Author Topic: Where the market is - Buyer Offers  (Read 86754 times)

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Offline eyephone

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Re: Where the market is - Buyer Offers
« Reply #60 on: March 29, 2021, 06:04:10 PM »
Those who are looking to buy a home, what's your budget?

looking for a newer 1 or 2 bed townhome, around the low 500's

That's tough in Irvine especially if you want a "newer." Stonegate East or Woodbury East will sometimes have 1bed-plus-den with that price range so stay tuned.

But you did not help that person find a partner for dual income. (to buy a house)


Offline kpatnps

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Re: Where the market is - Buyer Offers
« Reply #61 on: March 29, 2021, 10:37:25 PM »
Salary increases dramatically in the past 5 years. The 9 month salary for a fresh finance/accounting assistant professor in the UC system has increased from 200k to 300k.

I highly doubt it.

There could be a miniscule % of tentured professors making tha kind of salary, but fresh guy? nO way.

UC salaries are public. should be fairly easy to search.

https://transparentcalifornia.com/

See where all your tax monies go.


Offline kpatnps

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Re: Where the market is - Buyer Offers
« Reply #62 on: March 29, 2021, 10:38:57 PM »
Most of my clients are professionally employed with dual income households....legal, medical, dental, finance, engineering, etc.  I'd venture to guess that 80% of them have household incomes from $200k to $500k.

200 to 500K is a big range.  Might as well say 99% of your clients are between 100k and 1M.

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Re: Where the market is - Buyer Offers
« Reply #63 on: March 30, 2021, 12:23:01 AM »
Most of my clients are professionally employed with dual income households....legal, medical, dental, finance, engineering, etc.  I'd venture to guess that 80% of them have household incomes from $200k to $500k.

200 to 500K is a big range.  Might as well say 99% of your clients are between 100k and 1M.

Ok fair enough, more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment. I've noticed that some higher earning first-time buyers tend to have somewhat limited down payment funds from savings which reduces their ultimate maximum purchase price. 
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Offline daedalus

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Re: Where the market is - Buyer Offers
« Reply #64 on: March 30, 2021, 01:59:39 AM »
more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment.

They can qualify for that, but I think you've said in the past that most buyers spend conservatively, right?   Even 5x seems like it's pushing it to me.  For a couple grossing $300k and buying a $1.9M home ($1.5M loan)...That's ~$6300/month just for P&I (@ 3%).  Add in Taxes, HOA, insurance, mello-roos...  ~$10k/month?  Give or take.
$25k gross -30% equivalent taxes all in, -10% retirement savings...  $15k take home

$15k - $10K = $5k left to pay for everything else.  Not starving by any means, unless they have young kids in daycare @ $1500 each.  Then it gets pretty tight.  Car payments, insurance, food, utilities...nothing left for the annual vacay to Disneyworld.  Unless we're not saving for retirement.   :o


Offline akkord

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Re: Where the market is - Buyer Offers
« Reply #65 on: March 30, 2021, 06:02:34 AM »
more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment.

They can qualify for that, but I think you've said in the past that most buyers spend conservatively, right?   Even 5x seems like it's pushing it to me.  For a couple grossing $300k and buying a $1.9M home ($1.5M loan)...That's ~$6300/month just for P&I (@ 3%).  Add in Taxes, HOA, insurance, mello-roos...  ~$10k/month?  Give or take.
$25k gross -30% equivalent taxes all in, -10% retirement savings...  $15k take home

$15k - $10K = $5k left to pay for everything else.  Not starving by any means, unless they have young kids in daycare @ $1500 each.  Then it gets pretty tight.  Car payments, insurance, food, utilities...nothing left for the annual vacay to Disneyworld.  Unless we're not saving for retirement.   :o

I think USC mentioned most buyers are conservative in this area, so I wouldn't think they would go for what they max qualify for so 1-1.5mm depending on down with a 600-800k loan is would be a lot more realistic and manageable.  That's assuming they can find a 1mm home these days.    :-\ 

Offline OCtoSV

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Re: Where the market is - Buyer Offers
« Reply #66 on: March 30, 2021, 08:22:54 AM »
Most of my clients are professionally employed with dual income households....legal, medical, dental, finance, engineering, etc.  I'd venture to guess that 80% of them have household incomes from $200k to $500k.

200 to 500K is a big range.  Might as well say 99% of your clients are between 100k and 1M.

Ok fair enough, more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment. I've noticed that some higher earning first-time buyers tend to have somewhat limited down payment funds from savings which reduces their ultimate maximum purchase price.

Needing 2 earners to achieve $250-350K/yr and trying to buy a 1.5M house is just insane unless the down is >$500K. It also leaves no room for one of them to stay home with kids.

2 earners in my neighborhood in SV (not the fanciest by any means but somewhat Irvine-like in demographics) is typically $350-500K+, with median home sales price $1.5M.

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Offline zovall

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Re: Where the market is - Buyer Offers
« Reply #67 on: March 30, 2021, 08:37:53 AM »
Needing 2 earners to achieve $250-350K/yr and trying to buy a 1.5M house is just insane unless the down is >$500K. It also leaves no room for one of them to stay home with kids.

Do you mean the option for one parent to not work and stay home with kids? Did you take that option or is it more about knowing that you could take that option if desired?

Offline Cornflakes

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Re: Where the market is - Buyer Offers
« Reply #68 on: March 30, 2021, 08:55:50 AM »
more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment.

They can qualify for that, but I think you've said in the past that most buyers spend conservatively, right?   Even 5x seems like it's pushing it to me.  For a couple grossing $300k and buying a $1.9M home ($1.5M loan)...That's ~$6300/month just for P&I (@ 3%).  Add in Taxes, HOA, insurance, mello-roos...  ~$10k/month?  Give or take.
$25k gross -30% equivalent taxes all in, -10% retirement savings...  $15k take home

$15k - $10K = $5k left to pay for everything else.  Not starving by any means, unless they have young kids in daycare @ $1500 each.  Then it gets pretty tight.  Car payments, insurance, food, utilities...nothing left for the annual vacay to Disneyworld.  Unless we're not saving for retirement.   :o

The way you did math is pretty accurate and you are right, it is very tight. I think that if you are buying 1.9M home, one of these two conditions has to be met to make the numbers work for borrower and for the lender.

1. If 300k income, better have lower LTV more like 60% or less. Then you get a nice cut in interest rate, payments are a bit lower etc..
2. If 80% LTV, better have income north of 450k. Higher the better.

Offline Mety

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Re: Where the market is - Buyer Offers
« Reply #69 on: March 30, 2021, 11:08:45 AM »
Those who are looking to buy a home, what's your budget?

looking for a newer 1 or 2 bed townhome, around the low 500's

That's tough in Irvine especially if you want a "newer." Stonegate East or Woodbury East will sometimes have 1bed-plus-den with that price range so stay tuned.

But you did not help that person find a partner for dual income. (to buy a house)

You can try that, but a real faithful wife is a gift from God. So even if you end up introducing someone for him, you don't get the credit. 

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Offline eyephone

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Re: Where the market is - Buyer Offers
« Reply #70 on: March 30, 2021, 11:22:20 AM »
Those who are looking to buy a home, what's your budget?

looking for a newer 1 or 2 bed townhome, around the low 500's

That's tough in Irvine especially if you want a "newer." Stonegate East or Woodbury East will sometimes have 1bed-plus-den with that price range so stay tuned.

But you did not help that person find a partner for dual income. (to buy a house)

You can try that, but a real faithful wife is a gift from God. So even if you end up introducing someone for him, you don't get the credit.

Yes, you can not force a relationship. But that person wants the dual income to buy a house or something. Idk

* I take that back, I guess you can do an arrange marriage and charge a fee. jkjk
« Last Edit: March 30, 2021, 12:54:50 PM by eyephone »

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Re: Where the market is - Buyer Offers
« Reply #71 on: March 30, 2021, 12:51:28 PM »
more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment.

They can qualify for that, but I think you've said in the past that most buyers spend conservatively, right?   Even 5x seems like it's pushing it to me.  For a couple grossing $300k and buying a $1.9M home ($1.5M loan)...That's ~$6300/month just for P&I (@ 3%).  Add in Taxes, HOA, insurance, mello-roos...  ~$10k/month?  Give or take.
$25k gross -30% equivalent taxes all in, -10% retirement savings...  $15k take home

$15k - $10K = $5k left to pay for everything else.  Not starving by any means, unless they have young kids in daycare @ $1500 each.  Then it gets pretty tight.  Car payments, insurance, food, utilities...nothing left for the annual vacay to Disneyworld.  Unless we're not saving for retirement.   :o



I agree, just because they would be approved for a $1.5m loan amount doesn't mean that they go that high.  A typical buyer with that type of income would tend to get a loan of $900k to $1.1m hence why I state that pretty much all of my Irvine buyers are underbuying.
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Offline OCtoSV

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Re: Where the market is - Buyer Offers
« Reply #72 on: March 30, 2021, 03:38:48 PM »
Needing 2 earners to achieve $250-350K/yr and trying to buy a 1.5M house is just insane unless the down is >$500K. It also leaves no room for one of them to stay home with kids.

Do you mean the option for one parent to not work and stay home with kids? Did you take that option or is it more about knowing that you could take that option if desired?

I took that option early on when the wife got preggo and fortunately have scaled my earnings since that time to buy our house/fund our lifestyle and retirement investing on 1 income.

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Offline kpatnps

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Re: Where the market is - Buyer Offers
« Reply #73 on: March 30, 2021, 07:04:53 PM »
more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment.

They can qualify for that, but I think you've said in the past that most buyers spend conservatively, right?   Even 5x seems like it's pushing it to me.  For a couple grossing $300k and buying a $1.9M home ($1.5M loan)...That's ~$6300/month just for P&I (@ 3%).  Add in Taxes, HOA, insurance, mello-roos...  ~$10k/month?  Give or take.
$25k gross -30% equivalent taxes all in, -10% retirement savings...  $15k take home

$15k - $10K = $5k left to pay for everything else.  Not starving by any means, unless they have young kids in daycare @ $1500 each.  Then it gets pretty tight.  Car payments, insurance, food, utilities...nothing left for the annual vacay to Disneyworld.  Unless we're not saving for retirement.   :o

100% agree with you.  300K income with a 1.9M home is insane in my opinion.  This is the classic example of being house poor imo. 

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Re: Where the market is - Buyer Offers
« Reply #74 on: March 30, 2021, 07:34:36 PM »
more than 50% of my Irvine buyers have household incomes from $250k to $350k (the majority of these are dual-income households).  Assuming that buyers don't have any significant outstanding recurring debt obligations (car loans/leases, student loans, etc), they can easily qualify for a loan of 5-6x their annual pre-tax income assuming they have the required downpayment and reserves with today's interest rate environment.

They can qualify for that, but I think you've said in the past that most buyers spend conservatively, right?   Even 5x seems like it's pushing it to me.  For a couple grossing $300k and buying a $1.9M home ($1.5M loan)...That's ~$6300/month just for P&I (@ 3%).  Add in Taxes, HOA, insurance, mello-roos...  ~$10k/month?  Give or take.
$25k gross -30% equivalent taxes all in, -10% retirement savings...  $15k take home

$15k - $10K = $5k left to pay for everything else.  Not starving by any means, unless they have young kids in daycare @ $1500 each.  Then it gets pretty tight.  Car payments, insurance, food, utilities...nothing left for the annual vacay to Disneyworld.  Unless we're not saving for retirement.   :o

100% agree with you.  300K income with a 1.9M home is insane in my opinion.  This is the classic example of being house poor imo. 

Unless the buyer is putting a larger downpayment.  Some people need a larger home because they have 3-4 kids and/or have parents living with them.  Each situation is different. 
Martin Mania, CPA
AgencyOne
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CA CPA License # 107675
mmania001@yahoo.com
714-747-3884 cell

Often imitated....Never duplicated!
Have license, will travel!

 

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