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I have no idea. You need some crazy money bags to wanna drop 3-4M+ on a house and commit to 40k property tax for life. Household TC: 900k NW: 4M+ Rent: $4k / month
These are the people who will go in shambles when recession hits or layoffs
Idk man, maybe an L7 couple making 1.5-2M a year, changing jobs every 4 years or getting sick refreshers.
There is a world outside salaried tech bros. Many small and medium business owners make more than many tech workers. I used to be a realtor and most of the clientele buying 3M+ homes were business owners or C-suite or VP types. Mostly, it was business owners. Their down payment capacities were also much higher. Also just so you know - most of these business owners aren’t tech entrepreneurs. They’re in businesses like restoration companies, daycare centers, large scale cleaning companies, restaurant owners, franchisee owners. This was actually the demographic of a majority of my clientele who bought the more expensive homes. Tech workers have a myopia of salary and TC. There’s a whole world beyond us where people are doing extremely well. They also don’t penny pinch. The small mindset of negotiating tiny things on the deal mostly happened with salaried tech bros. Entrepreneurs came with a much more graceful mindset to most deals.
Penny pinching ftw. You can stuff grace up a chimney
Yea we’re already being pinched by real estate leeches and agents for doing absolutely shit work and getting paid thousands of dollars for it. Penny pinching is how it should always be done. People work hard for their money. Only people who inherited family businesses from their rich dads are the ones who won’t penny pinch and have “generous dispositions”. Or they have FU money. Not everyone is bleeding money out of their orifices.
With 900k income you cld afford one.
Op, which city are you renting? Are you in good school district?
You’re dropping $48k on rent per year while the people that own these houses were increasing net worth by a few hundred k per year just on market increase over the past ten years. Not to say those increases will continue. Also cheap money for large investment, that is the nature of real estate vs other investments.
A lot of these properties are vehicles for capital. Probably not owned by someone making 2m, but much more.
Bought one, HH TC about $2M/year
1. Not everyone buying these 3-4M homes as their first homes. These would be their second or third homes (and they have plenty of equity from previous homes to draw from.) 2. Different ppl have different investment vehicles. To you, it’s not RE, but to them, RE is less risky than stocks. You obviously can take 1/4 of your NW as down payment, but you don’t want to do so.
This. I bought one last year for 5M and most people in my neighborhood are people who are upgrading from their previous home. So the equity from the previous home paid for the 25-30% down. Property tax is high but at least you save on the private school cost of the school district is good. Matters a lot when you have multiple kids
Between the fee for private schools and property tax for the high price, are you still saving?
People probably making 3-4M a year
Are there that many ppl making 3-4M a year in the Bay Area? I doubt it. The days are numbered.
Tbf a lot probably bought when the properties were like 2m or less. And some probably are only making like 750k or something and just stretching their budgets. But ya with interest rates where they are, super high end homes like that will be hit the hardest. They have a very limited demographic as is and it's shrinking by the day