East Bay living - does this sound at all right to you?

[sav858]

It's not that "fishy" but from the very basic info you provided they should be able to afford a 2 or 3 bedroom apartment in Walnut Creek. If they had the cash for a standard down payment they could get a condo or townhouse there. IMO some factors that might make that all they can afford is:

1)They rent an expensive 1-br on the higher end in WC and are picky such as they like to be in new, modern, updated places.

2) They have a fair amount of other debt like credit cards. And if this is the case it certainly is not something they probably want to tell anyone.

3) Childcare is pretty pricey overall and they could be sending their kid to an expensive day care.

[smashystyle]

Originally Posted by sav858

It's not that "fishy" but from the very basic info you provided they should be able to afford a 2 or 3 bedroom apartment in Walnut Creek. If they had the cash for a standard down payment they could get a condo or townhouse there. IMO some factors that might make that all they can afford is:

1)They rent an expensive 1-br on the higher end in WC and are picky such as they like to be in new, modern, updated places.

2) They have a fair amount of other debt like credit cards. And if this is the case it certainly is not something they probably want to tell anyone.

3) Childcare is pretty pricey overall and they could be sending their kid to an expensive day care.

Don't forget student loans, especially if we're talking about professionals who have been to grad school. (Edit: sorry, just saw student loans mentioned in the OP, but this can make a big difference; some people have thousands/month in loans).

Also, some people live frugally because they are putting a lot of money towards retirement or other savings (including for a down payment). Such people could probably "afford" more, but they don't have a lot of disposable income.

[sav858]

Originally Posted by smashystyle

Don't forget student loans, especially if we're talking about professionals who have been to grad school. (Edit: sorry, just saw student loans mentioned in the OP, but this can make a big difference; some people have thousands/month in loans).

Also, some people live frugally because they are putting a lot of money towards retirement or other savings (including for a down payment). Such people could probably "afford" more, but they don't have a lot of disposable income.

Yes, this as well. Some people I know make a pretty good salary but live relatively frugally because they like to put a lot of money into savings and retirement.

[2sleepy]

Originally Posted by justinbro2002

well childcare alone can run $1500+/- a month so there goes a good percentage of disposable income

Bingo! That's about what my step-son and his wife pay for childcare for one 2 year old in SF, unreal

[Lockdev]

That sounds legit.

Walnut Creek housing is absurdly overpriced at the moment.

A small(1200sq ft or so) house here starts in the 600s, although they get snatched up ridiculously fast. Most homes run 800k+.

Either way, that's way too much for a 180-200k/year income unless they have a giant down payment.

Say they bought a 700k house with a 100k down payment, that still puts them at a mortgage of about $4k/month with taxes/insurance.

It's doable, but they'd be stretched extremely thin.

[beb0p]

Originally Posted by misscross

so here is the situation:

• one couple both in their 30s, making at least around $180 - 200k combined. Neither in high tech.
• renting one bedroom apartment in Walnut Creek
• one child in daycare
• extreme frugality in just about every area of life, super old beater car, second hand everything for kid, etc.
• no student loans at least on husband's side

Since one spouse works in SF and is renting a one-bedroom apt (when most of Walnut Creek is single family homes that consist of 3 bedrooms or more), I am going to assume they are renting a newer condo near the BART station. The older one bedroom go for around $2,200 and a newer one can go for as high as $3,500 a month.

So let's to the math here:

Assuming combined income of $180k. The after tax monthly take home income is roughly $10,000.

Rent - $2,200 - $3,500
Childcare - $2,000
Car payment - $500
Car insurance - $100
Gas - $200
Internet, Electricity, phone, cable, BART, etc - $400
Food - $1,200 (includes dinning out)
Entertainment - ??

So they are probably paying between $6,600 - $7,900 a month not including misc stuff like fixing cars, new clothes, entertainment, etc. So overall, they are probably spend between $7,000-$8,500 a month overall. If it's on the lower end they probably can afford more but if it's on the higher end it's as far as they can go without ruining savings.

Are they also giving the child piano lesson, camp, etc? That really eats into the savings. Also, some high-end daycare can cost as much as $2,000 a month. Also, have to factor in their vacation travel, ski trips, etc.

So yes, it entirely possible they are paying out as much as they can without ruining their savings. Plus, most likely they are saving to buy a house so they maybe they are also hunkering down now for the down payment.
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