How do people afford $800k - $1.2 million homes? (Austin, Round Rock: crimes, lawyers)

[TurtleCreek80]

Originally Posted by motherofthree

And that's how it should be done. People get caught up in showing off. No one NEEDS a million dollar house in TX.

No, it's not how it SHOULD be done. It's not necessary to live in a $200k home if you're worth $20M. You could easily pay cash for a $2M home and have about $500k of annual income from just interest/invenstment income & dividends of the remanining $18M. Does he "need" a $2M home? Of course not! But with that kind of net worth & cash flow, it's certainly not going to bust the budget if he would like to live in a $2M home.

If one chooses to live frugually to a fault/extreme, it's either by choice or becasue they have emotional/psychologically issues with spending money. Not becasue it's the one singluar RIGHT way to live- as your post is conveying.

[TurtleCreek80]

Originally Posted by motherofthree

And that's how it should be done. People get caught up in showing off. No one NEEDS a million dollar house in TX.

I don't think you have a clear grasp on what a $1M home looks like in a lot of areas. These are some $1M-range homes in Dallas -->





Empty lot - $850k. Notice the lovely water tower & major 8-lane highway this house backs up to?

Are they all nice houses? Yes, they are. Are they in an excellent school district? Yes, they are.

But are they what you think of when you hear "million dollar home"


......no, not really.

[TurtleCreek80]

Originally Posted by FueledByBlueBell
We make >$200k per year, live in a $360k house and I still wonder this every day. It just seems like there are so many $800k plus houses in Austin... amazing.

Originally Posted by cBach

Personally, I couldn't stand a gigantic house that I rarely go into some rooms, still have to heat and cool them, pay ridiculous property taxes, pay an exorbitant fee for watering a multi acre lot of land, plus the maid, gardener, pool man, etc... I'd much rather spend that money and buy a small vacation home somewhere like at the coast or in the mountains.

Again, if someone wants to live in an in-town neighborhood (possibly to be closer to work) AND wants good schools, $350k or $500K or even $1M is NOT a "gigantic house" with so many rooms you lose count. I think some of you are REALLY out of touch with the real estate market....

These are in Austin:
$845K 3 bed/ 2 bath 2,600sf on a .3 acre lot


$689k 3 bed / 2 bath / 2,089sf / .16 acre lot


$519k / 3 bed/ 2 bath/ 1,377sf / .18 acres

[hoffdano]

Originally Posted by sinking

How it should be done? It sounds like he his hording money. By spending it within his mean he could help out local businesses. He could get his bathrooms remodeled every year on just the interest he earns. It may seem wasteful but it is giving contractors work, their suppliers work, and so on. Obviously a silly example but just to make a point.

The guy either just has no interests in things that cost much money or is a hoarder of money. I don't see it as particularly noble to live so far below your means.

Let's look at an extreme: Bill Gates. He spent the better part of his first 40 years of life building his company. Compared to his wealth, he spent very little. He was living radically below his means.

Now - he is probably the most important philanthropist in the world and possibly in history. He is committed to using his wealth for the most noble causes. He will spend in excess of $40B of his and Warren Buffett's wealth over the coming years.

How on earth can you judge negatively someone living well below their means? By living below his means, he isn't a burden to society. He didn't default on a loan. He didn't generate a foreclosure. He doesn't need food stamps.

If his money is in a bank or in equities, that capital is being put to use. If he owns bonds, then he owns IOUs for money lent to either businesses or municipal bodies. Only if his money is hidden in cash under his mattress is it truly sitting idle. And even if it is - I see it as his right to do so after working hard to earn it.

[sinking]

Originally Posted by hoffdano

Let's look at an extreme: Bill Gates. He spent the better part of his first 40 years of life building his company. Compared to his wealth, he spent very little. He was living radically below his means.

Now - he is probably the most important philanthropist in the world and possibly in history. He is committed to using his wealth for the most noble causes. He will spend in excess of $40B of his and Warren Buffett's wealth over the coming years.

How on earth can you judge negatively someone living well below their means? By living below his means, he isn't a burden to society. He didn't default on a loan. He didn't generate a foreclosure. He doesn't need food stamps.

If his money is in a bank or in equities, that capital is being put to use. If he owns bonds, then he owns IOUs for money lent to either businesses or municipal bodies. Only if his money is hidden in cash under his mattress is it truly sitting idle. And even if it is - I see it as his right to do so after working hard to earn it.

I wholeheartedly agree that it is his right to do as he wishes with the money he earns.

He is not a burden on society so much because he is living below his means, he is not a burden on society because he has 20 MILLION DOLLARS. While not an astronomical amount it sounds like he is living like someone who makes $50k and is living below their means. At just 1.25% interest in a savings account he is making $250k a year. The guy would have to be MC Hammer retarded to become a drain on society, blowing through his savings, and ending up on food stamps. He can, however, live still below his means (just not so much) and support local business.

[curious1111]

Seems like this is edging into a class warfare debate...hope not...

"No one NEEDS a million dollar home", "No one NEEDS anything more than a $500k home in Austin" (first thing I have ever disagreed with Steve on in reading his posts for years!), etc.

When our income was $200k/year, we had a $250k house. We prioritized paying it off completely. Made tough choices then. Didnt over extend. Rolled into our next house, etc. We put about 50% down on our $1mm home and the left over mortgage is 15 yrs at a very low rate and payment for us. Probably will pay it off in half that time. It's not a mansion. But it is very close to everywhere we spend our life. If we could have paid $500k to get the same house, location, etc. we would have. But for us, no commutes, no traffic, more family time was important.

I really challenge some of the posters here to be honest about how much house they would buy if they made $500k, $700k, or $1mm/year+. And before you start talking about savings, college, extra curriculars for kids, charity, etc.; assume all that is taken care of. I think you would buy a $1mm house. $1mm house may be extravagant out in Cedar Park, Round Rock, etc...but in certain parts of Austin, it is not. Same goes for Dallas, as has been posted with some examples.

[d-boy-80]

What are the suburbs with the 900,000 dollars and above homes if you don't mind me asking? I am lurking obviously but this topic grabbed my attention.

[jobert]

Originally Posted by d-boy-80

What are the suburbs with the 900,000 dollars and above homes if you don't mind me asking? I am lurking obviously but this topic grabbed my attention.

Don't jump in head first.. I would rent for at least 6 months.

[curious1111]

Originally Posted by d-boy-80

What are the suburbs with the 900,000 dollars and above homes if you don't mind me asking? I am lurking obviously but this topic grabbed my attention.

Although I am not sure, I suspect not many suburbs in Austin, or most cities for that matter. But get closer to downtown and even modest homes are expensive...and easily go into that range.

[mark311]

Originally Posted by curious1111

Although I am not sure, I suspect not many suburbs in Austin, or most cities for that matter. But get closer to downtown and even modest homes are expensive...and easily go into that range.

Quite a few listings in that range can be found in Cedar Park and Georgetown (Breakaway Park, Cimarron Hills, etc.)