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Old 05-12-2010, 05:57 PM
 
8,780 posts, read 16,251,371 times
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Quote:
Originally Posted by Appias View Post
Sure. Here's how it adds up. $53k per year income putting 20% down at around 5% rate and a purchase price of $230,000 is right around 1/3 of your income (roughly $1500). Even with a little debt you should be able to afford it, no ramens necessary. Now is it harder for people? Does that $230k buy a lot less than it used to? Yes. But CT isn't unique in that. There was a giant housing bubble. It did wonky things from coast to coast.
I don't think it's quite that simple. You have to look at the population as a whole. According to C-D's most recent data, the median income in my town is $69K, the median home is $301K. That doesn't mean that someone earning $69K can afford $301K.

It's just a composite average. That average will include plenty of retired widows in $350K homes that have a median income of something like $25K..... It will include plenty of young families living in a "sweat equity" starter valued at $250K while the families have a median income closer to $100K, etc., etc.....
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Old 05-12-2010, 06:07 PM
 
262 posts, read 519,044 times
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Quote:
Originally Posted by Stratford, Ct. Resident View Post
I don't think it's quite that simple. You have to look at the population as a whole. According to C-D's most recent data, the median income in my town is $69K, the median home is $301K. That doesn't mean that someone earning $69K can afford $301K.

It's just a composite average. That average will include plenty of retired widows in $350K homes that have a median income of something like $25K..... It will include plenty of young families living in a "sweat equity" starter valued at $250K while the families have a median income closer to $100K, etc., etc.....
You don't think what is that simple? Tryingtomakeit was skeptical that the numbers added up and wanted to know if they did. They do (assuming not large amounts of other debt). Now, if your point is that the two numbers are not particularly useful or truly representative of the population then I agree but that is a different point. I'm also not sure about your example with your particular town, what point are you trying to make exactly?
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Old 05-12-2010, 06:19 PM
 
8,780 posts, read 16,251,371 times
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Quote:
Originally Posted by Appias View Post
You don't think what is that simple? Tryingtomakeit was skeptical that the numbers added up and wanted to know if they did. They do (assuming not large amounts of other debt). Now, if your point is that the two numbers are not particularly useful or truly representative of the population then I agree but that is a different point. I'm also not sure about your example with your particular town, what point are you trying to make exactly?
The median is based upon gross earnings, not net. This is obviously going to result in a considerably lower "true" median income number.
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Old 05-13-2010, 07:05 AM
 
262 posts, read 519,044 times
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Quote:
Originally Posted by Stratford, Ct. Resident View Post
The median is based upon gross earnings, not net. This is obviously going to result in a considerably lower "true" median income number.
That will vary based on tax deductions. For some it will be "considerably lower" for others will not. Since we don't know we can only use the number we do have. Just like with debt. Everyone has their own set of circumstances, but based on the numbers we do have it adds up. How about this:
*The numbers work




*your milage may vary based on your personal mix of debt and taxes
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Old 05-13-2010, 09:59 AM
 
112 posts, read 207,349 times
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Quote:
Originally Posted by Stratford, Ct. Resident View Post
I don't think it's quite that simple. You have to look at the population as a whole. According to C-D's most recent data, the median income in my town is $69K, the median home is $301K. That doesn't mean that someone earning $69K can afford $301K.

It's just a composite average. That average will include plenty of retired widows in $350K homes that have a median income of something like $25K..... It will include plenty of young families living in a "sweat equity" starter valued at $250K while the families have a median income closer to $100K, etc., etc.....

Exactly!!!
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Old 05-13-2010, 10:19 AM
 
112 posts, read 207,349 times
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Quote:
Originally Posted by Appias View Post
Sure. Here's how it adds up. $53k per year income putting 20% down at around 5% rate and a purchase price of $230,000 is right around 1/3 of your income (roughly $1500). Even with a little debt you should be able to afford it, no ramens necessary. Now is it harder for people? Does that $230k buy a lot less than it used to? Yes. But CT isn't unique in that. There was a giant housing bubble. It did wonky things from coast to coast.
The household income was $53k (total-not per person), add in the cost of renting in CT, utilities, groceries, etc and where does a household (esp if they have young children) save up 20% to put down on a house?

Most people in this state use FHA or CHFA to buy their first house when they are starting out. FHA/CHFA now requires around 3% down. So that same house that was $1500/month with 20% down is now around $1800/month (and that is without the high cost of utilities in this state). Try calling a reputible mortgage company, tell them you have no debt and a household income of $53k/year...see how much they will pre-approve you for.

I agree there was a housing bubble but that bubble has popped. You don't think CT is unique?? Go onto a national real estate website and you will see what $230k will buy you in CT and what it will buy you in MOST other states (excluding CA and other higher COL states).
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Old 05-13-2010, 10:49 AM
 
262 posts, read 519,044 times
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Quote:
Originally Posted by tryingtomakeitinCT View Post
The household income was $53k (total-not per person), add in the cost of renting in CT, utilities, groceries, etc and where does a household (esp if they have young children) save up 20% to put down on a house?

Most people in this state use FHA or CHFA to buy their first house when they are starting out. FHA/CHFA now requires around 3% down. So that same house that was $1500/month with 20% down is now around $1800/month (and that is without the high cost of utilities in this state). Try calling a reputible mortgage company, tell them you have no debt and a household income of $53k/year...see how much they will pre-approve you for.

I agree there was a housing bubble but that bubble has popped. You don't think CT is unique?? Go onto a national real estate website and you will see what $230k will buy you in CT and what it will buy you in MOST other states (excluding CA and other higher COL states).
I know that it is household and not per person. How does a household save up 20%? Slowly. Over the years and by not taking fancy vacations, by cooking at home. Saving money is hard, but people used to do it. You buy a starter house, kids share rooms, you drive an old car you paid for in cash. There is no easy way unless your parents have money. Where do you get your statistics to prove that "most people in this state use FHA or CHFA". I'm skeptical that this is really the case. CT is not unique in having a housing bubble. It was everywhere and CT didn't even have the worst of it, not like Florida or Arizona or California. Regarding what $230k will buy you in other states, that is an entirely different topic and much more relevant to this thread. It's hard to see how far your buying dollar can go in other states. But as others on this thread have said, you have to be able to find work. Lots of nice places out there, but if you can't pay the bills you will be foreclosed on there just as fast as you would here.
If you have $53k a year, no debt but good credit and 20% down you will have no problem getting pre approved for a starter house at $230,000. One third your income towards housing is very desirable to banks even in these times of stricter lending.

Last edited by Appias; 05-13-2010 at 10:58 AM.. Reason: typo
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Old 05-13-2010, 10:51 AM
 
1,183 posts, read 1,286,837 times
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Quote:
Originally Posted by tryingtomakeitinCT View Post
I agree there was a housing bubble but that bubble has popped. You don't think CT is unique?? Go onto a national real estate website and you will see what $230k will buy you in CT and what it will buy you in MOST other states (excluding CA and other higher COL states).
The problem with this is that doing a side by side comparison between states when it comes to housing is hard to do at best. Think of it this way: yes you might be able to buy "more" house in certain states but specific location and amenities may make the comparisons moot. I'll agree that living here is expensive, especially to renters, but the fact is ANY desirable part of the country with a repetitively strong economy is going to be expensive these days. Even in the boom metros, if you looked at the parts of those areas that people wanted to be you'd think that you were looking at Stamford or West Hartford in terms of price and area, it really evens out.

The problem with Connecticut however is that certain zoning rules (namely parking requirements) stifled the ability to add mixture of housing options and a variety of pricing points in the last 10 years. Not to mention pretty anti-Urban state and federal governments.

~Cheers
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Old 05-13-2010, 11:06 AM
 
112 posts, read 207,349 times
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Quote:
Originally Posted by Appias View Post
I know that it is household and not per person. How does a household save up 20%? Slowly. Over years and buy not taking fancy vacations, by cooking at home. Saving money is hard, but people used to do it. You buy a starter house, kids share rooms, you drive an old car you paid for in cash. There is no easy way unless your parents have money. Where do you get your statistics to prove that "most people in this state use FHA or CHFA". I'm skeptical that this is really the case. CT is not unique in having a housing bubble. It was everywhere and CT didn't even have the worst of it, not like Florida or Arizona or California. Regarding what $230k will buy you in other states, that is an entirely different topic and much more relevant to this thread. It's hard to see how far your buying dollar can go in other states. But as others on this thread have said, you to be able to find work. Lots of nice places out there, but if you can't pay the bills you will be foreclosed on there just as fast as you would here.
If you have $53k a year, no debt but good credit and 20% down you will have no problem getting pre approved for a starter house at $230,000. One third your income towards housing is very desirable to banks even in these times of stricter lending.
I agree with many of your points and yes, if you have 20% down with little debt you can very easily get approved for a mortgage. However, in this state these days, $230k is a starter home in most cities. The cost of renting is OUTRAGEOUS. So for someone to have a family and rent it is very hard to save money and that is living frugally. My statistics for FHA and CHFA come from the majority of my friends...that is how they bought their homes. Most people I know who do not have family to give them a down payment and who are starting out on their own do use CHFA. As for finding work in other states where the COL and housing is lower, there are jobs. However the jobs pay a lot less than CT. I have been doing my research and in many of those places I could get a job making $1, yes one dollar above minimum wage and easily afford to buy my own place. Will it be a place like Greenwich?? NOPE. But will I be able to sit back and not worry so much about trying to keep up financially, YES. But again, that is a different topic. I still just do not see how a less than $10k increase in income (in 8 yrs?) is appropriate for such a high inflation of home prices in this state.
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Old 05-13-2010, 11:19 AM
 
Location: The brown house on the cul de sac
2,081 posts, read 4,122,972 times
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Quote:
Originally Posted by tryingtomakeitinCT View Post
However the jobs pay a lot less than CT. I have been doing my research and in many of those places I could get a job making $1, yes one dollar above minimum wage and easily afford to buy my own place.
Where can you easily afford to live making $9.00 an hour?
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