[sdnerd]

Yes, absolutely I agree with you.

A couple making $80k does have to put in a lot more effort to save up for a down payment, no questions. But it is doable in a reasonable time period if they are willing to make some sacrifices. I’ve seen several comments from people saying $80k is just scraping by salary, which is why I commented.

In theory over those 3-5 years they were saving that $60k, their income would hopefully be increasing as well as they gained more experience in whatever field they were starting in.

People are now buying 3/2’s in MM for $300-315k; sure they aren’t the nicest places but $60k will get you into a decent starter home now. And prices keep sliding so… 🙂

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

Let’s remove the kid from your equation, and let’s have the couple actually put in a little tough love on their lifestyle. After all – home ownership should take a little sacrafice to start off.

(modifying your numbers)

Let’s do some math. A young couple with no child because they waited until they were financially stable before expanding their family, $80k/year income.
– Federal tax $7000
– Social security and medicare tax $6000
– State tax $3000
– Health insurance employer contribution $200*12 = $2400 (assuming they have good benefits)
– Rent (1br apartment in a decent area) $1100*12 = $13200
– Utilities $100*12 = $1200 (SDGE, High Cable)
– Two car loans (two Civics/Corollas) $300*2*12 = $7200 (We’ll leave this, although they could get something cheaper or older used)
– Car insurance for both cars = $2,000 (Your number was incredibly high)
– Gasoline (two commutes of 10 miles each on weekdays, staying at home on weekends, at 35 mpg and $3.50 gas) $1000
– Food for two adults and no child, say $500*12 = $6000

There you go – that couple now has a whole lot more money to save each year for a down payment, with plenty extra money for a vacation or two and a decent social life. There’s even room left in there for student loans, etc.

Let’s say they saved $20k/year and spent the rest having fun. That’s only 3 years to save up for a 20% in MM. Sure, add some unexpected expenses and let’s ay it takes them 5 years.

How is that unreasonable?

[sdnerd]

I’m not surprised about the 20% down payments – but what does surprise me a bit are some of the much larger ones (and the % of them from your sampling). 50% down payment on a $600-700k house, etc.

I would guess those are people who did sell at the top, and need to move the cash into a new purchase.

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years. And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

[sdnerd]

I’m not surprised about the 20% down payments – but what does surprise me a bit are some of the much larger ones (and the % of them from your sampling). 50% down payment on a $600-700k house, etc.

I would guess those are people who did sell at the top, and need to move the cash into a new purchase.

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years. And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

[sdnerd]

I’m not surprised about the 20% down payments – but what does surprise me a bit are some of the much larger ones (and the % of them from your sampling). 50% down payment on a $600-700k house, etc.

I would guess those are people who did sell at the top, and need to move the cash into a new purchase.

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years. And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

[sdnerd]

I’m not surprised about the 20% down payments – but what does surprise me a bit are some of the much larger ones (and the % of them from your sampling). 50% down payment on a $600-700k house, etc.

I would guess those are people who did sell at the top, and need to move the cash into a new purchase.

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years. And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

[sdnerd]

I’m not surprised about the 20% down payments – but what does surprise me a bit are some of the much larger ones (and the % of them from your sampling). 50% down payment on a $600-700k house, etc.

I would guess those are people who did sell at the top, and need to move the cash into a new purchase.

And I am still shocked about the perception that an $80k/year income is inadequate to save up a down payment. Assuming you live reasonably, that is still more then enough to save up quite a big chunk of money after a few years. And a dual income couple making that much money (is most likely) either very young – or probably shouldn’t be buying in CV, PQ, MM, etc but somewhere a bit more in-line with their salary ranges.

[sdnerd]

The rate in which MM has been impacted has been quite significant. Far quicker then I originally anticipated.

I think it still has a bit to fall, but I highly doubt there will be another 30% across the board fall in MM. Perhaps a long flat period.

MM has some nice areas, and some bad parts, but as some have pointed out it has a good location. You can get to all the high paying tech jobs, to numerous hospital locations, RB, PQ, etc quite quickly. I think rents will hold short term and increase long term.

Investors aside, a decent 3/2 in a good location like MM for $300k is a nice starter home for a couple where each person is making $50-60k. Especially as it pencils out to rents.

I expect to see a lot of people who bought in Temecula and commute to this general area moving back down to MM, or at least renting there.

The comment that often gets tossed around “Everyone who could buy a home the last few years has” is about as absurd as “They aren’t making any more land.”

We are nearly 8 years into this; I assure you 8 years ago the amount of people priced out of the market is quite substantial. New graduates, first time job, etc. A young couple where each person makes $50k, over the course of 8 years – that’s a measly $7,500 savings a year for that 20% down. And as long as one person remained employed you could cover the monthly expenses.

Just my .02; I wouldn’t bet on 3/2’s in MM at $200k though.

[sdnerd]

The rate in which MM has been impacted has been quite significant. Far quicker then I originally anticipated.

I think it still has a bit to fall, but I highly doubt there will be another 30% across the board fall in MM. Perhaps a long flat period.

MM has some nice areas, and some bad parts, but as some have pointed out it has a good location. You can get to all the high paying tech jobs, to numerous hospital locations, RB, PQ, etc quite quickly. I think rents will hold short term and increase long term.

Investors aside, a decent 3/2 in a good location like MM for $300k is a nice starter home for a couple where each person is making $50-60k. Especially as it pencils out to rents.

I expect to see a lot of people who bought in Temecula and commute to this general area moving back down to MM, or at least renting there.

The comment that often gets tossed around “Everyone who could buy a home the last few years has” is about as absurd as “They aren’t making any more land.”

We are nearly 8 years into this; I assure you 8 years ago the amount of people priced out of the market is quite substantial. New graduates, first time job, etc. A young couple where each person makes $50k, over the course of 8 years – that’s a measly $7,500 savings a year for that 20% down. And as long as one person remained employed you could cover the monthly expenses.

Just my .02; I wouldn’t bet on 3/2’s in MM at $200k though.

[sdnerd]

The rate in which MM has been impacted has been quite significant. Far quicker then I originally anticipated.

I think it still has a bit to fall, but I highly doubt there will be another 30% across the board fall in MM. Perhaps a long flat period.

MM has some nice areas, and some bad parts, but as some have pointed out it has a good location. You can get to all the high paying tech jobs, to numerous hospital locations, RB, PQ, etc quite quickly. I think rents will hold short term and increase long term.

Investors aside, a decent 3/2 in a good location like MM for $300k is a nice starter home for a couple where each person is making $50-60k. Especially as it pencils out to rents.

I expect to see a lot of people who bought in Temecula and commute to this general area moving back down to MM, or at least renting there.

The comment that often gets tossed around “Everyone who could buy a home the last few years has” is about as absurd as “They aren’t making any more land.”

We are nearly 8 years into this; I assure you 8 years ago the amount of people priced out of the market is quite substantial. New graduates, first time job, etc. A young couple where each person makes $50k, over the course of 8 years – that’s a measly $7,500 savings a year for that 20% down. And as long as one person remained employed you could cover the monthly expenses.

Just my .02; I wouldn’t bet on 3/2’s in MM at $200k though.

[sdnerd]

The rate in which MM has been impacted has been quite significant. Far quicker then I originally anticipated.

I think it still has a bit to fall, but I highly doubt there will be another 30% across the board fall in MM. Perhaps a long flat period.

MM has some nice areas, and some bad parts, but as some have pointed out it has a good location. You can get to all the high paying tech jobs, to numerous hospital locations, RB, PQ, etc quite quickly. I think rents will hold short term and increase long term.

Investors aside, a decent 3/2 in a good location like MM for $300k is a nice starter home for a couple where each person is making $50-60k. Especially as it pencils out to rents.

I expect to see a lot of people who bought in Temecula and commute to this general area moving back down to MM, or at least renting there.

The comment that often gets tossed around “Everyone who could buy a home the last few years has” is about as absurd as “They aren’t making any more land.”

We are nearly 8 years into this; I assure you 8 years ago the amount of people priced out of the market is quite substantial. New graduates, first time job, etc. A young couple where each person makes $50k, over the course of 8 years – that’s a measly $7,500 savings a year for that 20% down. And as long as one person remained employed you could cover the monthly expenses.

Just my .02; I wouldn’t bet on 3/2’s in MM at $200k though.

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