Why is DCUM SO conservative with housing?
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Anonymous
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On another thread, someone asked how much house they can afford with a $300-$400,000 HHI. Some posters gave reasonable answers but others responded by saying their home cost less than they earn in a year!
https://www.longtermtrends.net/home-price-median-annual-income-ratio/ As shown in this chart, for most of this century, home prices have been more than 5x the median household income (and are currently at a staggering 7x income!). So yes, if your HHI is a relatively secure 400K, you can get that $1.7 million house. You don’t have to stick to 800K. More expensive homes are more expensive for a reason, either location/commute, large enough to accommodate everyone, good school districts, beauty/renovations, etc. Why do so many on DCUM insist on lowering their standard of living by being so unreasonably stingy with housing? |
Anonymous
| It’s not just DCUM, it’s the people in this area! I know people whose HHIs are likely double ours but they live in old, crappy homes. We are very comfortably able to afford our home, and I’m sure they could too! Perhaps they value passing that money on, or putting it into luxury items |
Anonymous
| People like to humblebrag anonymously on the internet. Its weird. |
Anonymous
We fall in this category. We plan to retire early so it’s well worth it to us to live in an older, smaller home. I know you disagree right now, but talk to me again when you’re 52 and still looking at another decade plus of working. We’ll be retired and comfortable by then. |
Anonymous
| Because we have different priorities. We live in a smaller, older house but it meets our needs just fine and allows us to pay for things like vacation, private school, hobbies, therapies, etc without having to think about it. A house is just 4 walls and a roof, other stuff is more important to us. |
Anonymous
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Because the $750k is large enough for our family, is in a good school district, and my office is in Mountain View—it’s a tough commute from anywhere on the east coast.
Sure prettier finishes would be nice but I don’t need or value that. Our house is comfortable and feels like a lived in home that you can relax in. I love it and even though we looked at the $2M houses, that just felt too formal to me, even when they were empty. |
Anonymous
| DCUM wants others to think that even if the poster lives in universally acknowledged crappy home, they secretly have millions in the bank because they are just “conservative.” Except that isn’t true… home price is usually a pretty accurate reflection of the wealth a family has. |
Anonymous
Warren Buffet lives in a home that most of us could afford. https://www.businessinsider.com/warren-buffett-modest-home-bought-31500-looks-2017-6 |
Anonymous
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Because we bought last year, when we were afraid one of us would lose his job, so we were budgeting for one income. Kicking myself a bit now because I figured we'd move up someday, but with housing priced rising 20% a year and salary plateaued in comparison, I now wish we'd stretched.
Of course, thats a gamble, if we had bought bigger and were now digging into savings to pay the mortgage on one income or not saving for retirement at all I would probably regret THAT. |
Anonymous
Warren Buffet is the exception that proves the rule. |
Anonymous
Eh. We could retire at 55 despite the nice house. But I also don’t see the urgency to retire so early. Retired people say they’re going to volunteer a ton and travel the world but they mostly end up in front of the TV. Regular work of some kind keeps your mind sharp. |
Anonymous
Bingo. Same for car discussions where they act like every "smart" multi-millionaire drives a Toyota Rav4 or a crappy old Subaru.  It's pathetic coping.
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Anonymous
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Do y’all feel better now?
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Anonymous
| Sometimes I just think the people in the house and car threads are the same people with different priorities. Like, I only bought a house for 2x HHI but I spent like 50% HHI on cars every 3-4 years. The difference is that I don't tell anyone in either of those threads what they SHOULD be doing. If you want to go 4x income on house, do it. If you want to drive a mcdonald's happymeal box to work, do it. |
Anonymous
| OP makes their point clumsily, but they are correct. Every time a “can I afford this” question comes up there are a cadre of posters who live and die by the antiquated 3x income rule. It isn’t hard to set a budget. If you can afford the house, grow retirement savings, and grow emergency savings, that’s all you need to know. |