Triangle real estate 2018 outlook (Raleigh, Cary: credit, house, to buy)
Raleigh, Durham, Chapel Hill, CaryThe Triangle Area
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Interesting...I don't really think that assumption is accurate either.
While I'm sure it describes some buyers, I'm willing to bet there are a lot of people buying $300-$500K homes that do not have a household income anywhere near $300k/yr. But that is another topic all together.
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.
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.
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!
Maybe. Real incomes in this country have not gone up adjusted for inflation in 20+ years. Cost of goods have become cheaper due to outsourcing/globalization.
Taxes are fairly reasonable here but we don't know how things will play out in the long term.
I have so many friends that keep moving to bigger houses because they can afford the payment. By afford I mean they are barely above water.
If you make $91K median per year in Cary then the price point for buying should be no more than $200K tops. Assuming you want to save for retirement, college, rainy day emergencies, a vacation, etc. Instead people are buying at $400K and more. The math does not add up any way you slice and dice. This area is no longer affordable for most people that have any sense.
The only way this makes sense is if these people have $$ from else where or are making waaaay more than $91K. Is that the only segment buying? I think not.
Well a couple things. First your point about income and inflation. That is true for the low and lower middle but that isn't who we are referring to here. Incomes of the upper middle and above, the ones buying these types of homes, have more than outpaced inflation.
Second while your current job might only keep up with inflation, most of the professionals I know continue to improve themselves and receive promotions or take another offer to increase pay.
Many people have side gigs or maybe investment gains they pour into their housing too - not all of it comes from just working their regular jobs.
This area is plenty affordable...lots of homes in the 200k range...but unlike other high cost areas you don't have to drive three hours to get them. Back in 2003 I knew a guy who drove from the Pennsylvania border to NYC area every day due to housing prices!
If that is all you have in savings, you are definitely doing it wrong, and I don't care about retirement accounts/401k's, stocks, etc. Just wrong if you are that thin on actual pure cash savings.....
Quote:
Originally Posted by wheelsup
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! Which is stupid because the card gets paid when the bill comes.
If that is all you have in savings, you are definitely doing it wrong, and I don't care about retirement accounts/401k's, stocks, etc. Just wrong if you are that thin on actual pure cash savings.....
Why keep money in a savings account? What is the point of keeping it there? Our checking account has to have some money in it which is used to pay bills. The rest gets swept into a brokerage. In fact this reminds me I need to transfer that $150 out of there and zero it out.
Why keep money in a savings account? What is the point of keeping it there? Our checking account has to have some money in it which is used to pay bills. The rest gets swept into a brokerage. In fact this reminds me I need to transfer that $150 out of there and zero it out.
LOL, you said you had "little in savings". That is apparently not true, you have savings but its in a brokerage account? Your initial statement was misleading.
If that is all you have in savings, you are definitely doing it wrong, and I don't care about retirement accounts/401k's, stocks, etc. Just wrong if you are that thin on actual pure cash savings.....
LOL, you said you had "little in savings". That is apparently not true, you have savings but its in a brokerage account? Your initial statement was misleading.
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.
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