***With the marriage age for high earning professionals these days being very late (mid 30s), i’m guessing our potential first time homeowner in his/her late 20s is more likely than not SINGLE and makes in the $50-75k/yr range. A late 20s/early 30s buyer is also most likely going ZERO DOWN, and interest only or possibly even NegAm. With those creative schemes now out the door and interest rates higher those buyers are all but gone!***
You said it in the first sentence: With the marriage age for the high earning professionals these days being very late (mid 30s)…While YOU’re guessing that the first time homeowner is in his/her late 20’s…I’MM guessing that the first time homeowner will be in the early to mid 30’s. Because home prices have gone up so much, it wouldn’t make sense for someone in their “late 20’s” making “50-75K” to buy a house. In fact, I doubt they were looking to buy a house in the first place . That’s what half this board is doing anyways: renting. That’s how you save up money. Or find other ways to save money such as getting married/finding roommates. I’m on the young side, but were people in their late 20’s that are SINGLE making 30-40K looking to buy single family homes with 4 beds 3 baths in the 80’s? (or whatever income that would scale 50-75K down to 80’s money). I’m GUESSING (as we all do on the boards) the answer is no. (Hey! I proved your point though about young buyers will no longer be in the market…but I guess I’m trying to say is that the young buyers were never in the market to begin with).
***Case in point: A friend of mine is a Business Analyst for a Fortune 500 company, she is a grad from UCI. Her starting salary was $42,000/yr and she is now, 2.5 yrs later at $47,500/yr. People DON’T make as much money as you think!!! We often infer income by looking at spending patterns which is obviously not the right way to guage it.***
Case in point: I know 4 people who graduated recently from UCLA and UCI. One graduated with a masters at UCI working in a Biotech company making 67K first year. One graduated with a bachelor’s UCLA at a biotech company making 60K firs year. Another one graduated UCLA with a bachelor’s working at a petroleum refinery making 74K first year (with 10% raises after 6, 12, and 24 months…no surprise coming from oil companies). And yet another graduated UCLA with a bachelor’s in business working at a Second Tier financial group making 50K first year.
Just have two of them live together, and you’re already over 100K.
On a side note, I do believe housing prices are inflated. But I don’t like it how some stories post out the extreme points of the picture. Or maybe I’m a bull in disguise =P
