Not reasonable in my view. Looks like the people who earn the most have the longest most grueling commutes. Neighborhoods do not segregate by income that way because they evolve over time. Aside from income, people have non-job-related wealth that affect what they can afford.

If I lived in Orange County, I’d live somewhere in Irvine because it’s centrally located and close the employment centers. If I could afford it, I’d live in Newport Beach.

Using your numbers, here’s what I think is reasonable.

80k HH income – $250k home

100-120k – $350k home

north of 120k – $500k home

Looking at it a different way….
Old lending standards, rough estimates.
10% down
60k=225k purchase price
80k=275K purchase price
100-120k= 375K purchase
north of 120K= Pay cash
I am guestimating these things based on the memory of an old house payment calculator thingy that was new 10 years ago. I looked for it but can’t easily find it. It costs 40K a year to live modestly(read,get by) with a wife and a couple of kids now, before rent or mortgage, and it is getting more expensive by the minute! I don’t think 60K will mean anything in San Diego County for SFR unless you are a buddist munk with a penchant for a house in the ghetto.Roomates could help though,been there done that. I think 60K income is definitely Average Condo in Average Location even in the next trough of the cycle.
So if you are entertaining what I am saying at all try analyzing what 225k,275k or 375k might get you if your income is in those brackets and you don’t have a ton of cash. Of course, stretching is safer if you are steril.

Hi Rustico –

No I was referring to the original post by Kev, not your post. I was thrown a bit because of how the post equated income level with a certain size home in a given neighborhood and that made no sense to me. What you posted made perfect sense, essentially the expectations of the buyer should be 100% based on what they can afford. That will always be based on market conditions, lending climate, and personal assets.

kev
just me being a smartass as usual re fullerton. I agree that 120K is a top 10% income but Laguna/Dana Point is a top 1 to 3% location. I just dont see an 1800 sq ft home on a 120k income as realistic for a place like that unless you have a nice chunk to put down. the re are lots of other nice places that will be cheaper but I think your initial post didnt pass my reasonableness test.

This is really easy. History shows that it’s “reasonable” to expect the cost of buying to fall back down to where it only carries a small premium over renting. So if you want to know what X income can afford to buy after the market corrects just look at what X income can afford to rent right now. At 30% of gross income, an $80k HH income can afford $2000 a month, a $120k HH income could afford $3000 a month, etc.

FWIW, there are dozens of 3 bed+ rentals in Dana Point and Laguna Niguel listed below $3000 a month (though only a handful above 2000 sf).