1.5 m houses
How can people afford 1.5 m houses in the bay area? And we are talking average houses with 3-4 bedrooms and not much lot here. What is the average TC of these folks?
It’s roughly $7500/mo mortgage payment. Banks will approve you if your mortgage is roughly 1/3 of your gross income. 7500x12x3=270K. Totally doable for family of professionals. Even though it’s sort of insane to pay this much for such crappy houses.
Agreed
Its not matter of getting loan from bank but the economics doesn’t make sense
475k for dual income family. We were paying more in rent before then our mortgage payment now 🤷🏻♂️
How much is the house price and mortgage now? I wonder how it is less than rent.
Rent is much lower than mortgage payment, especially for some larger houses, where the demand may be lower than single bedroom options. My rent is half the monthly payment if I had bought it. The economics are questionable given how much lower rent is vs monthly mortgage.
Easily. That's like ~7k a month. A few years experience plus a 300k down payment.
There's thousands of other people making 300k in the Bay area. That's why houses are only on the market for a few days. There's even husband and wife teams making 500k or 600k a year
It doesn't make much economic sense. May be if you expect the house prices to double in next 3-4 years.
@vataran - you need to redo your math. Rent for house is at least 5k/month. 7500 mortgage is not all interest. There is at least 2000 in principal + you have tax deduction. Finally, and increase of 50k/year in price appreciation (3.5%) represent 4000/month. So, yes price appreciation is part of the equation, but a mere 3% / year would make it worth it.
You're forgetting property taxes, on-going maintenance, time value of money and depreciation. The principal will vary significantly during the life of a loan so not the right comparison. Don't feel bad, most people forget to incorporate those in their calculations.
730k
This entire post is everything wrong with sf now.
Except there is no human feces in this post, or corrupt and incompetent politicians demanding more of your money to deal with the human feces problem.
It only works out with the mortgage tax deduction along with limited supply, excess demand. A 3-4 bedroom in NYC will be a lot more than 1.5m so sometimes it's about adjusting expectations. Get a roommate, smaller home etc
My guess is that many are sitting on equity when, not long ago, the houses were much less.
300k
How does that make sense?