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how much income to be able to live in an million dollar home
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PostPosted: Sat May 20, 2017 2:42 am GMT    Post subject: Reply with quote

champagne taste with a beer budget.

Yes its true, decent house in decent area is 800k...

But that's because your interpretation of 'decent' is different to others.

To the folks who live in 500k homes in Acton or surrounding areas, are they living in some kind of squalid conditions? fearful every night of being attacked?

No, they have compromised their mortgage by accepting a longer commute.

People who make more money are going to have first dibs on where they want to live and drive costs up for everyone else. Unless we live in a communist country, this is how its going to be for any 'finite' resource

The blame is soley on liberal NIMBYs who hide under 'historic districts' and overcrowding concerns who refuse to change zoning laws so more houses can be built on smaller lots. Or allowing high rises in places like Newton and suburbs closer to the city

But even then, there is nothing stopping foreigners or rich people buying multiple units and hence again having first dibs
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PostPosted: Sat May 20, 2017 5:12 pm GMT    Post subject: Reply with quote

Anonymous wrote:
bsg61 wrote:

I think for a million dollars you should Gross $250K household, at least. That puts you at 4X your income as a house price.

While I think $250k is great income to have, I am not sure how many % of MA family would have that kind of take home gross. That could be top 1% or 2% percent of income bracket we are talking about.
What kind of jobs in Boston would pay $250k annually? Surgeon doctors and Corp. Lawyers?



Some surgeons (e.g. orthopedic, with experience, cardiac) make more like 500K and up. I would assume some corporate lawyers make 250K and way up.

200K-250K seems like a ton of money to me yet I have a feeling it is not that unusual and that I know more than a few people who make that kind of $$$ and more; naturally, no one talks about how much money they make. That topic is still a bit taboo.
Quote:


Seems like ~9.6% of households earn more than $200K locally.
http://statisticalatlas.com/metro-area/Massachusetts/Boston/Household-Income[/quote]

150K+ jobs used to be confined to jobs such as doctors and lawyers which require massive educational investment in terms of time/money.

These days, STEM jobs are now paying at least 120K-200k. These only require 3-4 year college, doesn't have to be IVY league, has nothing to do with "who you know", what you look like etc etc....

I suspect these are the professions which are buying up all the higher priced homes in 'good school' districts
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PostPosted: Sat May 20, 2017 5:47 pm GMT    Post subject: Re: how much income to be able to live in an million dollar Reply with quote

Anonymous wrote:
As many of us quickly being put into current Boston home price reality, any decent SFH in decent town start price at $800,000, and you won't see anything that you really want to live in until you are willing to pay about million dollar.
So just try to get an idea of how much income does a family need to have, in order to afford an million dollar house, with current interest rate and tax rate?

From my rough calculation, beside the $200,000 down payment, you need about $5000 monthly mortgage, plus $1000 monthly for tax, plus $400 monthly for insurance. Then utilities(electricity, water, gas, cable, internet, phone, minor maintenance) will hit another $1000 for bigger house.
So in order to keep your milllion dollar home running, you need about $7000 cash.
That is just basic of the basic to keep your home, you still need to shelf out money for car, food, and other expenses. I feel like $1500 would be a fair amount.
Assuming you are in 25% ~ 30% tax bracket, with family health insurance and max 401k deduction taking place, you gross monthly income need to be at least $14000 ~ $16000 monthly, or around $180,000 annually to handle an million dollar house.

Is my calculation sounds reasonable?


You obviously haven't spoken to a loan officer yet. The maximum back end ratio for any mortage is 41% of your gross pay. The BE ratio for a family making 180k/yr is 6,150/month and it includes all your monthly debt payments. Realistically, 180k/yr isn't enough to get an 800k jumbo mortgage. I think 250k/yr is more likely to get loan approval in your scenario.
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PostPosted: Sat May 20, 2017 5:48 pm GMT    Post subject: Reply with quote

Anonymous wrote:
Anonymous wrote:
bsg61 wrote:

I think for a million dollars you should Gross $250K household, at least. That puts you at 4X your income as a house price.

While I think $250k is great income to have, I am not sure how many % of MA family would have that kind of take home gross. That could be top 1% or 2% percent of income bracket we are talking about.
What kind of jobs in Boston would pay $250k annually? Surgeon doctors and Corp. Lawyers?



Some surgeons (e.g. orthopedic, with experience, cardiac) make more like 500K and up. I would assume some corporate lawyers make 250K and way up.

200K-250K seems like a ton of money to me yet I have a feeling it is not that unusual and that I know more than a few people who make that kind of $$$ and more; naturally, no one talks about how much money they make. That topic is still a bit taboo.
Quote:


Seems like ~9.6% of households earn more than $200K locally.
http://statisticalatlas.com/metro-area/Massachusetts/Boston/Household-Income


150K+ jobs used to be confined to jobs such as doctors and lawyers which require massive educational investment in terms of time/money.

These days, STEM jobs are now paying at least 120K-200k. These only require 3-4 year college, doesn't have to be IVY league, has nothing to do with "who you know", what you look like etc etc....

I suspect these are the professions which are buying up all the higher priced homes in 'good school' districts[/quote]

Yeah, I agree. Technology, Pharma, and Biotech all pay well. They have a recruitment pipeline from the local universities. I suspect that a household with two entry-level Ph.D.'s would start over the 200K threshold. Bachelor's + experience probably pays very well too.
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PostPosted: Mon May 22, 2017 5:33 pm GMT    Post subject: Reply with quote

I blame HGTV. Whatever happened to the starter house.
I work with a lot of people that have bought homes in the last couple of years.
No one spent $1M.
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PostPosted: Fri May 26, 2017 3:58 pm GMT    Post subject: Reply with quote

Quote:

I work with a lot of people that have bought homes in the last couple of years.
No one spent $1M.


That is an objective statement, which doesn't mean much. I know a lot of folks who pay over million dollars for their homes, who made the purchase in the last couple of years.

Brookline, Newton, Wellesley, Lexington, Belmont. These are traditional top tier towns that most people look after.
Finding properties there below 1M these days, and you will always find some odd things in every each one of them. Acutally for Brookline, you better bump the base price up to 1.3M.

Of course the further you away from the Boston downtown, the bigger and better home you can get for your money. But unless you don't need to commute to work and drop off kids to school in the morning, you don't really want to live 1 hour plus drive from your office.

The fact is home price in decent towns in Boston area have gone up almost 100% in price in general, since home price hits bottom around 2011. What used to cost mid 500k home back in 2011, is costing around 1M in 2017. And the worse thing it leads to is price hike on those half decent towns in the last few years as well. Now a days, you pay used to newton price to buy in watertown; Any you pay 700k for a condo in Natick since wellesley's condo is now 1.1M. Brookline is craziest of the all, with basement 1 bed starting around 500k.

This is a devaluation of USD, in direct related to your earning. For those first time home buyers, unless your salary more than double since 2011. Your home purchasing power is in reverse. And apparently there is no end and no solution in sight.
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PostPosted: Sat May 27, 2017 2:53 pm GMT    Post subject: Reply with quote

Objective or subjective ??
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PostPosted: Sat May 27, 2017 3:24 pm GMT    Post subject: Reply with quote

Interesting, according to Zillow, Wellesley is Very Cold, Newton is Cool and Lexington is Very Hot.

https://www.zillow.com/wellesley-ma/home-values/
https://www.zillow.com/newton-ma/home-values/
https://www.zillow.com/lexington-ma/home-values/
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PostPosted: Sat May 27, 2017 5:23 pm GMT    Post subject: Reply with quote

Anonymous wrote:
Quote:

I work with a lot of people that have bought homes in the last couple of years.
No one spent $1M.


That is an objective statement, which doesn't mean much. I know a lot of folks who pay over million dollars for their homes, who made the purchase in the last couple of years.

Brookline, Newton, Wellesley, Lexington, Belmont. These are traditional top tier towns that most people look after.
Finding properties there below 1M these days, and you will always find some odd things in every each one of them. Acutally for Brookline, you better bump the base price up to 1.3M.

Of course the further you away from the Boston downtown, the bigger and better home you can get for your money. But unless you don't need to commute to work and drop off kids to school in the morning, you don't really want to live 1 hour plus drive from your office.

The fact is home price in decent towns in Boston area have gone up almost 100% in price in general, since home price hits bottom around 2011. What used to cost mid 500k home back in 2011, is costing around 1M in 2017. And the worse thing it leads to is price hike on those half decent towns in the last few years as well. Now a days, you pay used to newton price to buy in watertown; Any you pay 700k for a condo in Natick since wellesley's condo is now 1.1M. Brookline is craziest of the all, with basement 1 bed starting around 500k.

This is a devaluation of USD, in direct related to your earning. For those first time home buyers, unless your salary more than double since 2011. Your home purchasing power is in reverse. And apparently there is no end and no solution in sight.


Housing prices have not doubled since 2011. Not even close. With that said, you are right that people building up a down payment had the increased savings offset by the rising prices and now slightly higher mortgage rates.
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PostPosted: Sun May 28, 2017 1:13 am GMT    Post subject: Reply with quote

Is anyone on this message board interested in buying a house somewhere
other than these aforementioned towns?
There are plenty of towns with nice neighborhoods and good school systems
that don't cost $1M.
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PostPosted: Sun May 28, 2017 12:41 pm GMT    Post subject: Reply with quote

Anonymous wrote:
Is anyone on this message board interested in buying a house somewhere
other than these aforementioned towns?
There are plenty of towns with nice neighborhoods and good school systems
that don't cost $1M.


The problem is that the bottom 90 percent think they are entitled to live like the top 10 percent.
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PostPosted: Sun May 28, 2017 4:20 pm GMT    Post subject: Reply with quote

Anonymous wrote:
Anonymous wrote:
Is anyone on this message board interested in buying a house somewhere
other than these aforementioned towns?
There are plenty of towns with nice neighborhoods and good school systems
that don't cost $1M.


The problem is that the bottom 90 percent think they are entitled to live like the top 10 percent.


And the top 10 percent think they are entitled to the top 1 percent.

The prices in those towns are rationalized by avoiding private-school tuition, almost as if public schools in other communities are not even an option. Folks then justify taking out massive mortgages in areas with high taxes, saddling themselves with huge month payments (>5K/mo) for 30 years. I do think that this mentality insulates those areas a bit from downturns, but I also feel that they have less upside compared to up-and-coming neighborhoods. Anecdotally, young professionals seem to be buying into watertown, lynn, east boston, etc. based on affordability/accessibility. The entire region is gentrifying.
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PostPosted: Sun May 28, 2017 11:51 pm GMT    Post subject: Reply with quote

Anonymous wrote:
Anonymous wrote:
Anonymous wrote:
Is anyone on this message board interested in buying a house somewhere
other than these aforementioned towns?
There are plenty of towns with nice neighborhoods and good school systems
that don't cost $1M.


The problem is that the bottom 90 percent think they are entitled to live like the top 10 percent.


And the top 10 percent think they are entitled to the top 1 percent.

The prices in those towns are rationalized by avoiding private-school tuition, almost as if public schools in other communities are not even an option. Folks then justify taking out massive mortgages in areas with high taxes, saddling themselves with huge month payments (>5K/mo) for 30 years. I do think that this mentality insulates those areas a bit from downturns, but I also feel that they have less upside compared to up-and-coming neighborhoods. Anecdotally, young professionals seem to be buying into watertown, lynn, east boston, etc. based on affordability/accessibility. The entire region is gentrifying.


18 years of good private school tuition will cost you almost 500k per kid. If you have 4 kids, it's cheaper to buy a 1.5 million dollar house in Wellesley and send your kids to public schools. If you value your family's life, you don't buy in East Boston, Chelsea or Lynn. Just imagine your kids walking home from school in Lynn. Watertown is a little better, though.
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PostPosted: Mon May 29, 2017 1:43 am GMT    Post subject: Reply with quote

Quote:
There are plenty of towns with nice neighborhoods and good school systems
that don't cost $1M.


Can you please list some of those towns, so we can agree/disagree on those neighborhoods in compare with those aforementioned towns?
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PostPosted: Mon May 29, 2017 1:04 pm GMT    Post subject: Reply with quote

Sure. To name a few Natick, Milton, Canton, Andover, Swampscott, Marblehead, Norwell, Melrose.

If you've got a smart kid and raise him to be a good student, he can go to any college he wants from any one of these schools districts.

Lots of happy, successful, well-educated people come from these and other places.
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