Forum Replies Created
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CricketOnTheHearth
ParticipantAs someone who makes $60,000 a year wage income, I have to comment on several things.
1) My taxes on my take-home pay are a bit over 30%. Back in the day I bought a few shares of stock, sold it recently, and realized some small amounts of capital gains on it. Doing the little math-rigamarole in the tax booklet made it clear that the tax on that stock gain was much, much less than that on my wages.
The downside of “make more money on capital gains” is that you have to have the money to invest in the first place– pretty tough when you are living close to the edge.
2) I do the best I can to save, put money away in my 401K, etc. I save some 8% towards retirement total, which I “hope” will be enough when I get there.
3) I am trying to save up some sort of a down payment, but the choices I am confronted with at $39,000/year max net are, (a) rent a decent-enough place and not save up more than a couple hundred dollars a month, petty change in this housing market, or (b) rent two rooms in a house and save more like $1,000/month, which might bring me a decent down-payment for a condo by the time the bottom rolls around. (I am doing the latter.) I think a house in any kind of decent neighborhood will forever be out of my reach even at the bottom. Meantime I endure cramped uncomfortable quarters just in the hope that I can lock down something and start paying it off so I am not renting when I retire in 24 years.
4)’waiting for bottom’, what the heck are you renting??? What the heck are you eating??? I see a lot of slack in your budget, based on the way I spend my own money. For one, nice 4 BR houses in RB rent for 2400/month. For another, I spend something like $200/month on groceries for myself… if you had kids I could see up to $800/month. Eating out and buying prepackaged foods will boost the monthly grocery bill pretty quickly.
Based on your description, I am guessing that you live in the big 5 bedroom house with the lawn, two SUV/minivans, lots of microwave dinners and the odd visit to Chuck E. Cheese, lots of shuttling back and forth to soccer games and the like. This is the way I grew up, and it is “middle class” in most of Middle America, but yup, you guessed it– in San Diego terms, you are Livin Large. Welcome to the top 5% of San Diegans, the rest of us don’t live that way.
>chirp<
ParticipantAs someone who makes $60,000 a year wage income, I have to comment on several things.
1) My taxes on my take-home pay are a bit over 30%. Back in the day I bought a few shares of stock, sold it recently, and realized some small amounts of capital gains on it. Doing the little math-rigamarole in the tax booklet made it clear that the tax on that stock gain was much, much less than that on my wages.
The downside of “make more money on capital gains” is that you have to have the money to invest in the first place– pretty tough when you are living close to the edge.
2) I do the best I can to save, put money away in my 401K, etc. I save some 8% towards retirement total, which I “hope” will be enough when I get there.
3) I am trying to save up some sort of a down payment, but the choices I am confronted with at $39,000/year max net are, (a) rent a decent-enough place and not save up more than a couple hundred dollars a month, petty change in this housing market, or (b) rent two rooms in a house and save more like $1,000/month, which might bring me a decent down-payment for a condo by the time the bottom rolls around. (I am doing the latter.) I think a house in any kind of decent neighborhood will forever be out of my reach even at the bottom. Meantime I endure cramped uncomfortable quarters just in the hope that I can lock down something and start paying it off so I am not renting when I retire in 24 years.
4)’waiting for bottom’, what the heck are you renting??? What the heck are you eating??? I see a lot of slack in your budget, based on the way I spend my own money. For one, nice 4 BR houses in RB rent for 2400/month. For another, I spend something like $200/month on groceries for myself… if you had kids I could see up to $800/month. Eating out and buying prepackaged foods will boost the monthly grocery bill pretty quickly.
Based on your description, I am guessing that you live in the big 5 bedroom house with the lawn, two SUV/minivans, lots of microwave dinners and the odd visit to Chuck E. Cheese, lots of shuttling back and forth to soccer games and the like. This is the way I grew up, and it is “middle class” in most of Middle America, but yup, you guessed it– in San Diego terms, you are Livin Large. Welcome to the top 5% of San Diegans, the rest of us don’t live that way.
>chirp<
ParticipantAs someone who makes $60,000 a year wage income, I have to comment on several things.
1) My taxes on my take-home pay are a bit over 30%. Back in the day I bought a few shares of stock, sold it recently, and realized some small amounts of capital gains on it. Doing the little math-rigamarole in the tax booklet made it clear that the tax on that stock gain was much, much less than that on my wages.
The downside of “make more money on capital gains” is that you have to have the money to invest in the first place– pretty tough when you are living close to the edge.
2) I do the best I can to save, put money away in my 401K, etc. I save some 8% towards retirement total, which I “hope” will be enough when I get there.
3) I am trying to save up some sort of a down payment, but the choices I am confronted with at $39,000/year max net are, (a) rent a decent-enough place and not save up more than a couple hundred dollars a month, petty change in this housing market, or (b) rent two rooms in a house and save more like $1,000/month, which might bring me a decent down-payment for a condo by the time the bottom rolls around. (I am doing the latter.) I think a house in any kind of decent neighborhood will forever be out of my reach even at the bottom. Meantime I endure cramped uncomfortable quarters just in the hope that I can lock down something and start paying it off so I am not renting when I retire in 24 years.
4)’waiting for bottom’, what the heck are you renting??? What the heck are you eating??? I see a lot of slack in your budget, based on the way I spend my own money. For one, nice 4 BR houses in RB rent for 2400/month. For another, I spend something like $200/month on groceries for myself… if you had kids I could see up to $800/month. Eating out and buying prepackaged foods will boost the monthly grocery bill pretty quickly.
Based on your description, I am guessing that you live in the big 5 bedroom house with the lawn, two SUV/minivans, lots of microwave dinners and the odd visit to Chuck E. Cheese, lots of shuttling back and forth to soccer games and the like. This is the way I grew up, and it is “middle class” in most of Middle America, but yup, you guessed it– in San Diego terms, you are Livin Large. Welcome to the top 5% of San Diegans, the rest of us don’t live that way.
>chirp<
June 9, 2008 at 5:41 PM in reply to: Will rents create a price floor despite the mini rental bubble? #220540ParticipantI have also experienced a widening rent/income gap.
This post has stuck in my mind for several days, and as a reality check I went back and looked at my pay slips and lease agreements for 2001, the last time I was financially “comfortable”.
I found that at that time, my rent was some 23% of my gross income.
Fast forward to today, my pay is 111% what it was in 2001 (i.e., it has risen 11% in the past 7 years). Meanwhile, the very same apartment I used to live in, is now nearly 150% the rent– it went from $1090 to $1515. If I rented there today, I would be spending 30% of my gross income on rent, or literally half my take-home pay.
. . .
My (extremely rough) rule of thumb is that $600 in monthly payment is roughly equivalent to $100,000 in house price, for a 30-year fixed mortgage. When I apply this rule to a published rent, I get an estimate of “what the rent says the house is worth”. Rents in RB currently imply home values of $250,000 for 2-bedroom condos, and $400,000 for single-family homes. Actual condos in RB are being listed in this neighborhood now (mostly by the converted complexes and the builders). Houses have a ways to go on this.
But if prices of houses and condos were to more truly fall back into line with incomes, where they were in 2001, they would have to fall to $181,000 for the 2BR condos not counting HOA fees, and probably more like $140,000 assuming a (low) HOA of $250. I neglect the property tax here, because with the federal income tax deduction for mortgage interest, for a new buyer the tax gain and the property tax are about a wash.
Who knows if prices and rents will actually ever fall to reasonable ratios vs incomes; I guess we will see.
>chirp<
June 9, 2008 at 5:41 PM in reply to: Will rents create a price floor despite the mini rental bubble? #220637ParticipantI have also experienced a widening rent/income gap.
This post has stuck in my mind for several days, and as a reality check I went back and looked at my pay slips and lease agreements for 2001, the last time I was financially “comfortable”.
I found that at that time, my rent was some 23% of my gross income.
Fast forward to today, my pay is 111% what it was in 2001 (i.e., it has risen 11% in the past 7 years). Meanwhile, the very same apartment I used to live in, is now nearly 150% the rent– it went from $1090 to $1515. If I rented there today, I would be spending 30% of my gross income on rent, or literally half my take-home pay.
. . .
My (extremely rough) rule of thumb is that $600 in monthly payment is roughly equivalent to $100,000 in house price, for a 30-year fixed mortgage. When I apply this rule to a published rent, I get an estimate of “what the rent says the house is worth”. Rents in RB currently imply home values of $250,000 for 2-bedroom condos, and $400,000 for single-family homes. Actual condos in RB are being listed in this neighborhood now (mostly by the converted complexes and the builders). Houses have a ways to go on this.
But if prices of houses and condos were to more truly fall back into line with incomes, where they were in 2001, they would have to fall to $181,000 for the 2BR condos not counting HOA fees, and probably more like $140,000 assuming a (low) HOA of $250. I neglect the property tax here, because with the federal income tax deduction for mortgage interest, for a new buyer the tax gain and the property tax are about a wash.
Who knows if prices and rents will actually ever fall to reasonable ratios vs incomes; I guess we will see.
>chirp<
June 9, 2008 at 5:41 PM in reply to: Will rents create a price floor despite the mini rental bubble? #220653ParticipantI have also experienced a widening rent/income gap.
This post has stuck in my mind for several days, and as a reality check I went back and looked at my pay slips and lease agreements for 2001, the last time I was financially “comfortable”.
I found that at that time, my rent was some 23% of my gross income.
Fast forward to today, my pay is 111% what it was in 2001 (i.e., it has risen 11% in the past 7 years). Meanwhile, the very same apartment I used to live in, is now nearly 150% the rent– it went from $1090 to $1515. If I rented there today, I would be spending 30% of my gross income on rent, or literally half my take-home pay.
. . .
My (extremely rough) rule of thumb is that $600 in monthly payment is roughly equivalent to $100,000 in house price, for a 30-year fixed mortgage. When I apply this rule to a published rent, I get an estimate of “what the rent says the house is worth”. Rents in RB currently imply home values of $250,000 for 2-bedroom condos, and $400,000 for single-family homes. Actual condos in RB are being listed in this neighborhood now (mostly by the converted complexes and the builders). Houses have a ways to go on this.
But if prices of houses and condos were to more truly fall back into line with incomes, where they were in 2001, they would have to fall to $181,000 for the 2BR condos not counting HOA fees, and probably more like $140,000 assuming a (low) HOA of $250. I neglect the property tax here, because with the federal income tax deduction for mortgage interest, for a new buyer the tax gain and the property tax are about a wash.
Who knows if prices and rents will actually ever fall to reasonable ratios vs incomes; I guess we will see.
>chirp<
June 9, 2008 at 5:41 PM in reply to: Will rents create a price floor despite the mini rental bubble? #220684ParticipantI have also experienced a widening rent/income gap.
This post has stuck in my mind for several days, and as a reality check I went back and looked at my pay slips and lease agreements for 2001, the last time I was financially “comfortable”.
I found that at that time, my rent was some 23% of my gross income.
Fast forward to today, my pay is 111% what it was in 2001 (i.e., it has risen 11% in the past 7 years). Meanwhile, the very same apartment I used to live in, is now nearly 150% the rent– it went from $1090 to $1515. If I rented there today, I would be spending 30% of my gross income on rent, or literally half my take-home pay.
. . .
My (extremely rough) rule of thumb is that $600 in monthly payment is roughly equivalent to $100,000 in house price, for a 30-year fixed mortgage. When I apply this rule to a published rent, I get an estimate of “what the rent says the house is worth”. Rents in RB currently imply home values of $250,000 for 2-bedroom condos, and $400,000 for single-family homes. Actual condos in RB are being listed in this neighborhood now (mostly by the converted complexes and the builders). Houses have a ways to go on this.
But if prices of houses and condos were to more truly fall back into line with incomes, where they were in 2001, they would have to fall to $181,000 for the 2BR condos not counting HOA fees, and probably more like $140,000 assuming a (low) HOA of $250. I neglect the property tax here, because with the federal income tax deduction for mortgage interest, for a new buyer the tax gain and the property tax are about a wash.
Who knows if prices and rents will actually ever fall to reasonable ratios vs incomes; I guess we will see.
>chirp<
June 9, 2008 at 5:41 PM in reply to: Will rents create a price floor despite the mini rental bubble? #220704ParticipantI have also experienced a widening rent/income gap.
This post has stuck in my mind for several days, and as a reality check I went back and looked at my pay slips and lease agreements for 2001, the last time I was financially “comfortable”.
I found that at that time, my rent was some 23% of my gross income.
Fast forward to today, my pay is 111% what it was in 2001 (i.e., it has risen 11% in the past 7 years). Meanwhile, the very same apartment I used to live in, is now nearly 150% the rent– it went from $1090 to $1515. If I rented there today, I would be spending 30% of my gross income on rent, or literally half my take-home pay.
. . .
My (extremely rough) rule of thumb is that $600 in monthly payment is roughly equivalent to $100,000 in house price, for a 30-year fixed mortgage. When I apply this rule to a published rent, I get an estimate of “what the rent says the house is worth”. Rents in RB currently imply home values of $250,000 for 2-bedroom condos, and $400,000 for single-family homes. Actual condos in RB are being listed in this neighborhood now (mostly by the converted complexes and the builders). Houses have a ways to go on this.
But if prices of houses and condos were to more truly fall back into line with incomes, where they were in 2001, they would have to fall to $181,000 for the 2BR condos not counting HOA fees, and probably more like $140,000 assuming a (low) HOA of $250. I neglect the property tax here, because with the federal income tax deduction for mortgage interest, for a new buyer the tax gain and the property tax are about a wash.
Who knows if prices and rents will actually ever fall to reasonable ratios vs incomes; I guess we will see.
>chirp<
ParticipantI’ve been thinking about what hipmatt said earlier:
“…while most of the population increases are from migration of relatively poor and creditless illegal immigrants. Good luck selling houses at these prices to them…”
There is a phenomenon I see here, involving (presumably) legal immigrants, where a large family (or several) buy into a house together and all chip in to make the payments. Thus you get 10 or more people crammed into a “single family” house and loads of cars parked in the street in front of and around it. I think it’s in fact aggravated by the “McMansionisation” of housing. The failure to build smaller, affordable houses doesn’t necessarily block these people from buying… it just gives them incentive to pile multiple people into a big house instead of one family into a smaller one. Escondido is wrestling with this problem now and I see it to some extent in Mira Mesa too. So just because they are poor immigrants doesn’t necessarily mean they won’t buy houses… just as likely, IMO, that they will pile into houses, resulting in overcrowded on-street parking.
On a related topic, about “the illegals”… I’ve seen an anecdotal comment from the U.S. Southeast (someone in building trades), and a recent article in the U-T about a big decrease in the San Ysidro cross-border traffic. Whether they are illegals, green-card legals, or what, it may be that the drop in jobs in the U.S. due to our recession is initially being soaked up by the immigrant/temporary workers. In other words, they are being laid off first, and are going/staying home (to Mexico/Central America). I have no idea in what numbers but it’s something to watch out for.
One last thing. When discussing immigration, we need to draw a bright hard line between “illegal” and “legal” immigrants. I see people on both sides of the debate blur this line constantly and it is a never-ending source of aggravation to me. Just because someone is brown and poor doesn’t necessarily mean they are illegal (or because someone is a white professional doesn’t mean they are legal– just look at our Governator). Go down to Golden Hall on a new-citizen-induction ceremony day. 1,000 people, mostly brown, come walking out those doors– and they are all not only “legal”, they are newly-minted American citizens.
>chirp<
ParticipantI’ve been thinking about what hipmatt said earlier:
“…while most of the population increases are from migration of relatively poor and creditless illegal immigrants. Good luck selling houses at these prices to them…”
There is a phenomenon I see here, involving (presumably) legal immigrants, where a large family (or several) buy into a house together and all chip in to make the payments. Thus you get 10 or more people crammed into a “single family” house and loads of cars parked in the street in front of and around it. I think it’s in fact aggravated by the “McMansionisation” of housing. The failure to build smaller, affordable houses doesn’t necessarily block these people from buying… it just gives them incentive to pile multiple people into a big house instead of one family into a smaller one. Escondido is wrestling with this problem now and I see it to some extent in Mira Mesa too. So just because they are poor immigrants doesn’t necessarily mean they won’t buy houses… just as likely, IMO, that they will pile into houses, resulting in overcrowded on-street parking.
On a related topic, about “the illegals”… I’ve seen an anecdotal comment from the U.S. Southeast (someone in building trades), and a recent article in the U-T about a big decrease in the San Ysidro cross-border traffic. Whether they are illegals, green-card legals, or what, it may be that the drop in jobs in the U.S. due to our recession is initially being soaked up by the immigrant/temporary workers. In other words, they are being laid off first, and are going/staying home (to Mexico/Central America). I have no idea in what numbers but it’s something to watch out for.
One last thing. When discussing immigration, we need to draw a bright hard line between “illegal” and “legal” immigrants. I see people on both sides of the debate blur this line constantly and it is a never-ending source of aggravation to me. Just because someone is brown and poor doesn’t necessarily mean they are illegal (or because someone is a white professional doesn’t mean they are legal– just look at our Governator). Go down to Golden Hall on a new-citizen-induction ceremony day. 1,000 people, mostly brown, come walking out those doors– and they are all not only “legal”, they are newly-minted American citizens.
>chirp<
ParticipantI’ve been thinking about what hipmatt said earlier:
“…while most of the population increases are from migration of relatively poor and creditless illegal immigrants. Good luck selling houses at these prices to them…”
There is a phenomenon I see here, involving (presumably) legal immigrants, where a large family (or several) buy into a house together and all chip in to make the payments. Thus you get 10 or more people crammed into a “single family” house and loads of cars parked in the street in front of and around it. I think it’s in fact aggravated by the “McMansionisation” of housing. The failure to build smaller, affordable houses doesn’t necessarily block these people from buying… it just gives them incentive to pile multiple people into a big house instead of one family into a smaller one. Escondido is wrestling with this problem now and I see it to some extent in Mira Mesa too. So just because they are poor immigrants doesn’t necessarily mean they won’t buy houses… just as likely, IMO, that they will pile into houses, resulting in overcrowded on-street parking.
On a related topic, about “the illegals”… I’ve seen an anecdotal comment from the U.S. Southeast (someone in building trades), and a recent article in the U-T about a big decrease in the San Ysidro cross-border traffic. Whether they are illegals, green-card legals, or what, it may be that the drop in jobs in the U.S. due to our recession is initially being soaked up by the immigrant/temporary workers. In other words, they are being laid off first, and are going/staying home (to Mexico/Central America). I have no idea in what numbers but it’s something to watch out for.
One last thing. When discussing immigration, we need to draw a bright hard line between “illegal” and “legal” immigrants. I see people on both sides of the debate blur this line constantly and it is a never-ending source of aggravation to me. Just because someone is brown and poor doesn’t necessarily mean they are illegal (or because someone is a white professional doesn’t mean they are legal– just look at our Governator). Go down to Golden Hall on a new-citizen-induction ceremony day. 1,000 people, mostly brown, come walking out those doors– and they are all not only “legal”, they are newly-minted American citizens.
>chirp<
ParticipantI’ve been thinking about what hipmatt said earlier:
“…while most of the population increases are from migration of relatively poor and creditless illegal immigrants. Good luck selling houses at these prices to them…”
There is a phenomenon I see here, involving (presumably) legal immigrants, where a large family (or several) buy into a house together and all chip in to make the payments. Thus you get 10 or more people crammed into a “single family” house and loads of cars parked in the street in front of and around it. I think it’s in fact aggravated by the “McMansionisation” of housing. The failure to build smaller, affordable houses doesn’t necessarily block these people from buying… it just gives them incentive to pile multiple people into a big house instead of one family into a smaller one. Escondido is wrestling with this problem now and I see it to some extent in Mira Mesa too. So just because they are poor immigrants doesn’t necessarily mean they won’t buy houses… just as likely, IMO, that they will pile into houses, resulting in overcrowded on-street parking.
On a related topic, about “the illegals”… I’ve seen an anecdotal comment from the U.S. Southeast (someone in building trades), and a recent article in the U-T about a big decrease in the San Ysidro cross-border traffic. Whether they are illegals, green-card legals, or what, it may be that the drop in jobs in the U.S. due to our recession is initially being soaked up by the immigrant/temporary workers. In other words, they are being laid off first, and are going/staying home (to Mexico/Central America). I have no idea in what numbers but it’s something to watch out for.
One last thing. When discussing immigration, we need to draw a bright hard line between “illegal” and “legal” immigrants. I see people on both sides of the debate blur this line constantly and it is a never-ending source of aggravation to me. Just because someone is brown and poor doesn’t necessarily mean they are illegal (or because someone is a white professional doesn’t mean they are legal– just look at our Governator). Go down to Golden Hall on a new-citizen-induction ceremony day. 1,000 people, mostly brown, come walking out those doors– and they are all not only “legal”, they are newly-minted American citizens.
>chirp<
ParticipantI’ve been thinking about what hipmatt said earlier:
“…while most of the population increases are from migration of relatively poor and creditless illegal immigrants. Good luck selling houses at these prices to them…”
There is a phenomenon I see here, involving (presumably) legal immigrants, where a large family (or several) buy into a house together and all chip in to make the payments. Thus you get 10 or more people crammed into a “single family” house and loads of cars parked in the street in front of and around it. I think it’s in fact aggravated by the “McMansionisation” of housing. The failure to build smaller, affordable houses doesn’t necessarily block these people from buying… it just gives them incentive to pile multiple people into a big house instead of one family into a smaller one. Escondido is wrestling with this problem now and I see it to some extent in Mira Mesa too. So just because they are poor immigrants doesn’t necessarily mean they won’t buy houses… just as likely, IMO, that they will pile into houses, resulting in overcrowded on-street parking.
On a related topic, about “the illegals”… I’ve seen an anecdotal comment from the U.S. Southeast (someone in building trades), and a recent article in the U-T about a big decrease in the San Ysidro cross-border traffic. Whether they are illegals, green-card legals, or what, it may be that the drop in jobs in the U.S. due to our recession is initially being soaked up by the immigrant/temporary workers. In other words, they are being laid off first, and are going/staying home (to Mexico/Central America). I have no idea in what numbers but it’s something to watch out for.
One last thing. When discussing immigration, we need to draw a bright hard line between “illegal” and “legal” immigrants. I see people on both sides of the debate blur this line constantly and it is a never-ending source of aggravation to me. Just because someone is brown and poor doesn’t necessarily mean they are illegal (or because someone is a white professional doesn’t mean they are legal– just look at our Governator). Go down to Golden Hall on a new-citizen-induction ceremony day. 1,000 people, mostly brown, come walking out those doors– and they are all not only “legal”, they are newly-minted American citizens.
>chirp<
ParticipantJust read Nostradamus’ comment.
Wow, and ow.
That was naiive.And I thought I was a sucker for believing the USPA & IRA salesman who drove a big white Cadillac, and losing $600 on a front-loaded mutual fund that was totally inappropriate for my investment desires.
Never, never, never let anyone but you handle your personal accounts. NEVER.
>chirp<
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