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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHow the hell do people afford housing?
I'm watching a show on the lawnmower channel where a teacher and a retail manager have a housing budget of $950,000. In what world do working people have that kind of money?
JVS
(61,935 posts)haikugal
(6,476 posts)Initech
(100,100 posts)But yeah most of these shows live in reality show fairy tale land. Best not to think about it too much.
SMC22307
(8,090 posts)Haven't had cable in nearly a decade... guess I'm missing out. Or not.
miyazaki
(2,249 posts)through channels trying to find something to watch than actually
watching.
SMC22307
(8,090 posts)yet again more re-runs of L&O:SVU and CSI:Wherever...
Initech
(100,100 posts)Much better programming on Netflix and Hulu than there is on network TV.
SMC22307
(8,090 posts)flamingdem
(39,320 posts)How does a working person in Los Angeles afford to pay 3000 for an average one bedroom apartment.
LiberalEsto
(22,845 posts)Makes me wonder if they're major drug dealers or something.
HooptieWagon
(17,064 posts)IDK how people can afford rent. Most all the working people I know either have owned a home for many years (bought cheap), or have several people sharing rent in a small house. All the new apts going up are upscale, there are few apts affordable to the working class.
spinbaby
(15,090 posts)And stayed put. We couldn't afford today's prices.
HooptieWagon
(17,064 posts)Can't afford to move, but I'm lucky... millenials with college debt have little hope of owning a home.
yeoman6987
(14,449 posts)The price of housing is through the roof. I mean I guess it is good for me when I sell but that won't be for 30 years or more and who knows what life will be like then.
alarimer
(16,245 posts)Which is pretty middling.
edhopper
(33,615 posts)I assume?
Yeah some major BS with that show.
Half a million for vacation home in Mexico?
Arugula Latte
(50,566 posts)reject houses for things like paint color, non-granite countertops, and master bedrooms that aren't quite the size of airplane hangars.
edhopper
(33,615 posts)"dated".
So Far From Heaven
(354 posts)I tried dating my kitchen a few years ago, but found I couldn't get all the shit in the car after I tore it out, so the date was cancelled.
Pakhet
(520 posts)it came with the house and we've been there 24 years and would have paid it off if my step dad hadn't continually refinanced for the cash. I bought it for 69.5 and deaded it to my mother before moving to texas. when I got back from texas in 2006, the amount owed was 74...I've gotten it back down to 56 in the last 10 years. We stay despite the problems because there's no way to rent a 3 bedroom (or even 2 bedroom) anything for what I make in mtg payments. it's 40% of my income right now, which is much better than in past years
Populist_Prole
(5,364 posts)That term is so overused now, as in "If you're a hammer; everything looks like a nail".
People throw it around over/about everything now. I could see them visiting some museum or historical site and pan it while trying to sound savvy by dismissing everything as "dated".
My girlfriend/fiancee always watches 'House Hunters' and it sure has made her much more critical of my home and everything in it. This or that is "dated" and "So 90s". By the time we're done updating it we'll be behind the curve anyway.
Odin2005
(53,521 posts)Texasgal
(17,047 posts)annoy me the most!
Really? You must have stainless? What the hell is wrong with white that works?
Travis_0004
(5,417 posts)Sure it works, but if you are going to spend 200k or more on a house get what you want.
White is fine, but if the next house has stainless and all else is equal, I would take the stainless.
I just threw out a black range this week for stainless (I also switched to gas.)
Its nice to have gas, the only downside I had to change the microwave too so it matches.
Mariana
(14,860 posts)It wasn't my favorite job and I was glad to get out of that kind of work. So, no stainless appliances for me because they remind me of that. I don't like any hardware with a "brushed nickel" finish for pretty much the same reason. This is my home, I don't want it to look like a workplace.
My kitchen is dated, too - it has cabinets made out of real wood.
meow2u3
(24,772 posts)Why the stainless steel? That costs a fortune just to maintain the outside of those appliances.
What are these people buying? a restaurant?
grasswire
(50,130 posts)and it seems that the wife is always the stubborn one, for some reason.
yeoman6987
(14,449 posts)Or when a couple is looking for a home and sees one that is 50 grand over budget but one of the set of parents comes through with the 50 grand. Heck, I wish my parents had 50 grand lying around to give to me.......Lord some kids are really spoiled by their parents. I have friends whose parents still have them on their cell phone plans and they are 34 and 36 years old. WTF......I only wish....lol.
Populist_Prole
(5,364 posts)A budget too high for most people of any age, let alone mid-20s and yet, despite having enough money to blow their noses in, they reject otherwise nice places for relatively small items that could be addressed with a couple...three thou.
2naSalit
(86,775 posts)I live on <$800/month. I live in a two room shotgun cabin in the mountains and am thankful to have hot running water and some who supplies my firewood, but I still have to break it up some to fit in the stove. I drive a vehicle from 1992 and rarely go or eat out. I got out of California decades ago because I couldn't find enough jobs (or energy to have more than one FT job) to pay the rent for a bedroom in someone else's house there... and I was making decent pay!.. then I got hurt and that ended the career I was in the middle of.
When you only have enough to pay rent, you are thankful to have the shelter but you often go without much food or other needs being met. I have no idea how anyone can come up with that much $ for rent, I have never paid more than $600.month but I don't look for housing in high rent areas. It's either figure it out or end up relocating... sometimes to the streets.
Beaverhausen
(24,472 posts)That seems to be the only way many people can afford a down payment.
underahedgerow
(1,232 posts)into nearly a million in profit, buying, restoring and selling property over a period of about 8 years. Started in pennies, now I have long term holds.
I learned how to play the stock market, getting up at 4am to get on with the east coast traders and made some decent bucks.
I do it now a bit with the advantage of being 6 hours ahead of the NY markets, but it's not interesting much to me anymore. I like property. And gold. I hold gold as a hard asset for when I need cash, buying scrap as cheap as I can, and cashing in occasionally.
But property is still the best investment, if you learn the trades, learn the values and have to ability to know what people want and how to stage the sale.
No one gets rich by working from 9-5 and taking a paycheck from someone else. People get rich by creating their own wealth, their own opportunities and their own jobs and income.
CoffeeCat
(24,411 posts)I'm sure you can make a killing.
The problem is knowing when is the right time. I know people who, in 2008, decided that they wanted to get in on flipping houses.
Of course, they're still crying.
By the time the average Joe figures it out, it's too late.
SusanCalvin
(6,592 posts)Exactly.
mnhtnbb
(31,402 posts)We had a fire that burned our house down in 2007. Had to fight the insurance company to get what we were owed--based on a replacement value policy--
and ended up having to hire a public adjuster (give him 15% of what was collected) because the insurance company REFUSED to give us more than
2/3 of what we owed on our loan claiming that was the value of the house. They finally paid us enough to pay off the loan, but we still had to come
up with cash out of pocket to clear the lot of the burned down house and take down some trees that had burned and were a hazard. That cost us
about $30,000. Out of pocket. Should have been covered by insurance.
We rented for a year. A small house came on the market in our same neighborhood, and we decided to buy it and remodel/update it. The insurance
company didn't fight us on contents replacement and we basically used the money from that for the remodel of the house.
Yeah, you guessed it. We bought that little house in 2008. Absolutely top of the market. Probably paid about $65,000. more than we should have.
Then we put more money into it.
About 2 years later we decided to rebuild on the lot where the house burned. We had a rental apartment on top of the detached garage that didn't burn
and figured we could get almost enough rent that would pay the property taxes. We determined--at our ages then 68 and 59--that we could afford to use
cash (from a lifetime of investment) to rebuild a house that we intended to design so we could "age in place". I hate these retirement communities
of nothing but old folks. Lots of people in our area go into them when they are in their 70's. Not for me. Shoot me first, please. We figured we'd
sell the little house we had bought/remodeled. Well. In 2011 we moved in to the new, single level house and put the little house on the market.
Nothing. No action. Not an offer for 4 months and meanwhile we're making mortgage payments. Pulled the house off the market and rented it within
a week since we live walking distance to campus at UNC - Chapel Hill. We continued to rent it for another three years. By that time hubby is 71
and still working almost full time but really wanting to back off to half time. Our youngest son was accepted to grad school at Yale School of Drama--with an excellent financial aid package--
but was still going to need more than $10K a year in living expenses. He wanted to take student loans and we convinced him not to--that we'd sell the little house and use cash from
that to help him. He could just consider it getting inheritance early. So, we put the little house back on the market. Lots and lots of showings. Not one offer until 6 months later (and
now vacant since tenant moved out three months earlier) while we're still making mortgage payments on it--for $10K more than we paid for it. We figured we had put at least $100K in to
the remodeling/updating. So there went the contents insurance money, but we did clear enough to help our son for three years of grad school. That was 2014.
OK. Fast forward to about a week ago. The house across the street from the little house goes on the market. Same size. Original owners who are going to retirement community.
That house sold in LESS THAN A WEEK listed at the same price as where we had priced our little house. My guess is close to--if not--full price. No updated kitchen or baths. They patched the roof that needs replacement. No big deck or carport which our little house had. I contacted our realtor--who also had their listing--and his response was "the market is hot again".
Timing. It's all about timing. If we'd held that little house until now--renting it to cover mortgage/taxes--I suspect we could have gotten $50K more than we did, which would be
about what you'd expect to get for having updated the place.
It's all about timing. In hindsight, we would have been better off NOT buying/updating that little house and dumping the lot for what we could have gotten out of it and not rebuilding.
How could you know?
underahedgerow
(1,232 posts)time, research and good old gut instinct. Things are cyclical.
Knowing a good bargain, having a good credit rating for the lowest possible interest rate; trying to buy from private sellers, having a great escrow agent, having a great paralegal to handle the sales paperwork; all those little bits come into play.
Having awesome contractors AND a great eye for knowing exactly what people want is also important. If you're buying in a modest area, keep the improvements a bit above average, but not over the top.
And in urban settings, keeping your fingers on the pulse of neighborhoods that are going to become trendy, that helps.
It also helps to go into lesser-appreciated neighborhoods and really make classic, clean up and improvements on a house. I definitely found that by fixing up a crappy house on a relatively crappy street makes other people take notice and start fixing up their own properties. Everyone's values increase. You can't make a silk purse from a sow's ear, but people pay attention. When the grass stays green, the bars come off the windows, trees and flowers are planted and cared for, a new coat of paint and simple, decent quality, classic restoration takes place, other people follow along. Pretty soon one really nice house on the street turns into 10 nice houses on the street. It was my personal version of urban development...
SusanCalvin
(6,592 posts)Completely agree, but in a rational world they would be comfortable.
miyazaki
(2,249 posts)underahedgerow
(1,232 posts)And I am being completely serious!
Being comfortable, relatively debt free, have decent transportation, good food on the table, family, friends and the things that bring you joy are something more Americans should aspire to.
It's ok to have enough. Wanting more is what gets a lot of people into trouble.
Marrah_G
(28,581 posts)It's like these people live in a completely different reality from my own.
ohnoyoudidnt
(1,858 posts)Kaleva
(36,340 posts)The one I'm living in now was bought for $35,000.00 6 years ago and we owe nothing on it.
virgogal
(10,178 posts)Housing cost in some parts of the country is insane---both purchasing and renting.
Madness!
meow2u3
(24,772 posts)virgogal
(10,178 posts)It sold in 2013 for $450,000.00.
It was a 3BR,2 BA house.
(Boston suburb)
I have no clue how young folks do it these days.
.
SusanCalvin
(6,592 posts)Kaleva
(36,340 posts)yeoman6987
(14,449 posts)You can get a fixer up there for real cheap.
Kaleva
(36,340 posts)Person 2713
(3,263 posts)At that price the first home was easy to get compared to where they came from , so back here people can't believe the prices for a 3 bedroom home in the Detroit area
Here in Chicago the area prices are $$$$ up up up
AgerolanAmerican
(1,000 posts)take out debt you can't repay to keep the debt collapse away!
Release The Hounds
(467 posts)Much of HGTV is Canadian.
Warpy
(111,338 posts)I always wondered where people in CA came up with that kind of money. They're not all film stars or investment bankers or even lucky SOBs who managed to get in on the ground floor of exactly the right tech startup. Some of them have ordinary jobs and they're shelling out a million bucks for a tract house.
Then again, I know they're back to writing a lot of dodgy mortgage paper, especially in CA. Welcome to the new housing bust turning into an international banking fiasco, same as the old bust and fiasco.
SusanCalvin
(6,592 posts)We spend 12% of our income on housing. (Yeah, I had to check that a couple times.)
I can't imagine spending more. I'd be so nervous in case things went to hell in a handbasket.
meaculpa2011
(918 posts)Last edited Sun Apr 17, 2016, 10:37 AM - Edit history (1)
taxes and insurance cost us more than $25,000 per year.
We also pay the highest utility rates in the country.
I don't think any community has a future if young people cannot afford to stay.
When we're gone, our kids will have to rent out rooms to stay in their own home.
We bought our first home in Queens back in 1977 for $44,000. Since my wife and I both got laid off right after we signed the contract, we were broke after putting up our last $3,000 for the down payment. We had the second floor rented the week we moved in and used the rent money to make our first mortgage payment.
That house is listed for sale now at $799,000! Madness!
SusanCalvin
(6,592 posts)And you're sure right about pricing out the young people.
meaculpa2011
(918 posts)that we didn't back out of the house deal when we lost our jobs. I did odd jobs and my wife did secretarial work. Her father insisted that she take sten and typing in high school. It came in handy. Her company wanted her to pursue a graduate degree in accounting (she already had a Masters in education) but the Board of Ed called her back two years after the layoff.
I took my grandfather's advice and bought the best two-family house we could afford.
Buying that first house gave us the foundation for financial security for the rest of our lives.
Retrograde
(10,153 posts)We wanted to buy a house in one of the higher-priced areas, so we got by with 2 moderate salaries, one car between us along with bikes and public transportation, limited vacations to camping in local parks, brown-bagging, and so forth until we put together the down payment (it was my entire take-home pay for a year, plus about 20% of Mr. Retrograde's). Now, we didn't have kids, had decent medical coverage, and had paid off our student loans. And we bought a small house, less than 1000 sq ft. Of course, that was several decades ago.
Agnosticsherbet
(11,619 posts)Whether they make that much money or not.
Liberal_in_LA
(44,397 posts)haele
(12,676 posts)VA doesn't go that high, and unless that retail manager is also a franchise owner, even with perfect credit, a pair in that situation with an average joint income of $100K -$150K a year in most situations like this just isn't going to enable them to realistically afford even a 30 year mortgage on a $950K house.
They'd also need to be putting at least 20% down, and probably closer to $400K to get that mortgage down to a manageable level.
So unless they're flippers (ala "real estate investors" of the 2004/2005 bubble bundles), have a 20/30% in cash down to bring to the table, or are trading up from a house they own free and clear to cover a down-payment, they're looking at a mortgage that would require a sustainable and predictable annual income of at least $250K a year for the next ten years or so. They're way over their heads - perhaps if not for the TV cameras on a show attempting to sell an illusion of "The American Dream".
And while they may be able to flip a $950K house to an overseas investor for more than a million as soon as they get title and before the end of the year - enough to make a profit on it - they're still up shit creek if something happens to their income.
This sort of purchase is a bad sign.
Haele
silvershadow
(10,336 posts)Many families, mine included, have multiple generations living under one roof- and we used to be what we thought was lower-middle class. In short, they don't.
matt819
(10,749 posts)Could that be $950 to $1,000?
Adrahil
(13,340 posts)Those folks are buying WAY beyond their means in all likelyhood. I'm in a top 5% household and I couldn't afford a house like that and still eat.
Folks buying like that are doing the same stuff that got the housing market in trouble before. They are getting balloon loans with low payments to begin with then they hope to sell at a profit before the payments skyrocket or the loan matures.
Unwise.
I bought below my means, and it is still a very comfortable house, though I do live in a very low cost of living area.
Beaverhausen
(24,472 posts)She and her husband had already chosen their home. They were taken to two others just for the show.
I have no idea if the prices shown are real or not though.
I do know she got a sizable amount of money from her parents to help them buy their first home.
nolabear
(41,991 posts)The whole thing was set up beforehand. There is nothing real about reality TV. 😄
So Far From Heaven
(354 posts)What choice do they have? The people on your show are what's wrong with capitalism as practiced today.
Most get the housing they can.
It's that or the car.
Algernon Moncrieff
(5,790 posts)Lots of HGTV stuff is set there, where they are apparently paid in Monopoly money.
Liberal_in_LA
(44,397 posts)hfojvt
(37,573 posts)your could buy my whole block probably for less than $950.000. My house cost $35,000 a few years back the two next door (yes, two) were up for sale at $85,000. The big business building next door was up for $300,000, but I heard they took a fair amount less. Say $200,000. That's $320,000 then there is a business, 5 houses and a church.
Okay, some of those houses might be kinda pricey, but I will bet you can easily find ten houses in town with a total cost of much less than $950,000.