Debt-Free Atlantans (Sandy Springs, Decatur: apartment complexes, health insurance, condos)

[equinox63]

What percentage of intown Atlanta residents would you assume are debt-free except for their homes?

Are the majority of Inman Park, Candler Park, Morningside, VA highlands, Collier Hills, or Decatur City residents economically savvy, inherently wealthy, or just keeping their lifestyles above water juggling both considerable income and debt?

I know it varies greatly, but I was curious about the general concensus regarding the economic undertones of those who live in stereotypically higher-end intown areas. The stats on AJC almost always shows that the majority of the residents in the afforementioned areas make less than $100k.

I'd assume it'd be tough to live in those areas making $100K a year unless you were debt-free. What do you think the average debt-to-income ratio is for these areas?

Just curious...

[GALiberal]

I haven't seen any of those stats about income but I would think that apartment complexes and condos tend to bring income stats down for a lot of areas.

As an example, Wikipedia lists Sandy Springs' average income for a male as $60,053 and average household income at $116,406. Which seems a bit low for a home owner (non-condo/townhome) in that area.

[Mishap]

It really depends on the situation. According to Zillow, the median home value is just about 400k in Virginia Highland while the median household income is 65k and the median age is 36 (a solid decade+ in the workforce). That puts it over 6X median income which would never get past an underwriter today. The difference though is if you have older couples whose income has come down but they still have high assets or people that put very big down payments (possible if they made a profit selling a past home during the boom). My parents probably make under 50k these days but their 400k home is paid for and they're just working to keep health insurance till they're Medicare eligible.

A person conceivably could have bought a home at 6X their salary during the housing boom and just lived house poor since then. If they put 10% down, they have a $2,100/mon mortgage and then maybe another $500/mon on taxes. That's $31k in annual costs which is well over 50% of their income once you subtract out payroll taxes. If it's a single earner w/ a dependent spouse and a huge amt of mortgage interest, they're probably zeroed on income taxes leaving maybe 50-55k in net income. If you eat ramen and drive a 20 yr old Civic, you can make it all work but that's a tightrope. Other debt makes such a situation less tenable of course but none of that mattered during the boom.

Income certainly isn't the only factor. I'm keeping my belt tight despite buying a condo w/ a mortgage that is only 1.7X my salary simply b/c I had to drop 40k cash down on top of the 15k/yr I'm spending on tuition right now.

[noah]

Hard to say as far as trends but I would suspect there is some of each of these scenarios. But someone who is financially smart and has been in a professional job for say 10-15 years say making a household income of $80k (average household income in Ga is $40k) could sock away some serious wealth. You don't have to make over $100k to become wealthy. For example someone investing 10% of that income and earning 10% interest per year would have $138k after 10 years. Thats with saving 10% which isn't that hard to do.

Add to that the fact that many of these neighborhoods have increased in value 2 or 3 fold in that time and those that bought a while back may have had a much smaller payment and may be close to paying it off.

[ReadyForMarriage]

Originally Posted by noah

Hard to say as far as trends but I would suspect there is some of each of these scenarios. But someone who is financially smart and has been in a professional job for say 10-15 years say making a household income of $80k (average household income in Ga is $40k) could sock away some serious wealth. You don't have to make over $100k to become wealthy. For example someone investing 10% of that income and earning 10% interest per year would have $138k after 10 years. Thats with saving 10% which isn't that hard to do.

Add to that the fact that many of these neighborhoods have increased in value 2 or 3 fold in that time and those that bought a while back may have had a much smaller payment and may be close to paying it off.

yep!

[neil0311]

Originally Posted by noah

For example someone investing 10% of that income and earning 10% interest per year would have $138k after 10 years. Thats with saving 10% which isn't that hard to do.

Where are you going to realize that kind of after tax average return, except in a situation like today where the market sold off and you can buy low and ride the recovery? You also have to remember that except for 401K or similar qualified retirement plans, you are saving after tax dollars.

I do agree that you can easily save money if you have made smart choices, and some of us have not spent more than they can afford and have made some pretty smart choices.

[goozer]

People have debt everywhere, so I'm sure Intown neighborhoods are not significantly different than most places. It is a pricey area to buy a house, but I would guess that over half the people who actually live in the neighborhood rent. The median income looks at the person in the middle, with 50% of all residents earning more and 50% earning less. If the median income is 65k, that is pretty high. I do not see that these numbers are out of whack. If you want out of whack, take a look at La Jolla, CA. The median home price there is something like $1.4 million while the median household income is something like $90k. Of course, the $90k household income could easily include a family that has a $10 million trust fund, where no one in the family works, and they live off the $90k "interest" each year in a house that is already completely paid for. Never underestimate the number of wealthy people that want/choose to live in desirable areas.

On another note, if someone can tell me how to hook up 10% appreciation a year for my investments (noted above) please let me know!!!