How do people afford $800k - $1.2 million homes? (Austin: attorney, house)

[N. Olikee]

I think spending $1M on a home when you are making $700K / yr. IS fairly conservative.

[curious1111]

Originally Posted by ImOnFiya

Defending by not saying anything..nothing on what you do, how you do it, or how you spend it..just vague "Tea-Party"-like slogans. I know one thing: anyone spending $1mm on a home is not being "fairly conservative" in their purchase.

"Fairly extravagant", maybe! But, this is Texas, the home of big things. Don't downplay it - OWN it!

I pretty much dont understand one word of your post... sorry... are you drunk?

English please. What does the Tea-Party have to do with any of this?

[texastrigirl]

Well the people I know that afford that price of home in Austin are very rich. In one case, my friend lives in Rob Roy...her dad bought her the house and paid cash for it with his Dell gazillions from the early days. He owns a mansion down the street and homes in Cayman and Seattle. Other friends of mine from childhood own MULTIPLE properties on Lake Austin and in Davenport Ranch. He made gazillions in venture capital starting in the 90's and they have done very well with real estate over time. In all cases, the folks were (are) very hard working, were in the right place at the right time or have a parent that was. All still hold full time jobs. In the case of the family that owns the Lake Austin and Davenport Ranch homes - she still goes to garage sales!! They drive modest cars and don't appear wealthy at all. Until you see their houses of course. In every case, they are salt of the earth folks and I couldn't be happier for them.

[ImOnFiya]

Originally Posted by curious1111

I pretty much dont understand one word of your post... sorry... are you drunk?

English please. What does the Tea-Party have to do with any of this?

No, I am not drunk. However, I do believe you are telling a little bit of a fib when you say you didn't understand what I said. The fact that you responded with quick response tells me you understood plenty. I wasn't trying to be mean or offensive.

But, if you want to trade insults, as a Texan, home of the gun state, I'll be more than happy to fire away! LOL !

[rickc007]

Originally Posted by curious1111

I think that there are MANY false assumptions made in this thread. Not everyone that can afford a house in that range is from California, ....

My comment on Californians was not that they can "afford" it ...
My observations from living there is they will "spend" it, whether they can afford it or not.

They spend a significantly higher percentage of their income
on housing, some way out of their means.

Owning a 900k house does not give you wealth if you owe 850k on it.
Especially if it is currently appraising for 600k

[curious1111]

Originally Posted by ImOnFiya

No, I am not drunk. However, I do believe you are telling a little bit of a fib when you say you didn't understand what I said. The fact that you responded with quick response tells me you understood plenty. I wasn't trying to be mean or offensive.

But, if you want to trade insults, as a Texan, home of the gun state, I'll be more than happy to fire away! LOL !

I REALLY didnt/dont understand! No fibbing. I answered quickly because anytime I post here, I follow the thread carefully.

No matter....I didnt take any offense to your post (except that somehow you think we have something to do with the Tea Party because we live in a $1mm house? We dont like the Tea Party! Sorry just dont get it!)

[TurtleCreek80]

Originally Posted by mimimomx3

1. Trust Fund
2. Equity from previous homes
3. Stock windfall
4. ARMS/creative financing
5. Cash businesses

Why does everyone seem to leave out the biggest factor in being able to afford an $800k home??? High paying jobs!!! Not cash businesses, not stock windfalls, not ARMs, etc.

There are plenty of "big law" firms in town that pay a 5th year attorney (someone who's approx 30) $200-250k per year. Married dual attorneys with combined income of $400-500k per year can conservatively afford an $800k-$1M home and probably afford a $1.2-1.5M home if they don't have major debts (student loans, etc). Same for surgeons, doctors, corporate mid to senior level executives, entrepreneurs, top performing real estate agents, finance people (private wealth, hedge fund/ private equity, etc).

Austin has a lot of well-educated residents. It's not such a stretch to see that many marry one another and have a dual income household with two very high paying jobs.

My fiancé and I are one of those couples. Two mid-level corporate jobs + equity from selling both our homes which we purchases 4 and 8 years ago (without ARMS or the help of our parents) means we can afford to look at homes in the$900k-$1M range on a $300k ($120k-ish job & $170k ish job with bonuses) income. With a 20-25% down payment (proceeds from selling homes and additional cash savings), our PITI will end up being a good bit less combined than it was to maintain our former separate households.

[sinking]

Originally Posted by ImOnFiya

Defending by not saying anything..nothing on what you do, how you do it, or how you spend it..just vague "Tea-Party"-like slogans. I know one thing: anyone spending $1mm on a home is not being "fairly conservative" in their purchase.

"Fairly extravagant", maybe! But, this is Texas, the home of big things. Don't downplay it - OWN it!

I would say someone spending less than 1.5x their gross annual income on a house is being fairly conservative.

[Jennibc]

Originally Posted by curious1111

I think that there are MANY false assumptions made in this thread. Not everyone that can afford a house in that range is from California, a trust fund baby, rich from stock options, over extended with mortgage debt, etc.

I am the sole earner in our house. I am the second in our extended family to go to college...no silver spoon. Just worked hard, very hard. Our household income is >$700k/year, and we live in a $1mm home. We felt that we were actually fairly conservative in our purchase. I think that plenty people in the home price range posted here, have similar stories to ours.

No bragging, no ego, just feel the need to represent/defend us self-made types....

I know I didn't write EVERYBODY. So perhaps you are making assumptions? I don't think by pointing out that many people that can buy those houses because of stock options or being in the stock market at the right time is attacking self made types at all. In fact, one could argue having the foresight to go into a particular industry or being able to negotiate a compensation package that ultimately brings on wealth can fall within the definition self-made.

But I still think that many people that can afford those homes had great timing in terms of earlier home purchases or cashing in stock options.

That's not to say I think "self-made" is some kind of myth. Both my spouse came from the lower socio-economic class yet we are solidly middle class now. I believe there is opportunity for economic mobility in this country, both up and down the ladder.

[Jennibc]

Originally Posted by TurtleCreek80

My fiancé and I are one of those couples. Two mid-level corporate jobs + equity from selling both our homes which we purchases 4 and 8 years ago (without ARMS or the help of our parents) means we can afford to look at homes in the$900k-$1M range on a $300k ($120k-ish job & $170k ish job with bonuses) income. With a 20-25% down payment (proceeds from selling homes and additional cash savings), our PITI will end up being a good bit less combined than it was to maintain our former separate households.

There it is.

I didn't mention high paying jobs, because I thought that kind of went without saying since the original post was talking about having a high paying job and not being able to fathom how people did it. So, at least in my response, I was pointing out that in ADDITION to the high paying jobs you would likely have to have one of those additional asset components.