No. of Recommendations: 2
When I bought my first house in 1988, it cost me about 1.3 times my then annual salary. And it was a two family home of which I could rent out the right half.
My daughter is looking at homes in a market where homes are essentially about 15 times her annual salary. Of course she could move out of Sandy Eggo to the absolute boondocks of South Carolina where she could get a fine house for only 5 times her annual salary.
Sure, and a similar story can be told about what my parents paid for their first home and what I paid for mine. Difference is that I had to move away from home because of the high cost of living, buying a property in a much cheaper area several states away. I started with a banal non-HGTV worthy property, on a busy road, that I then fixed and put into rental service when I moved into my next fixer upper in a better location. It's important to note that I learned on the job, coming in to home ownership with little more than having hung out as Daddies Helper as a kid, while he worked on the house and yard. Contractors have never been cheap. The only thing that seems to be new under this sun is the unwillingness to buy anything other than that perfect HGTV ready property, to start with a first time buyer place that will be traded in as one builds equity. There is an entitlement issue with people seemingly feeling they should be able to afford Tiffany type areas, instead of starting at Walmart neighborhoods. Because they can't get what they want at their price point, the whining about it's so unfair starts. You can't always get what you want, so go for what you need. Truly, the disconnect between understanding needs vs wants is incredible to me as technology firms spits out endless toys. In some ways I think we have done our kids a disservice in not allowing them to be truly poor for any period of time. One learns to make tough decisions, to think outside the box and develops grit with the challenge of unaffordability. One learns to ask themselves "What do I need," rather than mindlessly buy what they want.
Our 30 year old is moving from Atlanta to Portland Maine, in part because he wants a stand alone home, not a condo. From what I've seen on Realtor.com, it should be about 2 times his salary.
IP
