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I’m 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 can’t 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
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.
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?
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!!
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.
Location: Was Midvalley Oregon; Now Eastside Seattle area
13,075 posts, read 7,515,583 times
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Quote:
Originally Posted by American Expat
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..
Location: Formerly Pleasanton Ca, now in Marietta Ga
10,351 posts, read 8,572,211 times
Reputation: 16698
Quote:
Originally Posted by CGab
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.
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.
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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