Future of real estate in irvine

[OpenSky]

 

[jmoney74]

Nevermind the obvious - that mortgages and bills are monthly and paychecks are typically bi -weekly, which takes a bite out of liquidity for lots of households, save for 2 months a year.

Add 401k withholdings, healthcare premiums, car payments/expenses, child care expenses, 529 savings for x kids, some student debt, out of pocket healthcare costs, tutors, allowances, vacations now and again, sports and arts for the kids. It doesn't leave much left for savings, eating out and a little play time.

$200k is barely enough even for an $850k starter home with typical expenses. Even with 20% down, assuming someone can scrape it together without borrowing against their 401k, which further eats into monthly cash flow.

Let's just say take home $100K

$8333 per month
- 4000 per month for home mortgages and bills

4333 per month

-2K a month for 2 kids

$2,333

So that's what you're probably left with spending if you took home 100K.  Plus car payments.. probably should be driving a civic or something at that rate.

Doctor's wages with a receptionist's ride. Isn't Irvine grand? Mello Roos and HOAs don't matter, right?

I'm just trying to state that it's not hard to do.  Yes.. you can't all live DAT LYFE aka Qwerty lyfe.. and maybe it would really affect his lifestyle currently.. but you can still live an okay lifestyle and not have to shop at the 99 cent store every other weekend at 200K.  The barrier for most first time home buyers is the down payment.  Look at Irvine rents.  $2600 for a 2 bedroom? 

 

[OpenSky]

 

[eyephone]

Nevermind the obvious - that mortgages and bills are monthly and paychecks are typically bi -weekly, which takes a bite out of liquidity for lots of households, save for 2 months a year.

Add 401k withholdings, healthcare premiums, car payments/expenses, child care expenses, 529 savings for x kids, some student debt, out of pocket healthcare costs, tutors, allowances, vacations now and again, sports and arts for the kids. It doesn't leave much left for savings, eating out and a little play time.

$200k is barely enough even for an $850k starter home with typical expenses. Even with 20% down, assuming someone can scrape it together without borrowing against their 401k, which further eats into monthly cash flow.

Let's just say take home $100K

$8333 per month
- 4000 per month for home mortgages and bills

4333 per month

-2K a month for 2 kids

$2,333

So that's what you're probably left with spending if you took home 100K.  Plus car payments.. probably should be driving a civic or something at that rate.

Go in style - civic Si. 

 

[eyephone]

Your not far off - I hear stories people just getting by. Eating cup of noodles/udon/spam/can food on a daily basis.

 

[jmoney74]

Civic Si Hatchback was my first ride.. you always remember the first. 

 

[ps99472]

Civic Si Hatchback was my first ride.. you always remember the first. 

This deserves its own thread!

My first car is also a Honda, the Civic EX Coupe.  Neuspeed 2" drop springs, white Volk TE-37 rims, R.S. Akimoto intake for my rice rocket.  If I gun it, I can beat a Vespa!  Worse part, we paid sticker for the new car, my mom and I didn't know you were suppose to haggle.  And our APR was 19.99%.  We really got swindled, and I will remember that for the rest of my life.

I know one of jmoney's challenge/security questions! 

 

[eyephone]

< previous Civic owner >

 

[gasman]

Right. Cost me thousands over the years. As IC stated, it was finally fixed in 2013. I stand corrected on AMT affecting an increasing group of folks in the middle class - the patch is a significant fix.

LOL...oops, I haven't filed my 2013 returns yet.  Maybe I'll rescind my statement come July/Aug...

...or not.   Not until the lawmakers give me a retroactive rebate on AMT for the past 5 years...

 

[jmoney74]

Civic Si Hatchback was my first ride.. you always remember the first. 

This deserves its own thread!

My first car is also a Honda, the Civic EX Coupe.  Neuspeed 2" drop springs, white Volk TE-37 rims, R.S. Akimoto intake for my rice rocket.  If I gun it, I can beat a Vespa!  Worse part, we paid sticker for the new car, my mom and I didn't know you were suppose to haggle.  And our APR was 19.99%.  We really got swindled, and I will remember that for the rest of my life.

I know one of jmoney's challenge/security questions!

LOL

Man you had it decked out nicely.  I only added an exhaust to mine with some cheapy upgrades that only a part time employee at the family fun center could afford (now boomers). 

Sucks you guys got swindled like that.  The internet is such a huge ally now to look up information on what you should be paying.

 

[eyephone]

Right. Cost me thousands over the years. As IC stated, it was finally fixed in 2013. I stand corrected on AMT affecting an increasing group of folks in the middle class - the patch is a significant fix.

LOL...oops, I haven't filed my 2013 returns yet.  Maybe I'll rescind my statement come July/Aug...

...or not.   Not until the lawmakers give me a retroactive rebate on AMT for the past 5 years...

You shouldn't complain if you vote Democrat. Tax tax...

 

[gasman]

Oh man, I didn't realize the lot of you were rice rocket pilots in a previous life!  This is bringing back memories...oh, the memories...  ;D

 

[qwerty]

I guess I suck at articulating a point.

At least qwerty and IHO (hopefully) get me. Is that progress? Or a step back? 

Progress my friend, progress.

 

[eyephone]

My perspective: When your young you think like a Democrat (govt should fund programs), when your older and make money you think like a Republican (wtf should I pay high taxes to fund govt programs)

 

[OpenSky]

 

[irvinehomeshopper]

You articulated your point well. HOA dues, MR and mortgage for many are a burden for an average family. However many doctors, attorneys and Tech geeks make fairly good living could live in a custom home else where but chose a tract home in Irvine. Tutors and cultural enrichment classes cost about $25k annually. The school competition is so fierce it is really heartbroken to see your child fall and get left behind if one can't afford the extra enrichment courses. The cost of living is much higher. Retail, restaurants, and services are costlier. The comfort is knowing that the house investment and future appreciation is the 401k and takes a gamble by not having money set aside for the future such as medical emergencies and unforeseeable events.

When economy tanks cash is king. Many house rich cash poor were caught in a bind if one loses a job or has medical bills. Immediate cash meant selling the home at the worst market. The last recession was a good example where house rich folks lost their homes and cars to the banks.

I guess I suck at articulating a point.

At least qwerty and IHO (hopefully) get me. Is that progress? Or a step back? 

 

[OpenSky]

 

[paperboyNC]

Interestingly, even switching to an ARM doesn't fully offset the MR and HOAs.

Still not getting it, IC?

By the way, $200k income is hardly upper class in Irvine. That's barely enough for a starter home and not enough for extracurricular activities with a couple kids. AMT and MR/property tax would be meaningful.

Yeah I don't know how you can buy a house in irvine and raise a family on 200k. That alone should be a red flag not to buy in irvine right now.

You can and plenty of people do.  The hurdle for ownership in Irvine is not monthly affordability...it's the 20% down payment.

At $200K, one's monthly gross income is $16666.  Net pay is about $11,000

a $850,000 house at 20% down would mean a mortgage of $680,000...which is a payment of about $3,450 a month.  Add in HOA and taxes of about $1,500 a month...you have housing cost at about $5,000 a month.

Thus you have about $6,000 of disposable income after housing payment even assuming no housing related deductions whatsoever. 

Median household income is only around $90k/yr. My household income is around there and I managed to buy a 2000 sq ft home, have both kids in preschool, own two relatively new vehicles, go on vacation twice a year, etc. You guys saying it's tight on $200k/yr have no clue.

 

[OpenSky]

 

[paperboyNC]

How much did you pay for your home paperboy?

Bought before prices went back up. Paid under $600K ($280/sqft). Monthlies are mortgage of $1900, property tax $500, mello roos $300, hoa $245, insurance $50 = $2995/mo