Link

That's a downpayment isn't it? Not a price for the house, right?

If you're in CA, it's most likely not the price for the house.

It's kind of sad the real estate increases, as it creates a real hardship for young first time homebuyers in buying a first home, sometimes regardless of the creative financing options.

Yup, that really stinks. By the time I'm ready to get my own first home, they'll probably be 2 million by then.

$2mil/6 = $333k/yr you'll have to be making at a minimum to afford a traditional mortgage

Most of us find that sad, not funny

Hey, that's for SoCal, at that rate it will be all $3mil for a small house in NorCal. So $500k/yr to afford the mortgage. It's so pathetically sad I think it's funny.

I see no way of affording a house in S. CA, the way I see things now is just pay rent and stash the rest in a IRA to create a downpayment for the house. 2-3 years till the housing bubble pops?

Nope. It'll just cool. Cuz if you think you're the only stashing money for a downpayment, you're wrong. Plenty of people do that, and the ones who started in the early part of this decade will just be getting around to having the $150k downpayment and $100k/yr salary to afford a standard starter home in 2-3 yrs (based on standard assumptions of $600k avg. home price and mortgage = 4.5x income), when the housing bubble cools... but it won't pop, cuz the bubble part is appreciation since 2002, everything else seems like standard supply and demand.

You guys could always buy beachfront property on speculation in Arizona.




<runs>

google the movie cocoanuts 1929

Link

Real Estate
Locating Affordable Luxury Homes
Forbes.com
By Peter Coy

Here's a look at the metro areas where pricey houses are a stretch even for the highly paid -- and where they're within comfortable reach.

Thinking of buying a high-end house in, say, San Francisco? Look out. BusinessWeek's latest reading shows that luxury housing is extremely expensive in San Francisco and many other markets -- even in comparison to the generous incomes of the kind of people who buy pricey homes in those areas.

Luxury homes are most expensive in relation to top-range incomes in San Francisco, San Diego, Los Angeles, and Orange County, Calif., according to the BusinessWeek Luxury Housing Affordability Index, based on first-quarter data. On the East Coast, New York and Miami are nearly as expensive. Boston, Washington, and Seattle are just a little behind (see our real estate slide show, "What a Million Bucks Gets You"). link

At the other extreme, high-end homes are still affordable to wealthy buyers in such cities as Cleveland, Detroit, Pittsburgh, and St. Louis.


AFFORDABLE ST. LOUIS. To calculate the index, BusinessWeek uses the 90th-percentile house price in each metro area -- that is, the price that's lower than 10% of all homes sold but higher than 90% of homes sold (prices are supplied by Fidelity National Financial). We compare the 90th-percentile price to the 90th-percentile family income -- the earnings that are lower than 10% of all incomes in the metro area but higher than 90% of incomes. Taking into account prevailing interest rates, it calculates whether the 90th-percentile family income is high enough to afford a 90th-percentile home.

The higher the index value, the more affordable the homes are. By our measure, St. Louis is tops in affordability among major metro areas with an index of 237, while San Francisco is dead last at 64. Texas cities are excluded from the comparison for lack of data.

So if you're hunting for your slice of high-end real estate heaven, beware the two coasts.


Metro Areas --- Luxury Home Price --- Affordability Index
---Atlanta -------------- $360,000 ------------- 203
---Baltimore ------------ $561,748 ------------- 119
---Boston --------------- $765,000 ------------- 110
---Chicago -------------- $465,000 ------------- 147
---Cleveland ------------ $260,000 ------------- 223
---Denver --------------- $430,000 ------------- 156
---Detriot -------------- $298,250 ------------- 218
---LA-Long Beach -------- $890,000 -------------- 71
---Miami ---------------- $580,000 -------------- 92
---Minneapolis-St. Paul - $411,300 ------------- 168
---New York ------------- $848,500 -------------- 80
---Newark --------------- $620,000 ------------- 139
---Oakland -------------- $869,000 -------------- 96
---Orange County ------ $1,191,500 -------------- 65
---Philadelphia---------- $340,000 ------------- 202
---Phoenix-Mesa --------- $450,000 ------------- 129
---Pittsburgh ----------- $254,900 ------------- 212
---Portland-Vancouver --- $384,000 ------------- 167
---Riverside-San Bern. -- $540,000 ------------- 100
---San Deigo ------------ $922,900 -------------- 70
---San Francisco------- $1,575,000 -------------- 64
---Seattle -------------- $600,000 ------------- 110
---St. Louis ------------ $265,600 ------------- 237
---Tampa-St. Pete-------- $350,000 ------------- 154
---Washington D.C. ------ $737,000 ------------- 114

$1.6 mil is closer to reality, but that's still not going to buy you a luxury home here. You gotta get to at least 2.5mil for that. It will however buy you a luxury condo.