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Old 11-30-2017, 12:33 PM
 
Location: River's Edge Inn, Todd NC, and Lorgues France
1,734 posts, read 2,563,001 times
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I miss those 17% cd rates in the early 80's .
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Old 11-30-2017, 12:34 PM
 
9,265 posts, read 8,231,667 times
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Quote:
Originally Posted by ucctgg View Post
I miss those 17% cd rates in the early 80's .
I bet you don't miss the 17% mortgage rates
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Old 11-30-2017, 12:49 PM
 
Location: Raleigh, NC
794 posts, read 1,322,901 times
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Quote:
Originally Posted by Funky Chicken View Post
I live in a neighborhood with a price range of $375K-$525K.
I know my neighbors pretty well. I know what they do and I have a decent idea of what those jobs pay. My profession also exposes me to salary information.
It's also not hard to figure out how much money was borrowed when they bought their homes. A few mouse clicks gets that done if you are interested.
I would put the household income average in my neighborhood at $125-$150K. A few might be higher (dual income white collar households) but many are single income with one parent staying home. An educated guess as to typical monthly PITI for my neighbors would be about $2,500 per month. That's about 20% of gross income-well below the typical 28/36 guidelines.
The idea that the $300-$500K housing price range is the domain of the rich is pretty inaccurate IMO. It doesn't take a $200K plus household income to afford a $500K house unless you are a very poor manager of your money. A smart move for a household with a $200K income would be to stay at or below that $500K price point and save/invest instead of keeping up with the Joneses, and I think there is a pretty equal mix of people that subscribe to that theory and those who just buy as much house as they can get approved for.
One more thing to consider. If I showed you what $500K buys in the town where I grew up, you would understand why people relocate here and get stars in their eyes when they see how far their money will go. We ended up downsizing 4 years in because we realized we had bought more house than we wanted to take care of, but coming from 1170 square feet the idea of nearly 4000 SF on a lateral price move was like winning the lottery.
Quote:
Originally Posted by North_Raleigh_Guy View Post
Those incomes are more in line with what I was thinking was more the norm when it comes to homes in that price range. Thanks for the feedback!

I think its a pretty fair representation of my neighborhood as well ($400k-$500 price range; assuming $100k+ income for those with a SAHM and probably $150k-$200k for full time double income).
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Old 11-30-2017, 12:54 PM
 
6,799 posts, read 7,335,361 times
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Quote:
Originally Posted by wheelsup View Post
Did you read it? I stated surveys always ask about savings accounts. And that was my point - the results ARE misleading.

Judging by how the media reports stories that I am familiar with I pretty much disregard ALL news as well.
You said: " On paper my wife and I are poor - we have CC debt and little in savings - which is what those surveys ask. I think we have about $150 in an actual savings account!"

"We...have little in savings - which is what those surveys ask"

You said savings, not savings accounts. And I'm sure thats what the surveys ask, how much do you have in savings? They don't literally mean a passbook savings account, sheesh.
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Old 11-30-2017, 12:55 PM
 
2,843 posts, read 2,963,185 times
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Quote:
Originally Posted by fly_widget View Post
I think its a pretty fair representation of my neighborhood as well ($400k-$500 price range; assuming $100k+ income for those with a SAHM and probably $150k-$200k for full time double income).
And this is neither median nor average
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Old 11-30-2017, 01:05 PM
 
Location: Raleigh, NC
794 posts, read 1,322,901 times
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Originally Posted by hey_guy View Post
And this is neither median nor average


Did I say it was? And, what does that have to do with the post? I was responding to two people's anecdotal experience to say it was similar to mine.
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Old 11-30-2017, 01:59 PM
 
19 posts, read 30,487 times
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Quote:
Originally Posted by fly_widget View Post


Did I say it was? And, what does that have to do with the post? I was responding to two people's anecdotal experience to say it was similar to mine.
So if the median income in Cary is $90K but you live in a neighborhood where incomes are $100-150K++ then your experience is not really representative of the whole picture.

Let's do a simple math here:

Assume $100K salary
Taxes + insurance premiums + life ins + 401K = 25% of that if not higher
So, $75K net or $6250 per month
Now savings = roth maxed out is $10K/year for two = $5417
Two college funds @$300 per piece = $4800
2 Car payments = $1000 leaves $3800
Groceries = $800 leaves $3000

So, how do you afford that $400K house again? Your payment even if you put 20% down will be $2000-$2200.

You gonna live on $800 for everything else? LOL!

Something has to give....which means most have no savings and are house poor. Even if you make $150K you are pretty screwed if you buy in that range. I have not even taken into account childcare, which is a big expense for young homeowners.

Banks will qualify you because they want you to borrow more and the real estate agents will encourage you because they want larger commission checks. This is the reality in Cary.
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Old 11-30-2017, 02:10 PM
 
Location: My House
34,937 posts, read 36,163,891 times
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Quote:
Originally Posted by Icorpse View Post
So if the median income in Cary is $90K but you live in a neighborhood where incomes are $100-150K++ then your experience is not really representative of the whole picture.

Let's do a simple math here:

Assume $100K salary
Taxes + insurance premiums + life ins + 401K = 25% of that if not higher
So, $75K net or $6250 per month
Now savings = roth maxed out is $10K/year for two = $5417
Two college funds @$300 per piece = $4800
2 Car payments = $1000 leaves $3800
Groceries = $800 leaves $3000

So, how do you afford that $400K house again? Your payment even if you put 20% down will be $2000-$2200.

You gonna live on $800 for everything else? LOL!

Something has to give....which means most have no savings and are house poor. Even if you make $150K you are pretty screwed if you buy in that range. I have not even taken into account childcare, which is a big expense for young homeowners.

Banks will qualify you because they want you to borrow more and the real estate agents will encourage you because they want larger commission checks. This is the reality in Cary.
Put down a little more money, drive cheaper cars (you can drive two cars for less than 500 bucks if you want to and they'll both be new... can do even better if you have no car payments at all) and invest in a 401k through your employer that matches your contributions... fluctuate what you contribute, but always make sure you put in enough for the full match.

College funds... I'm mixed on that... I think they are great, but not at the expense of the family's living arrangements. Those kids can always stay home and attend community college for a couple of years until they go to a 4-year state school (less money)... they can also worth part-time to contribute to their schooling and they can also get merit scholarships if they are good students.

Sooo... do you really tighten up to max out college funds? Nah. I wouldn't do it if it meant that I had to buy a tiny place that my kids couldn't stay in while they went to community college if they went that route in order to reduce college costs.
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Old 11-30-2017, 02:15 PM
 
9,265 posts, read 8,231,667 times
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Quote:
Originally Posted by RedZin View Post
Put down a little more money, drive cheaper cars (you can drive two cars for less than 500 bucks if you want to and they'll both be new... can do even better if you have no car payments at all) and invest in a 401k through your employer that matches your contributions... fluctuate what you contribute, but always make sure you put in enough for the full match.

College funds... I'm mixed on that... I think they are great, but not at the expense of the family's living arrangements. Those kids can always stay home and attend community college for a couple of years until they go to a 4-year state school (less money)... they can also worth part-time to contribute to their schooling and they can also get merit scholarships if they are good students.

Sooo... do you really tighten up to max out college funds? Nah. I wouldn't do it if it meant that I had to buy a tiny place that my kids couldn't stay in while they went to community college if they went that route in order to reduce college costs.
Not to mention saving for college can actually be a disadvantage when it comes to loans and financial aid. Which is crazy, but that's the way it goes.

iCorpse is also not taking into account tax credits and things like that, which can add up.
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Old 11-30-2017, 02:26 PM
 
13,811 posts, read 27,378,934 times
Reputation: 14244
I'm mid-30's and have never had a car payment. My wife did back in college but we cleared that up right quick after graduation. It's funny how inflated these budgets tend to get when posted as "examples".

When we moved here we way overbought for our income level, but to be sure we expected it to increase. Unfortunately it actually went down soon after buying due to the recession, life sucked for a while and then things got a lot better.

I personally wouldn't live in a crappy house or bad neighborhood, but ones definition of that will change your price point considerably.

To be sure, this area still offers affordable homes within reasonable commuting distance of job centers in nice areas. They may not be HGTV model homes but one can launch a career here while investing your disposable income and in 10 years set yourself up financially for the rest of your life.

You really can't do that in places like NYC or LA or DC without sacrificing your living situation significantly or pouring all your money into your house.
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