Let’s see, the county I live in (Santa Clara) sits at $700,000 average home price, $170k required income. Don’t know about most of you, but I’m not there yet. And the county I was born/grew up in (Santa Cruz) isn’t much better at $669,500 home price and $163k income. Santa Cruz is the worse out of the two in terms of affordability since the average income is only $62k (and a lot of that is ppl that commute over to the Silicon Valley for sure, there’s not many high paying jobs to speak of IN Santa Cruz county) for a 262% higher needed income vs. average. The ONLY higher one I saw was San Fran, but who the F wants to live there anyway.
Yep…you want to live where the ballers do, you have to pay the price. My brother is kind of but not as bad in the same situation. He lives in FL and a decent home is $300+K …he makes about $100K and there is no way he can afford a home. Now he can move away from his job and drive futher and probably swing it…but he can’t be baller right near the beach. So he rents for now.
Can you move to a cheaper part of CA and still drive to your job?
If he makes $100k he should be able to buy a $300k house FWIW. Unless that is, he has a lot of extra expenses (multiple car payments, hookers, blow…).
The town I lived in until about a year ago (Gilroy) is a 45 minute drive to my office w/o traffic. Peak commute hours, it can easily double. Housing is cheaper there, I could probably get a nice place in the 400s. To get into the 300s I’d have to be about 2hours away from my office w/o traffic, but out some of the worst rush-hour freeways in the world. I had thought about buying something out that way, in a particular a town where they’re about to build a giant multi-function motorsports complex in the next few years.
But I’m not commuting 4+ hours/day. So I figured I’d crash at my Parents’ place mon-thurs nights. But do I really want to get into a mortgage for a place I’ll be at just on the weekends in the Central Valley (hot, land-locked, nothing to do, nowhere to go)? Maybe, we’ll see.
People buying more house than they could afford didn’t work out so well as we’ve seen recently. Going with the old 2.5x your annual income is a pretty safe bet. Just because the mortgage folks say you are ‘approved’ for an expensive house doesn’t mean you should buy one.
He said he can “afford” a house for $300+K…(btw that is for a very avg home, somewhat nicer ones run like $400-$500K) but he would be pretty much house poor. Figure is you make $100K/yr after taxes and 401K you will take home roughly $2,000 every 2 weeks. Then a mtg on a $325K house is roughly $2K/month…then add in real estate taxes and other basic household expenses…and 3/4 your take home goes tot he house alone…then add in other expenses and next thing you know you are living paycheck to paycheck. Now for a married couple with a combined income of like $150+K then it would be realistic.
What you explained sounds a lot like what people do to live in certain parts of CA. From what I hear it is not uncommon to commute 1.5-2 hours each way. I never understood why people would want to live in a place where the cost of living makes it where you have to make $300K/year to live somewhat comfortable. It sounds like you need to stay with the parents and bank a ton of $ and have a huge down payment…where you can keep your payments at a point where you can live and still have some fun. Whatever you do, good luck!!
I would rather have a house I can afford comfortably than a huge ass house that leaves my living paycheck to paycheck. I lived like that for a while, it’s not fun.
I like where I am at now, I paid for my house what I make in a year.
TJ - good luck on finding a house. I wouldn’t mind the 4 hours of travel time if I had your vette to drive everyday though. :love:
Yup, it’s not uncommon for ppl to commute ~2hrs or even more each way out here. Insanity, and just not worth it to me. I’d rather enjoy my life than buy something just for the sake of buying.
I have the option of staying with my parents if I want (I rent a house right now). But again, what am I willing to do just for the sake of buying. Being 26 and living at home isn’t one of those things. In all reality the split of my rent for my house is very reasonable and wouldn’t be “the” difference. Just like selling the 'vette wouldn’t be “the” difference. Selling the Lexus wouldn’t be “the” difference.
Really it’d have to be all those things AND then some, just to buy something that’d still be an hour or more commute each way. Plus, I don’t really pay for my Lexus, I have very little benefit in selling it unless I get a '06 Cobalt for like $5k or something (still new enough to qualify for my vehicle reimbursement plan through work, which is a flat-rate + mileage and does not change based on the car you have).
It’s all possible but I’ve had friends go down this road (sell everything and live like they have nothing for a few years) to buy a house. None of them were happy in the end. But maybe they will be in 10 more years…
Haha, thanks!
I agree, I don’t want to be paycheck to paycheck etc. But out here it’s not like I have the option of a ‘reasonable’ house that’s I can afford vs. stretching for a huge ass house. It’s more like a tiny ass house in a “so so” are that is still a massive stretch. Haha.
ill buy your vette. it will make things way easier.
my uncle lives within an hour of LA. (works for northrup grumble or however you spell it) he has two house’s one for him (very small) and one where his ex wife and 3 kids lives. he travels 1.5 hours in the morning to the kids sees them in the morning travels another hour to work and the exact same thing in reverse in the evening. infuckinsane. i travel 2.4 miles to work and complain. 6 minutes if i hit both red lights.
This should be clear to anyone with a grasp on personal finances. For those that struggle in this area (a large % of the population), the recent housing debacle should be a good real-life example.
Although I don’t think any generic multiple of one’s income is an accurate indicator of the price of house he or she can afford.
My friend moved from Boston when he got a job with NASA just outside San Francisco. He bought a used Aerostar van, and found some girl on craigslist renting out an extra room for $300/month. It’s certainly not glamorous, but he never has trouble with meeting his financial obligations, even when unforseen things go wrong…which is inevitable.
