07-03-2022, 02:56 PM | #57 | |
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It is worth noting that this couple saved $200k over 10 years by saving $20k per year. $20k/year is $1,667/month, which is them saving 33% of their take-home, and it leaves them $3,319/month for rent and life. The median rent for an apartment in Sonoma County is $2,087, so that will leave them $1,232 for food, insurance, internet, health bills, gas, etc. It is doable, but not great EXCEPT, we forgot appreciation. That home of $830k will appreciate faster than wages. Home values are appreciating around 10.6%, but let’s say the difference in home appreciation versus wage inflation is 5%. Over ten years, that would appreciate the property from $830k to $1.352 million, which is a gain of $521,983 or an appreciation of $52k per year. That would add another $10,400/year to their savings goal to meet the 20% or $270k versus $200k. This would put their Savings up another $867/month to $2,534/month in savings or 51% of their take-home, and it leaves them $365 for food, gas, insurance and other bills. This is why I said that they would be better off doing a FHA loan at 3.5%, which would be $29,050 if they had the cash, and it might be reasonable for them to get the home within two years of saving $20k/year. Clearly, the median couple can’t afford the median house using the 30/30/3 rule. Well, what can they afford? The median family with an income of $86,173 can afford no more than 3x their gross wages, which would be $258,519. They would put 20% down or $52 plus closing costs and four years of appreciation, so let’s say $80k with some extra assets or savings in the bank to have 30% covered. They would be on the hook for $1,489, which would be cheaper than renting and be 30% of their take-home. Looking on Realtor.com, there are 58 homes below $258k. If we take away 55+ homes then we are left with 18 homes. All but 3 of these are mobile homes in a park where there will undoubtedly be rent. One looks like a shack or shed for $200k. To say the others are in the middle of the forest and fixer-uppers is an understatement. Clearly, the median family can’t afford to own in Sonoma County, now. What will it be like in five or ten years? What about half of the families that make less than the median wages who live in Sonoma County? It isn’t like Napa or Marin is cheaper. Lake County and Mendocino are cheaper, but the idea of driving an hour or more twice a day to work in the city of Santa Rosa just to own isn’t exactly an affordable or reasonable option for half the population, and the prospects in those counties aren’t a huge improvement. This leaves renting, but rent is going up aggressively. Regardless, there is obviously a problem when the average family can’t afford anything in the county, even the cheapest housing. What does this mean for anyone wanting to buy who is single? For reference, the median individual income is $44,071, which is clearly that much further from ever being able to afford anything in this county using the 30/30/3 rule. My guess is a lot of people are overextended. I don’t know how bad it is in other parts of the country, but the median household income is $67.5k, and the medium home is $375k, which is 5.5x the median family’s income, so chances are the prospects everywhere are just as dire. The American dream of owning a home is slipping away for the middle class family.
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07-03-2022, 03:27 PM | #58 | |
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also, i nearly failed math, but if we take away 55 from 58, i'm pretty sure 13 isn't the remainder. could be wrong though.
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07-03-2022, 03:57 PM | #59 |
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He is saying 40 homes are in 55+ communities. It wasn't math at all.
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07-03-2022, 04:55 PM | #60 |
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Most people in the 55+ communities sell to buy in a downsizing way to move into an active living, retirement community. These homes are often cheaper because of the limited demand. In a similar way, I removed the mobile homes because those parks charge $600+ for rent, so the true cost is a different calculation.
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07-03-2022, 05:07 PM | #61 | |
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so it wasn't a math failure, it was an english failure.
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07-03-2022, 06:41 PM | #62 |
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07-03-2022, 07:20 PM | #63 |
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my area's too poor to segregate the old from the young.
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07-03-2022, 10:51 PM | #64 | |
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07-03-2022, 11:16 PM | #65 |
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I don't pay too much attention to the media, but I wonder if this housing issue is being acknowledged by the media or politicians? Or they prefer to focus on some fake problems like bathrooms or "climate change"?
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07-03-2022, 11:36 PM | #66 | |
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07-04-2022, 01:00 AM | #67 | |
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07-04-2022, 01:20 AM | #68 |
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07-04-2022, 01:21 AM | #69 |
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I think there is a mentality and some lessons to learn like the guy mentions at the end of the video, while not necessarily needing to go full autocratic. The US has a home ownership rate of 65%, yet it is probably lower, and Singapore has a 91% rate. There really is zero reason why almost everyone can’t own their own home.
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07-04-2022, 01:26 AM | #70 |
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Can’t tell if you are being serious or making a Russian communist dig.
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