Real Estate Market beginning a big Price Correction? Especially in the suburban over a $million bracket? (loans, to live)

[Whatsnext75]

Originally Posted by Dm84

A lot of people are stretched very thin and would be unable to survive if they lost their job. People are just reluctant to discuss the negative aspects of their finances with friends.

yeah, i obviously dont ask details and i of course know people who have high salaries or have parents help them out. But there are a lot of people who i wonder, how do you afford your life...

[Shrewsburried]

Originally Posted by Whatsnext75

yeah, i obviously dont ask details and i of course know people who have high salaries or have parents help them out. But there are a lot of people who i wonder, how do you afford your life...

Could be a social bubble as well. My social network has plenty of couples pulling 160-190K gross who bemoan the cost of housing and cannot afford to buy inside the 128 belt despite it being a want. Few, if any, are making it 'look easy'.

[mwbms28]

Originally Posted by Dm84

A lot of people are stretched very thin and would be unable to survive if they lost their job. People are just reluctant to discuss the negative aspects of their finances with friends.

And currently the economy in MA is good, so you don't have a lot of people losing their jobs. People aren't talking about having to move now, but the tune may change if a recession hits and job loss begins.

People do questionable things to appear to be keeping up - one friend took out a 401K loan to go on vacation; another is pinned to an ARM that resets in two years. Credit cards are offering me 18 months no interest no payments on the daily. Right now, there are a lot of ways to hide/defer debt.

[MrLinderman]

Originally Posted by mwbms28

And currently the economy in MA is good, so you don't have a lot of people losing their jobs. People aren't talking about having to move now, but the tune may change if a recession hits and job loss begins.

People do questionable things to appear to be keeping up - one friend took out a 401K loan to go on vacation; another is pinned to an ARM that resets in two years. Credit cards are offering me 18 months no interest no payments on the daily. Right now, there are a lot of ways to hide/defer debt.

Yup.

For every person (like the majority of folks on this board) who manages their CC debt to keep it cleared off, there are 2 or 3 out in the real world who are maxed out making minimum payments in an effort to keep up. For every person here who contributes a decent amount to retirement there are 3 or 4 who will" worry about it later." For everyone one of us who tries to keep their car costs as low as reasonably possible, there are 6 or 7 in the real world who buy cars they can't afford and stretch the loans out to 6 or 7 years.

Just because someone looks like they are doing well doesn't actually mean that they are.

[BostonMike7]

Originally Posted by MrLinderman

Yup.

For every person (like the majority of folks on this board) who manages their CC debt to keep it cleared off, there are 2 or 3 out in the real world who are maxed out making minimum payments in an effort to keep up. For every person here who contributes a decent amount to retirement there are 3 or 4 who will" worry about it later." For everyone one of us who tries to keep their car costs as low as reasonably possible, there are 6 or 7 in the real world who buy cars they can't afford and stretch the loans out to 6 or 7 years.

Just because someone looks like they are doing well doesn't actually mean that they are.

So true. Have a couple we know that we always wondered where the money came from. Now they are getting divorced and finding out it a major reason for the divorce is "keeping up with the joneses". $800K house, new cars, fancy vacations, and less than $1k in savings and no retirement.

[raider21]

Originally Posted by tysmith95

I don't understand why somerville is so expensive. East Somerville basically looks the same as somewhere like Everett. Yet it costs twice as much. I don't get the allure.

neither do I

[Whatsnext75]

Originally Posted by raider21

neither do I

The allure is it's close to Cambridge and boston. Dorchester is also becoming alluring given people getting prices out of South end/southie
The city is expanding because the population has grown
People have no choice but to move into other areas.

[Partial Observer]

Originally Posted by BostonMike7

So true. Have a couple we know that we always wondered where the money came from. Now they are getting divorced and finding out it a major reason for the divorce is "keeping up with the joneses". $800K house, new cars, fancy vacations, and less than $1k in savings and no retirement.

If someone can get a mortgage on an 800K house and has sufficient credit to blow on cars and vacations, then he/she is doing just fine. There's no shortage of high-paying middle-management jobs to keep those people in their McMansions and E550s/LX570s indefinitely.

[GeoffD]

Originally Posted by Partial Observer

If someone can get a mortgage on an 800K house and has sufficient credit to blow on cars and vacations, then he/she is doing just fine. There's no shortage of high-paying middle-management jobs to keep those people in their McMansions and E550s/LX570s indefinitely.

Depends.

To me, "doing fine" with a 6 figure income means you're accumulating wealth. There are still tons of people using housing appreciation and home equity loans to fund an unsustainable lifestyle. If you're maxing out your 401(k) and on a trajectory to zero out the mortgage on that $800K house, sure. You're accumulating wealth. I don't think behavior has changed much from the Great Recession where millions of people who were spending everything they made and lived on credit found themselves out on the street when they had a job glitch.

Census bureau data says that 70th percentile household net worth for the 55 to 64 age bracket is about $350K. Most of the Boomers aren't accumulating wealth to be able to retire comfortably since they don't have pensions. There just aren't all that many people out there with a million dollar household net worth.

[Ninotchka P]

We are going to have a retirement crisis in this country and it's gonna be ugly.