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Old 11-05-2009, 12:36 AM
 
656 posts, read 1,318,953 times
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Quote:
Originally Posted by KT13 View Post
This post makes no sense, i have no clue what you are trying to say here. I thought I was pretty clear. If we are talking about suburbs such as McLean or Fairfax Country, most of housing stock is single family homes and most people living there are deriving their wealth from income (e.g. they report income and that is what's going towards the statistics such as median income of the area). So median income of the area is more relevant in this situation than some illusive wealth of some conspiratorial multi-millionaire corrupt contractors you keep bringing up.

Median income doesn't have to do with price of the homes, I used a couple of cities to illustrate if an area has very high income individuals more so than the high income earners who earn closer to the median , they can drive up the cost.

also, most people don't buy homes cash as you must be aware if you have been in the US for a while. It is quite possible for a family with the combined income of 200K (not unusual for this area) to afford a home that costs 800K-900K and it's even possible to get a home over 1 million or at least it was when the mortgage lending was looser.
Yes, I know which means the net worth of the individual may even be less, as the end consumers pay a premium for their homes.
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Old 11-05-2009, 01:04 AM
 
656 posts, read 1,318,953 times
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Quote:
Originally Posted by cpterp View Post
Why do you post in red?

In reality you'll never find such a large split in incomes near the median (ie. there won't be a 400K gap between the top an bottom 50%, unless the town actually does have 41 people) assuming a normal distribution. There still may be extremities on either end though which skew the per capita data, as I've posted repeatedly before. Since you constantly bash the median income as a measure of wealth, may I ask what you think is an appropriate measure? [this should be good]

There are a variety of factors to measure wealth, but no concrete measure, it depends on the area and demographics and the wealth of the area tied with the economy ,prescene and access of capital, in certain cases real estate prices but not all the time, in select cases surveys or studies may be used, sometimes its obvious wealth can be in area such as where bill gates lives, and the very wealthy live but average and median incomes don't show that, the high end of real estate such as 20-30 million dollars condos may be indicative of wealth but it depends on whether the purchase is tied to the economy of the area vs. speculation and vacation or secondary properties .

Uh, the rest of your post doesn't really make much sense. The only thing I understand is that the median in McLean (one of the top 10 wealthiest "towns" along with Bethesda and Potomac) is between 100K and 200K, yet you claim a "significant" number of people make >500K. Well, this just proves my point. The majority of people living in McLean definitely do not make more than $500K per year, and the $100-200K is way more realistic, and that's why the median income is in that range.


Aaaah, they do , in mclean, va 10% of the folks have a household income of over 500k a year, and 20% over 250k. Now of course the folks making 500k a year or 250k may have millionares, but may not be super millionares are billionares (don't see 10-20 million dollar homes but that may or may not be as revelant in this case), but may get the money from things such as lobbying and defense contracting and create jobs via the government and have the end consumers pay lots of money for their homes. Of course the median suggests that many folks may struggle with mortgages and other expenses especially if they are newcomers to the market which many folks in the region area given population growth coinciding with housing growth trends.

In Bethesda, Potomac we see similar situations, in many cities were more wealthy folks the median income may be far less, for instance in many silicon valley cities and areas studies have shown that they are more wealthy despite lower median income , and more access to capital and wealth flow exists there, even despite fewer individuals making the more than 250 or 500k with a median of 120k or so.

$20-30million condos? lol You're joking right? If such things exist in McLean, how many of them could there possibly be, and how is that relevant to this discussion?
That's a relevant discussion but with many variables that may or not apply to this situation.
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Old 11-05-2009, 08:47 AM
 
Location: NW District of Columb1a USA
382 posts, read 1,426,884 times
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Tech2 your points are well taken. Income and wealth are not the same. Someone who makes $300K a year but spends $350K a year is not wealthy. Just the opposite. They may have a lot of purchasing power but they are in debt. Whereas someone who makes $40K a year, spends $35K a year and sits on $3million in stock holdings is wealthy.
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Old 11-05-2009, 09:45 AM
 
583 posts, read 1,178,725 times
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Quote:
Originally Posted by tech2enable View Post
Yes, I know which means the net worth of the individual may even be less, as the end consumers pay a premium for their homes.
So, if like you are saying 10% makes over 500K a year and 20% over 250K a year, how is this not a wealthy area? you have almost 1/3 of people living in the area that are falling within the top 1% of US income earners. Are these the wealthy contractors you are talking about that are driving up the costs for the rest of the population? You previously said there are very very few of those and that majority of population in DC area earn somewhat depressed wages in your opinion which are way lower than the housing prices suggest.

Now you are contradicting yourself? You are bringing a point that there are way too many people making crazy incomes in the area which goes against your other point that people don't get paid well in DC area.

If you are a household earning consistently year after year over 250K or 500K and chances are you are a millionaire then how could 1.5 mil home or even a 2 mil home be out of reach? If you look at real estate listings at least on ziprealty you will see that there are plenty of homes that are less than 1 million and you can find those that are under 700K which are attainable for a household making a little over 100K (if both partners are working these are quite average and easily attainable salaries). I found prices on RE in Mclean to be cheaper than those in some areas of Arlington or NW DC.

From what you have shown the prices in Mclean are pretty reasonable based on what people are getting paid.
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Old 11-06-2009, 10:19 AM
 
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Quote:
Originally Posted by HomerBrink View Post
Tech2 your points are well taken. Income and wealth are not the same. Someone who makes $300K a year but spends $350K a year is not wealthy. Just the opposite. They may have a lot of purchasing power but they are in debt. Whereas someone who makes $40K a year, spends $35K a year and sits on $3million in stock holdings is wealthy.
I know, I was not using that argument, the other poster was trying to argue that income as a median equates to wealth, you are right on the mark.
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Old 11-06-2009, 10:20 AM
 
656 posts, read 1,318,953 times
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Quote:
Originally Posted by KT13 View Post
So, if like you are saying 10% makes over 500K a year and 20% over 250K a year, how is this not a wealthy area? you have almost 1/3 of people living in the area that are falling within the top 1% of US income earners. Are these the wealthy contractors you are talking about that are driving up the costs for the rest of the population? You previously said there are very very few of those and that majority of population in DC area earn somewhat depressed wages in your opinion which are way lower than the housing prices suggest.

Now you are contradicting yourself? You are bringing a point that there are way too many people making crazy incomes in the area which goes against your other point that people don't get paid well in DC area.

If you are a household earning consistently year after year over 250K or 500K and chances are you are a millionaire then how could 1.5 mil home or even a 2 mil home be out of reach? If you look at real estate listings at least on ziprealty you will see that there are plenty of homes that are less than 1 million and you can find those that are under 700K which are attainable for a household making a little over 100K (if both partners are working these are quite average and easily attainable salaries). I found prices on RE in Mclean to be cheaper than those in some areas of Arlington or NW DC.

From what you have shown the prices in Mclean are pretty reasonable based on what people are getting paid.
Not necessarily, because the high end workers are far from the median, what about the other 80% or so.
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Old 11-06-2009, 10:54 AM
 
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Quote:
Originally Posted by tech2enable View Post
Not necessarily, because the high end workers are far from the median, what about the other 80% or so.
You just said that about 1/3 of population of McLean are officially falling into what we consider the top 1% of income earners. Now you are saying 'what about 80% of others'? Can you make up your mind and decide finally whether you believe people earn high incomes or not?

When you talk about income levels of the majority of population within the area, this is where the median income comes into place. If it is high that means that majority of people are well to do at least when their income is concerned and are able to qualify for a more expensive home.

If you look at prices for RE in McLean there is a certain portion of really high end homes and those costing over 1 or 2 million, which are pretty much McMansions and are catered to your most high earning households. But you can still buy a decent home in McLean enough for a family of 4 with 3 bedrooms for under 700K and even 500K. In comparison, in prime area of the city like Georgetown 1.5 mil is not going to get you a McMansion size property, it would be rather a modest rowhouse. Also around most prime areas of NW DC prices of several million are not unheard of and there are much much less of such properties in McLean.
McLean was not immune from foreclosures and prices have fallen, i know someone who got a remodeled McMansion for half price last year due to foreclosure.
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Old 11-06-2009, 10:57 AM
 
583 posts, read 1,178,725 times
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Quote:
Originally Posted by tech2enable View Post
I know, I was not using that argument, the other poster was trying to argue that income as a median equates to wealth, you are right on the mark.
Actually, I have not ever said that median income = wealth. I am pretty much aware that networth is a much better measurement of wealth and always go by that. I simply stated that for some type of neighborhoods or areas (such as single family suburbs with transient population) median income plays a role in RE prices. People with higher income are able to qualify for higher priced homes. You are forgetting that most of them are taking out loans and not putting cash payments up front like those with really high networth are able to do. Your income is one of the very important factors when taking out a loan.
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Old 11-06-2009, 01:24 PM
 
656 posts, read 1,318,953 times
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[quote=KT13;11509872]You just said that about 1/3 of population of McLean are officially falling into what we consider the top 1% of income earners. Now you are saying 'what about 80% of others'? Can you make up your mind and decide finally whether you believe people earn high incomes or not?
Quote:

Not sure how I follow you, I said 20% of households make over 250k, so the other 80% is not counted.




When you talk about income levels of the majority of population within the area, this is where the median income comes into place. If it is high that means that majority of people are well to do at least when their income is concerned and are able to qualify for a more expensive home.




If you look at prices for RE in McLean there is a certain portion of really high end homes and those costing over 1 or 2 million, which are pretty much McMansions and are catered to your most high earning households. But you can still buy a decent home in McLean enough for a family of 4 with 3 bedrooms for under 700K and even 500K. In comparison, in prime area of the city like Georgetown 1.5 mil is not going to get you a McMansion size property, it would be rather a modest rowhouse. Also around most prime areas of NW DC prices of several million are not unheard of and there are much much less of such properties in McLean.
McLean was not immune from foreclosures and prices have fallen, i know someone who got a remodeled McMansion for half price last year due to foreclosure.
Dc's median income is only around 50k , so that's not a great argument, of course since many people do not live in D.C. but rather live outside there income may be counted in the suburbs, many of the defense contractors for example have offices in the suburban areas outside of D.C. In d.c. you have fewer taxpayers making above 250k or 500k then in say Bethesda or mclean, of course if the cost of living is high in the suburbs then in D.C. it may be even higher especially for people desiring for shorter commutes and traffic patterns as well as central offices being in D.C.
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Old 11-06-2009, 05:29 PM
 
Location: N/A
1,359 posts, read 3,432,165 times
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Quote:
Originally Posted by tech2enable View Post

There are a variety of factors to measure wealth, but no concrete measure, it depends on the area and demographics and the wealth of the area tied with the economy ,prescene and access of capital, in certain cases real estate prices but not all the time, in select cases surveys or studies may be used, sometimes its obvious wealth can be in area such as where bill gates lives, and the very wealthy live but average and median incomes don't show that, the high end of real estate such as 20-30 million dollars condos may be indicative of wealth but it depends on whether the purchase is tied to the economy of the area vs. speculation and vacation or secondary properties .


So in other words you can't come up with a better statistic than the median income. Moving on...

Quote:
Originally Posted by tech2enable View Post
Aaaah, they do , in mclean, va 10% of the folks have a household income of over 500k a year, and 20% over 250k. Now of course the folks making 500k a year or 250k may have millionares, but may not be super millionares are billionares (don't see 10-20 million dollar homes but that may or may not be as revelant in this case), but may get the money from things such as lobbying and defense contracting and create jobs via the government and have the end consumers pay lots of money for their homes. Of course the median suggests that many folks may struggle with mortgages and other expenses especially if they are newcomers to the market which many folks in the region area given population growth coinciding with housing growth trends.


10% of the population is not the majority! Again I can't understand the rest of the paragraph since it's incoherent and jumbled.

Quote:
Originally Posted by tech2enable View Post
I know, I was not using that argument, the other poster was trying to argue that income as a median equates to wealth, you are right on the mark.
I hope you're not referring to me as "the other poster." I clearly said median income is not synonomus with wealth, but it is the best readily available measure of wealth, especially when comparing it between different areas. Please understand that I never said the median income was a perfect measure, but the best measure. There is no perfect statistic, all have some sort of caveat.

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