I would have said the area I live was that a year ago. We saw the most job growth and lowest unemployment in the country, all while my house was likely worth no more than $150,000.
But the most job growth in the country requires that people move there (here) and they require houses when they arrive. With that surprising increase in demand, I expect I could get $250,000 for my house now, which is a staggering increase in a fairly short period of time.
On the other hand, if you're coming from a place where houses are selling for $1,200,000 (the 4 * $300,000 suggested above), then maybe you still see $250,000 as being affordable. We certainly have jobs. Every place of business in the area seems to be hiring.
$300k is a very very good family income and is in the top 90% if not more. Even if you just got the job you should be able to afford a house. $1m for an old suburban house is very high for most places in the US.
you could buy a reasonable home for about $229,000 in many areas with some jobs, but even that is still a massive financial burden that is not easily solved with "just get some tenants"
Back in the day, house prices were 1 year's salary. Now it's more like 6-7 years of salary, with a high tax assessment and no job security or pensions too.
It's wild. Single family houses are being listed at $2M-$3M and going for $1M over asking. And the houses would often be considered fairly modest anywhere else in the country.
I imagine a lot of buyers can afford this by selling their existing homes. Or perhaps they socked away a huge nest egg during after an IPO or over the duration of the stock market run up.
But new homebuyers would need to earn about $750k+/year for the foreseeable future for this to make financial sense. That could be a risky wager over the next few years.
Thank you! There is a bit of coastal bubble going on in this conversation.
I made $50K per year when I graduated and bought a house about a year later. $170K for a new house in a nice neighborhood. The total house payment was sub $1000. That's typical when you get out of the big cities on the coast.
I'm in the job market. 2-3x local family income, median house price would put us at 60% of take home pay going to purely principal and interest payments.
It doesn't take social anxiety to see how unaffordable housing is.
A $640k house is an amazing home almost everywhere in the country. The problem you're describing here is that the region you're living in has insanely high real-estate prices compared to the rest of the country and you cannot afford to live there.
Keep in mind the housing price. Making 200k on a 1.5 million house is significantly poorer than $150k on a 300k house. All your extra incomes goes towards interest payments and then some.
Inflation have been crazy for the last decade, salary is finally starting to catch up, especially this year.
You know things are getting good when recruiters email out the salary numbers on initial contact.
Interesting point. When I used to make 50K a year, nice houses used to cost 300K. Today, I make x2.5 that amount and houses cost x2.5 that. Definitely not going to be able to afford a nice house in my area :'(
That has gradually changed a lot in the last ten years.
A decent house is $150,000 to $200,000 where I'm at. That's 2,000-2,500 sq feet, 0.75 to 2 acres of land. The murder rate here is almost zero, violent crime is very low, and I have access to high speed Internet and normal shopping / consumer goods. I can day trip to multiple major metros. Public housing here is actually nice, safe, clean. The homeless rate is nearly zero. And I spend zero time in traffic.
Put your $50,000 down on the home. Your mortgage payment is now $725 to $750 or so.
Make $6k, $8k, $10k, whatever per month doing Go, Python, JavaScript, etc. remote contracting. Or just take a decent remote job.
Your take home is ~$54k on $85k income contracting, before any deductions. Your bills are $2,500 per month. You can easily pay your house off in seven or eight years.
And that's not a crazy scenario or a high-end outcome in terms of contract work. That's doable for anyone in the top 50% skill wise.
You can pull off that scenario all over the US.
Or make $150,000 in Seattle, and that same house costs $1.2 to $1.5 million. Somehow figure out how to come up with your $325,000 down payment. Now your mortgage is $5,000 per month. Your property tax is over $10,000. Your take home pay is $9k to $9,500 per month. Your house, for just the mortgage and taxes, is going to cost you around ~66% of your take home pay, versus ~16% in my scenario. That house is going to cost $2 million total - minimum - over 30 years of mortgage payments, plus another $300,000+ in tax payments.
I feel pretty bad for engineers making ~$150,000 or less in Seattle or San Francisco. Telecommuting will set you free.
you won’t be able to comfortably afford a $1M house, which would be well below average in a coastal area where SWE jobs are mostly located, at today’s rates if you make $200k. Would be tight even on $300k.
"How much do houses cost where you live, btw? I don't think people would be "gambling away their houses" by giving you 15K - wouldn't that just be two or three years more of paying off the mortgage?"
Yes, I admit I was being a bit melodramatic. :)
Houses around here cost anywhere from 30K (manufactured home and a building lot) up; site-built homes start in the 60s for a small two bedroom place. I don't personally know anyone who spent more than 150K for a house within 40 miles of here, but there are a lot of ads for subdivisions "starting in the 190s" and such, now. Property values have gone way up for newly built homes, but older homes haven't appreciated proportionately. As I mentioned above, we're paying a little over 50K for ours, but we had the land given to us by relatives.
This is all totally off-topic, I suppose. Perhaps I'll point at this thread when I start hiring to explain why I'm only offering 35K salary. ;)
Goodness, I live in a rural area, and the house prices are only insane, instead of egregiously insane. I don't know how I'd afford a home for a young family if I was just starting out today.
Moneywise, if you expect to make roughly $100k and can buy a townhouse for roughly $300k in your area, that's a pretty good financial position to be in.
House prices are almost at pre-recession levels in some places, but it's still possible to get a really nice 2000 sqft place in a 30-45 drive for $300-400k (cheaper in worse areas)
Not really. Mortgage rates are so low that even with only 5% down the monthly mortgage payments on a $400K house are similar to what someone would be paying for monthly rent in these cities.
Mortgage rates are incredibly low and there are a number of options to reduce down payment requirements right now. Meanwhile, wages are up and better paying jobs are more common for young people. $400K isn’t out of reach at all for a lot of first-time home buyers in this economy.
It came with the assumption that I wanted the same standard of living. But the truth applies the other way. You won't live in a neighborhood with top rated schools (they will be safe), but you can live in a nice neighborhood with a 70k household income. When I bought my first home in 2002, it was a new build and 2800 square feet for around $170K. I was making around 70K. Looking now, that same house I use to live in just sold for around the same price about a year or two ago. The neighborhood is a safe, quiet, place.
Commuting to downtown was only about a 30-35 minute drive.
But the most job growth in the country requires that people move there (here) and they require houses when they arrive. With that surprising increase in demand, I expect I could get $250,000 for my house now, which is a staggering increase in a fairly short period of time.
On the other hand, if you're coming from a place where houses are selling for $1,200,000 (the 4 * $300,000 suggested above), then maybe you still see $250,000 as being affordable. We certainly have jobs. Every place of business in the area seems to be hiring.
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