okay, i'm just floored (Boston, Winthrop: real estate, to rent, daycare)

[id77]

Originally Posted by simplexsimon

For this house in particular, the down payment was 30%. You think $8k/month in PITI is tight for a household on $300k? What's your math here? We must have different spending habits.

For a lot of the $150k+ incomes, a chunk of that comes in the form of RSUs and the smart families aren't cashing those out for expenses; they're either selling and re-investing that or holding. Add in taxes, retirement, health insurance/hsa, and ESPP, that same household might only be actually taking home ~$100k. $8k would be untenable for that household, and even $4k can be tight if there's also things like daycare costs in the equation.

[yesmaybe]

Originally Posted by simplexsimon

For this house in particular, the down payment was 30%. You think $8k/month in PITI is tight for a household on $300k? What's your math here? We must have different spending habits.

I will say that I bet their HHI isn't 300k. Maybe even not 200k.

[msRB311]

Originally Posted by yesmaybe

I will say that I bet their HHI isn't 300k. Maybe even not 200k.

?? how did they get the house then?

[yesmaybe]

Originally Posted by msRB311

?? how did they get the house then?

Banks will approve $1M mortgages at 200k easily, esp at 30% down.

[msRB311]

This was 1.4M...

[yesmaybe]

Originally Posted by msRB311

This was 1.4M...

They put 30% down, so the mortgage is 980k.

[lrfox]

Originally Posted by timberline742

It's a pretty great spot. Quiet neighborhood. Super easy Rte 2 access. There is a little park on Spy Pond right near there where I've landed some big bass and a tiger musky. Walkable to Alewife. Walkable to a good section of Mass Ave. Near the bike path. Lots of flexibility in that spot. The appeal is understandable. It's a pretty nice looking spot and a good size. Way way way nicer looking than the average in this State.

I don't disagree at all. I love the area and I understand most of the appeal. But I think there are some minor issues I'd personally struggle with at $1.4 million. The big one is the lack of a second full bath. 1700 square feet is more than plenty for me, but I wouldn't want to pay $1.4 million to share a shower with my guests (or kids if we had any). This one in the same neighborhood has 2 full baths, nearly 1,000 extra square feet, and a bit more of a yard (although it desperately needs water). We'll see what it ends up going for, but they're asking $120k less than 55 Eliot. I'd prefer 2nd full bath. This one is also nearby, comparably priced, and seems like a much nicer house.

If anyone in the house is needs to commute by car at normal commuting hours, it's a tough spot (though it's ideal for weekend getaways or off-peak commutes). And while it's reasonably close to Alewife, I wouldn't be thrilled with the 24 minute walk (especially at that price point). It's not an effort thing (1.25 miles is really a nothing walk), it's a time thing. 24 minutes on top of however long the T ride is and however long the walk is on the other end of the line adds up. I'd probably end up begrudgingly biking that to save 20 minutes each way. Not a deal breaker, but something to consider. And finally, I don't love that it's still a few minutes (7 according to maps) walking to Spy Pond. Again, not a deal breaker at all, but for $1.4 million I'd like to have a view or at least be a little closer (like where 28 Colonial is). But $1.4 million is not even close to my budget so my nitpicks don't really matter. Someone who could afford it seemed to like it enough and that's that.

[jayrandom]

Originally Posted by id77

For a lot of the $150k+ incomes, a chunk of that comes in the form of RSUs and the smart families aren't cashing those out for expenses; they're either selling and re-investing that or holding. Add in taxes, retirement, health insurance/hsa, and ESPP, that same household might only be actually taking home ~$100k. $8k would be untenable for that household, and even $4k can be tight if there's also things like daycare costs in the equation.

Spending $500 on rent is untenable if you invest all but $400 of your income. If you take home $400 and invest $0, most would say you can't afford $500 rent. If you take home $4000 and invest $3600, most wouldn't say you can't afford the rent, just that you are choosing to use that money elsewhere.

Someone with a $300k income can likely afford this mortgage. Whether you would make the same choices is just your own projection.

Originally Posted by yesmaybe

I will say that I bet their HHI isn't 300k. Maybe even not 200k.

Originally Posted by yesmaybe

They put 30% down, so the mortgage is 980k.

Somehow they ended up with $300k to put down. That's really all we know. Not quite sure the point of speculating further.

[simplexsimon]

Originally Posted by Jimbo21

not addressed to me, but thought i'd chime in. our household income is something like $360k. our piti is about $3200. i would be rather uncomfortable going up to $8k. doesn't leave enough leeway for investing (maxing out a 401k, $1800/month in 529 plans, and taxable investing), child care (which cost me $3k/month back when my kids were little), and general flexibility. we can run our house, rather comfortably, on only one income. i'm thinking of retiring at 50something. $8k/month piti would cost me and my family a hell of a lot of comfort and security. just my $0.02. others will obviously have a different view.

You're right there's certainly not a lot of flexibility but I don't think it's unaffordable. Your situation is a lot more unusual than one where someone is paying 30% of gross income on housing.

[msRB311]

Originally Posted by lrfox

I don't disagree at all. I love the area and I understand most of the appeal. But I think there are some minor issues I'd personally struggle with at $1.4 million. The big one is the lack of a second full bath. 1700 square feet is more than plenty for me, but I wouldn't want to pay $1.4 million to share a shower with my guests (or kids if we had any). This one in the same neighborhood has 2 full baths, nearly 1,000 extra square feet, and a bit more of a yard (although it desperately needs water). We'll see what it ends up going for, but they're asking $120k less than 55 Eliot. I'd prefer 2nd full bath. This one is also nearby, comparably priced, and seems like a much nicer house.

If anyone in the house is needs to commute by car at normal commuting hours, it's a tough spot (though it's ideal for weekend getaways or off-peak commutes). And while it's reasonably close to Alewife, I wouldn't be thrilled with the 24 minute walk (especially at that price point). It's not an effort thing (1.25 miles is really a nothing walk), it's a time thing. 24 minutes on top of however long the T ride is and however long the walk is on the other end of the line adds up. I'd probably end up begrudgingly biking that to save 20 minutes each way. Not a deal breaker, but something to consider. And finally, I don't love that it's still a few minutes (7 according to maps) walking to Spy Pond. Again, not a deal breaker at all, but for $1.4 million I'd like to have a view or at least be a little closer (like where 28 Colonial is). But $1.4 million is not even close to my budget so my nitpicks don't really matter. Someone who could afford it seemed to like it enough and that's that.

+1

I think these are things that people aren't thinking through in this market. Someone else mentioned FOMO and that's really what I gather happened here. Even if the people's HHI was 500k it just seems like a lot to spend 1.4 mil on this particular house for what you're getting.

People making that amount of money I have to imagine would want some luxuries aside from being close to a train station...so it could be someone really is scraping by to get this house but I can't imagine a wealthy or high earning person would want this? I mean there are plenty of 2-3 million dollar homes out there that offer a lot more than this one.

We live in a time where people are making a lot of money in the are but we also live in an area where people are pretty obsessed with saying they live in a certain area to keep up with the joneses.