Who can afford 800K-1M homes? Genuine Curiosity!

[Anonymous]

We are able to 'own' a ~$1.5 million house now because, like other PPs, we bought it in 2001 and not 2007. So that was luck.

But also, back in 2001, we bought way, waaaaay more house than we needed for 2 adults no children. (it's got 6 bedrooms, 4 full baths). That was intentional, not lucky. Our big ole house has appreciated more in absolute dollars more than, say, a 2 bedroom condo that would have maybe been more suitable for 2 adults, no children.

So the townhouse down the street that was $300K in 2001 is worth $750K now. Our house that was $650K in 2001 is worth $1.4 now. We just rode up our initial investment that was larger than some.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:"my husband and I both work, make a combines gross income of $185K and can not afford an $800-1mil home
have 1 child."

Because you don't have 20%? I just refinanced an almost 900K house on a 175K salary. And yes, we save for college and retirement.

How much of that 900k did you refinance? Because unless it was $720k, then you're really not making a fair comparison. Our mortgage is $400k; we make about $250k; I can't imagine nearly doubling my mortgage payment. Of course, on top of retirement and college, we're also paying daycare right now, but still, a 720k mortgage on a 175k salary seems pretty steep.

Yes, it does. I have a 3.25% ARM, have our mortgage down to $500K and we have a HHI of just over $200K and I can't imagine increasing my mortgage. We do save for retirement and college. Wow...talk about house-poor.

I'm the one who originally said "my husband and I both work, make a combines gross income of $185K and can not afford an $800-1mil home have 1 child." True I don't have 20% to put down but even if I did I can not imagine buying a home for 800K. Even with 20% down that is a mortgage of 640K. at 4.8% that is a mortgage payment of close to $4200. Now way could we afford that and still feed our kid. And no we don't live extravagant lives.

[Anonymous]

Yesterday, my husband peed out gold coins.

So we used the money as a down payment (30%) on a home in Chevy Chase.

Yes, it's true; some people ARE made of money.

[Anonymous]

for me, inheritance, plain and simple. i actually worry about how our $160k HHI will be received in the neighborhoods we are looking to buy in. i know, "poor little rich girl,' but i lost my parents young and suddenly and wouldn't wish it on anyone.

most of my friends (early-mid 30's, combo of high and low earning, but all professionals and many with advanced degrees) had family help with down payments etc. i know only a few couples who did not.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sr manager at a very large defense contractor, and a sr manager in sales for Microsoft. COmbined HHI just shy of $500k/yr. We also bought yrs ago and kep trading up.

Plenty of people in our neighborhood are lawyers, IT professionals, Congressman, doctors. All houses are are in $1.2 - $1.6m range.

We (and neighbors) are late 30s, early 40s.

PP where do you live? Your neighborhood sounds ideal.

McLean, which seems to traditionally be loathed by DCUM. But we really like it. Langley area, to be more specific.

If you're looking, the house next to us is on the market for $1.6 now, zoned for Churchill/Cooper/Langley.

[Anonymous]

My neighborhood is stuffed with lawyers.

[Anonymous]

Dh and I bought our second home for $1.07 million two years ago. We were 38 and 37---gross about 350k-400k/year. We have been married since we were 27 and 28.

We also own a home we bought four years ago for $620k. We rent that out as an investment property.

We are big savers/investers $-wise. Neither of us came from $ or have been given any financial help. The home purchases were from our own savings. We didn't make a windfall. We bought near the top of the market on the first home and second home. However, both homes are in fantastic neigbhorhoods and have actually seen appreciation in the short time we have owned them.

We have two children.

I never thought I'd own a million dollar home...much less two homes.

[Anonymous]

Anonymous wrote:Dh and I bought our second home for $1.07 million two years ago. We were 38 and 37---gross about 350k-400k/year. We have been married since we were 27 and 28.

We also own a home we bought four years ago for $620k. We rent that out as an investment property.

We are big savers/investers $-wise. Neither of us came from $ or have been given any financial help. The home purchases were from our own savings. We didn't make a windfall. We bought near the top of the market on the first home and second home. However, both homes are in fantastic neigbhorhoods and have actually seen appreciation in the short time we have owned them.

We have two children.

I never thought I'd own a million dollar home...much less two homes.

This is us. though we are slightly younger (35 and 36) and have 3 kids. We bought our second home more recently for just over $1 million and our first home in 2003 for $450k. We now rent out the second home and while we don't turn much of a profit, our expenses are paid for and they renters are - in effect - paying down our mortgage for us. We also make around $480k/year plus bonuses.

I will say - life is good and I feel very blessed. We both came from solidly middle to upper middle class families. No big inheritances, but our undergraduate degrees were largely paid for by our parents (both DH and mine). I only now realize what am amazing gift that was.

[Anonymous]

There are also entrepreneural-types that have done very well - though fewer in DC than, say, NYC. We're in commercial real-estate. Our neighbor is a divorcee who received a lot of money from her previous husband. Others on our block are lobbyists and high-ups at the IMF. One couple owns a bakery that's done extremely well.

[Anonymous]

I agree with most here; these homes are bought by people who have incomes deep into six figure AND have accumulated equity in previous homes.

A $1 million mortgage would require $6k-$7k per month in payments for a 30 year note. Having $400k in equity from a previous home can push the monthly bill closer to $4000 per month. Hefty but manageable if the family is bringing home $10k net per month (about $200k gross per year).

OK, those numbers kind of make me sick.

[Anonymous]

My husband & I make about 250K combined & have 90K saved. In most areas, that would probably get us a nice living situation, but we are stuck in our 1 bedroom downtown b/c we can't afford anything here & don't want a long commute.

[Anonymous]

Anonymous wrote:I agree with most here; these homes are bought by people who have incomes deep into six figure AND have accumulated equity in previous homes.

A $1 million mortgage would require $6k-$7k per month in payments for a 30 year note. Having $400k in equity from a previous home can push the monthly bill closer to $4000 per month. Hefty but manageable if the family is bringing home $10k net per month (about $200k gross per year).

OK, those numbers kind of make me sick.

That's pretty accurate. We have a million dollar mortgate on a house worth more than $1m, and our monthly mortgage is around $5k. No family money or inheritance, just (fortunately) good jobs and early entry into the local market. (and no, we're not lawyers).

[Anonymous]

Anonymous wrote:
OK, those numbers kind of make me sick.

Anonymous wrote:
That's pretty accurate. We have a million dollar mortgate on a house worth more than $1m, and our monthly mortgage is around $5k. No family money or inheritance, just (fortunately) good jobs and early entry into the local market. (and no, we're not lawyers).

I wrote that comment about being sick. I don't mean to be negative. It's just that finances are one of those things that I think about from the perspective of my upbringing, so talking about $5k mortgage payments and $1 million homes seems like monopoly money.

To make myself feel better I went over to http://www.globalrichlist.com/ to find out how I rank:
Top 1% in the world baby! Not enough to buy that house on Capitol Hill, but still....

[Anonymous]

Anonymous wrote:My husband & I make about 250K combined & have 90K saved. In most areas, that would probably get us a nice living situation, but we are stuck in our 1 bedroom downtown b/c we can't afford anything here & don't want a long commute.

Not in an 800k home but similar income and savings to this poster. The only difference is timing. I had a property that when up 100k and bought a house that even with the downturn has probably gone up 200k from where we bought it. I thank my lucky stars my mom pushed me to get my own property (planted the seed) and my old apartment had roach problems. I was saving something like $500/ month living in an affordable apartment excited to be able to save so much. However, despite never using more than the microwave and the apartment spraying twice a year, there was a bad roach problem. The day I saw one in the bedroom was the day I decided to finally try to buy even if I wouldn't be able to save quite as much. The timing ended up working to my advantage. Very conservative with money so I don't think I would be in the house I am in now, if I didn't have the down payment back in 2003 which would not have happened without the previous property bought in 1999.

[Anonymous]

I would never pay $6K a month for a mortgage.

never!

Our only debt is our home, kids attend private, and we pay only $2K/month.

NEVER!!!!!