Inflated home prices (Dallas, Frisco, Leonard: sale, mortgage, house)

[Leonard123]

Originally Posted by Kenro911

Agent always say that. Don't take it seriously, quite frankly no one knows let alone agents. If the middle class is getting obliterated, who is going to prop up the housing market? Sooner or later, something is going to give unless the government literally pays half of your mortgage.

My best guess is that throngs of businesses are doubling incomes of people who were already at six figure incomes. These aren't seasonal/wage jobs. There is no way to make those increases go away.

[Sunbather]

Yes, the engineering, tech, networking, software etc. world has seen wage growth like I've never seen in my 15 years of working. I'm not the only one I know who doubled an already comfortable salary by choosing to take a new job. And that's only from those I actually talk numbers with. However, as least via direct friends and family I'm not seeing wage growth at the same rate further down the salary ladder. All anecdotal, but I am curious to see studies around wage growth by income bracket for 2021.

[mastershake575]

Originally Posted by Leonard123

Prices go up because more than enough people are willing to pay those prices. As long as people are willing to pay the higher prices, of course they are going to go up, and my real estate agent thinks 2022 will be worse with an even bigger increase than 2021.

Sadly, I see the middle glass being completely obliterated right now. There is absolutely nowhere in north Texas that is well suited for the middle class in my opinion. I think they are probably getting hurt more than anyone and not just with housing.

As to the post above about Addison, I was only comparing like houses themselves (age, condition, size, lot), but the main point I was trying to make is that schools are not "110 percent" driving property or resale values. Schools are only going to be one factor of many, and even that would have to be based on media/PR and/or random statistical nuances.

Agreed.

DFW is just becoming like most majority metroplexs. Upper middle class being the "minimum" to buy in desireable suburbs/highschool feeders.

Low inventory due to combination of low interest rates (which attracts investors), boomers living longer (sitting on there houses forever instead of the usual turnover rate), and a very large Gen Y population that wants to buy in now

Originally Posted by Kenro911

Agent always say that. Don't take it seriously, quite frankly no one knows let alone agents. If the middle class is getting obliterated, who is going to prop up the housing market? Sooner or later, something is going to give unless the government literally pays half of your mortgage.

The lower middle to middle-middle is being obliterated. If you don't have a household income of at least 100k then you simply won't live in an above average highschool feeder.

"Prop up the housing market" will be upper middle class along with transplants. When there's a shortage of houses then it means the barrier of entry will be higher.

If you have 100 people trying buying into a neighborhood (60 middle class, 30 upper middle, and 10 upper class) but only 25-30 houses for sale that year in that area then those 60 middle class people will basically be left out to dry.

[Kenro911]

Originally Posted by mastershake575

Agreed.

DFW is just becoming like most majority metroplexs. Upper middle class being the "minimum" to buy in desireable suburbs/highschool feeders.

Low inventory due to combination of low interest rates (which attracts investors), boomers living longer (sitting on there houses forever instead of the usual turnover rate), and a very large Gen Y population that wants to buy in now


The lower middle to middle-middle is being obliterated. If you don't have a household income of at least 100k then you simply won't live in an above average highschool feeder.

"Prop up the housing market" will be upper middle class along with transplants. When there's a shortage of houses then it means the barrier of entry will be higher.

If you have 100 people trying buying into a neighborhood (60 middle class, 30 upper middle, and 10 upper class) but only 25-30 houses for sale that year in that area then those 60 middle class people will basically be left out to dry.

What can you even afford in Frisco on 100K household income realistically? That's like 6K take home at best with little retirement investment and no major debts to service and a very healthy health insurance from employer. These days even 2 bedroom apartments are approaching 2.5K to live in a cardboard box. By the time you pay all bills, at least 2 cars for the household, gas, insurance, tolls etc that barely leaves anything to survive on. Then how on earth are you even supposed to save for a down payment and emergency fund for responsible home ownership.

House ownership in Frisco needs around 200K or over income, median home is close to 600K. Prices for food, gas, home insurance, electricity have all went up in past year as well.

100K income in Frisco is a 2 bedroom apartment living lifestyle.

[mastershake575]

Originally Posted by Kenro911

What can you even afford in Frisco on 100K household income realistically? That's like 6K take home at best with little retirement investment and no major debts to service and a very healthy health insurance from employer. These days even 2 bedroom apartments are approaching 2.5K to live in a cardboard box. By the time you pay all bills, at least 2 cars for the household, gas, insurance, tolls etc that barely leaves anything to survive on. Then how on earth are you even supposed to save for a down payment and emergency fund for responsible home ownership.

House ownership in Frisco needs around 200K or over income, median home is close to 600K. Prices for food, gas, home insurance, electricity have all went up in past year as well.

100K income in Frisco is a 2 bedroom apartment living lifestyle.

Your mixing up 2 different things.

"100k being the entry point of homeownership" is not the same thing as "100k is the minimum entry point of the city of Frisco".

Entry point of an above average highschool feeder would be like a 1950s or 1960s house in Richardson, East Plano, or a 70s house in North Garland.

Frisco will obviously be on the higherend since houses are bigger, newer, and it attracts upperclass transplants.

Like I said, 100k will be like barebones no thrills entry level for above average highschool feeder and most cities will see upper-middle to low upper class

[Kenro911]

Originally Posted by mastershake575

Like I said, 100k will be like barebones no thrills entry level

Well what I find interesting is that Frisco which I think is the most wealthiest DFW or one of suburb has median income of 130K to 150K depending where you look.

If 100K income buys you barebones home that probably needs countless thousands investment into structural integrity in not so fancy area. Yet the wealthiest area in DFW or one of - has median income of just 150K. Its not like there are that many low income apartments in Frisco to dilute that number much either.

Which brings me to the question, how are people affording these homes all around DFW metro? The whole transplant argument does not hold weight much simply because DFW metro is 4th largest in US and Texas is 2nd largest by population. Californians can't simply alone overwhelm real estate in such heavily populated area.

Lets not forget that to live in DFW Metro you must have car, and those are not cheap at all - they never were and now they are extra expensive. One car per working adult eats up that income real fast.

[mastershake575]

Originally Posted by Kenro911

Well what I find interesting is that Frisco which I think is the most wealthiest DFW or one of suburb has median income of 130K to 150K depending where you look.

If 100K income buys you barebones home that probably needs countless thousands investment into structural integrity in not so fancy area. Yet the wealthiest area in DFW or one of - has median income of just 150K. Its not like there are that many low income apartments in Frisco to dilute that number much either.

The 130k number you're talking about was the spring 2019 census which was based on income from 2018.

That was the last census published for Frisco. That's obviously not going to be viable 4 years later, the median frisco household price for that year was $380k which is 100% in line with that income.

[mastershake575]

Originally Posted by Kenro911

Yet the wealthiest area in DFW or one of - has median income of just 150K. Its not like there are that many low income apartments in Frisco to dilute that number much either.

the problem that you're not realizing is your only focusing on the present instead of the past.

85% of these houses were sold pre-covid when prices were way cheaper.

15% (which is being really generous) selling for a high price has no reflection of household income of patrons who bought pre 2020

[Leonard123]

Originally Posted by Kenro911

Well what I find interesting is that Frisco which I think is the most wealthiest DFW or one of suburb has median income of 130K to 150K depending where you look.

If 100K income buys you barebones home that probably needs countless thousands investment into structural integrity in not so fancy area. Yet the wealthiest area in DFW or one of - has median income of just 150K. Its not like there are that many low income apartments in Frisco to dilute that number much either.

Which brings me to the question, how are people affording these homes all around DFW metro? The whole transplant argument does not hold weight much simply because DFW metro is 4th largest in US and Texas is 2nd largest by population. Californians can't simply alone overwhelm real estate in such heavily populated area.

Lets not forget that to live in DFW Metro you must have car, and those are not cheap at all - they never were and now they are extra expensive. One car per working adult eats up that income real fast.

The most likely explanation is that most people living in Frisco now bought there when it was cheaper. It's also possible that many of the people moving there are likely paying well over 20 percent down. In all though, population growth has probably been incredibly small over the past year simply because there has not been a lot to buy. Also keep in mind that probably all of these people moving to Frisco are dual-income and could not afford the house otherwise.

I'm not sure why the obsession with Frisco. Prosper actually tops out Frisco in its price point and income levels. A recent ranking even ranked Celina as the third wealthiest city in the state; Frisco was not even in the top 20. Melissa made number 9 though. Percentage wise, prices have seen much higher gains in a few select less expensive areas, quite notably Celina and Melissa.

[jaysan89]

Originally Posted by Leonard123

Prices go up because more than enough people are willing to pay those prices. As long as people are willing to pay the higher prices, of course they are going to go up, and my real estate agent thinks 2022 will be worse with an even bigger increase than 2021.

Sadly, I see the middle glass being completely obliterated right now. There is absolutely nowhere in north Texas that is well suited for the middle class in my opinion. I think they are probably getting hurt more than anyone and not just with housing.

As to the post above about Addison, I was only comparing like houses themselves (age, condition, size, lot), but the main point I was trying to make is that schools are not "110 percent" driving property or resale values. Schools are only going to be one factor of many, and even that would have to be based on media/PR and/or random statistical nuances.

Sad but true. I've moved out of DFW a couple of months ago due to the high housing costs and relocated to a nearby state where it is more affordable for the middle class.