SERIOUSLY - how are people affording these $1Mil+ homes with $8,000+ monthly mortgages!?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

You don’t have to live in DMV. There are beautiful houses with decent public schools in suburban Detroit that you can afford. You chose not to make an optimal financial decision and instead complained about others’ good fortune.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

There are literally numerous economic studies showing that incomes have not remotely kept pace with housing prices (not to mention things like childcare, groceries, etc.) keep going up.

I’m an older millennial who managed to get on the property ladder in 2012. Yes my DH and I have worked hard to move up to our current home and fix it up. But admitting that we had it easier than people starting out today doesn’t negate that.

Both things can be true — people who made good decisions and made sacrifices along the way have benefitted from property value increases and also younger people today do not have these same opportunities. Telling them to just live a little more frugally or work a little harder isn’t going to help.

It would help at the margins. What would help is leaving HCOL regions. There are jobs in Cleveland and Las Vegas, I’m sure you can hack it there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

Thank you! Housing, college tuition, and health insurance costs have far outpaced wages in the entire country for a long time. You used to be able to afford a SFH in most places in the DC suburbs, including desirable neighborhoods like Arlington and Bethesda, on one GS 12 salary in the early 1980s. With current mortgage rates and prices, two GS 12s (making around $200-$250 combined) would have to move to places like Woodbridge or Wheaton to afford a SFH, and they’d be house poor if they bought one because the mortgage on a $500,000 to $600,000 in those neighborhoods would run around $4,000+ with current interest rates.

Some people on here have no clue what they’re talking about.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

Thank you! Housing, college tuition, and health insurance costs have far outpaced wages in the entire country for a long time. You used to be able to afford a SFH in most places in the DC suburbs, including desirable neighborhoods like Arlington and Bethesda, on one GS 12 salary in the early 1980s. With current mortgage rates and prices, two GS 12s (making around $200-$250 combined) would have to move to places like Woodbridge or Wheaton to afford a SFH, and they’d be house poor if they bought one because the mortgage on a $500,000 to $600,000 in those neighborhoods would run around $4,000+ with current interest rates.

Some people on here have no clue what they’re talking about.

I think the people who can afford houses others want know what they’re talking about, as evidenced by their making good decisions.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Saved $2,000 a month from ages 22-25 (late 90s) for down payment. Bought dump townhouse in Glover Park for ~$350. Renovated ourselves. Sold for ~$800 around 2010. Bought dump in MoCo. Renovated. Live there now. We now owe <$300K on our mortgage and our housing costs are less than a 2BR "luxury" apartment. Along the way refinanced whenever judicious. Never took the temptation to buy a tear down for $3M. It's called saving and discipline. It's not that hard.

So you do see and understand now that your "dump" Glover Park townhouse is that $1M home now, right? You were able to get on the property ladder when that home was $350K. Cast a net today to see what $350K gets you.

And salaries have increased along with home prices. Anyone who makes decent decisions when young can get on the property ladder somewhere decent in this country. Stop complaining and pointing fingers and take responsibility.

Let's take 1998 as the baseline since you said "late 90s." Between 1998 and 2022, the real median income in DC moved from about $59K to $111K. That's about an 88% increase, which is a lot.

But during the same period, median housing prices went from $105K to $370K. That's a 252% increase.

To answer OP's question, the answer is and will always be "generational wealth" in the majority of cases, even if you define generational wealth as simply "no student loan debt"

You don’t have to live in DMV. There are beautiful houses with decent public schools in suburban Detroit that you can afford. You chose not to make an optimal financial decision and instead complained about others’ good fortune.

Love these people that give anecdotes about how they did it in DC and when presented with evidence of how things have changed in DC go “Well, you choose to live in DC!”

[Anonymous]

I don't think anyone that bought in the DC area in the 90s imagined this area would explode in wealth, RE prices, and population the way that it has.

[Anonymous]

Anonymous wrote:Family helps with down payment. That’s how. Family helps with child care.

Nope, not me, not mine. We did all on our own. You can read the story above where the OP just goes on and on with insults because they are unwilling to put in hard work and compromise.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It’s an equity game. We make about the same as you, and bought our home for 1.4. However we had 800k in equity from 2 previous homes. Gotta start somewhere.

NP. This is true, but I think we have to admit there is a huge element of luck.

How many people on this board have shared that “move up” housing has gone up in price significantly faster than their “starter” home and now they are stuck. I’ve seen so many posts of people who wished they had stretched a little bit more so they didn’t have to move. With transactional costs so high and so much of mortgage going to interest, it’s just a lot harder to get on and move up the property ladder these days.

I totally realize I lucked out being able to buy a first home in 2012 and then moved closer-in to a walkable SFH in a good school district inside the beltway in 2018. Refi’d to 2.75% during COVID.

Like OP my family has a 300k HHI and mortgage is about $3,900 (so in line with their budget). But not only could I not afford our current home, even our outside the beltway starter townhouse we bought 13 years ago would be a stretch.

I’m not sure what the best advice is because the housing situation around here really sucks. If I was just starting out in this area and didn’t have a big downpayment I’d seriously consider leaving. Even rents aren’t cheap. DH and I have realized we likely need to save to help our kids buy their first homes in addition to 529s.

My strategy here is to suggest that my children move somewhere that is not the DMV area or other very expensive large city. My sister just bought a gorgeous new build the size of my $1M 1990s house for $400K in a city most of you would scoff at, but she loves.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The only way for a $300,000 down payment to magically appear for most people is if they win a lottery.

Who needs a 300k down payment for a first house? Answer. Nobody.

+1

Take a loan from your 401 to cover the 5% down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The only way for a $300,000 down payment to magically appear for most people is if they win a lottery.

Who needs a 300k down payment for a first house? Answer. Nobody.

+1

Take a loan from your 401 to cover the 5% down.

We put 10% down and took a loan from my 401(k) to do so. You pay yourself back with interest so it's not too different from investing in an average market. Now would be a good time to do that.

[Anonymous]

Anonymous wrote:

I can't afford my house now and I make nearly double what I made when we bought it. Currently at $3k PITI. No equity, no parents help to buy it. DH and I saved (but not like we scrimped a ton while living in a rental condo) and put down 20% on a $750k house. But rates were sub 3%. Our house is probably about $900k now and interest is more than double. So much of it is luck of timing. And not having student loans which was due to our parents paying for college for both of us and me not going to grad school (engineer career).

This post is why I think housing prices will come down. Wait a bit OP. These prices are not sustainable. And sooner or later people need to sell.

What exactly is your experience with real estate? How many homes haved you owned?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The market sets the prices. If you don't prepare to meet the market where it is, you can reasonably expect to be disappointed. Many people in this generation live a life of luxury, free spending, and expect to have it all. That is not a reasonable expectation. I can tell you are upset by the increasing insults you are hurling. No one owes anyone else a house.

I’m upset that you and your entire generation have royally f$&ked up our entire country due to your stupidity and short-sightedness, and you don’t even have the good grace to STFU and stop telling the youngsters that it’s the avocado toast and not the mouth breathing Fox News cult members and the blue blood union busting union beneficiaries (ahem, you) who are ruining their futures.

No one owes you respect. And you clearly aren’t worthy of any.

Look, I am 40, I have 3 kids and have a HHI of 400-450k. We own 3 houses in NW DC all over 1 mil in value. We also send kids to private school (about 80-90k/year).

We also never eat out, and watch what we spend. Our only car is very old, all the properties we bought were fixer uppers, etc. we rent two out of 3 and the rent pays for the mortgage and any repairs needed.

We had about 300k from my others to buy the first house, but we bought the second and third on our own by saving (living below our means).

We are not boomers (also not born in the US), but I see how much families with lower HhI than ours spend… that is why they can’t afford to buy a house. Stop shopping at While Foods, getting Ubers, eating out multiple times a week, getting nails done, etc. and you will see how much you will save.

Literally nothing else in your post counts when the bolded is true, princess. Stop pretending your generational wealth that allowed you to *vault* over your peers is NOTHING and you did it all by yourself because you’re just so wonderful and smart and frugal. Do some calculations using the median income (not your top 1% salary) in the DMV, add in reasonable expenses and retirement savings, and tell me how long it will take you to SAVE an extra 300K.

You’re nothing more than a spoiled rich @$$hole. Seriously, STFU.

Let me break it down for you since you are not very smart.

Yes, my parents helped buying the first house. It was a 1,400 sqft townhouse in downtown DC. Very walkable area, but not very safe and ok schools. House was outdated, but in decent shape for us. We dug the basement (after a couple of years of savings) and started renting it. Our income at the time was HHI 200k. The rent gave us an extra 1,200/months which was great. We had a 3k mortgage per month and one baby. I was in school and mostly took care of our daughter.

After about 6 years, we had saved enough to buy another townhouse. This new house is bigger than the first and little further out. Our income had gone up to maybe 350k (including the rent of the first house around 50k/year). This second house was a big dump. Disgusting, dirty, with pests everywhere. We moved into the basement that was the nicest part of the house (1 bedroom and 1 bathroom for 4 people). Slowly we started fixing the upper part. We took down carpets, broke down some walls, redid bathrooms and eventually 5 years later we redid the kitchen. For the first 4 years we lived with a very ugly and outdated kitchen/appliances. We painted a lot of the house ourselves and tried to cut costs as much as possible. Rented the basement after we moved in the upper floors and increased our income that way.
By this time, our income had gone up to 400 or so, but we had 2 kids in private so our take home was more like 170k. We were paying two mortgages. Always living as cheaply as possible, we bought another home recently while renting the other two.

We are trying to give our kids a head start by giving them a nice house each to start with, but I fully expect them to save and grow their wealth like DH and I are doing. This is how we are easing our kida

Again, no one wants to read your autobiography you smug dingbat. Nobody cares what kind of house you picked out with your THREE HUNDRED THOUSAND DOLLAR GIFT.

This update actually makes you look more pathetic. You were pulling down 200K and you STILL needed mommy and daddy to buy you your shitty townhouse? What a freaking loser.

Calling people names makes you look even more pathetic… I feel really bad for you that you need or want to do this on an anonymous board. I hope your life gets better

Disagree. Maybe if people in real life told you that you’re a smug AH you would stop going around preaching to the poors that they’re just not as financially savvy and frugal as you are and that’s why they can’t afford a house.

You’re insufferable, but you can change. It starts with admitting to yourself that the reason you have a bunch of expensive real estate is because you have rich parents, not because you live your life better than people like OP.

To refresh everyone’s memory, this is the trite BS this absolute @$$hole contributed to this conversation:

“I see how much families with lower HhI than ours spend… that is why they can’t afford to buy a house. Stop shopping at While Foods, getting Ubers, eating out multiple times a week, getting nails done, etc. and you will see how much you will save.”

This thread has gone off the rails. You have serious problems, get help. See a psychologist.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The market sets the prices. If you don't prepare to meet the market where it is, you can reasonably expect to be disappointed. Many people in this generation live a life of luxury, free spending, and expect to have it all. That is not a reasonable expectation. I can tell you are upset by the increasing insults you are hurling. No one owes anyone else a house.

I’m upset that you and your entire generation have royally f$&ked up our entire country due to your stupidity and short-sightedness, and you don’t even have the good grace to STFU and stop telling the youngsters that it’s the avocado toast and not the mouth breathing Fox News cult members and the blue blood union busting union beneficiaries (ahem, you) who are ruining their futures.

No one owes you respect. And you clearly aren’t worthy of any.

Look, I am 40, I have 3 kids and have a HHI of 400-450k. We own 3 houses in NW DC all over 1 mil in value. We also send kids to private school (about 80-90k/year).

We also never eat out, and watch what we spend. Our only car is very old, all the properties we bought were fixer uppers, etc. we rent two out of 3 and the rent pays for the mortgage and any repairs needed.

We had about 300k from my others to buy the first house, but we bought the second and third on our own by saving (living below our means).

We are not boomers (also not born in the US), but I see how much families with lower HhI than ours spend… that is why they can’t afford to buy a house. Stop shopping at While Foods, getting Ubers, eating out multiple times a week, getting nails done, etc. and you will see how much you will save.

Literally nothing else in your post counts when the bolded is true, princess. Stop pretending your generational wealth that allowed you to *vault* over your peers is NOTHING and you did it all by yourself because you’re just so wonderful and smart and frugal. Do some calculations using the median income (not your top 1% salary) in the DMV, add in reasonable expenses and retirement savings, and tell me how long it will take you to SAVE an extra 300K.

You’re nothing more than a spoiled rich @$$hole. Seriously, STFU.

Let me break it down for you since you are not very smart.

Yes, my parents helped buying the first house. It was a 1,400 sqft townhouse in downtown DC. Very walkable area, but not very safe and ok schools. House was outdated, but in decent shape for us. We dug the basement (after a couple of years of savings) and started renting it. Our income at the time was HHI 200k. The rent gave us an extra 1,200/months which was great. We had a 3k mortgage per month and one baby. I was in school and mostly took care of our daughter.

After about 6 years, we had saved enough to buy another townhouse. This new house is bigger than the first and little further out. Our income had gone up to maybe 350k (including the rent of the first house around 50k/year). This second house was a big dump. Disgusting, dirty, with pests everywhere. We moved into the basement that was the nicest part of the house (1 bedroom and 1 bathroom for 4 people). Slowly we started fixing the upper part. We took down carpets, broke down some walls, redid bathrooms and eventually 5 years later we redid the kitchen. For the first 4 years we lived with a very ugly and outdated kitchen/appliances. We painted a lot of the house ourselves and tried to cut costs as much as possible. Rented the basement after we moved in the upper floors and increased our income that way.
By this time, our income had gone up to 400 or so, but we had 2 kids in private so our take home was more like 170k. We were paying two mortgages. Always living as cheaply as possible, we bought another home recently while renting the other two.

We are trying to give our kids a head start by giving them a nice house each to start with, but I fully expect them to save and grow their wealth like DH and I are doing. This is how we are easing our kida

Again, no one wants to read your autobiography you smug dingbat. Nobody cares what kind of house you picked out with your THREE HUNDRED THOUSAND DOLLAR GIFT.

This update actually makes you look more pathetic. You were pulling down 200K and you STILL needed mommy and daddy to buy you your shitty townhouse? What a freaking loser.

Calling people names makes you look even more pathetic… I feel really bad for you that you need or want to do this on an anonymous board. I hope your life gets better

Disagree. Maybe if people in real life told you that you’re a smug AH you would stop going around preaching to the poors that they’re just not as financially savvy and frugal as you are and that’s why they can’t afford a house.

You’re insufferable, but you can change. It starts with admitting to yourself that the reason you have a bunch of expensive real estate is because you have rich parents, not because you live your life better than people like OP.

To refresh everyone’s memory, this is the trite BS this absolute @$$hole contributed to this conversation:

“I see how much families with lower HhI than ours spend… that is why they can’t afford to buy a house. Stop shopping at While Foods, getting Ubers, eating out multiple times a week, getting nails done, etc. and you will see how much you will save.”

This thread has gone off the rails. You have serious problems, get help. See a psychologist.

Sorry you got your feelings hurt, princess. Why don’t you go cry about it to Daddy, maybe he’ll buy you a pony.

[Anonymous]

I bought a TH awhile ago and have about $700K in equity.

In theory I could easily afford the $1mill home, but no way I'd want to pay the ever increasing taxes/upkeep/insurance on a $1mil+ home.

If I move it will be to another region of the states, I'd like a medium sized, well constructed home, on a quiet lane with with mature trees, a nice little garden and fresh air.

Other than that I'd like to live in a much less populated area. There are a lot of perks to living here, but the 1.2 million people crammed together in ~400 sq. miles, who live adjacent to equally congested jurisdictions, isn't one of them. There are people and houses everywhere.

I couldn't imagine plunking down a wad of cash to live in the congested mess that is the DMV.

[Anonymous]

It seems really expensive but it can get a lot more expensive. Prices here are relatively affordable compared west coast cities, NY, or Boston.