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Old 02-08-2018, 08:25 AM
 
Location: Living on the Coast in Oxnard CA
15,372 posts, read 25,586,306 times
Reputation: 19646

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Quote:
Originally Posted by MDrenter223 View Post
Iím looking at moving to an area where the median household income is only $60k/yr, but the median three bedroom home is $600k.

How does that even work?

My household income will finally be more than sustenance level, but even grossing more than 3x the median I canít afford a freaking $600,000 home (well not without a down payment and sticking to the rule of 28).

This is a crazy world we live in.
Quote:
Originally Posted by aslowdodge View Post
So the op wants a 600k mortgage on a 600k house?
It just seems like if they have 11k a month the mortgage should not be that hard if putting down 20 percent.
It seems as if the OP is moving to a new job and will finally have that large income. That does not mean that the op had that large income all along.
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Old 02-08-2018, 09:15 AM
 
1,162 posts, read 1,267,651 times
Reputation: 1629
Quote:
Originally Posted by Mr. Zero View Post
If it's California, prop 13 would contribute to a huge disconnect between median income and home price.
Looked up prop 13, that is a really interesting piece of legislation.

Only the new residents are paying property taxes on the full value of their home. Is that why you hear of high home values in places like LA, but the schools are also fairly awful?
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Old 02-08-2018, 09:20 AM
 
Location: Saint John, IN
10,638 posts, read 3,319,645 times
Reputation: 12748
I know someone who owned a home in California and when he relocated for work to the Chicagoland area he was able to pay cash for his home in a VERY affluent Chicago suburb. Now don't get me wrong, Chicago is extremely high for COL too, but compared to California it's much less.


My point is, OP if you are looking to buy a home in the future, but don't feel you can afford your area then it's time to move to where you can afford it!!
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Old 02-08-2018, 09:21 AM
 
Location: NY/LA
3,082 posts, read 2,552,577 times
Reputation: 2382
Quote:
Originally Posted by MDrenter223 View Post
Looked up prop 13, that is a really interesting piece of legislation.

Only the new residents are paying property taxes on the full value of their home. Is that why you hear of high home values in places like LA, but the schools are also fairly awful?
I don't know about that, but I would imagine that lower property taxes are one of the reasons why state income tax is so high. (Our annual property tax is about .6%-.7% of the FMV of our house, and we only bought a little over 5 years ago.)

You have more stability and predictability once you own a home, but there are trade-offs.
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Old 02-08-2018, 09:58 AM
 
Location: The Triad (NC)
26,867 posts, read 57,900,981 times
Reputation: 29296
Quote:
Originally Posted by MDrenter223 View Post
Only the new residents are paying property taxes on the (current) full value of their home.
Ten years later their tax will still be based on the value today.

Quote:
Originally Posted by CGab View Post
...don't feel you can afford your area then it's time to move to where you can afford it!!
This is just as true for doctors as it is for burger flippers
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Old 02-08-2018, 10:11 AM
 
Location: midvalley Oregon and Eastside seattle area
2,940 posts, read 1,351,301 times
Reputation: 2437
Quote:
Originally Posted by American Expat View Post
No, Seattle hasn't adopted any measures to stop or slow foreign buying as far as I'm aware. It's a dilemma because those buyers are bringing cash that is helping sellers and the economy overall but making it very difficult for people working in the local economy to buy a desirable house To be fair, Seattle hasn't had yet nearly the foreign buying that Vancouver saw at its peak.
We are not all foreigners
We bought our first Seattle rental from inheritance money, 2015. The seller had already dropped his Ask twice, priced too high. Selling into the Winter months and wanted to move back home in Utah. He also was going to make a 20% profit on his 14 months of ownership plus rent collection.
We are ROI positive on this unit and +50% market appreciation in our 30 months of ownership. Our rent will increase $50 (2%) on the next cycle to previous owner's level. Rent is slightly below market, slightly behind on fixed expenses (HOA, Ins, taxes).

A couple-3 years ago, Seattle area, It was more advantageous to buy than to rent. The situation is turning where renting will be cheaper than buying, primarily because of the shortage of condos, SFH and Townhouses within commuting distance. Rentals availability will be coming on strong in 2018. JMO.

Last edited by leastprime; 02-08-2018 at 10:27 AM..
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Old 02-08-2018, 10:21 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,114 posts, read 3,406,011 times
Reputation: 5643
Quote:
Originally Posted by SOON2BNSURPRISE View Post
It seems as if the OP is moving to a new job and will finally have that large income. That does not mean that the op had that large income all along.
Agreed, I posted that and the op came back and confirmed it. It does sound like he does not live in California now, but has a job there coming soon.
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Old 02-08-2018, 10:27 AM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,114 posts, read 3,406,011 times
Reputation: 5643
Quote:
Originally Posted by CGab View Post
I know someone who owned a home in California and when he relocated for work to the Chicagoland area he was able to pay cash for his home in a VERY affluent Chicago suburb. Now don't get me wrong, Chicago is extremely high for COL too, but compared to California it's much less.


My point is, OP if you are looking to buy a home in the future, but don't feel you can afford your area then it's time to move to where you can afford it!!
Yep. If you live in coastal California or the metro areas and have equity you are in pretty good shape to live elsewhere. I just bought a home and a similar home back in the Bay Area would by 4x the monthly payment plus I would need another 250k for the down payment.
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Old 02-08-2018, 06:34 PM
 
Location: Sydney Australia
597 posts, read 302,858 times
Reputation: 868
Quote:
Originally Posted by GeoffD View Post
I don't get the past tense with Vancouver. My sister's house on West 19th in Dunbar went up another $500K last year. There is no sign of a slowdown. She's paying city property taxes on over $3 million valuation. People are being chased out of their homes by the property taxes. All that does is accelerate the teardowns to construct new homes with a 2nd wok kitchen that sit unoccupied.
I had read, perhaps incorrectly, that Vancouver had introduced penalties on properties that are unoccupied and that this had caused a turn down in sales to overseas investors.

Out of curiosity, how much are typical property taxes there? Ours do not increase greatly if the house is owner occupied. You pay more on purchase on all properties and again more capital gains tax on sale for an investment property. But annual rates, as we call them, might be $1400 a year on a cheap house and $2500 on one four times the value.
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Old 02-08-2018, 07:17 PM
 
Location: Bay Area, CA
28,191 posts, read 43,469,993 times
Reputation: 18605
Welcome to California, I guess?

I live in the Bay Area, where median home prices are well over $900K in most neighborhoods - and median household income averages like $85-140K depending on the city. But as someone pointed out earlier, you have to consider that not everyone is buying homes. In fact, we probably have way more renters than your average cities, including families and not-young professionals. I'm a 41 year-old woman, single with no children, income around $84K; and I've never owned a home. I rent instead, and currently have a "good deal" at $2100/mo for a 1br duplex. We make compromises to live in these expensive regions, usually because this is where the good jobs are too. And in my case, I grew up and still have family/friends here.

As for the (not filthy rich) homebuyers here, they're either "house poor" and/or have a sizable down payment. A lot of folks (of all ages) get this money from parents/family, since it's tough to save $100K+ on your own, even with a comfortable salary. If I ever do buy a home around here, that's the deal I have - my father has that much put aside for me, otherwise I'd NEVER even have a chance at home ownership. The mortgage + tax payments would still be out of my reach, though, which is why I haven't taken him up on the offer yet. Not to mention, I'm hoping to relocate somewhere more affordable soon.

Last edited by gizmo980; 02-08-2018 at 07:27 PM..
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