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My cousin is a good example. Bought his home in Eaton's Neck just steps from the ocean for $250K in the 90s and it is worth in the millions now. He is in a home that only a rich person can buy and he is a middle class earner.Does this make Eaton's Neck a middle class kind of town? Technically yes and no. Because no middle class person can afford to buy into the neighborhood now. But many people living there make a middle class salary.
True.
We see very similar stuff out here in Poquott and Scotts Beach.
You are correct Crooks. Most people on LI residing in houses worth 600K, 800K, etc did not pay this much for their homes (not even close) and could not afford to buy their own homes today at the current market value.
We've been looking at the median value of homes, not the cost. To the multitudes of people like me who purchased homes prior to the Bush bubble years (and haven't borrowed against their value), homes are healthy assets. My mom and dad purchased their 2.5 acres in CSH in the late 60s for around 80k. It's worth well over a million now. Even adjusted for inflation that's one hell of a capital gain! Mom's living on a retirement income now, so no, she couldn't afford to buy the house with her income, but obviously, she could sell it and buy a comparable house.
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Therefore, the people living in these homes are not necessarily upper middle class earners but those who are able to comfortably buy into these neighborhoods at the current price today without equity from the sale of another home or any kind of outside assistance from family, etc are definitely at the very least upper middle class earners.
Agreed. Which is why I insist CSH is a predominantly upper-middle area with a smaller middle class population (that is shrinking). It's been that way since I was a kid.
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This is why in towns like Cold Spring Harbor, the cost of homes vs the median household income do not match. The MHI was around 130K or so at the last census but the average house value was over 800K. People earning 130K can only afford 390K in mortgage, so to say that the average person in that town could buy their own home today is absurd. But anyone who is able to buy a home in CSH now (without outside help) has to be upper middle class to wealthy.
Incorrect. You're looking at the median household income only, which does not mean most CSH HH's earn that amount. It's one figure in a more complex equation. Median means middle - half the households earn below the 135k amount and half above it (with many significantly above it). You also have to look at the per capita income to get a sense of what people are really earning, which is a healthy 63k in CSH. You can also look at the mean, or average, HHI which is 188k . Mean income for a family is 202k. Half the men in CSH make more than $121k (individually).
My cousin is a good example. Bought his home in Eaton's Neck just steps from the ocean for $250K in the 90s and it is worth in the millions now. He is in a home that only a rich person can buy and he is a middle class earner.Does this make Eaton's Neck a middle class kind of town? Technically yes and no. Because no middle class person can afford to buy into the neighborhood now. But many people living there make a middle class salary.
Millions? I think your cousin might be exaggerating a bit. Looking at recent home sales in Eaton's Neck, I'm still seeing houses steps from the water that sold in the 300-600s range:
There was only one recent sale over 1 million at 1,070,00. Unless your cousin's house looks like this, it's not worth millions, and even then it's not in the multimillion range.
This one is listed at 435K, so it will sell for around 400:MLSLI.com
This one's listed at $375: MLSLI.com
I'd say the middle class dream is alive and well in Eaton's Neck.
Additionally, if you're cousin's house really is worth millions and he paid 250k (or around 410k in 2012 dollars), isn't that a good thing for him? Provided he hasn't borrowed against the equity, doesn't it mean he could sell and buy another house worth millions in the neighborhood?
My cousin is a good example. Bought his home in Eaton's Neck just steps from the ocean for $250K in the 90s and it is worth in the millions now. He is in a home that only a rich person can buy and he is a middle class earner.Does this make Eaton's Neck a middle class kind of town? Technically yes and no. Because no middle class person can afford to buy into the neighborhood now. But many people living there make a middle class salary.
I don't know about that....there's been a little thing call market(housing) correction that has been taking place since 2007. 250K in the 90's is not worth millions now unless he did a million or two in renovations or his land is sitting on a nice oil reserve
Last edited by BigMike50; 07-14-2012 at 09:33 AM..
My cousin is a good example. Bought his home in Eaton's Neck just steps from the ocean for $250K in the 90s and it is worth in the millions now. He is in a home that only a rich person can buy and he is a middle class earner.Does this make Eaton's Neck a middle class kind of town? Technically yes and no. Because no middle class person can afford to buy into the neighborhood now. But many people living there make a middle class salary.
Once there was a time when $250K was considered a lot of money to spend on a house. And that would have been in the 1990s. When I bought my first house in 1997, people thought we were C-R-A-Z-Y to look to buy in Garden City, where we were surely going to have to pay around $300K for a house!!! O.M.G. that was crazy-talk back then! I had people talking about me at work ("she is going to spend $300K on a house, who does she think she is?") I have a friend whose husband didn't want to pay more than $200K for a house, even though they had more than 50% of that amount to put down. She had to practically put a gun to his head to make him pay $200K for a house. Now you have people paying more than that to live in OK areas for houses that need $100K of updates and the taxes are $10K a year. And they aren't making any more than we were making back then.
Thing, I seriously doubt most people in Garden City, and LI at large, have seen their incomes triple and quadruple in the time since then (for the same job levels that we were at then); yet home prices have, and so have taxes. But people keep telling themselves "it's worth it".
Related to this thread, the Census publishes SELECTED MONTHLY OWNER COSTS AS A PERCENTAGE OF HOUSEHOLD INCOME (SMOCAPI). These costs include mortgage (if there is one), real estate taxes, various insurances, utilities, fuels, mobile home costs, and condominium fees. This item is used to measure housing affordability and excessive shelter costs. For example, many government agencies define excessive as costs that exceed 30 percent of household income.
Nassau County
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Housing units with a mortgage (excluding units where SMOCAPI cannot be computed) 239,408
Less than 20.0 percent 57,281 +/-1,393 23.9% +/-0.6
20.0 to 24.9 percent 31,143 +/-977 13.0% +/-0.4
25.0 to 29.9 percent 30,801 +/-1,186 12.9% +/-0.5 30.0 to 34.9 percent 24,271 +/-934 10.1% +/-0.4
35.0 percent or more 95,912 +/-1,633 40.1% +/-0.6
Housing unit without a mortgage (excluding units where SMOCAPI cannot be computed) 122,718
Less than 10.0 percent 23,553 19.2%
10.0 to 14.9 percent 21,950 +/-704 17.9% +/-0.5
15.0 to 19.9 percent 17,566 +/-674 14.3% +/-0.5
20.0 to 24.9 percent 12,454 +/-595 10.1% +/-0.5
25.0 to 29.9 percent 9,207 +/-517 7.5% +/-0.4 30.0 to 34.9 percent 6,952 +/-565 5.7% +/-0.4
35.0 percent or more 31,036 +/-1,016 25.3% +/-0.7
Suffolk County
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SELECTED MONTHLY OWNER COSTS AS A PERCENTAGE OF HOUSEHOLD INCOME (SMOCAPI)
Housing units with a mortgage (excluding units where SMOCAPI cannot be computed) 286,686
Less than 20.0 percent 59,627 +/-1,406 20.8% +/-0.4
20.0 to 24.9 percent 38,528 +/-1,304 13.4% +/-0.4
25.0 to 29.9 percent 37,535 +/-1,467 13.1% +/-0.5 30.0 to 34.9 percent 31,210 +/-1,317 10.9% +/-0.4
35.0 percent or more 119,786 +/-1,747 41.8% +/-0.6
Housing unit without a mortgage (excluding units where SMOCAPI cannot be computed) 114,347
Less than 10.0 percent 21,309 +/-755 18.6% +/-0.6
10.0 to 14.9 percent 21,135 +/-881 18.5% +/-0.6
15.0 to 19.9 percent 17,203 +/-686 15.0% +/-0.6
20.0 to 24.9 percent 12,468 +/-728 10.9% +/-0.6
25.0 to 29.9 percent 8,363 +/-495 7.3% +/-0.4 30.0 to 34.9 percent 6,339 +/-511 5.5% +/-0.5
35.0 percent or more 27,530 +/-877 24.1% +/-0.7
50% of the mortgaged household's in Nassau and Suffolk are living in the "excessive" category of 30% or more, with a scary 40% are at 35% or more. Once again, I wish the Census wouldn't cut-off the stats at a "high" point like this since it would be interesting to see how the more than 35% breaks down (I imagine you will see some households in the 50-60% range).
Obviously, our property taxes are "excessive" relative to the rest of the country, and with some people saying that their taxes have gone up 20-30-40-or even 50% in 10-15 years, I'd say some of these 30%+ households, especially the un-mortgaged ones might necessarily be to blame for their situation.
Once there was a time when $250K was considered a lot of money to spend on a house. And that would have been in the 1990s. When I bought my first house in 1997, people thought we were C-R-A-Z-Y to look to buy in Garden City, where we were surely going to have to pay around $300K for a house!!! O.M.G. that was crazy-talk back then! I had people talking about me at work ("she is going to spend $300K on a house, who does she think she is?") I have a friend whose husband didn't want to pay more than $200K for a house, even though they had more than 50% of that amount to put down. She had to practically put a gun to his head to make him pay $200K for a house. Now you have people paying more than that to live in OK areas for houses that need $100K of updates and the taxes are $10K a year. And they aren't making any more than we were making back then.
Thing, I seriously doubt most people in Garden City, and LI at large, have seen their incomes triple and quadruple in the time since then (for the same job levels that we were at then); yet home prices have, and so have taxes. But people keep telling themselves "it's worth it".
Then you have the other end of the spectrum. My brother realized he wasn't gonna be able to afford a house on LI in 2002. He moved to Houston where he had a 4bed/3bath house built for him for 139k. He added some extras over the past 10 years. He is getting divorced now and has put the house on the market. The realtor told him to put it on for 140K but, comps have sold for 30k less and taken time to sell.
You are right about market correction. And no, I was not exaggerating about my cousin's house. He bought a very mediocre at best house for 250K and then with his own hands, over the span of 20 years rebuilt his home into a much larger house- like 2-3 times the size. He did a little at a time and basically lived in a construction zone for 20 years, but it has turned into a healthy investment for him.
Once there was a time when $250K was considered a lot of money to spend on a house. And that would have been in the 1990s. When I bought my first house in 1997, people thought we were C-R-A-Z-Y to look to buy in Garden City, where we were surely going to have to pay around $300K for a house!!! O.M.G. that was crazy-talk back then! I had people talking about me at work ("she is going to spend $300K on a house, who does she think she is?") I have a friend whose husband didn't want to pay more than $200K for a house, even though they had more than 50% of that amount to put down. She had to practically put a gun to his head to make him pay $200K for a house. Now you have people paying more than that to live in OK areas for houses that need $100K of updates and the taxes are $10K a year. And they aren't making any more than we were making back then.
Thing, I seriously doubt most people in Garden City, and LI at large, have seen their incomes triple and quadruple in the time since then (for the same job levels that we were at then); yet home prices have, and so have taxes. But people keep telling themselves "it's worth it".
The big difference is, mortgage rates fluctuated around 7%-10% in the 90's. From 2001 to 2012, they've fluctuated from 3.75%-7%, which they are currently at record lows around 3.75.
See what happened? Also, median household incomes have risen at about the rate of inflation since the 90's.
Mortgage rates in Japan are close to 1%. I think that's a real possibility here in the future.
And yes, I am happy for him. The whole point was that most people are in homes valued at prices far exceeding what they could pay for a home, and therefore many household incomes do not match with current home values. That is all.
So I guess the question is....is a town middle class when most people living in the town are middle class? Or is a town middle class when middle class people can afford to buy into the neighborhood today at current home prices? Because many neighborhoods with middle class people living there do not have any available housing stock at middle class prices.
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Smocapi
