Housing and young people – why is this not a solution?

[Anonymous]

Why wait til the kids are out of college? My elementary school kid has investment account worth quarter of a million.
There are may ways to help them, but time is money. I would not wait til they graduate college.

[Anonymous]

Your "solution" to the housing crisis is for all kids to attend college, graduate and immediately make $100k, live with their parents until they are 30, and save half a million dollars?

You're a genius, OP. A real policy savant. Where should we mail your Nobel Prize?

Care to tackle peace in the middle east next? I'm sure you can come up with a solution - perhaps set a specific date and time for everyone to drop their weapons and sing Kumbaya?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We all hear about inflation, housing costs in the DC area, and the hardships that face young people. But is this really so dire?

Let’s say you have a young person who lives at home with their parents after graduating college, from age 22 to 30. And let’s say their income averages $100,000 per year over that time (starting at $80-90,000 and ending up at $110-120,000 at age 30).

Of their $100,000 income, they pay $25,000 in taxes and only need to spend another $10,000 per year since they are living at home. That means they can save on average $65,000 per year—or $520,000 over the eight years (ignoring any potential investment gains).

That’s enough for them to buy a $400,000 condo in cash (or use that amount as a huge down payment if they’re getting married and need to buy a house instead). On top of that, they have enough to buy a solid $25,000 car, furniture for their new place—and still have enough left over for an emergency fund and maybe even some investments. That sounds like a pretty darn good place to be in as a 30-year-old.

Obviously, that only works under certain conditions. First, the kid has to major in something marketable. And the parents have to live in the same area and be at least middle-class/upper middle-class—but that describes most of the DCUM demographic. Thoughts? Why isn’t this the solution?

Eight years? I graduated at 21 and married at 30, living with parents would really screw with that timeline.

And a freaking condo? Why not just light the money on fire. Especially $400k — where is that, Columbus Ohio??

Out of touch on all points.

My partners got along with my parents. Timeline improved because it helps filter out bad mates.

Median price for a condo in Bethesda is $320K.

So you don’t have sex until marriage? Or had sex in your parents home? And you say I’m out of touch?

Improved timeline you advocate marrying even later than 30?

BS. There’s one unit for sale in Bethesda for under $400k, and has a $300/month HOA ; one bed, one bath from 1951 (though it is a nice little townhouse given all that).

https://www.zillow.com/homedetails/6726-Offutt-Ln-201A-Chevy-Chase-MD-20815/37196792_zpid/

HOA fees are not all "Bad". Look into it. In my condo, HOA includes home insurance--everything beyond the belongins/personal content---also includes earthquake insurance which is a big part, includes window washing quarterly, dryer vent cleaning yearly, all maintenance walls and outward---all outer walls are windows and I dont' pay to fix them/maintain, our also includes the 24 hour concierges. SO the deductible is $50K, so I need my own coverage up to $50K and then for my personal belonging, but otherwise my HOA fees cover everything else (and ours is well funded and well maintained HOA so no surprise fees)

But most Townhomes HOA includes exterior maintenance as well, so the roof is no longer your responsibility directly, etc. So the fees are not actually that high if it's well managed and you look into what is included.

[Anonymous]

What fantasy world do you live in? DD is graduating looking at jobs paying 50k. Even with raises, she’ll be lucky to hit 100k by 30. Sure she has a few finance classmates who will start with high salaries but that’s not the norm.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Who earns 100k straight out of college with just a bachelor’s degree? That sounds like fantasyland. Even people with business degrees aren’t bringing that much in two years after graduation typically.

My kid started at $65K in a MCOL area with a business degree. 2 years in making $76K, still MCOL area. So it's not that hard to believe that someone could be earning 90k+ right out of college in a HCOL/VHCOL area, especially if it's a finance/accounting job. Oh and my kid had a 3.4gpa and officially isn't using their Business degree, just a job that requires any degree, so over 50% of their co-workers have a variety of non-stem LA/Humanities degrees and started at the same salary. So also guessing someone with a 3.9+Gpa can land a job paying much more

Maybe a first year investment banker but that’s it. Employers don’t pay more to people with 3.7 or 3.9 GPAs. It’s a job, not a school activity.

Well my kid has several friends making 75-90K in MCOl areas, most are business and engineering. You don't have to be an investment banker to make decent money.

[Anonymous]

Anonymous wrote:We all hear about inflation, housing costs in the DC area, and the hardships that face young people. But is this really so dire?

Let’s say you have a young person who lives at home with their parents after graduating college, from age 22 to 30. And let’s say their income averages $100,000 per year over that time (starting at $80-90,000 and ending up at $110-120,000 at age 30).

Of their $100,000 income, they pay $25,000 in taxes and only need to spend another $10,000 per year since they are living at home. That means they can save on average $65,000 per year—or $520,000 over the eight years (ignoring any potential investment gains).

That’s enough for them to buy a $400,000 condo in cash (or use that amount as a huge down payment if they’re getting married and need to buy a house instead). On top of that, they have enough to buy a solid $25,000 car, furniture for their new place—and still have enough left over for an emergency fund and maybe even some investments. That sounds like a pretty darn good place to be in as a 30-year-old.

Obviously, that only works under certain conditions. First, the kid has to major in something marketable. And the parents have to live in the same area and be at least middle-class/upper middle-class—but that describes most of the DCUM demographic. Thoughts? Why isn’t this the solution?

I don’t want my kids in my house for 30 years.

They need to move out and make the same mistakes I did to truly grow as a person.

[Anonymous]

Lol. Very few college grads make that amount and most owe money on student loans. What you are describing is not possible for most college grads.

[Anonymous]

The majority of young, singles living in the DMV don't have family here. That's your first problem...there is no option to live at home.

Also, the median income for college graduates in DC is $65k to start. Based on your growth assumptions, they are at around $80/$85k by 30.

So...there you go.

[Anonymous]

I just don't know what you'd do about dating. I really didn't want my parents to know that much about who I was dating. If it was serious I introduced my parents, but not immediately. My parents would have made fun of the duds for the rest of my life and brought up their issues. I also wouldn't have wanted to discuss why a first date didn't work out either.

And neither my parents nor my inlaws would allow unmarried people to sleep together under the same roof. Neither is super conservative or over the top religious. They just didn't want it happening at their home until marriage.

I think a better solution is for parents to buy a condo or small house and rent it out to their kid and kids' roommates. My parents did this and made a lot of money. My parents actually made money on me going to college by doing this. And when they sold those places, they made a lot of money then too.

[Anonymous]

Anonymous wrote:My friend’s daughter did this. She is a RN and made around 70k then, lived at home for 4 years, parents didn’t charge money for rent or food/utilities etc. The only condition was that she gets to have $1000 a month in spending money and save the rest. She ending up saving 100k, parents matched the 100k and she bought a 2 bedroom plus loft apartment for 450k at 2.75% interest in 2020.

Her apartment is worth 525k now and monthly payment is very manageable, now she is on her own and can live her life as she pleases. She is currently 27 and plans to have it fully paid by 35 ( she is doing travel nursing so she is making more money) then can have close to 600k for down payment on a SFH.

Most parents don’t have $100k sitting around to give to their kid for a down payment. Most don’t even have enough for their kid to go to college hence the student loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We all hear about inflation, housing costs in the DC area, and the hardships that face young people. But is this really so dire?

Let’s say you have a young person who lives at home with their parents after graduating college, from age 22 to 30. And let’s say their income averages $100,000 per year over that time (starting at $80-90,000 and ending up at $110-120,000 at age 30).

Of their $100,000 income, they pay $25,000 in taxes and only need to spend another $10,000 per year since they are living at home. That means they can save on average $65,000 per year—or $520,000 over the eight years (ignoring any potential investment gains).

That’s enough for them to buy a $400,000 condo in cash (or use that amount as a huge down payment if they’re getting married and need to buy a house instead). On top of that, they have enough to buy a solid $25,000 car, furniture for their new place—and still have enough left over for an emergency fund and maybe even some investments. That sounds like a pretty darn good place to be in as a 30-year-old.

Obviously, that only works under certain conditions. First, the kid has to major in something marketable. And the parents have to live in the same area and be at least middle-class/upper middle-class—but that describes most of the DCUM demographic. Thoughts? Why isn’t this the solution?

Yeah, that person is doing great. Despite crying being poor, the top 1% always do great. For every one of them, there are 10s of people who graduate with 300k in student loans, are making 30k a year as interns and spending money they do not have trying to build a network that will never accept them. They of course cannot live with their parents since, the parents had to downsize in order to be able to retire before they are 80.

OP here. No, not top 1% - they have way more advantages than I suggested. What I laid out is a way for the children of the top 40% socioeconomically to get ahead despite the real challenges facing young people today.

[Anonymous]

This does not at all factor in student loans, which can be crippling. And many young people may not find jobs in their industries close to home.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My friend’s daughter did this. She is a RN and made around 70k then, lived at home for 4 years, parents didn’t charge money for rent or food/utilities etc. The only condition was that she gets to have $1000 a month in spending money and save the rest. She ending up saving 100k, parents matched the 100k and she bought a 2 bedroom plus loft apartment for 450k at 2.75% interest in 2020.

Her apartment is worth 525k now and monthly payment is very manageable, now she is on her own and can live her life as she pleases. She is currently 27 and plans to have it fully paid by 35 ( she is doing travel nursing so she is making more money) then can have close to 600k for down payment on a SFH.

Most parents don’t have $100k sitting around to give to their kid for a down payment. Most don’t even have enough for their kid to go to college hence the student loans.

Or to buy another residence to rent out to their kid and roommates. Sometimes the best you can do is help with their education and allow them to live at home until they can afford to live on their own.

[Anonymous]

Anonymous wrote:This does not at all factor in student loans, which can be crippling. And many young people may not find jobs in their industries close to home.

Well first and foremost, kids need to stop taking massive loans for college. No school (not even Harvard) is worth going into massive debt. Find a school that wants you/will give you merit aid and that you can afford. Every state has several state schools, many that most decent students can get admitted to and that will give good students merit. (Not talking UVA, VaTech, W&M, UMD). Find those schools search for merit for your good student (anyone with a 3.5+ UW HS can easily find merit. Pick one that costs less than $30-35K---state school or private that gives you excellent merit. Then earn $10K+ per year (summer, all breaks, PT for 8-10 hours during the week), take the $5.5K/year for student loans (higher each year to total 27K over 4 years). Now you have 15K left. Hopefully the parent can assist with some via cash flow or savings. (that's 60K total over 4 years give or take). If parents cannot help, then find a school that costs even less. It can be done.

My 3.5UW/25 ACT/No AP kid had 2 private universities (ranked 80-100) that cost only $40K/year. They had another (ranked ~120) that cost only $30K. That was without any merit searching. Had 2 state schools that cost about $20K, after the merit awards (yes for even a kid with those stats). Had they gone to schools ranked 120+ they could have found several good schools that cost less than $20K. It is possible to do.

So stop taking massive loans, attend college that is affordable

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The solution is they get a bunch of roommates. It's part of life, or should be. Too many want to live alone.

Exactly. 20-somethings aren't entitled to live alone, nor remain at their parents house. Live with roommates and save.

For high caliber families, family is better than roommates.

Whatever that means.