
If a 3 bed 2 bath 1950's ranch fixer-upper "starter home" comes on the market, it gets snatched up by a REIT for rental, or a developer who bulldozes to build a $500k house on the lot.
Except where I live, it's $1.4mm rather than $500k.
We bought a nice, little 1,500 sq ft townhouse for $500k a few years ago. It's everything we need right now (although I would love a yard for my dog). But we don't buy things we don't need. I know a lot of people in my area who either commute 1.5 hours each way to work (where they can afford a single-family home) or purchased a home they can barely afford. In my ZIP code (22180), it seems there is only townhouses for $450k - $650k or SFHs for $1.2mm+.
It is what it is... I choose to live here for a variety of reasons. But I didn't realize this was also happening across middle America. I imagine it's more difficult where salaries aren't high as they are in my area.
This post was edited on 10/16/19 at 3:55 pm
Posted on 10/16/19 at 4:13 pm to thegreatboudini
quote:
To be fair, a 1500 sq ft starter home is hard to come by
Yes, my first home was a starter home in BR around 1,400 square feet. I went cheap thinking I was saving all kinds of money and making a wise financial choice. Ended up being in area going downhill quick. There was a reason it was affordable in BR.
I love when people talk about starter homes in BR like they are everywhere and in great locations for reasonable prices. Anywhere you would feel safe in BR and your investment will be protected is pricey.
Unless you want to move to the burbs or outskirts but then you have to foot bill for traffic (time) and gas and car.
This post was edited on 10/16/19 at 4:14 pm
Posted on 10/16/19 at 4:25 pm to bayoubengals88
I can believe it. Hell I am looking at forking out $1335/month for family health care plan at my new employer... less than 10 employees
If I had a mortgage on top of that it certainly would not be doable on less than $100k income. By the time you pay insurances, food, utilities etc it really adds up. Hell the average cable/phone/internet package can equal a nice car note.
If I had a mortgage on top of that it certainly would not be doable on less than $100k income. By the time you pay insurances, food, utilities etc it really adds up. Hell the average cable/phone/internet package can equal a nice car note.
Posted on 10/16/19 at 4:49 pm to bayoudude
can someone explain to me how generally ppl say "economy doing great" and then in the next breath they say "but no one care afford a home"
I'm curious.i like pure facts and feel like one side out here lying
I'm curious.i like pure facts and feel like one side out here lying
Posted on 10/16/19 at 5:06 pm to baldona
quote:
Nashville, Dallas, Houston, Atlanta, etc all have 1500 ft starter homes in less then highly sought after neighborhoods for reasonable prices. You have to simply give something up. That's a slightly underwhelming school for your kids, slightly longer drive, not as nice neighborhood, etc.
Speaking for DFW, this is absolutely correct. Most desirable area 1500 sq ft homes are probably $300-350K, but those figures could drop closely to $200K as you move into less desirable areas of town.
The 'city' spans from as far north as Prosper, west to Fort Worth, south to DeSoto, and at least as far east as McKinney. Driving that circle might take 4+ hours
Just Prosper to downtown on the DNT can be north of an hour and that's a straight shot driving 80 mph the entire way. All of that to say: Of course there are areas that are comfortably affordable for someone making $100K. Richardson is a great example of a place that 'meets in the middle' - pretty good area, close enough to the city, a lot of older homes but prices that are more manageable. I see it as a great option for someone that doesn't want to be too far from the city. Otherwise, Frisco is as good as anything in the US from a suburbia POV.
This post was edited on 10/16/19 at 5:09 pm
Posted on 10/16/19 at 6:50 pm to lynxcat
I could live like a King in LC on a buck-twenty a year.
Posted on 10/16/19 at 8:23 pm to southernelite
I live in Nashville. If you want a reasonably nice 1500 square foot house for 250,000, in a neighborhood where you won’t get shot, your commute to the city will be about 40 minutes each way. Not the end of the world, but it’s a sacrifice.
This would be Kingston Springs, Madison, maybe the tail end of Bellevue.
This would be Kingston Springs, Madison, maybe the tail end of Bellevue.
This post was edited on 10/16/19 at 8:25 pm
Posted on 10/16/19 at 9:09 pm to LSUtoOmaha
I think what the article fails to address is that if you make over 100,000 with little to no debt then you certainly could afford a home from 300,000-500,000. More than that, probably not. But who could argue with no student loan or car debt that a $2,300 mortgage isn’t conceivable for someone making 100,000 - 150,000 a year?
Posted on 10/16/19 at 11:17 pm to thegreatboudini
quote:
This is impressive, and I commend you, but this is just not the norm for people living in regions with legitimate jobs and growth potential.
I should have added in live in north La
Posted on 10/17/19 at 2:37 pm to Mr Perfect
quote:
can someone explain to me how generally ppl say "economy doing great" and then in the next breath they say "but no one care afford a home"
I'm curious.i like pure facts and feel like one side out here lying
Good 'ole Baw likes whiskey. Good 'ole Baw works as a welder. Good 'ole Baw takes a job with a 20% raise, but bourbon becomes illegal. Single malt scotch becomes the only whiskey on the market. Good 'ole Baw has a much better life, but can't afford to drink whiskey anymore.
Two things can be true at once.
Posted on 10/17/19 at 6:16 pm to Paul Allen
quote:
$2,300 mortgage isn’t conceivable for someone making 100,000 - 150,000 a year?
It would be upwards of 40% of take home pay after taxes/insurance/retirement (assuming this is a family man). Not something I’d want to do, but it’s possible even with a small car note. Won’t be much wiggle room though.
Posted on 10/17/19 at 6:21 pm to notsince98
quote:
Unfortunately I belive it is true. Too many have crazy student debt, at least 2 car loans, $300/month cell phone bills, $900/month eating out bills, etc.
It takes discipline to own a home on $100k these days compared to what most are doing.
Agree. I've never had a car note. My cell phone is $30 a month, no reason to spend more.
Student loan debt is a mixed bag. Not all states make public universities affordable (look up in state tuition at Penn State or Michigan).
Health insurance is a major drag on family budgets. But you can join a sharing ministry.
Posted on 10/18/19 at 10:52 am to Paul Allen
quote:
But who could argue with no student loan or car debt that a $2,300 mortgage isn’t conceivable for someone making 100,000 - 150,000 a year?
Better hope your "affordable" starter home doesn't need a roof, AC system, etc replaced or you'll be going into debt.
In my 18 months of home ownership, I've had to replace the washer, dryer and now I just had to get quotes for a new downstairs AC system. The "cheap" option is 6k. The roof will also need to be replaced sometime in the next couple of years and that will be 10k+
I'm not salty about it because the property value has absolutely skyrocketed since we purchased, but being able to afford the monthly mortgage payment is only part of being able to afford the house. Especially if you're going with an older "starter" home that likely wasn't kept up with as well as a nicer or newer house.
Posted on 10/18/19 at 11:02 am to deeprig9
quote:
If a 3 bed 2 bath 1950's ranch fixer-upper "starter home" comes on the market, it gets snatched up by a REIT for rental, or a developer who bulldozes to build a $500k house on the lot.
In my area, that fixer-upper is also going for $350k, with a lot of work still being needed if it doesn't get snatched up immediately.
Posted on 10/18/19 at 1:47 pm to Mr Perfect
quote:
can someone explain to me how generally ppl say "economy doing great" and then in the next breath they say "but no one care afford a home"
I'm curious.i like pure facts and feel like one side out here lying
Economy doing great = higher house prices
House prices are just a reflection of the incomes of people who live in that area and their willingness to take on extra risk. When times are good, not only do people have more income but they feel more confident in the future - so as a group they are willing to pay more for housing.
Edit: It is the same case for all assets that have a limited supply. The stock market, commercial real estate, etc.
This post was edited on 10/18/19 at 1:49 pm
Posted on 10/18/19 at 2:24 pm to CivilTiger83
ok thanks to all the dudes who explained it to me
Posted on 10/21/19 at 8:51 pm to Paul Allen
quote:It is certainly conceivable.
But who could argue with no student loan or car debt that a $2,300 mortgage isn’t conceivable for someone making 100,000 - 150,000 a year?
Posted on 10/22/19 at 4:32 pm to bayoubengals88
25 years ago I bought my first house for $85K making 27k. it was what I could afford and was perfect size for a kid out of college. 25 years later, I still have that house, its paid for, is worth twice that and has been a rental for the past 20 years, making $1350/mo.
That article is complete shite.
That article is complete shite.
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