How Do People Afford It?

[ricco67]

Sarah,

What I (and SOME others on here) are merely saying that some people need to pick what they need wisely. If you need an escalade, get an escalade, but be sure to look at all the other options first.

[sarahiki]

Sarah,

What I (and SOME others on here) are merely saying that some people need to pick what they need wisely. If you need an escalade, get an escalade, but be sure to look at all the other options first.

I agree with that.

[Scott08]

Buying a "crappy old" house in Briargrove, West Memorial,West U or River Oaks is not nearly as glamourous as the Generic Mansions they can live in way out of town.

Not so sure about your first two neigborhoods, but ANYONE in the Houston area that doesn't think of West U and River Oaks as upscale neighborhoods obviously hasn't done their homework. As Borat might say "they cannot afford."

[KatieDidIt]

Not so sure about your first two neigborhoods, but ANYONE in the Houston area that doesn't think of West U and River Oaks as upscale neighborhoods obviously hasn't done their homework. As Borat might say "they cannot afford."

"crappy old" was not my sentiment. Its was that of those I lived near in the burbs.

I love my crappy old. It has squeaks and character.

[Gary]

$1000/month for auto fuel??

How is that possible? That's 11 gallons a day (if you drive into town every day). Even if your car only gets 20 mpg, that's 220 miles each day. Are you folks commuting from College Station?

I've got a F250 4X4 with a 7.3 diesel, and at $3.65 a gallon I can easily reach the $1000.00 mark.

[RedScare]

Do yall think property taxes plays a big role? I know my dad built a new house in montgomery country and sold the one in harris just b/c they were so much cheaper in montgomery county. He doesn't think he'd ever be able to retire had he stayed in harris b/c the taxes were so high. I'm not sure about other counties outside of harris besides montg.

This makes no sense. Montgomery County tax rates are much higher than Harris County's. Perhaps he moved to a less valuable home, which would make the total tax bill lower, but the rates up there are higher.

[CDeb]

This makes no sense. Montgomery County tax rates are much higher than Harris County's. Perhaps he moved to a less valuable home, which would make the total tax bill lower, but the rates up there are higher.

But would the assessed value on a similarly sized home be low enough to where the tax bill is lower?

[KatieDidIt]

But would the assessed value on a similarly sized home be low enough to where the tax bill is lower?

Yes, Harris County rarely hits you anywhere close to full market value,especially in older homes.

My comparisons above were on the exact same size house. One 3 years old on a 12,000 sf lot in Montgomery,the other 40 years old on 1/2 of an acre in Harris that actually has a higher market value. We are saving 6 grand a year living in Harris. Remember in Houston you don't get hit with MUD tax and its 2.8 for school and county.

[lockmat]

This makes no sense. Montgomery County tax rates are much higher than Harris County's. Perhaps he moved to a less valuable home, which would make the total tax bill lower, but the rates up there are higher.

I'll have to ask him. I thought that was the case. I do know that he had to fight a couple times to bring the appraisal of the house down.

[TJones]

"crappy old" was not my sentiment. Its was that of those I lived near in the burbs.

I love my crappy old. It has squeaks and character.

I will take a "crappy old" house in West U or River Oaks over a brand spankin' new McMansion in Katy ANYDAY of the week, if they are the same price.

[TAK]

having read this thread, i have come to the conclusion that i'm just cheap, prefer to stick money in the bank as i get older, didn't save enough when i was younger, shouldn't have gotten a divorce (although i didn't lose much money at all), and my parents shouldn't have been poor...

because i make 'enough' and i'm not considering $300k for a house...

[lockmat]

i have come to the conclusion that I just don't make enough money.

[houstonmacbro]

i have come to the conclusion that I just don't make enough money.

You and me both brother!

[musicman]

having read this thread, i have come to the conclusion that i'm just cheap, prefer to stick money in the bank as i get older, didn't save enough when i was younger, shouldn't have gotten a divorce (although i didn't lose much money at all), and my parents shouldn't have been poor...

because i make 'enough' and i'm not considering $300k for a house...

lockmat and houmacbro......listen to TAK.

[houstonmacbro]

lockmat and houmacbro......listen to TAK.

It is sound advice for sure.

[texas911]

This is America! Set some goals. If people want to live in their dream house, then let them work and afford it. Opportunities are endless here. At least here a $300K house is a very very nice house.

[TAK]

This is America! Set some goals. If people want to live in their dream house, then let them work and afford it. Opportunities are endless here. At least here a $300K house is a very very nice house.

I agree with all of this, but still don't know how people who don't make sixfigs are able to pay for a $300k house, save anything, or make it through any type of financial emergency. i understand a little better now - especially if parents are dropping 1/3rd of the purchase price in cash (although, i'd take that cash and invest it for a better return than the 6% i'd save on a mortgage, but i understand that doesn't deliver cashflow, so no house.)

give me $100k and I'll make money for both of us.

[texas911]

But TAK, how do you know what people are making?

[TAK]

if you know what someone does, you have an idea of what they make.

i do know there are alot of people making a lot of money. i'm not denying that. i know a lot of people live in the burbs and make a lot of money, too - because they'd rather pay less for the house and get more space, land, etc...

i want to live in the city and have more space and land... for less... call me greedy.

[sifuwong]

It is just called priorities man! Priorities! Some people like to live in shacks, but drive an Escalade. Others like to live in mansions, but drive an old Buick. Some have money,but live frugally. Others don't have money, but live lavishly. Some spend alot of their money on familys, relatives, etc. Others spend money on themselves only. It goes on and on and on....

[sowanome]

It is just called priorities man! Priorities! Some people like to live in shacks, but drive an Escalade. Others like to live in mansions, but drive an old Buick. Some have money,but live frugally. Others don't have money, but live lavishly. Some spend alot of their money on familys, relatives, etc. Others spend money on themselves only. It goes on and on and on....

Sifuwong... I totally agree with your statement, esp the buick/mcmansion & escalade/shack example. The thing about it, is that if you just go 2 months and track everything that you spend $ on, people will be very "Shocked" @ how much they can actually afford or save...But to each it's own and "It goes on and on".... (@ least a house isn't a depreciating asset)

[woolie]

Ok. I am the scenario in the OP. The answer is you can't afford a $300k home.

We are 24+25 years old. Our household income for 2008 will be right around 80k. We are in the process of buying a $225k 1900sq ft. 3 story townhouse in midtown. Our existing debt is negligible (a few thousand.) We are putting 10% down and have an additional ~20k in savings (this mostly came from an unfortunate early inheritance...) We have no children and do not expect to have children. Our car is a cheap Hyundai and paid off and we are not buying a new car. I ride my bike or take train to work in the TMC. All of our expenses are completely elastic and could easily cut our discretionary spending by half by eating out less (we are excellent restaurant patrons..)

Of course, our household income will be probably be 100k in 2009, 130k in 2011... corresponding to acquisition of a certain professional license and finishing a PhD, respectively. So that factors into our calculations on what we can comfortably afford.

ps. I would never live in the burbs. I'd prefer to live in Museum District or Montrose but it's simply out of our price range.

[DaveMc]

Me, wife, one son, one more on the way - currently in a 3/2/2 @ 1492sf...

I work at home and need an office.

My wife has her own company and needs a separate office.

Currently, my wife offices on our dining room table and I take up a BR. room.

We need one more room. A 3 BR and a study would work for right now, but If the next child is a girl, we'll eventually need another room.

Those are just the "needs".

A play area for the children and their toys would be nice. A guest BR would be nice (although wife's office and guest bedroom could probably be one in the same).

So, we're looking at 4 BR + Study or 5 BR. We don't "need" 2500 SF, but it would be pretty close. We're in 1492 now and can't fit bedroom furniture in the kid's room - fortunately, he's just in a toddler bed - a real bed wouldn't fit with the furniture and toys.

That is why we need 2500sf. 1500sf was perfect when I was single. It was still good when we had no kids. No longer.

Chear, Chear. Those that like to live in the dirty cramped city, more power to ya.

The burbs are great. My wife, three kids and I live very comfortably in our 4200+sq/ft house. Our energy/utility bills are (really) crazy low. I work just a few miles away with a 10 minute commute. I've only needed to go to Houston (med center) a couple times in the last decade.

Different strokes you know.

[20thStDad]

"Dirty, cramped" city with a soul, or shopping center and surface lot covered wasteland of the soul-less suburbs...different strokes indeed. I hope I never end up out in the boonies with every other chain store/restaurant just 5 convenient minutes away.

[sarahiki]

Chear, Chear. Those that like to live in the dirty cramped city, more power to ya.

The burbs are great. My wife, three kids and I live very comfortably in our 4200+sq/ft house. Our energy/utility bills are (really) crazy low. I work just a few miles away with a 10 minute commute. I've only needed to go to Houston (med center) a couple times in the last decade.

Different strokes you know.

just curious, how are your energy bills so low?

[DaveMc]

just curious, how are your energy bills so low?

The house is mediterranean.

Low ceilings,

polished concrete tiles floors downstairs,

white stucco exterior with a North/South exposure.

Well ventilated tile roof

High efficiency appliances

High efficiency HVAC

No MUD

I know it's only winter months but the last five have averaged Water/NG/Electricity/Trash-sewer combined about $150

[sarahiki]

The house is mediterranean.

Low ceilings,

polished concrete tiles floors downstairs,

white stucco exterior with a North/South exposure.

Well ventilated tile roof

High efficiency appliances

High efficiency HVAC

No MUD

I know it's only winter months but the last five have averaged Water/NG/Electricity/Trash-sewer combined about $150

Impressive. That's better than my so-called energy-efficient townhome.

[sowanome]

Ok. I am the scenario in the OP. The answer is you can't afford a $300k home.

Excellent post Wollie, with 10% down you are right on.... I will stick to intial thought and current situation, If you put 20% down and your mtg. only accounts for less than 30% of your monthly income, YOU should be ok, with extra $$$ left over to invest in retirement, vacation, etc. However, you really have to recognize where you're spending your money...(Eating out is usually the #1 culprit, Purchasing Alcohol may be #2)

By the way....LOCATION, LOCATION, LOCATION (If the majority of houstonians wanted to live in the suburbs, why was this post created and why does the inner loop have higher prices psf?) KEEP me IN THE LOOP (or at least near it)...

[infinite_jim]

No MUD

this post is not directed at the quoted poster but this is my itch with the burbs and sprawl in general;

it's parasitic nature in it's thirst for more infrastructure &/or utility services and extensions from the city core

(and that there's no spice in the burbs).

in ref to the thread title:

conspicuous consumption is not a novel concept today, more status quo

[sowanome]

Chear, Chear. Those that like to live in the dirty cramped city, more power to ya.

Different strokes you know.

"Dirty Cramped City?" >>Have you ever been to NYC, Chicago, etc...You don't know cramped/urban if you haven't been to those places....STAY on Your Farm!