2022 Real Estate Observations (Boston, Cambridge, Newton: hotels, landscaping, tile)

[matrix5k]

I've mentioned this before in this thread. Many people got very wealthy from 2008-2021. Whether from stocks, real estate, crypto or whatever. Many people became millionaires or multi millionaires from buying Amazon, Microsoft, Google, Apple, FB, Tesla, Bitcoin, Ethereum, houses or just old school index funds or whatever. Someone who bought a house for 300k in 2010 can sell it for 700k today and upgrade to a million dollar home, and the mortgage would be the same. The wealth gap is real.

That's why I don't think housing prices will come down much. Back in 2005-2007, people who had no business buying a house were given predatory mortgages and interest only loans like candy. Today, people actually have the money to pay these high prices because they're already rich.

So yes the majority of people paying these absurd prices easily make 100k per spouse. 100k isn't what it used to be. A new grad comp sci major can make 70-80k, he/she can hit 100k in a few years easily.

By the way, do realtors really get 3% for selling and 2% for buying or does the company take a huge chunk of that commission? 3% of a 700k house is 21k! Houses sell themselves around Boston... Sell 5 houses per year and that's over 100k.

[bricka]

Originally Posted by matrix5k

Someone who bought a house for 300k in 2010 can sell it for 700k today and upgrade to a million dollar home, and the mortgage would be the same. The wealth gap is real.

better yet, they can refinance in 2021 and it's actually cheaper.

additionally, people forget that real rates are still negative right now. sure nominal rates are going up, but inflation is still eating everything, and that includes housing.

[msRB311]

There's also plenty of people who didn't get rich between 2008 and 2021. We get that there are rich people in greater Boston (with or without crypto/Tesla stock) but the question seemed to be how are the 'average' people making it work? I also think most people who got rich between 2008 and 2021 through stocks were already doing pretty well.

[msRB311]

If you're bringing in 236k plus bonus at 36 id say you're doing pretty well. Most people make the most money in their careers in their 40s.

[tcalloway4]

I also wouldn’t consider us rich and swimming in money with fancy cars either lol my main goal is to be able to put this kid through college/trade school/whatever he picks, so he doesn’t have the loans swimming over his head like we did lol! I definitely give a lot of credit to families with multiple children in their households, I don’t know how they do it.

I have been following this thread as I have been noticing a lot of homes are having their prices come down in the areas we have been looking in. We will most likely be ready to buy By the end of October.

[Higherho]

Originally Posted by tcalloway4

I also wouldn’t consider us rich and swimming in money with fancy cars either lol my main goal is to be able to put this kid through college/trade school/whatever he picks, so he doesn’t have the loans swimming over his head like we did lol! I definitely give a lot of credit to families with multiple children in their households, I don’t know how they do it.

I have been following this thread as I have been noticing a lot of homes are having their prices come down in the areas we have been looking in. We will most likely be ready to buy By the end of October.

No, those are not rich numbers but we’re in the upper middle class for sure. No middle or lower middle class can afford any of those items you mentioned (without loans or ton of government aide).

https://money.usnews.com/money/perso...c-class-system


I am waiting till end of next year myself. Going to save up 20% and then sell my house (might put it towards the downpayment or invest it in solar ‘ off grid things for the house). By then, I’m sure we will see something happen with rates and house prices stabilize (I don’t think we will ever see pre covid house prices again though).

[MtPleasantDream]

Originally Posted by newenglandgal123

If two $100K incomes w/kid involved can't even afford that house I'm curious to know what the typical buyer profile is of these $750K+homes at the current 6% interest. They still seem to be going under contract quickly and the buyers can't all be physicians, CEO's or CFO's. Maybe the majority are independently wealthy or getting family money handed to them?

It's common for IT professionals to have 100K+ income (wage + bonus + stock), and even $200k+ is not that rare. Boston area has plenty of them. BioTech and Finance too.

But that also means the suburbs are in the process of gentrification.

[simplexsimon]

Originally Posted by msRB311

but the question seemed to be how are the 'average' people making it work?

Of the people I know that have "average" incomes:

A couple of people just took on greater risk. 5% down payment about 5 years ago, a precarious financial situation at the time, but are now better off.

Another person I know has avoided taking on that risk and today still lives with her mother.

[bricka]

for people making the decision to live in the greater boston area today: 250k household total comp will allow you to raise two kids, live in a decent school district (not wellesley, but also not brockton) take a vacation every year, save up to help pay for your kids college, not stress about bills/utilities, all while saving for retirement.

this is a middle class lifestyle, plain and simple. there are no first class flights, no vacation homes.

people will say "but 250k is high for the median household income in the US"

yes it is, but those people are not making a decision to live in the greater boston area, which is very clearly an elite place to live at this point. if you want 250k to be a lot of money, move to columbus OH, i've actually heard it's a great place to live

to the people who say "but I own a home in the greater boston area, did all of the things you mentioned, and my household income isn't anywhere near 250k" - congratulations! you are now what's known as "grandfathered in." enjoy it.

[newenglandgal123]

Originally Posted by bricka

for people making the decision to live in the greater boston area today: 250k household total comp will allow you to raise two kids, live in a decent school district (not wellesley, but also not brockton) take a vacation every year, save up to help pay for your kids college, not stress about bills/utilities, all while saving for retirement.

this is a middle class lifestyle, plain and simple. there are no first class flights, no vacation homes.

people will say "but 250k is high for the median household income in the US"

yes it is, but those people are not making a decision to live in the greater boston area, which is very clearly an elite place to live at this point. if you want 250k to be a lot of money, move to columbus OH, i've actually heard it's a great place to live

to the people who say "but I own a home in the greater boston area, did all of the things you mentioned, and my household income isn't anywhere near 250k" - congratulations! you are now what's known as "grandfathered in." enjoy it.

Absurd to think families have to be on a hamster wheel to make sure they're bringing in at least that $250K ea year to sustain what really are just the basics.