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Ten Reasons It's A Terrible Time To Buy An Expensive House


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2015 Jul 11, 12:58pm   924,857 views  448 comments

by Patrick   ➕follow (55)   💰tip   ignore  



  1. Because house prices in expensive areas still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's annual income with a 20% downpayment. Landlords say a safe price is set by the rental market; annual rent should be at least 9% of the purchase price, or else the price is just too high. Yet in affluent areas, both those safety rules are still being violated. Buyers are still borrowing 6 times their income with tiny downpayments, and gross rents are still only 3% of purchase price. Renting is a cash business that proves what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that affluent neighborhoods are still in a huge housing bubble, and that bubble seems to be getting more dangerous by the day.


    2. On the other hand, in some poor neighborhoods, prices are now so low that gross rents may exceed 10% of price. Housing is a bargain for buyers there. Prices there could still fall yet more if unemployment rises or interest rates go up, but those neighborhoods have no bubble anymore.

  2. Because it's usually still much cheaper to rent than to own the same size and quality house, in the same school district. In rich neighborhoods, annual rents are typically only 3% of purchase price while mortgage rates are 4% with fees, so it costs more to borrow the money as it does to borrow the house. Renters win and owners lose! Worse, total owner costs including taxes, maintenance, and insurance come to about 8% of purchase price, which is more than twice the cost of renting and wipes out any income tax benefit.

    The only true sign of a bottom is a price low enough so that you could rent out the house and make a profit. Then you'll know it's pretty safe to buy for yourself because then rent could cover the mortgage and ownership expenses if necessary, eliminating most of your risk. The basic buying safety rule is to divide annual rent by the purchase price for the house:

    annual rent / purchase price = 3% means do not buy, prices are too high

    annual rent / purchase price = 6% means borderline

    annual rent / purchase price = 9% means ok to buy, prices are reasonable

    So for example, it's borderline to pay $200,000 for a house that would cost you $1,000 per month to rent. That's $12,000 per year in rent. If you buy it with a 6% mortgage, that's $12,000 per year in interest instead, so it works out about the same. Owners can pay interest with pre-tax money, but that benefit gets wiped out by the eternal debts of repairs and property tax, equalizing things. It is foolish to pay $400,000 for that same house, because renting it would cost only half as much per year, and renters are completely safe from falling housing prices. Subtract HOA from rent before doing the calculation for condos.

    Although there is no way to be sure that rents won't fall, comparing the local employment rate (demand) to the current local supply of available homes for rent or sale (supply) should help you figure out whether a big fall in rents could happen. Checking these factors minimizizes your risk.


  3. Because it's a terrible time to buy when interest rates are low, like now. House prices rose as interest rates fell, and house prices will fall if interest rates rise without a strong increase in jobs, because a fixed monthly payment covers a smaller mortgage at a higher interest rate. Since interest rates have nowhere to go but up, prices have nowhere to go but down. When housing falls, you lose your equity, but not your debt.

    The way to win the game is to have cash on hand to buy outright at a low price when others cannot borrow very much because of high interest rates. Then you get a low price, and you get capital appreciation caused by future interest rate declines. To buy an expensive house at a time of low interest rates and high prices like now is a mistake.

    It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.



    • A low price lets you pay it all off instead of being a debt-slave for the rest of your life.


    • As interest rates fall, real estate prices generally rise.


    • Your property taxes will be lower with a low purchase price.


    • Paying a high price now may trap you "under water", meaning you'll have a mortgage debt larger than the value of the house. Then you will not be able to refinance because then you'll have no equity, and will not be able to sell without a loss. Even if you get a long-term fixed rate mortgage, when rates inevitably go up the value of your property will go down. Paying a low price minimizes your damage.


    • You can refinance when you buy at a higher interest rate and rates fall, but current buyers will never be able to refinance for a lower interest rate in the future. Rates are already as low as they can go.






  4. Because buyers already borrowed too much money and cannot pay it back. They spent it on houses that are now worth less than the loans. This means most banks are still actually bankrupt. But since the banks have friends in Washington, they get special treatment that you do not. The Federal Reserve prints up bales of new money to buy worthless mortgages from irresponsible banks, slowing down the buyer-friendly deflation in housing prices and socializing bank losses.

    The Fed exists to protect big banks from the free market, at your expense. Banks get to keep any profits they make, but bank losses just get passed on to you as extra cost added on to the price of a house, when the Fed prints up money and buys their bad mortgages. If the Fed did not prevent the free market from working, you would be able to buy a house much more cheaply.

    As if that were not enough corruption, Congress authorized vast amounts of TARP bailout cash taken from taxpayers to be loaned directly to the worst-run banks, those that already gambled on mortgages and lost. The Fed and Congress are letting the banks "extend and pretend" that their mortgage loans will get

    paid back.

    And of course the banks can simply sell millions of bad loans to Fannie and Freddie at full price, putting taxpayers on the hook for the banks' gambling losses. Heads they win, tails you lose.

    It is necessary that YOU be forced deeply into debt, and therefore forced into slavery, for the banks to make a profit. If you pay a low price for a house and manage to avoid debt, the banks lose control over you. Unacceptable to them. It's all a filthy battle for control over your labor.

    This is why you will never hear the president or anyone else in power say that we need lower house prices. They always talk about "affordability" but what they always mean is debt-slavery.


  5. Because buyers used too much leverage. Leverage means using debt to amplify gain. Most people forget that debt amplifies losses as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or a mortgage rate adjustment, he lost 100% in the real world.

    The simple fact is that the renter - if willing and able to save his money - can buy a house outright in half the time that a conventional buyer can pay off a mortgage. Interest generally accounts for more than half of the cost of a house. The saver/renter not only pays no interest, he also gets interest on his savings, even if just a little. Leveraged housing appreciation, usually presented as the "secret" to wealth, cannot be counted on, and can just as easily work against the buyer. In fact, that leverage is the danger that got current buyers into trouble.

    The higher-end housing market is now set up for a huge crash in prices, since there is no more fake paper equity from the sale of a previously overvalued property and because the market for securitized jumbo loans is dead. Without that fake equity, most people don't have the money needed for a down payment on an expensive house. It takes a very long time indeed to save up for a 20% downpayment when you're still making mortgage payments on an underwater house.

    It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is kept unfairly high because of the Realtor® lobby's corruption of US legislators. On a $300,000 house, 6% is $18,000 lost even if housing prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.


  6. Because the housing bubble was not driven by supply and demand. There is huge supply because of overbuilding, and there is less demand now that the baby boomers are retiring and selling. Prices in the housing market, even now, are entirely a function of how much the banks are willing and able to lend. Most people will borrow as much as they possibly can, amounts that are completely disconnected from their salaries or from the rental value of the property. Banks have been willing to accomodate crazy borrowers because banker control of the US government means that banks do not yet have to acknowledge their losses, or can push losses onto taxpayers through government housing agencies like the FHA.


  7. Because there is still a massive backlog of latent foreclosures. Millions of owners stopped paying their mortgages, and the banks are still not forclosing on all of them, letting the owner live in the house for free. If a bank forecloses and takes possession of a house, that means the bank is responsible for property taxes and maintenance. Banks don't like those costs. If a bank then sells the foreclosure at current prices, the bank has to admit a loss on the loan. Banks like that cost even less. So there is a tsunami of foreclosures on the way that the banks are ignoring, for now. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price. Right now, those foreclosures will wash over the landscape, decimating prices, and benefitting millions of families which will be able to buy a house without a suicidal level of debt, and maybe without any debt at all!


  8. Because first-time buyers have all been ruthlessly exploited and the supply of new victims is very low.

    From The Herald:

    "We were all corrupted by the housing boom, to some extent. People talked endlessly about how their houses were earning more than they did, never asking where all this free money was coming from. Well the truth is that it was being stolen from the next generation. Houses price increases don't produce wealth, they merely transfer it from the young to the old - from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize."

    House price inflation has been very unfair to new families, especially those with children. It is foolish for them to buy at current high prices, yet government leaders never talk about how lower house prices are good for American families, instead preferring to sacrifice the young and poor to benefit the old and rich, and to make sure bankers have plenty of debt to earn interest on. Your debt is their wealth. Every "affordability" program drives prices higher by pushing buyers deeper into debt. Increased debt is not affordability, it's just pushing the reckoning into the future. To really help Americans, Fannie Mae and Freddie Mac and the FHA should be completely eliminated. Even more important is eliminating the mortgage-interest deduction, which costs the government $400 billion per year in tax revenue. The mortgage interest deduction directly harms all buyers by keeping prices higher than they would otherwise be, costing buyers more in extra purchase cost than they save on taxes. The $8,000 buyer tax credit cost each buyer in Massachusetts an extra $39,000 in purchase price. Subsidies just make the subsidized item more expensive. Buyers should be rioting in the streets, demanding an end to all mortgage subsidies. Canada and Australia have no mortgage-interest deduction for owner-occupied housing. It can be done.

    The government pretends to be interested in affordable housing, but now that housing is becoming truly affordable via falling prices, they want to stop it? Their actions speak louder than their words.



  9. Because boomers are retiring. There are 70 million Americans born between 1945-1960. One-third have zero retirement savings. The oldest are 66. The only money they have is equity in a house, so they must sell. This will add yet another flood of houses to the market, driving prices down even more.


  10. Because there is a huge glut of empty new houses. Builders are being forced to drop prices even faster than owners, because builders must sell to keep their business going. They need the money now. Builders have huge excess inventory that they cannot sell at current prices, and more houses are completed each day, making the housing slump worse.




Next Page: Eight groups who lie about the housing market »



The Housing Trap

You're being set up to spend your life paying off a debt you don't need to take on, for a house that costs far more than it should. The conspirators are all around you, smiling to lure you in, carefully choosing their words and watching your reactions as they push your buttons, anxiously waiting for the moment when you sign the papers that will trap you and guarantee their payoff. Don't be just another victim of the housing market. Use this book to defend your freedom and defeat their schemes. You can win the game, but first you have to learn how to play it.

115 pages, $12.50Kindle version available

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382   Tenpoundbass   2021 Mar 27, 10:03am  

Eric Holder says
S&P long term average is ~9% IIRC. Even at 7% $280K will grow into >$1M over 20 years.


You are wrong at your assessment with the S&P, in August of 2000 if I had bought 10 shares $2161, then today I would only have a profit of $168K.
That's a huge gamble it could have gone the other way. When you have a wife and kids, a family that depends on you making smart choices. You don't gamble and piss your money away, while you owe a monthly nut on your family abode. It's the reason for 60% of the divorces out there, the husband does something incredibly stupid with the family finances.
Moreover people who feel compelled to pay off their house early, tend to have goals with the money they save after they paid it off. More like investing it in a cash flow business.

In the last 25 years, I've watched so many people who like to put a large chunk of their paychecks into their company's 401K, watch it calve in half, every time the Bilderbergs feel a financial squeeze, and feel like the commoners are getting too damn rich and high and mighty.

Then people say, yeah but it rebounds and comes back! Yeah if by the grace of God someone like Donald Trump gets elected. And more over people are impressed that their 401K's got back to $500K that they had in 1999 before the tech market crash. When in reality they should have over 2 million in their 401K.

1999 401K cratered, then again in 2007, then again in 2009 they keep losing half their nest egg, every few years, but somehow think they are winning.
383   Patrick   2021 Mar 27, 10:37am  

Tenpoundbass says
assessment with the S&P, in August of 2000 if I had bought 10 shares


Let's check. I can see from Yahoo Finance that S&P was $1518 on June 1st of 2000.

Now it is $3975. What annual percent increase would get that?

Say it has been 21 years (it hasn't quite, but still).

1518 x (1.047 ^ 21) = 3982

So the S&P has had an average annual gain of 4.7% since then. Not that impressive, but that was the very worst time to buy in that decade (1995 - 2005).

If instead we had bought Jun 1st of 2002 for $916, then:

916 x (1.08 ^ 19) = 3953

The S&P has had an average annual gain of 8% since then. Much better.

The lesson seems to be to buy at the right time, lol, though no one can tell you just what the right time is.
385   RWSGFY   2022 Nov 20, 9:50am  

GreaterNYCDude says

Seems the MSM finally agrees with you!

https://www.cnn.com/2022/11/12/homes/buying-a-home-high-rates/index.html


A broken clock is right twice a day.
386   BayArea   2022 Nov 20, 10:15am  

Boy I wish I bought an expensive house at the time this thread started in 2015
387   kmail   2022 Nov 20, 10:52am  

BayArea says

Boy I wish I bought an expensive house at the time this thread started in 2015

do you think houses will be cheaper 10 years from now? you don't have to wish. buy today and you can save yourself from repeating that same comment 10 years from now🙃
388   Blue   2022 Nov 20, 11:50am  

Patrick says




  1. Because house prices in expensive areas still dangerously high compared to incomes and rents. Banks say a safe mortgage is a maximum of 3 times the buyer's annual income with a 20% downpayment. Landlords say a safe price is set by the rental market; annual rent should be at least 9% of the purchase price, or else the price is just too high. Yet in affluent areas, both those safety rules are still being violated. Buyers are still borrowing 6 times their income with tiny downpayments, and gross rents are still only 3% of purchase price. Renting is a cash business that proves what people can really pay based on their salary, not how much they can borrow. Salaries and rents prove that affluent neighborhoods are still in a huge housing bubble, and that bubble seems to be getting more dangerous by the day.


    2. On the other hand, in some poor neighborhoods, prices are now so low that gross rents may exceed 10% of price. Housing is a bargain for buyers ...

Especially with crazy Biden out of control inflation. I know well enough how this one works back from my 3rd world experience to a level that the grocery stores never maintain prices tags as they kept changing every few (not months!) hours. Inflation is not fun unless you are brain-dead leftist kept voting to Dems again(really!). Good times are around to buy a shack if you happen or planing to live outside of super inflated urban centers.
389   Patrick   2022 Nov 20, 12:10pm  

BayArea says

Boy I wish I bought an expensive house at the time this thread started in 2015


Really, why? I've done better in the stock market than I would have done with a house.
390   AmericanKulak   2022 Nov 20, 12:15pm  

Minimum ~30% drop, that doesn't factor in the interest rates either.

Whatever ageda about Foreign Buyers and Blackrock, the vast majority of buyers in the vast majority of areas are taking out a mortgage.
391   B.A.C.A.H.   2022 Nov 20, 12:17pm  

Patrick says

Really, why? I've done better in the stock market than I would have done with a house.

That's right.

And all the Privilege-Of-Ownership-Premium you'd have paid above the cost of renting is money you'd not have been able to spend on investing, retirement (tax deferred) saving, saving for an emergency (like a period of unemployment), toys like cars, frivolties like travel and dining out, private lessons for kids.
392   B.A.C.A.H.   2022 Nov 20, 12:20pm  

BayArea says

Boy I wish I bought an expensive house at the time this thread started in 2015

I dunno, bro.

For the duration of the past seven years, there's been an excessive Ownership Premium above renting paid by those who borrowed to buy then.

Maybe, if you'd have paid cash. But imagine how much more conservatively invested cash would have appreciated since then, with no Property Tax payments.
393   AD   2022 Nov 20, 12:32pm  

AmericanKulak says

Minimum ~30% drop, that doesn't factor in the interest rates either.

Whatever ageda about Foreign Buyers and Blackrock, the vast majority of buyers in the vast majority of areas are taking out a mortgage.


Looking at the median home sales price chart on Ycharts, that would return home prices to mid 2020 levels :-/

Accounting for ~6% inflation in 2021 and ~8% inflation in 2022, that means housing would be well below 2020 price levels :-(

The same was with the S&P 500 when it dropped around 25% below its all time high. Accounting for inflation, it was below February 2020 levels.

.
.
394   B.A.C.A.H.   2022 Nov 20, 12:37pm  

ad says

Looking at the median home sales price chart on Ycharts

Bro, there's little imagination in looking at charts about the past.
395   AmericanKulak   2022 Nov 20, 12:44pm  

ad says

Looking at the median home sales price chart on Ycharts, that would return home prices to mid 2020 levels :-/

Accounting for ~6% inflation in 2021 and ~8% inflation in 2022, that means housing would be well below 2020 price levels :-(

The same was with the S&P 500 when it dropped around 25% below its all time high. Accounting for inflation, it was below February 2020 levels.

Yep, that's why I put it at the minimum drop.

Then we gotta factor in all time record retirements, people trying to downsize and get out of expensive states and big/old houses, etc.
396   B.A.C.A.H.   2022 Nov 20, 1:28pm  

B.A.C.A.H. says

ad says

Looking at the median home sales price chart on Ycharts

Bro, there's little imagination in looking at charts about the past.

AmericanKulak says

Then we gotta factor in all time record retirements, people trying to downsize and get out of expensive states and big/old houses, etc.

Yep. Those realities are not in the retrospective of the charts.
397   kmail   2022 Nov 20, 4:07pm  

i can't believe i've been on this thread for nearly 10yrs haha... everytime something inevitably shitty happens to the market, this thread creeps into my inbox w/an entertaining comment. :)

haha.. i don't even know how i found this forum, but it's become nostalgic and fun. :)
398   Patrick   2022 Nov 20, 4:11pm  

Lol, happy to hear it.

I've become a far, far, far right wing Nazi white far right supremacist MAGA right wing fascist in the meantime, you know. At least according to all the people who moved so far left that they can't even see the center anymore from there.
399   kmail   2022 Nov 20, 5:31pm  

haha... that's funny... i didn't know i was being recognized as privileged, white and racist (my fb "friends") until I was criticized for agreeing with the same sensible/fair policies the "privileged" crowd did. all of a sudden, my opinion different from the herd (zombie hoard) stood out and apart from my "friends." i thought i was chinese american who just agreed with basic values and treating people with fairness and respect. i didn't realize i was right wing until certain ideas didn't agree w/the hoard. always thought of myself more of an independent than a right or left anything. gov, media, and big orgs are mostly corrupt these days. we need a reset to get rid of the blatant corruption in leadership (most of gov).

anyway, i'm rambling... there's fake news and terrible bias on both sides, we just have to be mindful of how bias of news/"facts" are received. nothing's what it appears to be anymore...not even the simple man/woman thing that is as interchangeable as the parts of mr/mrs/mx. potato head! :o
400   DD214   2022 Dec 7, 4:28am  

401   GreaterNYCDude   2022 Dec 9, 9:10am  

Part of it is discipline (or lack thereof). I know the math tells me I should pay the minimum on my mortgage and invest the rest; I choose to pay extra every month. Who wants to pay for 30 years if you can do it in 20?

Part of it the peace of mind factor knowing I'm close to owning my home outright. 100% agree with TPB on that one.

When I unexpectedly was unemployed, the extra payments helped, as I was able to refinance at a lower cost basis, since the principal was paid down. It allowed us to float on my wifes earnings until I found new work. Now the PIIT is less than what I was paying in rent a decade ago. And rents have gone up substantially... 3% per year over 10 years catches up to you. Mortgage is fixed. Taxes have gone up somewhat, but not nearly as much as the rent.

Had I been on the standard 30 year plan, the refi would not have been worthwhile.

Part of it is I know that I wouldn't exclusivly invest the rest... a portion would be spent on "stuff" or "experinces".

And third there are few (if any) guaranteed investments. Sure you can just index fund it, but as Patrick points out... timing matters, even if you dollar cost average.

Despite my 401 k balance being down this year, my net worth has increased over the past year on account of the extra debt that has been paid down, plus the appreciation on the house itself.

Once it's paid off in full.... my cash flow frees up considerably, so long as I don't get stuck with the college bills.

In my view there is a difference between your primary residence and investing in real estate. It's a place to live, not a piggy bank.

I agree that real estate is overvalued once again, particularly in the "starter home" segment. The barrier to entry is real, and for many it does NOT make sense to buy. But these things are cylical. Equilibrium will return... its just a matter of time.
403   SunnyvaleCA   2022 Dec 16, 11:24am  

Patrick says

916 x (1.08 ^ 19) = 3953

The S&P has had an average annual gain of 8% since then. Much better.

The lesson seems to be to buy at the right time, lol, though no one can tell you just what the right time is.

All of that assumes you are buying the house or S&P for full cash. Now do the math buying the house with a 20% down and 3% mortgage verses buying the S&P on 80% margin at 8% interest. Obviously, the house will smoke the S&P (given the favorable purchase time). That said, the danger of a house is that you have to buy an enormous single contract all at once. With the S&P, you can just put spare cash in when you have it.
404   SunnyvaleCA   2022 Dec 16, 11:48am  

Is the "no more than 3x income" rule of thumb accurate for modern times?

That rule has been around for a long time and makes the gross assumption that you can afford 1/3 of your income on housing because you need 2/3 of your income on non-discretionary spending. But consider that people 50 years ago spent a much smaller slice of their income on discretionary spending. If people were willing to cut their lifestyles back to what was standard 50 years ago, people could indeed put 1/2 their income on a house payment.

I'm not saying people should buy a house in over-priced areas. I'm only saying that buying houses has always been a big financial hurdle that required living frugally and that today spending 1/3 of your incoming on the mortgage isn't really living frugally.
405   ForcedTQ   2022 Dec 16, 12:31pm  

SunnyvaleCA says

Is the "no more than 3x income" rule of thumb accurate for modern times?

That rule has been around for a long time and makes the gross assumption that you can afford 1/3 of your income on housing because you need 2/3 of your income on non-discretionary spending. But consider that people 50 years ago spent a much smaller slice of their income on discretionary spending. If people were willing to cut their lifestyles back to what was standard 50 years ago, people could indeed put 1/2 their income on a house payment.

I'm not saying people should buy a house in over-priced areas. I'm only saying that buying houses has always been a big financial hurdle that required living frugally and that today spending 1/3 of your incoming on the mortgage isn't really living frugally.


The leftover income is not just for discretionary, it’s so you have money to invest for future income when you want to/have to retire, and for emergencies or unexpected expenses.
406   Patrick   2022 Dec 16, 12:49pm  

SunnyvaleCA says

Obviously, the house will smoke the S&P (given the favorable purchase time).


No, the S&P would win by even more over a house if you invested in the stock market on margin.

But margin means DANGER. Margin works both ways, bankrupting you quickly when the housing or stock market is declining.
407   clambo   2022 Dec 16, 12:56pm  

I was watching a movie from 1975; the guy riding around had his radio on: "Today the Dow closed at 941."
Today the Dow is about 33,000.
Houses won't do that well.
408   AD   2022 Dec 16, 9:52pm  

S&P 500 average annual return is only about 6.5% since January 2000. Accounting for inflation, it is only about 3.5%. So much for the S&P 500 returning 11% a year over the long term. Has housing done better since January 2000 ?
.



.
409   zzyzzx   2022 Dec 27, 8:47am  

https://www.reddit.com/r/RealEstate/comments/zvgi53/should_i_sell_my_home_in_ca/

we bought our first house back in Dec 2020, we pretty much live paycheck to paycheck and all our money is tied to this house. We can’t even properly maintain the house because we don’t have the money (examples; ductwork, electrical panel, etc) and we’re feeling unhappy with our situation and feel stuck. We are back and forth whether it would be a good idea to sell, pay off debt, get our credit up, be more stable, save the rest of the money and try to buy again in a year or two. Of course we’d have to rent in the meantime and we have the rate 2.5 Apr on this house which is great but is it worth staying? We’d maybe walk away with 100k-130k
412   CBOEtrader   2022 Dec 27, 11:30am  

zzyzzx says






lets see him try to sell that house with rates at 7.5%
413   RWSGFY   2022 Dec 27, 12:00pm  

zzyzzx says







$1K rent doesn't jive with $2M house: in the areas where rents are $1K houses are not $2M and vice versa. Unless the guy was renting from some slumlord in a ghetto shithole which would be weird for someone making the money he said he makes. I also don't see how he could be approved for a loan that big - he certainly doesn't make enough for that.
414   HeadSet   2022 Dec 27, 1:58pm  

RWSGFY says

$1K rent doesn't jive with $2M house:

True, that is the rent for a small 1-2 bedroom apartment even in coastal Virginia.
415   Onvacation   2022 Dec 30, 2:47pm  

HeadSet says


RWSGFY says


$1K rent doesn't jive with $2M house:

True, that is the rent for a small 1-2 bedroom apartment even in coastal Virginia.


Could be renting a room in someone's house. I think he (assuming gender) made stated income PLUS 15K/month in some lucrative gig.

Outlier anecdote illustrating high cost of mortgage and possibility of job loss. There are a lot of SF Bay area mortgagees that are going to be hurting if they lose their job.
416   zzyzzx   2023 Jan 3, 12:23pm  

https://www.marketwatch.com/picks/my-wife-and-i-live-an-average-life-in-the-bay-area-making-320k-last-year-we-bought-a-house-for-200k-over-asking-now-we-dont-want-to-live-in-it-should-we-get-professional-help-01672699874

My wife and I live ‘an average life’ in the Bay Area making $320K. Last year, we bought a house for $200K over asking — now we don’t want to live in it. Should we get professional help?
417   Ceffer   2023 Jan 3, 12:38pm  

zzyzzx says

Should we get professional help?

LOL! They can still afford professional help? How Caligulan of them.
418   clambo   2023 Jan 3, 1:02pm  

It's getting expensive everywhere.
I'm seeing nice but small 2 bed/2 bath condos in La Paz for $170,000-$200,000 (900 -1000 square feet).
And, foreigners have to pay cash! You can't get a mortgage in the USA to "buy" in Mexico as far as I am aware.
419   stereotomy   2023 Jan 3, 3:14pm  

zzyzzx says


Should we get professional help?

Left coast / first world problems.

LOL
420   zzyzzx   2023 Jan 17, 12:05pm  

https://www.businessinsider.com/buyers-remorse-buying-a-home-regrets-2023-1

A 34-year-old first-time homebuyer with a 6.99% interest rate said she regrets the house she just purchased. Do you have buyer's remorse?

In December, a first-time homebuyer paid $585,000 — $35,000 over asking — for a three-bedroom house in Richmond, Virginia, with a mortgage interest rate of 6.99%.

The 34-year-old buyer, who asked to remain anonymous for privacy reasons (because they don't want to be outed as a moron) , hasn't even moved in yet, and already wishes she could take back the decision.

"I did the dumbest thing possible in buying the peak of the market and the peak of interest rates," she told Insider. "It just doesn't make any sense."

I didn't know that you could even pay that much for a house in Richmond, VA...
421   kmail   2023 Jan 17, 12:11pm  

zzyzzx says

https://www.businessinsider.com/buyers-remorse-buying-a-home-regrets-2023-1

A 34-year-old first-time homebuyer with a 6.99% interest rate said she regrets the house she just purchased. Do you have buyer's remorse?

In December, a first-time homebuyer paid $585,000 — $35,000 over asking — for a three-bedroom house in Richmond, Virginia, with a mortgage interest rate of 6.99%.

The 34-year-old buyer, who asked to remain anonymous for privacy reasons (because they don't want to be outed as a moron) , hasn't even moved in yet, and already wishes she could take back the decision.

"I did the dumbest thing possible in buying the peak of the market and the peak of interest rates," she told Insider. "It just doesn't make any sense."

I didn't know that you could even pay that much for a house in Richmond, VA...

really? why not? https://www.redfin.com/city/17149/VA/Richmond/filter/sort=hi-price
i'm not familiar w/that area tho... 600k would be nice in socal tho! :)

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