Real Estate market in your area ?

[The Critic]

Originally Posted By: Cristobal
Of course, all the public employees in California make over that amount, even the lowliest clerk. I cannot say more or this conversation will get too political.


That simply isn't true. All of the government employees I worked with, had salaries between 40-75k. Department supervisors were at about 90k, and the few high-level managers were at about 110k.

However, the salaries in higher education (as expected) are much higher, but even then the number of individuals earning over 100k are far and few.

 

[The Critic]

Originally Posted By: daves87rs
Very interesting way to put that....


Is that the best response you can come up with? I guess it's better than the one or two word replies you have been making lately.

 

[xxch4osxx]

Originally Posted By: CATERHAM
Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?

It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.
It must be nice to make that much combined!

 

[greenaccord02]

It's been pretty stable in my area. Hasn't gone up or down much in a few years.

 

[HTSS_TR]

I think the houses price in Turtle-Rock of Irvine did not drop much from 2006 because of the University High School, it is 1 of the best high school of Orange County, some families in Newport Beach tried some tricks to get their children to attend this school, some as far away as San Diego rents apartments next to school to have their children have an education here.

Also, it is next to University California Irvine, so that it is very convenience to go to.

One house stand out in the list, its square footage is only 1830 sq-ft sold for $1.060 mil in 15 days, $35k more than asking price of $1.025 mil.

I don't know how people afford $800k or $1 million plus houses, but I know some who bought their houses since 70's for around $70-75k and paid off mortgage long time ago. They just don't want to move elsewhere and are retiring at their current houses. That how they drive beat up cars, 15-20 years old, and live in million dollar houses. But then you may see some rather expensive cars driving around, Porsche Panamera 4-dr or 911 and few Lamborghini and Ferrari too.

 

[PandaBear]

Originally Posted By: HTSS_TR
I don't know how people afford $800k or $1 million plus houses, but I know some who bought their houses since 70's for around $70-75k and paid off mortgage long time ago.


You can't afford it as a starter. Most people buying these kind of home start with a house in the 80s/90s that cost 200k, then when they buy a house that cost 1M, their original 200k house becomes a 600k-800k house. That's the only way you can afford it.

Starter home? Most of my friend can only afford 400k-600k condos and town houses.

 

[PandaBear]

Originally Posted By: The Critic
Originally Posted By: Cristobal
Of course, all the public employees in California make over that amount, even the lowliest clerk. I cannot say more or this conversation will get too political.


That simply isn't true. All of the government employees I worked with, had salaries between 40-75k. Department supervisors were at about 90k, and the few high-level managers were at about 110k.

However, the salaries in higher education (as expected) are much higher, but even then the number of individuals earning over 100k are far and few.


In practice, police and fire fighters with over time pay can make that much. DMV? Very unlikely.

 

[HTSS_TR]

Originally Posted By: PandaBear
Originally Posted By: HTSS_TR
I don't know how people afford $800k or $1 million plus houses, but I know some who bought their houses since 70's for around $70-75k and paid off mortgage long time ago.


You can't afford it as a starter. Most people buying these kind of home start with a house in the 80s/90s that cost 200k, then when they buy a house that cost 1M, their original 200k house becomes a 600k-800k house. That's the only way you can afford it.

Starter home? Most of my friend can only afford 400k-600k condos and town houses.

I agree. Very few can afford million dollar plus starter house, the mortgage of those houses with 20-30% down is too much. After get the equity of a starter house bought in the 80's or 90's for down payment on the million dollar house, their mortgages can be as little as $400-500k which is not too bad with interest rate of around 4.5-5%.

 

[Dave Hess]

Real Estate market in your area ?

Down here in FL the housing market is in shambles and the values of homes will drop even more next year. I work for my uncle's State Farm agency and you would be surprised at just how 'CA$H Poor' some folks are who drive a fancy car and have a big house in a gated community. They can barely afford to buy food with all the financial debt they have taken on, not to mention a job layoff for either spouse and they would be SOL.


Quote:
It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.

Depends on where you live you can be very comfortable on $125,000 for two people, in other parts of the country you will be living in a plastic dog house from Pet Supermarket with that income level.

 

[rjundi]

Back on topic.

The real estate market is doing well in the Seacoast of NH. But this area is very desirable.

5 of 8 houses very close to me sold recently. Two between $200k-$250k and three homes on the water or with water view between $700k-$1.3M.

Those homes that are $700k-$1.3M pay about $13k-$25k/year in property taxes.

So on a $125k salary a $600k mortage is not DOABLE around here. My property taxes are $6800/year! However I pay no income tax so it works to my benefit.

 

[CivicFan]

Originally Posted By: SVTCobra
Originally Posted By: CATERHAM
Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?

It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.


Most professionals will tell you only to buy a house that is no more than 3 times your income. 125*3=$375k. Besides 125k/yr is about 10k/month and the payment is 4k/month at 4.5% interest for 30 years. Then add in taxes and insurance. Not even close to feasible.


That's the rule I try to stick with because it's easy to see what is possible and what is not. Obviously, there are factors like car loans, student loans or credit card debt that will affect the factor.

 

[crinkles]

Originally Posted By: PandaBear
800k house is very common here, at least in the NorCal. However, they are not starter home that people live in forever. Many start with a condo that cost 400k and graduate to a townhouse that cost 600k, then move to a house that cost this much.

Some people just have to have a big mortgage so their income don't hit AMT. Most family have 2 or fewer kids and an income of $110k per spouse to afford this. Property tax is only 1.2 or so % due to prop 13 but when you look at the mortgage, and after itemized deduction, federal and state income tax is nothing in comparison.

Why would people pay that much? because even a hood like Oakland would cost 400k. 800k is a recent / new upper middle class neighborhood with good school. 600k is a run down house in good neighborhood, 500k is a town house, 400k is a condo, and nothing is less than 300k usually unless you live 3 hours away from work.

Why people live in California? It is easier to find jobs if you have the skill, and typically you earn 20-40% more than the rest of the nation for the same kind of work.


you get paid more to pay more for stuff. makes no sense.

 

[The Critic]

Originally Posted By: crinkles
you get paid more to pay more for stuff. makes no sense.

Not everything costs more. Just housing and maybe, taxes. A 12-pack of Coors costs the same whether you are in Alabama or California.

 

[Food Scientist]

Originally Posted By: 757guy
Originally Posted By: SVTCobra
Originally Posted By: CATERHAM
Originally Posted By: xxch4osxx
I don't understand how people can afford a house for $800,000 What average working joe can afford that?

It's easy, if both partners are pulling down a combined income of $125,000/yr and I'm not talking professional salaries.


Most professionals will tell you only to buy a house that is no more than 3 times your income. 125*3=$375k. Besides 125k/yr is about 10k/month and the payment is 4k/month at 4.5% interest for 30 years. Then add in taxes and insurance. Not even close to feasible.


I have never heard 3 times annual income limit quoted. Mortgage qualification guidelines specify a mortgage payment should not exceed 28% of gross monthly income and 38% total combined debt (including credit cards, car payments, etc.). For someone who makes $125,000 per year, that would mean a maximum monthly house payment of $2916.00 per month. ($550,000 mortgage at 5% = a monthly payment of $2952.52)

Not what I would do in this market, but using Conventional Mortage underwriting guidlines it would be feasable.

757 Guy


If you take 375k over 30 years at 5%, then the payment would be 2013.08 per month. Add in some taxes and insurance and we are back to my original statement of not to buy a house no more than 3 times your income. Last time I checked, part of my monthly payment included an escrow payment. Just so happens that this (in general) lines up with the 28% number. Just remember that the 3 times your income is a rule of thumb.

 

[mpvue]

I check yahoo real estate from time to time; they put my home right around $140K. this is a high point, because 2 yrs ago, it was valued around 100K.
still not bad, I bought it needing restoration in '97 for 37K.
hardly any homes around here more than $150; in the 'burbs, $250 would be considered high. lots of people from NJ flee to PA to escape $6-800K homes and the multi-thousand dollar mortgages that go along w/ them. this caused a development panic here, w/ lots of new communities, McMansions, and the higher school taxes which follow families accustomed to a 'higher standard'.
me? I'm content w/ living in the depressed part of the not yet gentrified city w/ my $40K/yr.

 

[daves87rs]

Originally Posted By: The Critic
Originally Posted By: daves87rs
Very interesting way to put that....


Is that the best response you can come up with? I guess it's better than the one or two word replies you have been making lately.

Nah, I just liked how you fit california into a paragraph...it works pretty well.


Besides, I've been a man of few words lately..

 

[daves87rs]

Originally Posted By: mpvue
I check yahoo real estate from time to time; they put my home right around $140K. this is a high point, because 2 yrs ago, it was valued around 100K.
still not bad, I bought it needing restoration in '97 for 37K.
hardly any homes around here more than $150; in the 'burbs, $250 would be considered high. lots of people from NJ flee to PA to escape $6-800K homes and the multi-thousand dollar mortgages that go along w/ them. this caused a development panic here, w/ lots of new communities, McMansions, and the higher school taxes which follow families accustomed to a 'higher standard'.
me? I'm content w/ living in the depressed part of the not yet gentrified city w/ my $40K/yr.


Wow...37k...not bad.

 

[CivicFan]

Originally Posted By: daves87rs
Wow...37k...not bad.


Too high or too low? I see you live in Michigan where houses can go for as little at 10k.

 

[PandaBear]

Originally Posted By: crinkles
you get paid more to pay more for stuff. makes no sense.


Well, China can say the same about the poorest part of US as well, but of course things aren't as simple.

There are higher concentration of highly educated and technical work force, as well as industries who could only happen in these area with critical mass of such labor.

Try to hire 50000 engineers with 10 years RF, semiconductors, DSP, drivers, firmware, etc, experiences, chances are you can only find them in a few large cities in the US, and none of them will be at a location that can buy you a $100k house.

Remember, not everyone can afford a home here, and it is not a right. A lot of people rent or live 2 hours away.

 

[daves87rs]

Originally Posted By: CivicFan
Originally Posted By: daves87rs
Wow...37k...not bad.


Too high or too low? I see you live in Michigan where houses can go for as little at 10k.



For his area, a good deal (low priced).


With Michigan, most of those 10k houses are in either in the city of Flint or Detroit, not exactly where most people would like to live. In the Burbs though, the prices have bottomed out...maybe around 40k will get a decent "needs work" house.