$200K and just getting by

[Anonymous]

You can get by, but you can't afford the hip part of town.

Welcome to Gaithersburg, baby.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Or buy a home as early as possible. We got our first starter home when we were dating at age 22. We are 40 now and are on our 5th house with one as a rental.

By the time we started having kids at 27, we were established with equity and it just kept building

Good thing you don't buy in 2006.

+1 I know a couple that purchased a home as recent graduates in 2006 in Silver Spring. Their particular neighborhood has gone nowhere but downhill in the past decade.

I also know a couple of others (also recent grads, at the time) who stretched to buy condos in Tysons in 2006, and lost tons of money... They still own their condos and they'd have to sell at a horrible loss. They'll likely never get that money back. Tyson's has improved in popularity, but there are new condo buildings popping up everywhere that they are going to have to compete with when they go to sell.

If you bought in 2000 with no down payment, and it has worked out for you, I guarantee you, it is not because of your financial prowess.

+1

[Anonymous]

Anonymous wrote:You can get by, but you can't afford the hip part of town.

Welcome to Gaithersburg, baby.

"Baby" makes you sound trashy.

[Anonymous]

This couple is us. Our mortgage is lower and our childcare is too now but we have student loans. We do not take $8000 vacations. We can have a lot of what we want but not everything. No complaints.

[Anonymous]

Anonymous wrote:
Stop with the flying vacations each year . Make those once every three or four. Do driving trips and explore your own city.

No offense, but to a lot of us your life sounds fucking horrible. A life not spent traveling the world wouldn't feel like a life worth living.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We bought a townhouse in 2000, and back then we didn't need a DP! Things have changed making it more difficult to buy and afford things now for people under 40.

That's what I was about to say. PP who bought when she was 22 - that was 1998 or so. We bought in 1999 and had a 10% DP but could have done 5%, and the house was $200K.

Pp bought before they were married, and many many people break up with their significant other once they are working and in real life; they committed to a mortgage but not to each other. Very responsible.

And as for buying with 5% down, how can you even pretend that is reasonable; it's all about timing and PP got lucky. If it was 2006 you would have been sunk.

My point was that 10% (or 5% which we didn't do) of $200K for a 3-BR, 2-BA in a close-in burb was not that much money - for those asking how people had a downpayment that young.

And there are a ton of people on this board who bought in 2006 and have done just fine. Almost everything close-in and under $1M is up since then, with some DC neighborhoods way up.

Hon, you can't buy at 22 when houses are $1m to start. You CAN when houses are like $200K/$400K to start, which is what they were in 1999.

Bottom line, that's shit advice for anyone who's not 40 who was old enough to buy then (I was 16 in 1999, so thanks for the "great advice") and who doesn't have a time machine.

This. Those of us in our late 20s now are boggled at how fucking blind DC Gen X'ers can be about their obscenely lucky financial timing.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
Stop with the flying vacations each year . Make those once every three or four. Do driving trips and explore your own city.

No offense, but to a lot of us your life sounds fucking horrible. A life not spent traveling the world wouldn't feel like a life worth living.

If travel's that big of a priority then you have to make different trade-offs. Live in a small condo instead of a SFH. Buy less expensive cars and keep them longer. There's nothing wrong with traveling if that's what you love but you can't have everything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:
Stop with the flying vacations each year . Make those once every three or four. Do driving trips and explore your own city.

No offense, but to a lot of us your life sounds fucking horrible. A life not spent traveling the world wouldn't feel like a life worth living.

If travel's that big of a priority then you have to make different trade-offs. Live in a small condo instead of a SFH. Buy less expensive cars and keep them longer. There's nothing wrong with traveling if that's what you love but you can't have everything.

+1

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can get by, but you can't afford the hip part of town.

Welcome to Gaithersburg, baby.

"Baby" makes you sound trashy.

??? Seriously? You don't have an ounce of humor?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We bought a townhouse in 2000, and back then we didn't need a DP! Things have changed making it more difficult to buy and afford things now for people under 40.

That's what I was about to say. PP who bought when she was 22 - that was 1998 or so. We bought in 1999 and had a 10% DP but could have done 5%, and the house was $200K.

Pp bought before they were married, and many many people break up with their significant other once they are working and in real life; they committed to a mortgage but not to each other. Very responsible.

And as for buying with 5% down, how can you even pretend that is reasonable; it's all about timing and PP got lucky. If it was 2006 you would have been sunk.

My point was that 10% (or 5% which we didn't do) of $200K for a 3-BR, 2-BA in a close-in burb was not that much money - for those asking how people had a downpayment that young.

And there are a ton of people on this board who bought in 2006 and have done just fine. Almost everything close-in and under $1M is up since then, with some DC neighborhoods way up.

Hon, you can't buy at 22 when houses are $1m to start. You CAN when houses are like $200K/$400K to start, which is what they were in 1999.

Bottom line, that's shit advice for anyone who's not 40 who was old enough to buy then (I was 16 in 1999, so thanks for the "great advice") and who doesn't have a time machine.

This. Those of us in our late 20s now are boggled at how fucking blind DC Gen X'ers can be about their obscenely lucky financial timing.

This is still kind of BS. No one I knew when I was 22 -- in 1995 -- had $20,000 for a 10% down payment on a house, either. 10% of $250K is a lot less than 10% of $1M, but its still a ton of money. My starting salary was $26,000 a year, which was probably typical for an entry level white-collar job then. I think in 1999, the entry-level 22-year-olds at my firm were making $35-40K. Still not easy to save up $20,000.

[Anonymous]

But you didn't have to have 20% back then and you weren't saddled with exorbitant student loan debt. Mortgages were spec and no DP and college was reasonable. You were entering the work force and adulthood in an economic boom. WE entered in the worst financial climate since the Great Depression. Not saying you guys didn't work but you did NOT have the hurdles back then that we do now.

[Anonymous]

RE: mortgage, if you read the article:

Mortgage: $36,000

They took out a $640,000 mortgage at 3.75% after putting down $160,000 for a two bedroom, two bathroom single family home in the outer regions of San Francisco. Their payment is therefore $3,000 a month, or $36,000 a year. 70% of their $36,000 mortgage is interest. Hence, Take 70% X $36,000 = $25,200 a year in interest they are paying which is deductible from their $200,000 gross salary.

I don't know where the "outer region of SF" is, but I can tell you, that I lived near SF (not in, but very close to SF city), and bought our house over 10 yrs ago. Small 2br/1ba house for $730K. Again, this was over 10 yrs ago. The house is now worth 1.3mil. We were making about 300K at that point, with no kids. It was definitely comfortable. After 2 kids, and needing a 3br house, we decided it wasn't worth to plunk down 1.5 mil with over 15K in property taxes in a decent but not stellar school district with year after year budget cuts to education. We didn't drive expensive cars, or wear name brand clothes. We moved out of the SF Bay Area.

$200K is a lot, except if you live in a very high COL area like SF. I don't know how teachers survive there. I guess they can only rent, but even rent is ridiculous there.

[Anonymous]

Anonymous wrote:But you didn't have to have 20% back then and you weren't saddled with exorbitant student loan debt. Mortgages were spec and no DP and college was reasonable. You were entering the work force and adulthood in an economic boom. WE entered in the worst financial climate since the Great Depression. Not saying you guys didn't work but you did NOT have the hurdles back then that we do now.

Yes, it is a tough economy for new grads but don't think we were living in some utopia in the 90s. I know we're very, very lucky to have a house my DH bought in 1996 but that house came with an 7.5% interest rate! (eventually refinanced) And, that was with a significant down payment, borrowed from his 401k. Which he saved by living in a group house for 5 years and saving as much as possible. I graduated college in 1992 into a bad job market coming out of the early 90s recession. I lived with my parents for a couple years because my first job paid very little.

I guess Baby Boomers lucked out, graduating college into a good economy but then a lot of them also had to worry about getting sent to Vietnam so there's that. Every generation has their own challenges.

[Anonymous]

Anonymous wrote:But you didn't have to have 20% back then and you weren't saddled with exorbitant student loan debt. Mortgages were spec and no DP and college was reasonable. You were entering the work force and adulthood in an economic boom. WE entered in the worst financial climate since the Great Depression. Not saying you guys didn't work but you did NOT have the hurdles back then that we do now.

Actually, that PP's description is atypical for GenX too. Things weren't as cheap in the early to mid 1990s as you may think. When I was 22 (1995) I was still a law student, paying 35k per year for tuition and room & board. As another PP said starting salaries for people who had recently finished college were well under 40K. Even as a lawyer at biglaw in the late 90s, starting salaries were under 100k. The only people I know who bought houses within a year of finishing school had parental help for the downpayment.

[Anonymous]

Anonymous wrote:

Anonymous wrote:But you didn't have to have 20% back then and you weren't saddled with exorbitant student loan debt. Mortgages were spec and no DP and college was reasonable. You were entering the work force and adulthood in an economic boom. WE entered in the worst financial climate since the Great Depression. Not saying you guys didn't work but you did NOT have the hurdles back then that we do now.

Actually, that PP's description is atypical for GenX too. Things weren't as cheap in the early to mid 1990s as you may think. When I was 22 (1995) I was still a law student, paying 35k per year for tuition and room & board. As another PP said starting salaries for people who had recently finished college were well under 40K. Even as a lawyer at biglaw in the late 90s, starting salaries were under 100k. The only people I know who bought houses within a year of finishing school had parental help for the downpayment.

+1. When I moved to the DC area after college in 1996 I was 22 and I had an exempt position requiring a college degree that paid $27k and required long hours and travel.