SoCal couple struggles to purchase an affordable home off their $350k annual income

[Standing on business]

I am scoffing at the idea that they casually mention saving $5,000 a month. They could easily buy a home, pay it off in 10 years, and then save towards their retirement.

The economy is fukked up, but they're not part of the struggle.

That made the article a lil weird. The couple basically asked should they buy a house they want or continue investing $5k a month


Article even mention that a pay raise was coming for them, oh the struggle

 

[Deuterion]

Agreed.

Housing is the tool most middle class people use to store wealth....as opposed to ETFs, Mutual Funds etc.

The stock market has always had more consistent ROI while housing is a roller coaster ride.

All things being equal, buying makes more sense but things are not always equal. The $50k someone saved up could be invested in the market and earn a decent 5, 6, 7% return every year. Instead of sinking it into a home that requires repairs, HOA fees, property tax etc., the money can be put to work immediately and then you rent.

The renter vs buyer comparison tends to ignore the fact that most buyers have more money to start with....that's why they can afford to buy in the first place. At the very least they've received cash infusions from family members to get them set up.

Those "white people have higher net worth than black people" articles point out the dollar differential but ignore that the gap is almost entirely predicated on one group having all of their wealth tied to their homes and the other group not being able to afford buying...or they buy in less expensive areas.

…and that they have those homes because of federal government handouts via the New Deal that Black Americans couldn’t get.

 

[OneManGang]

Save up and move California is no longer for the working class, soon enough we'll all be living in the Midwest while rich folks own the coasts, lakefronts, and best cities

Then we will make those states poppin and they’ll follow us there too

 

[Jekyll]

Like the breh mentioned before it depends on your lifestyle. Money is a tool. It is coming out on top if it allows you to live the exact lifestyle you want to live in the exact location you want to live while still affording you the ability to make other investments that appreciate just as much if not more than a home would. On top of that the complete flexibility to bounce at a moments notice as opposed to needing to stick around for several years before you break even. This is worth a lot especially if your career is on the up and up. And hands free of maintenance costs. All that saved money can go to other investments.

You struggle with this mindset that there are other viable and lucrative investment vehicles than real estate and also less headache when you account for maintenance and tenant risks.

So long as you are still able to invest in other ways after your rent is paid then it's a great situation. After all, it's all about the math as you say right? Profit is profit whether it's coming from real estate, business, equities, or even crypto.

Eh you’re really not saying anything though. Its not even about the profit. Its about saving which is why I called it a savings account.

Housing is a necessary expense. You can either pay yourself with a mortgage or you can pay someone else’s off. It’s very simple. It’s very clear to the vast majority of the financial world which position is superior for obvious reasons. I get that you all are balling and have this super high loss tolerance but as someone who knows how hard it is to get the money, throwing away a fifth of your income every year just seems dumb. I’m not sure what lifestyle you think I’m sacrificing either. I’m downtown on one of the most popping blocks in this city with a principal payment that’s far cheaper than the rent in this area.


To each his own though. My place will probably be up for rent after a year. Tell me you’re from the Coli and I may discount the rent. May not though

 

[Jekyll]

Median income is misleading. Most of those people bought homes with assistance

Median income is the most accurate measure by far. It also lines up with housing costs in that area. You need $200k cash and $200k a year in income to afford a million dollar crib. If the average/median crib is 1mill then yes it makes sense that the income would be around $200k

 

[UberEatsDriver]

That made the article a lil weird. The couple basically asked should they buy a house they want or continue investing $5k a month


Article even mention that a pay raise was coming for them, oh the struggle

MarketWatch does stories on stupid ppl

 

[UberEatsDriver]

meh I feel you but like with the other poster I’ll just disagree.

Sure it doesn’t work out all the time, but on the other end of every rental is someone who is having a massive asset paid off for them. I know which end of the transaction I want to be on.

Btw I do agree that you have the opportunity to own you should but this ideology of just owning a home as a goal has made many Americans who can at least afford their depressed. There are other ways to invest money and the way these young ppl move these days they can’t really take care of a home.


You got young people glorifying people single and moving to a new city every 2 years

 

[Jekyll]

Btw I do agree that you have the opportunity to own you should but this ideology of just owning a home as a goal has made many Americans who can at least afford their depressed. There are other ways to invest money and the way these young ppl move these days they can’t really take care of a home.


You got young people glorifying people single and moving to a new city every 2 years

I get the lifestyle argument for sure. I plan on being out of this crib in 5 years but I’m preparing to ride the whole mortgage out if I have to because that’s the risk you take.

And yeah its a blessing to be able to afford a crib because these new age underwriting standards are crazy, part of the reason why I don’t fear a crash so much. Upfront you have to have 15% of the purchase price, 3% for closing, 4% to prepay taxes and escrow plus have at least 2-3 months of mortgage payments that the bank can verify before they will even give you a pre qualification. Then you have to hope you don’t get priced out by these cash buyers.

Idk. Seeing how these large investors are stockpiling cribs is setting off major alarms for me. We will soon be a society where even fewer people control the living expenses for everybody and that should scare people. These people aint never gave a fukk about endlessly raising rent and putting somebody on the streets if they can’t afford it. Now if they control all of the buying as well then they can afford to not sell until they get the exact offer they want. Most regular sellers aren’t on that type of time. shyt is fukked up and getting worse.

 

[No1]

Median income is the most accurate measure by far. It also lines up with housing costs in that area. You need $200k cash and $200k a year in income to afford a million dollar crib. If the average/median crib is 1mill then yes it makes sense that the income would be around $200k

You’re not comprehending what I am saying to you. Someone who makes 200k a year or a family that does, is generally not in a position as young adults to have 200k saved up to just drop on a purchase casually while still maintaining things like an emergency savings account, paying off loans, and other expenses. At the very least, not while they are in their late 20s or early 30s. That’s a sizable investment and that is made with family contributions. Moreover, the median cost of a home in Bel Air is 4.87 million. Putting 20 percent down is nearly a million dollars. If you think someone or family making 200k a year has a million dollars to put down at the age of the people in the OP then you’re not thinking clearly. If they had that then this article wouldn’t exist.

 

[Jekyll]

You’re not comprehending what I am saying to you. Someone who makes 200k a year or a family that does, is generally not in a position as young adults to have 200k saved up to just drop on a purchase casually while still maintaining things like an emergency savings account, paying off loans, and other expenses. At the very least, not while they are in their late 20s or early 30s. That’s a sizable investment and that is made with family contributions. Moreover, the median cost of a home in Bel Air is 4.87 million. Putting 20 percent down is nearly a million dollars. If you think someone or family making 200k a year has a million dollars to put down at the age of the people in the OP then you’re not thinking clearly. If they had that then this article wouldn’t exist.

I was looking at Bel Air, MD numbers for some reason which I didn’t know existed. Yeah at 4m you have to have hella cash on hand.

Overall the couple in the OP is overly dramatic which is the main point.

 

[C-NICE]

You need to learn what equity is. The money you pay into your mortgage principal is money you’re supposed to have the rest of your life minus interest. Its basically a savings account.

Rent is the ultimate scam. You either pay your own mortgage or you’re paying someone else's.

I work in finance but think your equity is a savings account maybe you should learn what equity is as it seems banks may be going away from helocs very soon and you taking in more debt but you securing the debt with your home as collateral so if you don’t pay it back you foreclose does that sound like a savings account.

 

[Jekyll]

I work in finance but think your equity is a savings account maybe you should learn what equity is as it seems banks may be going away from helocs very soon and you taking in more debt but you securing the debt with your home as collateral so if you don’t pay it back you foreclose does that sound like a savings account.

I’m not borrowing against the property, I don’t want a HELOC. I just want net proceeds...

 

[EndDomination]

Cali is done for if ur not an entertainer or millionare

Plenty of places in the state where housing isn't this absurd.
The main areas are the hyper-inclusive suburbs, and the major cities/tech hubs. Of course main LA, SF, and SD are going to be bad, along with Palo Alto/Mountain View - but there are spots throughout the Bay and in LA County that are far more reasonable.

Yeah, its time for a Thanos wipe out, or a China-like policy of having only 2 kids per household.

The problem has nothing at all to do with the population. Its literally all speculation and local limitations on new housing development

 

[HARLEM AL]

Seems like cali housing prices have been going up forever. When the fukk is the bubble gonna burst?

shyt just like NYC. The powers that be wont let it fall.

 

[EndDomination]

This can’t continue where a decent house costs a mil, you think u got a homeless problem now just imagine this situation 2 years from now

It's only in the inner parts of the major areas, eventually the local government will have to either allow for more housing development (and mixed housing at that), or update the public transportation infrastructure to make it easier to access the hubs from 30-40 minutes away.

Mind you, housing is also the most expensive in the hyper-segregated areas.

ATL is getting bad to though. My home girl left LA after trying to buy. Her range was 800k - 1.1 mill.
She moved to Atlanta hoping to find the LA equivalent for about 500-600k. Well, houses in the 500 to 800k range are getting 20 offers, many straight cash and 50-100k above asking price, on the first day listed.
She had to buy in the 800 to 1 mill range just to have a fighting chance. You're right, she does have way more sq ft than if she was in LA but it sucks she had to pay "LA prices" rather the LA equivalent but cheaper.

Where is she trying to move in ATL?
I was just out there with my girl two weeks ago and she lives in Inman Park - you can find plenty of places for under 1/2 a mil near there - Beulah Heights, Edgewood, and Poncey Highlands.