Basic affordability metrics

[Fearful]

Okay, I had known this at a high level, but it really came home when I was running the numbers on various rental scenarios. I was considering $4K / month for a house; for comparison, I calculated the after tax monthly income for $100K / year gross. $4100.

Whoa! No kidding houses in San Diego are unaffordable! A rough total cost of ownership of a house is 5% of purchase price; a $1M house is thus about $4K a month. I can sort of imagine how people are managing purchases, say if they have large (e.g. 50%) down payments, or teaser rates on ARMs, or bought before the inflation … but who the hell is affording $4000 a month rental?!? Are typical salaries >$200K? Are they all double income households? I had a respectable Silicon Valley salary, and my take home pay was about $5K a month. That would mean, uh, $1K a month left over for everything else?

Or are those rents propped up by folks like me with cash from selling houses and now waiting?

Or is this situation just completely out of balance?

[SD Realtor]

Fearful I know it is really hard to imagine that so many people have that kind of money. I am consistently amazed by it as well. All I can say is whether these people rent homes or by homes they have some dollars man.

SD Realtor

[SD Realtor]

Fearful I know it is really hard to imagine that so many people have that kind of money. I am consistently amazed by it as well. All I can say is whether these people rent homes or by homes they have some dollars man.

SD Realtor

[SD Realtor]

Fearful I know it is really hard to imagine that so many people have that kind of money. I am consistently amazed by it as well. All I can say is whether these people rent homes or by homes they have some dollars man.

SD Realtor

[SD Realtor]

Fearful I know it is really hard to imagine that so many people have that kind of money. I am consistently amazed by it as well. All I can say is whether these people rent homes or by homes they have some dollars man.

SD Realtor

[SD Realtor]

Fearful I know it is really hard to imagine that so many people have that kind of money. I am consistently amazed by it as well. All I can say is whether these people rent homes or by homes they have some dollars man.

SD Realtor

[PadreBrian]

That’s why house prices are going down down down to normal levels. Most household incomes are still below 200k. So you are looking at 600k being the new/old upper middle class home. NOT the 1.0-1.2 Mill houses that 0% down/no doc/option/teaser rate years of 2004/2005/2006 concocted.

[PadreBrian]

That’s why house prices are going down down down to normal levels. Most household incomes are still below 200k. So you are looking at 600k being the new/old upper middle class home. NOT the 1.0-1.2 Mill houses that 0% down/no doc/option/teaser rate years of 2004/2005/2006 concocted.

[PadreBrian]

That’s why house prices are going down down down to normal levels. Most household incomes are still below 200k. So you are looking at 600k being the new/old upper middle class home. NOT the 1.0-1.2 Mill houses that 0% down/no doc/option/teaser rate years of 2004/2005/2006 concocted.

[PadreBrian]

That’s why house prices are going down down down to normal levels. Most household incomes are still below 200k. So you are looking at 600k being the new/old upper middle class home. NOT the 1.0-1.2 Mill houses that 0% down/no doc/option/teaser rate years of 2004/2005/2006 concocted.

[PadreBrian]

That’s why house prices are going down down down to normal levels. Most household incomes are still below 200k. So you are looking at 600k being the new/old upper middle class home. NOT the 1.0-1.2 Mill houses that 0% down/no doc/option/teaser rate years of 2004/2005/2006 concocted.

[jpinpb]

I am skeptical of how much actual cash people have. I thought I read somewhere that savings are the lowest in history. Unless it’s the people that invested in gold and come time to buy a house, they sell. I guess that’s a possibility and more acceptable explanation to me. Or alternatively, those who did big cash refi and sat on their money, buying a cheaper place and walking from the big loan, as read on another thread.

[jpinpb]

I am skeptical of how much actual cash people have. I thought I read somewhere that savings are the lowest in history. Unless it’s the people that invested in gold and come time to buy a house, they sell. I guess that’s a possibility and more acceptable explanation to me. Or alternatively, those who did big cash refi and sat on their money, buying a cheaper place and walking from the big loan, as read on another thread.

[jpinpb]

I am skeptical of how much actual cash people have. I thought I read somewhere that savings are the lowest in history. Unless it’s the people that invested in gold and come time to buy a house, they sell. I guess that’s a possibility and more acceptable explanation to me. Or alternatively, those who did big cash refi and sat on their money, buying a cheaper place and walking from the big loan, as read on another thread.

[jpinpb]

I am skeptical of how much actual cash people have. I thought I read somewhere that savings are the lowest in history. Unless it’s the people that invested in gold and come time to buy a house, they sell. I guess that’s a possibility and more acceptable explanation to me. Or alternatively, those who did big cash refi and sat on their money, buying a cheaper place and walking from the big loan, as read on another thread.

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