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Man this hits deep. I moved out to Southern California a few years ago from the south east. It’s crazy, I can barely afford to buy a house here with a 300k/yr i

Man this hits deep. I moved out to Southern California a few years ago from the south east. It’s crazy, I can barely afford to buy a house here with a 300k/yr income. Even then it’s gonna be some non remodeled, in need of upgrades 700k home. To get anything decent (new kitchen, windows, working hvac) it’s at-least 900k+. I don’t get how people are buying these homes.

xnyan 6y ago
Help me understand. An average mortgage is 200k, at the average household income of 63k and a 30 year at 4.1%, thats 18.5% of your pretax income going into a mortgage. The same numbers for a 300k income and a 700k house works out to 13.5%. Seems like you are doing significant better than most? Happy to be corrected.
- missedthecue 6y ago
  Yeah I'm not sure what he's talking about either. $900k home on $300k income is entirely reasonable and a better ratio than what the average person does
  - mistrial9 6y ago
    no employee making $300k per year in California gets to keep that amount.. tax rate is 40% + overall last I heard, differing slightly by county and tax details
  - s1artibartfast 6y ago
    I’m not sure what part about a a 900k house inflated due to NIMBYism and stupid policy choices is reasonable. If OP feels the main entering the bottom of the market with their exorbitant salary, imagine how the the average person feels.
- ak217 6y ago
  They might be able to afford a house, but the community around them will not (the average household income in San Diego is around 100K, not 300K). By pricing out young people and stunting their communities, California NIMBYs reduce opportunity and social mobility. The ultimate result of the totality of California housing policies is that California senior homeowners transfer resources from the rest of society to themselves while reducing quality of life for everyone else.
_-david-_ 6y ago
>It’s crazy, I can barely afford to buy a house here with a 300k/yr income. How can you barely afford a house? Lets say you pay 100K in taxes and 50K in food, gas, healthcare, luxuries, etc. You could save 50K and still have an extra 100K a year to spend on the mortgage. You would be able to pay off your house in less than 10 years. Many people take out 30 year loans for their house! Its a massive investment and probably not worth it for the price but it definitely seems like you could afford to buy a house.
- ip26 6y ago
  The houses he mentions are likely 4-6x his take-home. Coming from the south-east, he may well be used to a market where good houses are 2x your take-home. Some parts of the country do have similar price-to-income ratios for property as California, but in general I think you're getting a much newer & better condition house at that ratio compared to California real estate. For example much of the Bay Area was built in the 60's.
  - koheripbal 6y ago
    That's not the point of the comment above. The point is that he absolutely CAN afford it.
    - ip26 6y ago
      By SF criteria yes. But by the criteria he's used to maybe not. An adjustment period may be required. Once upon a time three times your annual gross was considered an expensive house. And a little more than ten years ago, six to eight times your gross was considered prudence.
  - lotsofpulp 6y ago
    >you're getting a much newer & better condition house at that ratio compared to California real estate You can renovate and get a newer and better condition house. You can't get SoCal weather and natural features at any price. Hence the high prices.

xnyan 6y ago

Help me understand. An average mortgage is 200k, at the average household income of 63k and a 30 year at 4.1%, thats 18.5% of your pretax income going into a mortgage. The same numbers for a 300k income and a 700k house works out to 13.5%. Seems like you are doing significant better than most? Happy to be corrected.

missedthecue 6y ago
Yeah I'm not sure what he's talking about either. $900k home on $300k income is entirely reasonable and a better ratio than what the average person does
- mistrial9 6y ago
  no employee making $300k per year in California gets to keep that amount.. tax rate is 40% + overall last I heard, differing slightly by county and tax details
- s1artibartfast 6y ago
  I’m not sure what part about a a 900k house inflated due to NIMBYism and stupid policy choices is reasonable. If OP feels the main entering the bottom of the market with their exorbitant salary, imagine how the the average person feels.
ak217 6y ago
They might be able to afford a house, but the community around them will not (the average household income in San Diego is around 100K, not 300K). By pricing out young people and stunting their communities, California NIMBYs reduce opportunity and social mobility. The ultimate result of the totality of California housing policies is that California senior homeowners transfer resources from the rest of society to themselves while reducing quality of life for everyone else.

_-david-_ 6y ago

>It’s crazy, I can barely afford to buy a house here with a 300k/yr income. How can you barely afford a house? Lets say you pay 100K in taxes and 50K in food, gas, healthcare, luxuries, etc. You could save 50K and still have an extra 100K a year to spend on the mortgage. You would be able to pay off your house in less than 10 years. Many people take out 30 year loans for their house! Its a massive investment and probably not worth it for the price but it definitely seems like you could afford to buy a house.

ip26 6y ago
The houses he mentions are likely 4-6x his take-home. Coming from the south-east, he may well be used to a market where good houses are 2x your take-home. Some parts of the country do have similar price-to-income ratios for property as California, but in general I think you're getting a much newer & better condition house at that ratio compared to California real estate. For example much of the Bay Area was built in the 60's.
- koheripbal 6y ago
  That's not the point of the comment above. The point is that he absolutely CAN afford it.
  - ip26 6y ago
    By SF criteria yes. But by the criteria he's used to maybe not. An adjustment period may be required. Once upon a time three times your annual gross was considered an expensive house. And a little more than ten years ago, six to eight times your gross was considered prudence.
- lotsofpulp 6y ago
  >you're getting a much newer & better condition house at that ratio compared to California real estate You can renovate and get a newer and better condition house. You can't get SoCal weather and natural features at any price. Hence the high prices.