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Old 11-21-2017, 12:20 PM
 
Location: Denver, CO
122 posts, read 125,000 times
Reputation: 193

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Here’s your answer. Move to one of these states

15 states where millennials can afford to buy homes

Hint. Those states would be last on my list.
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Old 11-21-2017, 12:26 PM
 
Location: Denver
1,303 posts, read 431,386 times
Reputation: 1239
Quote:
Originally Posted by Westerner92 View Post
One thing you're missing: Sample bias. Of course highly paid college grads are surrounded by anecdotes of highly paid college grads. That doesn't change the fact that, according to the Census Bureau, your income in your late 20s is a standard deviation above the median household income (that's for all ages and includes households with multiple incomes) in the Chicago metro, which is $59,261. Unless you can convince me the US Census Bureau's data is bogus, your anecdote is meaningless.

My blinders fell off when my current position put me on projects in working class areas where I had to take income surveys of the people I supervised. Americans across all income levels have a tendency to think they're the average because we're all so socioeconomically segregated.

Also, you shouldn't have to jump around companies or have side gigs to get proper compensation if you work for ethical companies. I lucked out and found one of the few ethical firms in my field left, and it's mostly because it's employee owned. Our generation is being played for suckers, and you're playing right into it. So are all these people who have convinced themselves that only elite college grads should be able to afford property and build wealth.
I just turned 28, bought a $330k house (with 20% down) and have around $150k in retirement/investment assets. I went to a small po-dunk DIII school on the IL/IA border. I also worked my butt off in college, holding 2-3 part time jobs/internships and graduated with zero debt. Because of my internships, I started my first job in marketing making just under $48k/year. Was there for 2 years, made it to around $50k. Moved jobs to make $60k. Worked for 2 years, got a 10% promotion, now making $70k and am working remote.

On my $1600/month mortgage, my GF pays $750. If I didn't have a GF, I'd have a roommate and probably Air BnB out my 3rd bedroom on occasion for extra cash. I have a small DJ business where I'll pull in $2-3k/year, but mostly I have fun. I save 13% of my income in my 401k (mixture of ROTH and traditional) with a 3% match, making it roughly $11k/year in my 401k. I'll also end up saving another $600-700/month in stuff I don't end up spending (take-home pay after all deductions, including retirement is around $3100/month).

Again, I'm not an elite college grad (Graduated with a 3.1 from a no name school), but I'm smart with my money. Roomates is a smart financial decision. It essentially raises my income by another $10k/year to have a roommate vs living alone in my house. Hell, one of my friends in the Springs got divorced this spring and has 3 roommates in his 5 bedroom house. His mortgage is like $1200/month and he's making $1500/month from the roommates and lives there. He's getting paid $300/month and gets free housing.

For your comment about not having to jump around... the question I should flip back at you is: Why are you so loyal to your company? The old generation is the one that was played for suckers. Not realizing their potential value on the market. Believing in pension plans, etc. A new job means new challenges, which means more experience for my resume, thus makes me more valuable.

As far as being in the top 10% --- I do disregard census data. Census data includes welfare families, high school dropouts and people working part-time jobs. I look for actual salary data for people working full-time jobs as those are the people who I'd consider comparing myself to:

https://www.payscale.com/research/US...cago-IL/Salary

https://www.bls.gov/oes/current/oes_16974.htm#13-0000

I also believe you need to look at education level. Chicago public schools has nearly a 1/4 dropout rate. I'm not going to expect a high school drop out to make much more than minimum wage, maybe a little more if they go into the service industry and are a waitress and rely on tips. Again, these people I'm not going to compare myself to. A better comparison is against other college graduates. And the answer is against other college graduates, $50k is nowhere near the top 10%.
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Old 11-21-2017, 12:30 PM
 
Location: Denver via Austin
3,107 posts, read 6,480,124 times
Reputation: 3502
Quote:
Originally Posted by Brianmedia View Post
Here’s your answer. Move to one of these states

15 states where millennials can afford to buy homes

Hint. Those states would be last on my list.
See that OP? You're just too poor for Colorado and need to move to a state with no jobs.
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Old 11-21-2017, 12:56 PM
 
Location: Denver
1,303 posts, read 431,386 times
Reputation: 1239
Quote:
Originally Posted by Westerner92 View Post
See that OP? You're just too poor for Colorado and need to move to a state with no jobs.
Plenty of jobs in Indiana, Ohio, Pennsylvania and Wisconsin

I'd also think that Omaha, Kansas City, St Louis have plenty of jobs too.

Sure, Pennsylvania and Wisconsin (Madison, especially) are probably the only "desirable" places to live in that group, but there are jobs in those cities.

That, and again, I know plenty of mid to late 20's buying houses here in Denver. Yes, Denver is a very white-collar city, but it's not unobtainable for most with professional careers.
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Old 11-21-2017, 12:59 PM
 
Location: Denver via Austin
3,107 posts, read 6,480,124 times
Reputation: 3502
Quote:
Originally Posted by illinoisphotographer View Post
For your comment about not having to jump around... the question I should flip back at you is: Why are you so loyal to your company? The old generation is the one that was played for suckers. Not realizing their potential value on the market. Believing in pension plans, etc. A new job means new challenges, which means more experience for my resume, thus makes me more valuable.
If you look at the statistics, we're about 20%-30% poorer than our parents were in the 80s.

I'm loyal because they pay above market rate, raise my salary properly with experience, and vest me in the profits. I gain great experience because they invest in my training. You get good returns when you invest in people. I'm happy where I'm at, and there's a positive feedback cycle of employees rewarding the company and vice versa.

You can make yourself miserable trying to be the curvebuster for minimal returns, but all it does is make you first in a race to the bottom. This is what happens when there's a breakdown of loyalty between workers and executives:


Quote:
As far as being in the top 10% --- I do disregard census data. Census data includes welfare families, high school dropouts and people working part-time jobs. I look for actual salary data for people working full-time jobs as those are the people who I'd consider comparing myself to:


https://www.payscale.com/research/US...cago-IL/Salary

https://www.bls.gov/oes/current/oes_16974.htm#13-0000

I also believe you need to look at education level. Chicago public schools has nearly a 1/4 dropout rate. I'm not going to expect a high school drop out to make much more than minimum wage, maybe a little more if they go into the service industry and are a waitress and rely on tips. Again, these people I'm not going to compare myself to. A better comparison is against other college graduates. And the answer is against other college graduates, $50k is nowhere near the top 10%.
So only college graduates matter, and only the gentry class should be able to afford property. Got it.
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Old 11-21-2017, 01:37 PM
 
Location: Denver
1,303 posts, read 431,386 times
Reputation: 1239
Quote:
Originally Posted by Westerner92 View Post
If you look at the statistics, we're about 20%-30% poorer than our parents were in the 80s.

I'm loyal because they pay above market rate, raise my salary properly with experience, and vest me in the profits. I gain great experience because they invest in my training. You get good returns when you invest in people. I'm happy where I'm at, and there's a positive feedback cycle of employees rewarding the company and vice versa.

You can make yourself miserable trying to be the curvebuster for minimal returns, but all it does is make you first in a race to the bottom. This is what happens when there's a breakdown of loyalty between workers and executives:




So only college graduates matter, and only the gentry class should be able to afford property. Got it.
I'm glad your happy. As I said, I'm happy too making my $70k/year and am not "searching" for anything right now. That being said, have you ever actually shopped around? I know from talking to a few recruiters, I could get $75-80k for another corporate job or $90-100k working for an agency (though with long hours). Since I want to stay on the corporate side, a $5-10k raise isn't enough to make me move. But if someone came along with an $80k-90k salary offer, I'd jump as that would be a huge increase and would outweight negatives.

If anything else, knowing my value is good to know because if my company changes or if I ever get in a salary/promotion discussion with my current company, I have data points to back up my request.

Owning property is not a right. I'm not sure why you think it is. Hell, looking at 16th street or some of the bike paths, having a roof over your head isn't a right ever. And Denver is significantly more affordable than cities like Seattle, San Francisco, or NYC.

39.9% of metro Denver has a bachelor's degree, making it the 2nd most educated workforce in the country. On the flip side, only 38.8% of Denver metro is renting (https://www.bizjournals.com/denver/n...ther-than.html) That means there is an overlap where at least 22% of homeowners don't have a college degree. The answer is that in a desirable city like Denver, people are willing to pay more to live there. And when there's limited housing (and new housing is too expensive), the price goes up. The only people who can then afford it are those who have well paying jobs. And those who can't rent. Nothing is stopping you or anyone else from moving to Kansas City or Columbus. Both are nice mid-sized cities that are very affordable with many jobs. But if you want to live in Denver, then you have to be willing to pay Denver prices. It's simple supply/demand economics.
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Old 11-21-2017, 02:40 PM
 
Location: Denver via Austin
3,107 posts, read 6,480,124 times
Reputation: 3502
Quote:
Originally Posted by illinoisphotographer View Post
Owning property is not a right. I'm not sure why you think it is. Hell, looking at 16th street or some of the bike paths, having a roof over your head isn't a right ever.
Nice strawman, but I never said property ownership is a right. I was just trying to communicate that the current trends in housing costs, education costs, and salaries nationwide (skyrocketing income-to-home price ratio, average age of first time buying rising into the mid-30s) are foreboding for the health of our economy and quality of life down the road. It's not compelling for some people because they're content as long as there's someone else to look down on.
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Old 11-21-2017, 03:41 PM
 
Location: The North
5,071 posts, read 9,069,416 times
Reputation: 4039
Quote:
Originally Posted by Westerner92 View Post
Nice strawman, but I never said property ownership is a right. I was just trying to communicate that the current trends in housing costs, education costs, and salaries nationwide (skyrocketing income-to-home price ratio, average age of first time buying rising into the mid-30s) are foreboding for the health of our economy and quality of life down the road. It's not compelling for some people because they're content as long as there's someone else to look down on.
If those are true, why aren't all these apartments going empty in Denver? Why do these "overpriced" houses all get multiple offers in a day or two? Individuals can do dumb things, but the market tends to figure out the right level provided there is good information. No one can say people are uninformed about Denver.
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Old 11-21-2017, 03:46 PM
 
Location: The North
5,071 posts, read 9,069,416 times
Reputation: 4039
Quote:
Originally Posted by Westerner92 View Post
Since you're not willing to talk in hard numbers, I will. An income of over $50K a year puts you in the top 10% of earners in their mid 20s. $50K post tax, health insurance premiums, and maxing out your company 401(k) match will give you a take home of about $3000/month if you're lucky. Say your parents aren't wealthy and didn't give you a car, you buy a modest used Honda Civic. Car payment + car insurance + gas = $250/month. Say you don't care if you live in the suburbs and never go out with friends or have any hobbies aside from going to the gym ($40/month), so you rent a 1 bed in Aurora in one of those generic apartment complexes where your yard is a parking lot. That'll run you $1200 a month including utilities. You never eat out, and you eat cheaply: $200/month. You're on your own cell phone plan with a paid-off phone: $40/month. You don't have TV, but you have the internet because it's effectively a necessity now: $40/month.

Say you never have car troubles, don't have any student debt, have perfect health, never travel, don't have any hobbies, don't have any family emergencies, you never break anything, and you're best friends with the property manager who never raises your rent. That allows you sock back every bit of your leftover income. That nets you $14,760 of savings a year. Your meager pay raises are eaten up by inflation every year btw.

You want a modest townhouse or condo, $250K in 2017 dollars, which puts the down payment at $50K. But since you don't have $50K, it'll take you a few years to save up. Assuming a modest 5%/year home value appreciation, that means that in 5 years, that same condo is $319K, but you'll have enough. Assuming the ~10% appreciation rate the past couple years holds, it'll take you an extra year of unheard of luck, miserable spartan existence, and 90th percentile income to afford it.

The above is obviously just a demonstration, but it should drive home the point that you can't live in today's America without roommates.

And I guess I shouldn't have said "never" in my first post. It's just incredibly dumb and an almost unheard of luxury to live without roommates. There are also financing options beyond the traditional 20% down 30-year mortgage. I'm one of the lucky ones, and I'll be able to afford a home soon, but if I want to avoid being house poor, I will still have to take on roommates. Literally no one I know my age, even business consultants and engineers living in cheap Sunbelt cities, lives alone.
I'm calling nonsense on this top 10% is an income of over 50k. I just hired two analysts, one who is still in college and not graduating until next year. He's getting 55k and actually got a 58k offer elsewhere that fortunately he decided against because he likes our firm better. The other has one year of work experience, he's getting 62k. Neither went to a top school and these are just run of the mill finance jobs. If I'm paying these guys top 10% salaries, I'm blown away. And oh by the way, these guys are based in Las Vegas, not exactly a bastion of high salaries for millenials.
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Old 11-21-2017, 03:53 PM
 
Location: Denver
1,303 posts, read 431,386 times
Reputation: 1239
Quote:
Originally Posted by Westerner92 View Post
Nice strawman, but I never said property ownership is a right. I was just trying to communicate that the current trends in housing costs, education costs, and salaries nationwide (skyrocketing income-to-home price ratio, average age of first time buying rising into the mid-30s) are foreboding for the health of our economy and quality of life down the road. It's not compelling for some people because they're content as long as there's someone else to look down on.
You also have a large influx of 20 somethings who want to live in large cities where there isn't affordable real estate. Not to mention, 20 somethings are getting married later in life than in prior generations. This also pushes back home ownership.

Again, it's supply/demand. If there's not enough supply (like in Denver), then prices go up. When most of the people moving to Denver are college educated and have white collar jobs, they can afford spend more. It's not looking down on anyone. It's economics.

So what happens to people who can't afford a house? Well, they either keep renting, move somewhere cheaper (further out or another metro), or get roommates. Look at Hong Kong. People live in 80-100 sq foot apartments. Or places like Thailand or Vietnam where you'll have an entire family living in a 200fq foot apartment with 2 rooms. It's not that I don't have a heart.... just that Denver clearly is affordable for people as people are buying houses as soon as they pop up. If they over-extend themselves and buy too much... well, that's the option they made when deciding to live in a desirable place.
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