[quote=bearishgurl] I feel that a dual-income family can live on 1 to 1-1/4 of their income and save for college/retirement or a rainy day, if they so choose. [/quote]
Well, many will disagree with that especially when you throw in savings for college, retirement or rainy day!!!! (unless you are talking executive/manager salaries in the mid 100s). We have 2 very decent salaries, though none is 6 figures and we CAN’T save ENOUGH for college and retirement and rainy day. And we aren’t really splurging, or having major purchases, though we live pretty comfortable I’d say.
[quote=bearishgurl] The stable areas of primarily “retired folk” are where I think a buyer who is short on downpayment funds should consider for a seller-assisted purchase. (…) [/quote]
Maybe one of the realtors here that have done a lot of transactions recently can tell how often that happens, or how likely is that option?
[quote=bearishgurl]
And yes, I agree that a preponderance of dual income families AND single-income families who spend every dime they make every month (and then some), when lumped together in one tract, do not bode well for the stability of an area. (…)
I disagree that the prevalence of two-income families constrains people’s options. There are several one-income families around me with 2-4 minor children apiece. Their houses range in size from just under 1500 sf to 2600 sf. Lot sizes are 6000 – 14,000 sf. Ages of the homes are 49-65 years old. The prices they paid for their properties range from about $270K to about $500K. They purchased their homes 3-10 years ago. 2 families homeschool, one goes to private school and the rest go to public school. Often, the SAH parent does not have access to a vehicle at all times of the day. They do not hire out any domestic or gardening services or child care. [/quote]
So let me get this straight: In your part of town they have larger houses and they bought for like 300-500K with one income. Well, if they are living within their means the house price should be no more than 3x their income. That means a pretty decent ONE income of 6 figures -100-160K. Not shabby at all for one salary. Our TWO combined salaries are just slightly about that – so we will buy a 500K house of 1500-2000 sf just like your neighbors, but we will have to have 2 cars to commute to work and pay for all sorts of child care -i.e. more expenses. And so we’ll live from all the 2 incomes, not 1.25. Same expectations as your neighbors – not MORE expectations because we have 2 incomes or we are better educated or something.
But BG, you should make the disclaimer then that the bread winner has a very good salary and proximity to family helps also. With ONE of our salary we couldn’t afford most of your neighbors’ houses.
[quote=bearishgurl] I think a family CAN make it on one non-executive income but their expectations have to be such that they don’t feel deprived not driving a $100-per-tank SUV or not even owning a late-model vehicle. They bought these properties to be close to extended family members instead of standing in line with dozens of “competitors” in a captive open-house audience trying to chase down public school API scores. (…) No one is forced to take on “multiple jobs” just to keep up unless they have chosen a lifestyle above their means. [/quote]
See the paragraph above. No I don’t feel deprived not having a SUV or last model vehicle. I am not chasing the API scores – it just happens that in most places within 20 miles of our work places the schools are quite good (La Jolla, Univ. City, Carmel Valley, PUSD, Scripps).
[quote=bearishgurl] The homeowners in your “middle-class” group bought into what Tyagi called the “overconsumption myth.” She further states that families of yesteryear used to live on one income easily so we should be able to today. (…) The article fails to mention that these families of yesteryear differ from the typical family of today in that: they did not have anywhere near the square footage in their homes, frequently got by on one vehicle, did not aspire send all their children to college, medical costs were much cheaper, they hung their wash on the clothesline, had four (B/W) channels on the TV, etc. It’s comparing apples to oranges.[/quote]
Exactly, so you can’t live on one income, with all those expenses now. So, why were you saying before you can live on 1, 1.25 income?
[quote=bearishgurl]So therein lies the rub. If a potential buyer of today is a working-class family but their homebuying expectations are not in line with living on only one income so one can be a SAH parent, then they will either refuse to buy, will be unable to buy or may eventually be priced out of mortgage money while wrestling with the decision. Either way, these potential buyers don’t become homeowners unless this “expectation disconnect” is resolved and maybe that is okay.[/quote]
They will NOT be priced out if they rent and continue to save. Hell, if one saves a couple grand a month, one would be able to buy with cash a small retirement home/condo in 20-30 years or so.
What if none wants to be a SAH parent? After all we didn’t go to graduate school just to waste it.
Let see then in our case what that would mean. ONe income = 75K. 3 x that. $225K. Can you tell me what kind of decent house we can buy with that in lets say UC (older, non-tract houses, stable retiree neighborhood), or in PQ or in SR? That’s right. ZERO. No, it would buy a 2 bdr small apt. A 3 bdr 1500 sf house is about TWICE that, at least. Which is why we need to spend both incomes. q.e.d.
