Homeownership in Dallas area falls as millennials balk at buying (Arlington: lease, house)

[Berrie143]

Originally Posted by aznkobee

Growing up in Socal I definitely feel most people who grew up there all have the mentality that Socal is the best place to live and no matter what the monetary trade off it is worth it. I always feel like my friends and cousins are jealous that I have a nice house here but at the same time pity me because I live in Texas and have to suffer the heat and boredom..... Young people definitely care more about where to live than making money and owning houses. I don't feel bad for them at all because their lucky parents all bought houses at the right time, right place and saw it jump up couple folds. They can easily support their kids.

Yes, a lot of people in So Cal have the mentality that it's Eden, which is unfortunate for them. They aren't considering the future of this place and how so many cities have gone downhill and are going bankrupt. They aren't considering the COL getting so high that middle class people are now heading toward poverty level. They don't think about the future of their children and how they're going to survive in a place that WE, their parents, have barely survived. I have also had a few people tell me that they LOVE CA and will never leave and that any other place is just crap. Yeahhh, good luck with your So Cal life and your debts and your high-as-hell rent/mortgages and junk schools.

[bencronin04]

Sorry to derail this thread, but how in the world is SoCal SOOOOOOO expensive and it has terrible schools? These two things just don't go hand and hand to me, it's usually the complete opposite.

[happycrow]

Ben:

Sacramento makes Austin politics look clean and high-minded by comparison. 'nuff said.

[Pagusas]

Originally Posted by bencronin04

Sorry to derail this thread, but how in the world is SoCal SOOOOOOO expensive and it has terrible schools? These two things just don't go hand and hand to me, it's usually the complete opposite.

Location. Its the ultimate determining factor in real estate.

[wallawallahoohoo]

I think there are three contributing factors to housing un-affordability to young couples today:

1- Schooling costs. I've had countless boomers tell me that they paid close to nothing for school tuition at state schools. This is impossible now. And many 20, 30 somethings still have student loans to repay - and these aren't just for fancy pants Ivy schools.

2- Housing costs. Entry level housing near work has almost disappeared, thereby the increase in college grads moving back home. You simply cannot make an apples to apples comparison in the housing market in this decade versus 30 or 40 years ago. When older folk tell me the homes they bought in lives past, I just can't believe you can see it today, even if they were to sell their home and attempt to downsize.

3- Wage stagnation. These days to meet the demands of factors 1 and 2 it necessitates a dual income couple/family, which in the boomer years were not as common. The CPI inflation has also made necessities like food and rent a higher proportion of spend.

[numberfive]

Student loans are a huge factor, for sure. They really cut into buying power, especially when a $40k or $50k student loan ends up eating up $400-$500 of their monthly income for the next 10 years.

[EDS_]

Originally Posted by numberfive

Just curious, have you read The Millionaire Next Door? It will open your eyes to what the financial habits are of millionaires, and it's often very different from what your preconceived notions might be.

For example, the majority of millionaires don't buy new cars. They buy used, and don't spend over $30,000 on them. The people leasing high-end cars typically have an embarrassingly low net worth. In other words, the people that want to look like millionaires are usually the poorest.

"It's not what you earn, it's what you save".

With respect I'd say you should read that book again or at least understand what the author's were doing. The authors categorized earners into groups by net worth relative to income. Also note the book is almost 20 yrs old.

The Millionaire Next Door - Wikipedia, the free encyclopedia

Within the book the millionaires who fall into the "prodigious accumulators of wealth" group tend to drive beaters. The confusion is that group is nowhere near as large as many people want to think.

Doctors tend to fall into the, "low accumulators of wealth" group according to the book's formula. Yet lots of docs are millionaires and lots of millionaire docs drive really nice cars.

Because of my job and my wife's job we know lots of wealthy people ($1M-$100M+ net worths). I can't think of one from that group who drives a cheap used car, excepting a couple of car nuts who do drive beaters often but have GTRs, Lambos etc. in the garage or crazy go fast boats on Lewisville.

I don't have any data to back this up but I'd guess 75/80% of the millionaires in The US have primary cars worth more than $30K.

You also have to consider that Dallas/DFW has one of the highest concentrations of highly liquid $1M+ net worth types on Earth. I know it's comforting to think the lady in the tennis outfit driving the Land Rover Sport is faking it but around her she most likely isn't.

[synchronicity]

Originally Posted by EDS_

With respect I'd say you should read that book again or at least understand what the author's were doing. The authors categorized earners into groups by net worth relative to income. Also note the book is almost 20 yrs old.

The Millionaire Next Door - Wikipedia, the free encyclopedia

Within the book the millionaires who fall into the "prodigious accumulators of wealth" group tend to drive beaters. The confusion is that group is nowhere near as large as many people want to think.

Doctors tend to fall into the, "low accumulators of wealth" group according to the book's formula. Yet lots of docs are millionaires and lots of millionaire docs drive really nice cars.

Because of my job and my wife's job we know lots of wealthy people ($1M-$100M+ net worths). I can't think of one from that group who drives a cheap used car, excepting a couple of car nuts who do drive beaters often but have GTRs, Lambos etc. in the garage or crazy go fast boats on Lewisville.

I don't have any data to back this up but I'd guess 75/80% of the millionaires in The US have primary cars worth more than $30K.

You also have to consider that Dallas/DFW has one of the highest concentrations of highly liquid $1M+ net worth types on Earth. I know it's comforting to think the lady in the tennis outfit driving the Land Rover Sport is faking it but around her she most likely isn't.

Although I love TMND, I cringed at times at the way they used data.

One small nit - as you well know, saying "most millionaires drive (insert luxury car here)" is not the same as saying "most drivers of (luxury car) are millionaires". My purely informal and anecdotal observation is that "car value" correlates very poorly with net worth. That said, most 10M+ NW households my job has exposed me to do have at least one "luxury" car (although not necessarily a Lambo or the like).

That said, kinda backing up your point (and as this board provides plenty of evidence of), many affluent people (not necessarily 10M+ wealthy, but the "almost millionaires" and up, say) value things like "high quality schools" and therefore live in areas that are generally Not Cheap.

[Aceraceae]

Originally Posted by EDS_

With respect I'd say you should read that book again or at least understand what the author's were doing. The authors categorized earners into groups by net worth relative to income. Also note the book is almost 20 yrs old.

The Millionaire Next Door - Wikipedia, the free encyclopedia

Within the book the millionaires who fall into the "prodigious accumulators of wealth" group tend to drive beaters. The confusion is that group is nowhere near as large as many people want to think.

Doctors tend to fall into the, "low accumulators of wealth" group according to the book's formula. Yet lots of docs are millionaires and lots of millionaire docs drive really nice cars.

Because of my job and my wife's job we know lots of wealthy people ($1M-$100M+ net worths). I can't think of one from that group who drives a cheap used car, excepting a couple of car nuts who do drive beaters often but have GTRs, Lambos etc. in the garage or crazy go fast boats on Lewisville.

I don't have any data to back this up but I'd guess 75/80% of the millionaires in The US have primary cars worth more than $30K.

You also have to consider that Dallas/DFW has one of the highest concentrations of highly liquid $1M+ net worth types on Earth. I know it's comforting to think the lady in the tennis outfit driving the Land Rover Sport is faking it but around her she most likely isn't.

Well said. Last sentence especially nails it.

[bencronin04]

Originally Posted by EDS_

Because of my job and my wife's job we know lots of wealthy people ($1M-$100M+ net worths). I can't think of one from that group who drives a cheap used car, excepting a couple of car nuts who do drive beaters often but have GTRs, Lambos etc. in the garage or crazy go fast boats.

Though a lot of wealthy individuals own expensive cars I'm shocked that you don't know any that drive cheaper cars.

My parents have a used Ram and a 1999 Mercedes.
Our old neighbor that was the co-founder of Metro PCS owns an early 2000s Yukon.
My wife's bosses own an 05 And 08 SUV
The owner of a large pool company I know owns a PT cruiser and an H2 Hummer

All of those people have a net worth of well over a million. I will say they are not necessarily the norm by any means. I think the better statistic is the number of individuals that pay cash for a vehicle vs. financing. I think that would favor millionaires more realistically than used vehicles.