Frustrated home buyer in NoVA--will I ever find anything? (Oakton: to rent, student loan)

[wingerr8]

Originally Posted by wsamon

Actually, that IS a fair price because that's what people are willing to pay. It's just a much higher price here than in most of the country because there's a lot more people in this area that make a lot of money and because everyone wants the same thing and the desirable spots are so limited.

That's not "fair" price, that's "market" price.

[wingerr8]

Originally Posted by anonymous703

Although I agree with you first sentence, I'd ask you to define "a lot."



I do agree with you on that. Fairfax County median household income in 2008 was about $108k. That makes us the richest county in the nation (or so I've heard) but that's the equivalent of a dual-income household where each person is a GS-9. That's not unreasonable.

According to the stats on the FFX CO website, 31.8% of the households in this county make more than $150k. So yeah... I just don't believe that there are really enough households that can really justify the $500k+ SFH's in the area.

Given the lifestyle I live as a renter of a 1-BDR apartment, what I could actually buy isn't worth the sacrifice in my lifestyle right now. And an SFH? Forget it.

Loudoun is actually the richest....Fairfax is fourth.

[wsamon]

Although I agree with you first sentence, I'd ask you to define "a lot."

Touche. I would personally define it as anything that's more than a standard deviation above the national median income. I don't know what those numbers are, but I'm pretty sure that the median income for the US is somewhere in the vicinity of the upper $30ks. If someone's making, say, $70k / year that's almost certainly going to be at least one standard deviation above the median and is therefore "a lot" IMO. Notice, I don't necessarily equate "a lot" with impressive or overly rare. But in the majority of the country, a decent paying, white-collar job that gets you $70k+ would be considered a very good living and would allow you to live a pretty comfortable, secure lifestyle, even for a family (though that would get a little tighter).

I do agree with you on that. Fairfax County median household income in 2008 was about $108k. That makes us the richest county in the nation (or so I've heard) but that's the equivalent of a dual-income household where each person is a GS-9. That's not unreasonable.

Not unreasonable at all. However, if you keep that 2.5 times income thing in mind, that means that this family should be buying a house that costs roughly $280k (that's even fudged upward). Even 4 times income will put you at roughly $420k. There's nothing available for $280k in a safe area with decent commuting access, and there's very little for $420k as far as SFH. You're even stretching to find a decent 2 bed apartment or townhouse for that.

According to the stats on the FFX CO website, 31.8% of the households in this county make more than $150k. So yeah... I just don't believe that there are really enough households that can really justify the $500k+ SFH's in the area.

I'm not sure if you're being sarcastic here or not lol.

[anonymous703]

Originally Posted by wsamon

Not unreasonable at all. However, if you keep that 2.5 times income thing in mind, that means that this family should be buying a house that costs roughly $280k (that's even fudged upward). Even 4 times income will put you at roughly $420k. There's nothing available for $280k in a safe area with decent commuting access, and there's very little for $420k as far as SFH. You're even stretching to find a decent 2 bed apartment or townhouse for that.

I know. I'm a math geek for a living, and those numbers simply don't work. I have to wonder how many people around here are house rich and cash poor.

I'm not sure if you're being sarcastic here or not lol.

No sarcasm, see above Sticking with the 2.5x multiplier you threw out there, to afford a $500k house, the household must be bringing in $200k. The government itself doesn't pay terribly well -- you have to be a GS13 to break the six figure mark, including the DC locality adjustment -- and nobody gets to GS13 overnight.

Even in the private sector, who supposedly (and I can provide some anecdotal support of that) pays a bit better, it's not like we're making twice what we would make working for the man. My company sure doesn't hand out cash as if there's endless supplies of it.

There's simply no way that every SFH in FFX CO is owned by the equivalent of a dual-income GS13 or better couple.

[wsamon]

Originally Posted by wingerr8

That's not "fair" price, that's "market" price.

The difference between the two, if any, is a very theoretical discussion that's probably not worth having (no one's going to "win" anyway)

[pcity]

Originally Posted by anonymous703

No sarcasm, see above Sticking with the 2.5x multiplier you threw out there, to afford a $500k house, the household must be bringing in $200k.

Where is the 2.5 multiplier coming from? That might make sense for someone earning 50k a year, but at higher salaries, I don't see why you'd limit yourself to that. The higher you earn, the less you're spending on necessities like food, clothing, heat, and electricity, percentage-wise. That to me indicates that higher-earners can spend a higher percentage of income on the house.

[claremarie]

Originally Posted by anonymous703

Sticking with the 2.5x multiplier you threw out there, to afford a $500k house, the household must be bringing in $200k.

Unless you have equity from the sale of your previous home. Or you have some help from parents or other family members. Many commenters are overlooking the fact that relatively few of these >$500K homes are purchased by first-time buyers.

[wsamon]

Originally Posted by anonymous703

I know. I'm a math geek for a living, and those numbers simply don't work. I have to wonder how many people around here are house rich and cash poor.

I'm a programming geek for a living (among other things). I think most people, at least younger ones, are "house rich and cash poor." Pretty much everyone I know in my general age group that buys something depletes nearly all of their monetary reserves and winds up either living paycheck to paycheck (more or less) or having to get a roommate or two to help them afford rent. Really, what I've noticed is that living in the DC area seems to delay things by a bit. Instead of buying a starter home and living paycheck to paycheck at 24, in DC you do it in your early 30s. Instead of saving up a solid savings account and moving to a decent home that you can settle down in around 30, in DC you do it in your 40s, etc. if you want to go the home route. That or you stay in small apartments and town houses for an extended time. Or you go the route of improving your liquidity and renting, but obviously not building equity. Obviously, this isn't entirely true and certainly not for everyone, but it's the tendency that I've seen in the area as opposed to other places in the US.

No sarcasm, see above Sticking with the 2.5x multiplier you threw out there, to afford a $500k house, the household must be bringing in $200k. The government itself doesn't pay terribly well -- you have to be a GS13 to break the six figure mark, including the DC locality adjustment -- and nobody gets to GS13 overnight.

Well, one thing we have to examine is whether or not that 2.5x multiplier even makes sense. I suppose it does, but it is a little limiting. That would mean that someone making $40k / year could only buy a $100k house. It's pretty hard to find a quality one of those even out in the smaller towns, etc., though it can be done.

Even in the private sector, who supposedly (and I can provide some anecdotal support of that) pays a bit better, it's not like we're making twice what we would make working for the man. My company sure doesn't hand out cash as if there's endless supplies of it.

My company's private sector too, and unfortunately they don't pay well at all Sadly, I could probably move to the government and make more money than I'm making now. Unfortunately, I'd probably have to shoot myself from boredom if I did that since most gov jobs have significant down time and don't let you user the majority of the internet.

There's simply no way that every SFH in FFX CO is owned by the equivalent of a dual-income GS13 or better couple.

agreed, but I think a lot of the houses were purchased before the housing boom that really hit the DC area in the early 2000s (I think that's when it was). I was talking to a client of mine a couple years ago who mentioned that he had bought his townhouse in Old Town in the 90s for like $150k, and it's now worth close to 1/2 a mil (course this was like 2007, but Old Town prices didn't drop that much).

[AnjiSmith]

Where is BASS101 looking, may I ask?

[anonymous703]

Originally Posted by pcity

Where is the 2.5 multiplier coming from?

Not sure.

That might make sense for someone earning 50k a year, but at higher salaries, I don't see why you'd limit yourself to that.

I think that's true to some extent. I make one of those salaries that would be a very good living just about anywhere else, and could see stretching my housing multiplier to 3x or 3.5x, and I'd be looking at condos for that price range. And, in that multiplier, if one is supposed to consider maintenance, HOA/condo fees, and property taxes, that 3x to 3.5x starts getting a little high. I surely couldn't stretch it to 4x all things considered.

The higher you earn, the less you're spending on necessities like food, clothing, heat, and electricity, percentage-wise. That to me indicates that higher-earners can spend a higher percentage of income on the house.

Well, there are a few things that come into play here. The more you earn, the greater % of your income goes towards taxes. Second, for as much as your point is technically true, I wonder how true it is in practice -- the more one makes, the more one spends across the board, no? Doesn't somebody making a bit more spend a bit more on clothing, nicer cars (and the associated insurance), higher gas bills for those SUV's, and what not?