How do people afford $800k - $1.2 million homes? (Austin, Round Rock: real estate market, HOA)

[mimimomx3]

Originally Posted by TurtleCreek80

This forum attracts a wide cross-section of backgrounds and incomes. I am sure it is difficult for someone - perhaps someone who grew up in a home where college wasn't a "given" or whose parents worked blue collar jobs or service industry jobs- to imagine how so many people are out looking for a $1M+ home when they've always rented or lived in a $100k home. I think it's natural to wonder about what kind of jobs or financial/family situations allow for people to have so much money to spend on a home, especially if that person has never been exposed to the world of big law attorneys, corporate executives, entrepreneurs/small business owners, etc.

I guess I wouldn't feel comfortable buying a $1MM house if I only made $300K. I guess for people without kids, that might be an option.

[Exiled Texan]

I know someone who bought an $800K house in cash from a divorce settlement. She makes enough money to pay the taxes.


What kills me, are those that buy a flip job house only to gut it to the studs. If they were going to gut it to the studs, why didn't they just buy it when it was $200-300K cheaper 6 months earlier??? Money to burn????

[Jennibc]

Originally Posted by texastrigirl

I do believe TCAD has access to what you paid for your house so the first assessment period following the sale generally has a bump up to the price paid for the house. In fact it helped me because they tried to bump me up higher than I paid for my house. Because it was within 2 years of sale, I brought in my HUD and they bumped it back down. After that point it can only be adjusted no more than 10% per year. The people who bought my house (assessed around $224K at the time) got a bump up to $280K the first assessment period.

My understanding is that TCAD does not. This is not a disclosure state. The only way they find out what you paid is if you go and petition them because you have been assessed too much OR if someone else petitions and uses your home sale as a comp. I've heard, but am not certain, that realtors will help out old clients by giving them information on comps. But really this is all hearsay, if a realtor would like to chime in to set the record straight, I'd welcome it.

[TurtleCreek80]

Originally Posted by mimimomx3

I guess I wouldn't feel comfortable buying a $1MM house if I only made $300K. I guess for people without kids, that might be an option.

Of course how you spend your money is your own choice, but it's really not unreasonable.....

With no tax-beneficial deductions like 401k and health insurance, $300k income in Texas yields $18,000 per month in net income.

$18,000 Net monthly income
$4,200 Monthly mortgage payment on $1M home with 20% down
$1,500 Monthly savings for annual property taxes
$400 Monthly savings for annual home insurance bill
$11,900 left to spend/save

Could you REALLY not be comfortable living on the nearly $12,000 you'd have left each month after paying for your $1M home's PITI?

[TurtleCreek80]

Originally Posted by Jennibc

My understanding is that TCAD does not. This is not a disclosure state. The only way they find out what you paid is if you go and petition them because you have been assessed too much OR if someone else petitions and uses your home sale as a comp. I've heard, but am not certain, that realtors will help out old clients by giving them information on comps. But really this is all hearsay, if a realtor would like to chime in to set the record straight, I'd welcome it.

Texas is a non-disclosure state. You even have the right to "z" out your sale so that it is not entered into the MLS system that realtors use to pull comps. Otherwise, your sales price will go into the MLS. I have heard in some counties the CAD people have friends with MLS access and they do use it. But there is NO county where CAD is openly given that info by title companies or realtors or the MLS.

If you know a realtor, they typically have no problem pulling recent comps from the MLS as a favor during tax protest season.

[TurtleCreek80]

Originally Posted by mimimomx3

I think you just proved my point.

Not really. Because our down payment is about 50% cash/ 50% selling proceeds. Without the six-figure cash down payment addition, we'd be looking at homes in the $600-700k range, not $900k-$1M. In our case, the selling equity - although appreciated and welcome- is not enough to get us up into that price range (and the school district we want to purchase in).

[mimimomx3]

Originally Posted by TurtleCreek80

Of course how you spend your money is your own choice, but it's really not unreasonable.....

With no tax-beneficial deductions like 401k and health insurance, $300k income in Texas yields $18,000 per month in net income.

$18,000 Net monthly income
$4,200 Monthly mortgage payment on $1M home with 20% down
$1,500 Monthly savings for annual property taxes
$400 Monthly savings for annual home insurance bill
$11,900 left to spend/save

Could you REALLY not be comfortable living on the nearly $12,000 you'd have left each month after paying for your $1M home's PITI?

Like I said, this might be possible without kids, but not with. Personally, I wouldn't feel comfortable with those numbers.

[gpurcell]

Originally Posted by TurtleCreek80

Of course how you spend your money is your own choice, but it's really not unreasonable.....

With no tax-beneficial deductions like 401k and health insurance, $300k income in Texas yields $18,000 per month in net income.

$18,000 Net monthly income
$4,200 Monthly mortgage payment on $1M home with 20% down
$1,500 Monthly savings for annual property taxes
$400 Monthly savings for annual home insurance bill
$11,900 left to spend/save

Could you REALLY not be comfortable living on the nearly $12,000 you'd have left each month after paying for your $1M home's PITI?

Sure, you're fine as long as you keep the job.

Lose it and ab 800K mortgage will put you into poverty almost instantly.

[stan4]

Originally Posted by TurtleCreek80

Of course how you spend your money is your own choice, but it's really not unreasonable.....

With no tax-beneficial deductions like 401k and health insurance, $300k income in Texas yields $18,000 per month in net income.

$18,000 Net monthly income
$4,200 Monthly mortgage payment on $1M home with 20% down
$1,500 Monthly savings for annual property taxes
$400 Monthly savings for annual home insurance bill
$11,900 left to spend/save

Could you REALLY not be comfortable living on the nearly $12,000 you'd have left each month after paying for your $1M home's PITI?

Mrmmmm...I am in that situation...and I don't think I'd be comfortable with that big a mortgage on that salary. $300k after taxes and 401k yields much less than that...then you have to put some money away in pre-paid savings account (always pay yourself first)...then you have the mortgage and insurance and property taxes in there, but what about HOA, utilities (the energy costs are going to be astronomical), maintenance, repairs, required upgrades...

It's certainly doable, but it's tighter than you think. We still haven't been able to furnish this place (though we're taking our time, anyway...want to find exactly what we like).

[TurtleCreek80]

Originally Posted by mimimomx3

Like I said, this might be possible without kids, but not with. Personally, I wouldn't feel comfortable with those numbers.

How many kids do you have???