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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: fatty who wrote (10872)	5/31/2003 12:14:02 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 306849

A $150k income brings home about $6000 after taxes and deductions. That sounds a little extreme, with a 48% tax rate. Of course its Mass, so anything is possible but that is higher than we pay here. With 12.5k/mo income you should be taking home closer to 8K. And out of that 8K, $4k seems manageable for housing expense, leaving $4K/mo for other. To me that seems alright. That old rule 30% housing expenses starts to become irrelevant at right about this juncture, imo. For a while in 2001 I had housing expenses at 70% of my total take home pay, no problem, because I still had $2500/mo to spend, which really is fine as long as you don't have 2 kids in expensive private school. That seems to be the differentiator.

To: fatty who wrote (10872)	5/31/2003 5:39:11 PM
From: Micawber	Read Replies (1) \| Respond to of 306849

Fatty: You're the one who said We have lots of money to spend on food, entertainment and vacation but we just can't afford a decent house. Now you're saying the taxman is taking more than half your pay and you're barely getting by. Which is it? If you have all this money to spend, then haven't you socked some of it away? If you make a 20% DP on a $600k house, that leaves a $480k loan. At 5%, that's $31k a year. Add $15k for taxes and insurance, and your at $46k, less than a third of your income. What's the big deal? Most of it's deductible. If the taxman is taking that big of a cut, think about getting a new accountant, or calling the moving company.

To: fatty who wrote (10872)	5/31/2003 7:47:37 PM
From: George8	Respond to of 306849

Your case is very true. However, for trading up families who have owned house for a few years, it's often than not that they have had $200k-$300k equity in their lesser house. With current mortgage rate and capital gain exemption, it's not wise not to trade up for those folks.

To: fatty who wrote (10872)	6/1/2003 8:37:10 AM
From: J. P.	Read Replies (3) \| Respond to of 306849

I have the same thoughts about this real estate market. $150K is an income near the top 5% to 10% and yet it does not necessarily afford one an upper crust home. In fact with a top 5% income you may have to stretch to buy what was formerly a plain vanilla "middle class" colonial type house, and in some areas only a ranch house! What's wrong with this picture? Especially when some of the people living in these homes have relatively modest incomes, and originally bought in the area because it was modest and affordable. Modest and affordable now takes an upper crust income. But you suddenly have all these people who never had the drive to earn 100K plus a year with 100K plus windfalls because they bought a modest house to live in a few years ago. And do lower monthly payments make forking over an extra 300K over 30 years alright? Would you gladly pay an extra 20K for a new Toyota if they lower the interest and stretch the financing to 10 years?