S/O What is middle class?

[CalDisneyMomof2]

I'm assuming average CA buyer - you are assuming yourself. Most average people now carry both CC debt and college loan debt. Most also have to save for kid tuition. Even if not a 1st time buyer, most do not get $140K equity out of their 1st home to put towards a new one, especially when moving from an even smaller, less desired home to a nicer one. Most have very little savings, even with retirement included. For folks to buy these houses, they are probably not doing the old "80/20" loans for 30 years - they are doing all those new 40/50 year loans and/or balloon payment loans, and putting 5-10% down max. Thus, they will then also be eating PMI for years...

These homes are not truly affordable for them...not unless they are planning to use them as apartments that they eventually give up making about $0 on the sale (since they will have paid down so little and houses can only go up so much more at those salaries)...

I'm assuming myself and people that live in our city/surrounding OC cities. I'm not trying to argue with you. I'm just saying that a PP stated that $170k couldn't afford to live in the OC yet here we and many others in our city are doing it - and we're nowhere near $170k.

And this is our first home. We have $300k in equity (about $240k net if we sold). We would have plenty to put down on a different house and afford to pay the mortgage well under that 28% range.

 

[DawnM]

We make more than that and are considered upper class according to the calculator and there is no way we could afford a $720,000 house! The only debt we have is our mortgage, so it isn't like we are drowning in debt, either.

Sure you could. But you would need to change your lifestyle. If most of you $$ is going towards living expenses, you have to cut back somewhere else or not save as much. If you wanted to live there or had to, you could do it.

 

[DawnM]

I'm assuming myself and people that live in our city/surrounding OC cities. I'm not trying to argue with you. I'm just saying that a PP stated that $170k couldn't afford to live in the OC yet here we and many others in our city are doing it - and we're nowhere near $170k.

And this is our first home. We have $300k in equity (about $240k net if we sold). We would have plenty to put down on a different house and afford to pay the mortgage well under that 28% range.

We are looking at moving back to CA this summer or next. We will have 20% down (in part thanks to our last CA home sale!). We are looking at what we feel we can comfortably afford with two kids in college (most likely a local state school) and both of us working.

We can do it, it will be tighter in some ways, but our income will go up significantly as well.

I can't wait.

Yes, we will have to downsize our house significantly, but it is home and I can't wait to get back.

 

[CalDisneyMomof2]

We are looking at moving back to CA this summer or next. We will have 20% down (in part thanks to our last CA home sale!). We are looking at what we feel we can comfortably afford with two kids in college (most likely a local state school) and both of us working.

We can do it, it will be tighter in some ways, but our income will go up significantly as well.

I can't wait.

Yes, we will have to downsize our house significantly, but it is home and I can't wait to get back.

Brea/Fullerton/Placentia are more affordable OC cities (keep in mind they each have small pockets that aren't so nice - keyword SMALL) if you're looking here. CSUF is literally 3 miles from our house.

 

[DawnM]

Brea/Fullerton/Placentia are more affordable OC cities (keep in mind they each have small pockets that aren't so nice - keyword SMALL) if you're looking here. CSUF is literally 3 miles from our house.

We are not looking at OC, we will prob. move back to the foothills where we moved from. Thanks though.

 

[DaisyJ]

Sure you could. But you would need to change your lifestyle. If most of you $$ is going towards living expenses, you have to cut back somewhere else or not save as much. If you wanted to live there or had to, you could do it.

No, we couldn't. Just because the bank says you can afford a house doesn't mean you realistically can. That is beyond our personal max of three times our income. Not saving as much isn't an option, since we plan on retiring early and comfortably. Cali is not a place we'd ever choose to live and the COL is one of the reasons. We live in a house we can comfortably afford, so we can go on vacations and pay for college.

 

[DawnM]

No, we couldn't. Just because the bank says you can afford a house doesn't mean you realistically can. That is beyond our personal max of three times our income. Not saving as much isn't an option, since we plan on retiring early and comfortably. Cali is not a place we'd ever choose to live and the COL is one of the reasons. We live in a house we can comfortably afford, so we can go on vacations and pay for college.

But that is my point, you COULD do it if you had no choice. You would have to change what you are doing, but you could if you had to.

You HAVE the money, you are just choosing to spend it differently. That is absolutely fine and what we are doing right now as well, but you would not starve if you had to live there.

 

[DaisyJ]

But that is my point, you COULD do it if you had no choice. You would have to change what you are doing, but you could if you had to.

You HAVE the money, you are just choosing to spend it differently. That is absolutely fine and what we are doing right now as well, but you would not starve if you had to live there.

We wouldn't live there, so it doesn't matter.

 

[a742246]

We are in Brea. I'd say most of Brea is far from a bad neighborhood. Our 2,105 Sq Ft. home on 7,000 sq ft lot is worth but $720,000. A household of 4 with $170,000 could easily afford to purchase a home here.

A 720,000 house in Vermont the real estate taxes alone would be over $17,000 a year just curious what are the real estate taxes in Brea for a 720,000 house?

 

[CalDisneyMomof2]

A 720,000 house in Vermont the real estate taxes alone would be over $17,000 a year just curious what are the real estate taxes in Brea for a 720,000 house?

About $7,500 a year. It's not much over 1%.

 

[a742246]

About $7,500 a year. It's not much over 1%.

That 7,500 savings in taxes is about a 150,000 mortgage in itself. I used to live in Pacific Palisades in the 1980's my real estate bill was $1,200 a year back then. I sold that house in 1990 for $320,000. That same house today is over 3 million! Meanwhile, I bought a house in Vermont for 200,000 in 1993 that same house today is worth $200,000. Crazy.....

 

[CalDisneyMomof2]

That 7,500 savings in taxes is about a 150,000 mortgage in itself. I used to live in Pacific Palisades in the 1980's my real estate bill was $1,200 a month back then. I sold that house in 1990 for $320,000. That same house today is over 3 million! Meanwhile, I bought a house in Vermont for 200,000 in 1993 that same house today is worth $200,000. Crazy.....

Oh my goodness, $1,200 a month for real estate taxes??? That is CRAZY! And yes, PP is a VERY pricey area - beautiful - but pricey. We're about 30 minutes inland. Furthest east and north in OC so possibly why prices are so much less.

 

[DawnM]

That 7,500 savings in taxes is about a 150,000 mortgage in itself. I used to live in Pacific Palisades in the 1980's my real estate bill was $1,200 a month back then. I sold that house in 1990 for $320,000. That same house today is over 3 million! Meanwhile, I bought a house in Vermont for 200,000 in 1993 that same house today is worth $200,000. Crazy.....

I so wish I had kept our first house in Pasadena. 1600 sq. ft., 4 bedrooms, at the base of the foothills, $142,000. We could have had that thing paid off, renovated, added on to, etc.....

Now we are looking at moving back.....we have the $$ but Prop 13 would have been wonderful for us.....now we will pay $800/mo. instead of $150 or so. Sigh.

But on a good note, we ran some numbers......with the increase in salary, and the fact that I can carry health insurance for all of us for FREE (saving $700/mo over what we pay now) we should be fine.

 

[a742246]

Oh my goodness, $1,200 a month for real estate taxes??? That is CRAZY! And yes, PP is a VERY pricey area - beautiful - but pricey. We're about 30 minutes inland. Furthest east and north in OC so possibly why prices are so much less.

 

[a742246]

It should have been $1,200 a year I will fix that. Thanx for pointing that out.

 

[erc]

Interesting calculator. I work in software engineering and anyone in engineering can tell you that you either live on 1X engineering salary or 2X engineering salary depending on your child-rearing choices, and the difference is the difference between being middle class and being upper class.

That doesn't stop a co-worker of mine from crying poverty when I know that her husband is a senior engineering manager so between them they are easily pushing $300K in income. Word of advice. When you are a two professional income family, don't talk about money problems with the guy supporting a spouse and kids on a single income.

 

[DawnM]

N/M

 

[perditax]

Interesting calculator. I work in software engineering and anyone in engineering can tell you that you either live on 1X engineering salary or 2X engineering salary depending on your child-rearing choices, and the difference is the difference between being middle class and being upper class.

That doesn't stop a co-worker of mine from crying poverty when I know that her husband is a senior engineering manager so between them they are easily pushing $300K in income. Word of advice. When you are a two professional income family, don't talk about money problems with the guy supporting a spouse and kids on a single income.

Double engineering/no kids household here. (coder and admin respectively.) I keep waiting for the bottom to drop out of the pay in this industry, although I suppose that just because tons of people are getting IT degrees, it doesn't mean they're cut out to do the actual work.

And I assume your complainy friends did the usual and took on way too much debt.

Took the poll, scored upper for this area, apparently 25% of people here are "upper". I don't know, it all seems kind of arbitrary. Who decides what is upper?

When I think "upper class" I think of Richard and Emily Gilmore.

 

[AquaDame]

Well, there is upper middle and upper class... I'm guessing the 25% is the former?

 

[Liberty Belle]

Says middle for us. When I put in our demographics below, it said people with our education in our age and race groups were 58% in upper income tier. We're doing something wrong.