Reply to s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?

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Reply to "s/o - feeling "poor" at these ludicrously high incomes. what are they actually missing?"

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[quote=Anonymous][quote=Anonymous]PP here who bought house in 99.   When I started out, 20+ years ago, I noticed that my senior colleagues were much much better off than me.  They made more than me, sure, but the big difference was that they were paying the same in mortgage payments as I was for my one bedroom appt.

I realized that buying a house is insurance against rent increases.  So, I bought what I could afford -- on my income.  Money was tight for the first few years.  But in time, my income increased -- from 60K when I bought the house (1999) to 170K now.  Some of that was inflation, but most was career growth.  Now, my mortgage was at 8%, not 3.7%.  So, with the same monthly mortgage payment as a fraction of income, I  would be able to borrow 480K with an inflation adjusted salary to 85K. (same Loan to debt ratio).

That means a 600K house, which is basically what I live in.

More to the point, when we hire someone out of grad school, after a few years (same place in life), they are making about 100K.  At 100K, with current interest rates, they could buy my house today.

In 20 years, assuming modest inflation, they will be comfortable/
[/quote]

Just stop it. Someone making 100K cannot afford a 600K house.

I bought a condo in Arlington in 1997 for $60K, when I was making, I think, $54K a year. Those condos now sell for about $250K--four times what I paid. But people in the job I had then are not making $200K a year. They are making about $90K. There is no way they can afford to buy what I could on my salary 20 years ago. And they are not getting the appreciation either to get started on the property ladder. [/quote]

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