How many people do you think have cash saved up?

[sdrealtor]

Just one data point but I met with the son of a client last week. He’s 2 years out of college, works in Biotech and makes 45k/year. He’s lived with Mom the last years and saved about $40,000 in the bank and wanted to buy something. BTW, My advice was stay at home or find an apartment while you build your career. Great start with the saving but need higher income. Wait out the market a couple years as downside risk could easily wipe out all you have accomplished saving the last 2 years.

[waiting hawk]

We have over 100k saved and we are the only ones out of everyone we know. The idea of 10% population having about 70k is way to high. I think it is much much less. Wait till they start to factor in debt-to-income ratio like they always used to. That takes up a ton of savings which is dumb because who the heck would save at 5% when you have CC debts at 20% interest?

Now how many out there are debt free with 70k or more that buy median homes?

[waiting hawk]

We have over 100k saved and we are the only ones out of everyone we know. The idea of 10% population having about 70k is way to high. I think it is much much less. Wait till they start to factor in debt-to-income ratio like they always used to. That takes up a ton of savings which is dumb because who the heck would save at 5% when you have CC debts at 20% interest?

Now how many out there are debt free with 70k or more that buy median homes?

[Anonymous]

First post and hello!

I’m a lifelong Californian hanging out in Austin watching the California prices go down. We sold our Temecula house a year before the peak, but at a tidy profit. Rented for a bit and then bought a house for cash in Austin to catch a little appreciation while enjoying life.

I knew there’d be a crash in California, but for some reason, I never thought I’d come back to California so I didn’t think it was relevant to me. I was cashing out to leave for good. Now I’m thinking that if the prices go down enough, maybe 2002 levels, I might just come on back to my home state. I sorta miss the ole place.

I think (though one can never be sure) that the Austin market isn’t going to have a big crash, and we probably won’t own here long enough to be in danger. Maybe we’ll move back soon and rent while watching the carnage. We won’t make a killing on this house, but should clear selling costs and improvements which is good enough. If we come back, it’ll be with cash in hand, ready and waiting.

That might be where cash buyers come from. The cash-out-and-move-to-flyover-country crowd that has paid for houses in the Midwest and might be wanting to come back when and if prices come down.

[Anonymous]

First post and hello!

I’m a lifelong Californian hanging out in Austin watching the California prices go down. We sold our Temecula house a year before the peak, but at a tidy profit. Rented for a bit and then bought a house for cash in Austin to catch a little appreciation while enjoying life.

I knew there’d be a crash in California, but for some reason, I never thought I’d come back to California so I didn’t think it was relevant to me. I was cashing out to leave for good. Now I’m thinking that if the prices go down enough, maybe 2002 levels, I might just come on back to my home state. I sorta miss the ole place.

I think (though one can never be sure) that the Austin market isn’t going to have a big crash, and we probably won’t own here long enough to be in danger. Maybe we’ll move back soon and rent while watching the carnage. We won’t make a killing on this house, but should clear selling costs and improvements which is good enough. If we come back, it’ll be with cash in hand, ready and waiting.

That might be where cash buyers come from. The cash-out-and-move-to-flyover-country crowd that has paid for houses in the Midwest and might be wanting to come back when and if prices come down.

[cr]

This brings up a good issue to touch on: income – the true measure of housing affordability, and what should be the main determining factor of home prices.

My wife and I are late 20’s, pay less than a grand for rent, only loan is school at less than 5%, and saving for a 20% down payment, though our area is still way overpriced and we are nowhere near able to afford anything.

The good ol’ NAR says average income in CA is $61,536, and we are above that, but still priced out.

Even if that number is right, it sure seems prices have a lot farther to fall. Then add to that tighter lending, and lowest average savings in history.

[cr]

This brings up a good issue to touch on: income – the true measure of housing affordability, and what should be the main determining factor of home prices.

My wife and I are late 20’s, pay less than a grand for rent, only loan is school at less than 5%, and saving for a 20% down payment, though our area is still way overpriced and we are nowhere near able to afford anything.

The good ol’ NAR says average income in CA is $61,536, and we are above that, but still priced out.

Even if that number is right, it sure seems prices have a lot farther to fall. Then add to that tighter lending, and lowest average savings in history.

[Anonymous]

Asia, you’re smoking crack if you think a lot of couples in the their mid-20s are making anywhere close to 150K.

Secondly, I don’t consider 401K and Roth IRA as cash. Sure it is possible to pull money from those accounts (with penalties) to make a downpayment on a house but is that really a good idea? If you have to rob from your retirement account to finance a house then you are mortgaging your future (both literally and figuratively).

[Anonymous]

Asia, you’re smoking crack if you think a lot of couples in the their mid-20s are making anywhere close to 150K.

Secondly, I don’t consider 401K and Roth IRA as cash. Sure it is possible to pull money from those accounts (with penalties) to make a downpayment on a house but is that really a good idea? If you have to rob from your retirement account to finance a house then you are mortgaging your future (both literally and figuratively).

[eyePod]

It is possible to borrow up to $50K for a house purchase from a 401k. You loan the money to yourself and pay yourself the interest. It’s a pretty good deal if you’re into saving.

[eyePod]

It is possible to borrow up to $50K for a house purchase from a 401k. You loan the money to yourself and pay yourself the interest. It’s a pretty good deal if you’re into saving.

[newguy]

this may not be scientific, but wikipedia has an entry on household income in the united states.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

But it says that 15.73% of the entire US households make more than 100K. Only 5.84% make more than 150K. And I’m pretty sure that 5.84% aren’t all mid-to-high 20 year olds. =)

But I’m sure these numbers are a bit off for those who don’t report their income properly, so I’m expecting the numbers to be larger…but not much.

But here’s the breakdown:
0-25,000: 28.22%
25,000-50,000: 26.65%
50,000-75,000: 18.27%
75,000-100,000: 10.93%
100,000+: 15.73%
National Median: $44,389

Source: US Census Bureau 2005

[newguy]

this may not be scientific, but wikipedia has an entry on household income in the united states.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

But it says that 15.73% of the entire US households make more than 100K. Only 5.84% make more than 150K. And I’m pretty sure that 5.84% aren’t all mid-to-high 20 year olds. =)

But I’m sure these numbers are a bit off for those who don’t report their income properly, so I’m expecting the numbers to be larger…but not much.

But here’s the breakdown:
0-25,000: 28.22%
25,000-50,000: 26.65%
50,000-75,000: 18.27%
75,000-100,000: 10.93%
100,000+: 15.73%
National Median: $44,389

Source: US Census Bureau 2005

[Anonymous]

The Asian community might have a deeper pocket in this regard. Take my friend Ming for example. Ming came to the States with $1,000 in his wallet in 1995. After five years of postgraduate study, he obtained his Ph.D. degree in 2000 and got married. At that time the couple’s combined saving was close to $30,000. They decided to move to San Diego for his postdoctoral researcher position. The wife Mei found a job in a local high-tech company ($45K/yr). They bought their first brand new car (Toyota corolla) in cash and lived in an apartment. In 2002 Ming landed a job in a San Diego biotech company as a research scientist ($85K/yr). At that time Ming’s family already have over $70k cash in the bank. So they bought a 2br/2bath condo in to realize their American Dream. Their first child was born in that condo. In 2005 the couple sold their condo for a sizable profit and decided to wait on the sideline for a few years. Now their combined salary is over $170k/yr. They are still renting.

In a nut shell, my point is that Asian immigrants who recently joined the work force of San Diego high-tech industry might meet the criteria set by kev374.

———
You are what you eat.

[Anonymous]

The Asian community might have a deeper pocket in this regard. Take my friend Ming for example. Ming came to the States with $1,000 in his wallet in 1995. After five years of postgraduate study, he obtained his Ph.D. degree in 2000 and got married. At that time the couple’s combined saving was close to $30,000. They decided to move to San Diego for his postdoctoral researcher position. The wife Mei found a job in a local high-tech company ($45K/yr). They bought their first brand new car (Toyota corolla) in cash and lived in an apartment. In 2002 Ming landed a job in a San Diego biotech company as a research scientist ($85K/yr). At that time Ming’s family already have over $70k cash in the bank. So they bought a 2br/2bath condo in to realize their American Dream. Their first child was born in that condo. In 2005 the couple sold their condo for a sizable profit and decided to wait on the sideline for a few years. Now their combined salary is over $170k/yr. They are still renting.

In a nut shell, my point is that Asian immigrants who recently joined the work force of San Diego high-tech industry might meet the criteria set by kev374.

———
You are what you eat.

[Author]

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