The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Tradelite who wrote (1626)	2/19/2002 1:29:47 PM
From: J. P.	Read Replies (1) of 306849

Okay, whatever. I'm still saying you now have to be in the top 10% of income producers to afford being in a neighborhood where those who bought 5 years ago are only in the top 40% of income producers. (I'm not talking about the top 1% neighborhoods). That's a simple fact here in chicago. And who said anything about down payments and such? Who said anything about a Jag or credit cards? That never entered into the discussion as far as I can remember. If I'm living champagne wishes and caviar dreams, that will be news to my wife. What I'm talking about is the disconnect between incomes and new starter homes. Assuming you don't want to spend more than 25% of your gross income on a house payment. 100K a year is about 8K a month, so a 4K house payment for a 400K house is about 50% of your gross. So you have to go down to a 200K house. And a 200K house is a shack. And you have to wait until the end of the year to write it off. Sure, anyone can buy a house at some price point, if you can't afford House A you buy House B, doesn't take a genius. But now House B is pretty crappy by the standards that the top 10% of incomes used to produce.

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