Reply to How are Millennials affording new $1.5+million home in MD, DC and VA?

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Reply to "How are Millennials affording new $1.5+million home in MD, DC and VA?"

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[quote=Anonymous][quote=Anonymous]I'm amazed at how many 28-40 yo's we know that are purchasing brand new homes in Bethesda, Chevy Chase, DC, Vienna and McLean.  What took my spouse and I years to afford, they are buying at a relatively young age.  How do they do it here?  My spouse is a partner in a law firm and our house is barely worth a million. Granted, we'll have it paid for next year.  But really, Millennials what's your secret?   [/quote]

A lot of information is missing here. Income matters more than title. A law firm partner could be someone who puts out a shingle with his buddy and brings home $200K and has a stay at home spouse. Or it could be a biglaw partner bringing home a salary of $1M+ and also has a high earning spouse.

How much savings do you have?

How much did you pay for your home and how much do you still owe on the mortgage? If you paid $350K, owe $85K on the mortgage, and it's worth $1M, then you could probably sell and purchase a new $1.5M home. If you paid $985K, owe $800K, and have a HHI of only $200K and little savings, then trading up to a $1.5M home would be more difficult.

Our story, but I'm not a millennial: Spouse bought a condo and I bought a rowhouse prior to meeting each other. I lived very frugally to save up for that rowhouse - rented a house with roommates in a cheaper neighborhood, careful with spending, etc. Met each other and sold condo for a profit. We lived in rowhouse and later sold for a very large profit. Bought a SFH for a lot less than we could have. We actually paid less than what we sold the rowhouse for. Could have easily been approved for $1.5M+ but didn't want to spend that much.

Family money is a big in this area. Some people also live very frugally to save. Some people also buy at the maximum of what the banks will approve for their loan. I think this can be dangerous because many banks approve amounts that are too high and these folks are a few missed paychecks or a medical issue away from financial disaster.[/quote]

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