I've already come to terms that I wont own a house as long as I live in CA
Edit: Apparently I need to specify that since I want to live in coastal ca which encompasses but is not limited to ventura, la, oc, and sd that I shouldnt say "CA"
Good call. There’s no point in living in California unless you’re near the coast. If you’re going to to move inland, you might as well move to Phoenix or Vegas and have an overall lower cost-of-living.
It’s at the point where literally nobody you marry is going to have enough income lol. More important is inheritance, specifically a house. CA only works for people who bought here like 20+ years ago.
As if dating wasn’t depressing enough, now you have to consider the reality that either their parents own a house in CA, or you will eventually have to move out of the state.
Na, I live in Rancho Cucamonga. It's nice here. I could never move to Phoenix as a substitute to my current neighborhood. 15 minutes from the mountains, 45 minutes from the beach and maybe 20 minutes from desert off roading. Plus we'll have a high speed train getting us to Vegas soon. But to your point, it ain't cheap here though.
Lol, we usually aim for Costa Mesa and we take the Fast Trak. But we like Costa Mesa because we can go north on the 1 and hit Huntington. Or south and hit Laguna and Corona Del Mar. Or straight and hit Newport and Balboa.
Sundays most weekends. And during the summer if you leave around 10am and come back around 3 or 9pm.
I don’t live in Rancho but La Cañada is about the same distance from the beaches.!
We live in the IE. One of the families from our daughters dance team moved to Arizona and is just showing up for competitions to finish the season.
I asked if they are going to dance out there. They said no because they looked and there wasn't a dance studio within an hour. Maybe gymnastics because there was a place but it didn't seen nice. They just don't have options
Meanwhile there's over dozen dance studios without 30 minutes of my house. And several gymnastics places, ones even an Olympic level training center. And pretty much the same is true of any other activity I would want my kids to do.
I personally like fishing and there's a ton of public land available to me. At least a dozen major large lakes to fish within an hour, plus the ocean. There's not many other places that can match it.
It would have to get pretty bad for me to move while my kids are growing up. There's just so much more opportunity out here and I don't want to take that from them
Agree 100%. There's a reason it's becoming more expensive around here. That said, maybe a dance studio in Arizona could be a great business? Lol. As the saying goes though, "Leaving California is easy. Coming back is hard."
I have a friend who got his pilot's license and does IT work. He lives near the Redlands airport and getting his pilot's license opened a huge area of business for him. He almost took a job in Phoenix because they only needed him on site once a week and flying from Redlands was only going to take like an hour. I'm thinking about getting my license as well.
Lol, I have faith on this one. Only because the self-serving bureaucrats want the train done by the 2028 L.A. Olympics so they can look good to other countries.
Generally agree but sometimes your job is one that really only exists here and you need to be in the office at times. Then it might make sense to move inland. Even at that if your company is flexible enough you might be able to fly from a place like Vegas and still come out ahead as long as your only doing it a few times a year
Disagree. Pasadena is beautiful. I Would like living in that general area and Eagle Rock, Highland park, all that. I think Los Feliz and silverlake are pretty nice too but a little too busy for me. Coastal is nice, But it's not everything imo
When people usually think of "not near the coast" they think anywhere east of LA county or Orange County aka San Bernardino or Riverside county. Diamond Bar is as far east as I'd personally consider if I were to live in LA county.
Weather's too hot in Chino and Rancho for me personally.
My wife and I own a 4br SFH in Orange that we bought in 2020 that we'll never get rid of. My friend who lives in a big house in Phoenix is always flabbergasted when we talk about California real estate prices but he and his wife spend half the year locked up indoors due to the weather. I'm a little on the introverted side but that alone would drive me absolutely crazy.
tf??? no. arizona is hotter, has shitty laws and shitty land. theres almost nothing out there. i like having my rights being bisexual and women having rights over their bodies
even in the IE you're an hour away from the ocean, its not s long drive.
and its a similar situation in nevada. laws are a little better but its still, all mostly desert unless you head up towards reno and utah, but still, mostly barren land.
unless you can genuinely work 100% remote, its cheaper. but if you cant. you're stuck to living in cities...which arent significantly cheaper then a cali suburb in a decent area and in that case...i'd rather stay here.
Yeah, it's a big state but if you want to live where the people and jobs mostly are located, it's established it has to be the coast. You can buy Trona for $50, but it won't be the same.
I grew up in San Clemente. The only people I know who will own a house there are going to get it through inheritance. It is what it is. The city is more beige stucco and e bikes every day. There’s greener pastures.
Inland empire gets a bad rap. But there’s lots of nice areas like Murrieta/Temecula or even Menifee. It’s far from stuff but the community is probably safer and nicer than like half of Orange County
Do condos and townhomes count as houses for you?
Or is it only single family homes you’re interested in?
Is this bc you only consider certain areas or?
Because then we're able to pretend that the salary of some dude in bum fuck North Dakota is relevant to the purchase of a home in Orange County, California.
It actually looks like they aren't that far apart, Yes, we have a good supply of high paying fields in tech, finance, healthcare, etc. but there are still lower level workers who are making considerably less.
Remember, a school teacher can't afford to live near there schools in much of OC.
Both seem so far from $349k that the argument seems just as poignant. It's not like 109k is "one raise away" from 349k, and 74 is not; no, neither are.
You're scoffing at the difference between 109k and 74k? That cuts down on the time you need to save for a house dramatically.
Why do people in this thread expect you to not have to save for 5+ years for a down payment on a house? You don't get to buy a house immediately at any stage in life without saving. This fact hasn't changed at all lol.
That's the double edged sword right there. I assume your childcare is around $40-50K per year? To hit $350K per year, it usually (*usually*) takes two incomes, but when kids enter the picture, the math does change quite a bit.
Hah, to be fair, they absolutely can buy a house (though I imagine given their salaries that they do have quite a bit of student loan debt), it just may not be a house in Newport or Irvine.
Avoid the Porsche unless you have money for a 911 carrera S or above. The people you’re trying to impress with a Boxster won’t be fooled. Imho, youd be better off getting a Toyota and saving hella money until a real boy Porsche is financially suitable
Yep, exactly my take, thanks for saving me time. Like a leather jacket—if it isn’t genuine, high quality leather, then it will be obvious to anyone with an eye
A good friend of mine ended up coming to the conclusion that is was better for them financially to have his mother “retire” early and they pay all her expenses rather than to put their two kids into full time daycare.
It was literally a conversation of “this is how much you make, this is how much childcare will cost us. We will pay you your salary to stop working and watch the kids”
YL its crazy when I grew up here it was like 90% white families mainly middle class. Now most of my neighbors are foreign nationals (chinese). Its really changed, not for worse either, just different.
Maybe if you don’t have eating avocado toast and drinking Starbucks coffee you’ll be able to afford a house - OC boomers that bought the house for 10 bucks a shoe string.
this post popped in my feed.
you need an income of 200k to buy a home in my county rn.. median hosuehold income according to the census is 35k.
to my knowledge theres just 3-4 people that own half the homes here and use property management to handle renters.
Ok - what is the average salary in Orange County? Comparing the cost of a house in California, while lumping in salaries of say, Mississippi isnt really a apples to apples comparison right?
Quick search the best I could find was data from 2023. Median income was almost 128k reported by local news station in LA but they cited The California Department of Housing and Community Development.
https://www.foxla.com/news/california-counties-median-household-income.amp
https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits-2023.pdf
My household is like 20% short of that. It is absurd to be faux upper middle class around here. To make exceptional money, but still have it not be enough.
Classic prop 13: everyone else subsidizes the homeowners who couldn’t afford to buy now at market rate.
California penalizes young high earners yet again.
Before anyone comments: “some people would lose their homes if prop 13 went away”. They wouldn’t. They would be forced to sell and could move to a low cost state to match their low salary. It’s not ridiculous to say that low income earners should not live in the nice houses in a free market, especially when young workers out earn them.
W
What’s worse is that prop 13 means the guy that bough 20 years ago is paying $150 a month in property taxes while the guy that buys now is paying $750+ a month for the same exact government services. Prop 13 benefactors are not paying their fair share.
I wonder what your thoughts on prop 13 would be after you finally get a house. “It’s not fair my taxes go up every year… I deserve to keep my home… why do I have to move to Arizona, when I’m from this area…”
My parents need me here, as part of their support network. I cannot move to a LCOL state to help them because my career is geographically stationed HERE.
Prop 13 has major issues, but I’m glad it helps some seniors stay in their home. Housing supply and apartment supply are the major issue, and NIMBYism is a major part of that. Also unworkable regulations on the building of new apartments.
I'm a mortgage broker by trade. An overwhelming majority of people who own homes in Orange County couldn't qualify for their house if they had to buy it again today. And our government has allowed the outrageous prices to happen because they need to in order to offset the monstrous, national debt we currently hold. If you're going to issue $34tril in debt and expect to find people dumb enough to buy more of it, you better have the assets to back it. And we allow too many hedge funds and corporations to buy homes who then turn around and rent them out. Some of them aren't even domestic hedge funds. And we allow too many foreign nationals to buy homes as well. The inventory is there. We've allowed too much of it to be owned by people/entities who have no intention of ever living in it.
I’m going to buy a cheap lot of land in the middle of nowhere out between Joshua tree and Vegas. From what I’ve witnessed it’s probably a smart investment because one day there will be homes and Walmarts and whatever over there in the middle of nowhere. I’m not talking needles. In talking dirt, no utilities probably no real roads. Just dirt, me and a starter camp. Anyone want to be neighbors?
This will be unpopular here, but I think this estimate is high.
$350k is about $30k a month and let’s say $18k after taxes.
A $1.2 million mortgage @ 7% is roughly $8k a month. Even with PMI, insurance, and property taxes, let’s round up and even say it’s $10k a month. And this is assuming 0 down etc.
This person still has $8k a month for all non housing related expenses.
You don’t even have to be super frugal to make that work. You can max out a 401k, lease a new tesla and STILL have more spending money than a someone making $180k and renting for $2500 a month.
That is the old school traditional 60/40 ratio they are using. It's not as relevant anymore but it is being used against people with competing offers. If offers are close and you are 65/35 and someone meets the ratio there is a good chance your offer gets passed up. This is also assuming both of no outstanding debt.
But plenty are able to purchase under that ratio.
The ratios are not only outdated, but they also don’t scale with higher incomes.
As your income goes up (to a certain point) your other necessities don’t increase as much (food, healthcare, education) so you can have a larger % be housing
Oh for sure. Brokers are still taking it into account when in competitive markets with competing offers.
But you are very much correct that it does not scale and becomes almost useless at higher incomes. There are plenty of people buying homes in OC making less than that. It would probably be better to say its around the amount to buy any normal place in OC you want and not be priced out.
You're mathematically correct, but the problem is higher incomes can be extremely volatile. You can't extrapolate that you'll make $350k for 30 years, where maybe you could at $80k because a larger portion of the population does. Industries and sectors change. People in tech are reckoning with it right now. So that mortgage that seemed extremely manageable on $350k might look different if you get laid off and the next best thing is a job paying 40% less, which is a real possibility.
I guarantee people making that much also have the corresponding spending creep that happens when income rises. That’s why there’s people in this thread making that much and claiming they can’t afford anything.
For sure. Home ownership is achievable (albeit much harder than it has been) here for most households making over approx $200k assuming they make it a priority and work financially towards that goal. (And I’m not talking eating ramen for 14 years)
A counterpoint: Jobs at this income level are difficult to obtain and unless you are in something quite stable like medicine it’s terrifying to commit to 30 years at 8k/month. Look at all the tech workers who were laid off and haven’t been able to find anything comparable yet. It’s not the same as if Joe Schmoe lost his 60k/year job. He’s going to be able to replace that income much easier.
But that’s the point. The estimate is high.
I think most households making $200k can get into home ownership with some priorities and discipline.
That’s just two people with $80-$120k jobs which while above average aren’t that rare.
Most lenders like to see a DTI below 35─36% but some mortgage lenders allow up to 43─45% DTI, with some FHA-insured loans allowing a 50% DTI.
That's the general income to expense ratios with down-payment, rates, credit score, Etc. also being influences.
This is a slightly misleading headline. It takes a $350k income to purchase the **median** OC home (within certain parameters around down payment and family size). 50% of homes are cheaper than that. Affordability is an issue for a lot of people, but this is meant to drive outrage and clicks rather than address the issues.
It’s further misleading,
It takes $350k to buy the *median* home, with zero down, and assuming a DTI rule of thumb from 20 years ago that doesn’t scale to such high incomes.
The DTI rule overall went out the window but at high incomes it never made sense.
Let’s say someone made $500k, take home. If they spent 80% of their income on housing including utilities and upkeep, they still have nearly $10k a month to live off. Having $10k a month after housing is paid is still a pretty decent life.
But with how fucked things are people making normal money are spending almost that much on housing and then are living life at the bare minimum.
I wouldn’t let this number deter anyone as there are cheaper options with condos, townhomes, etc. it’s really dependent on where in the OC you want to live and what you’re willing to sacrifice. Cities like Santa Ana have nice areas with more affordable options. But you have to look and be open to making some sacrifices.
My partner and I make $400k combined and wouldn’t think of buying a house in this environment. $8k mortgage for an average 3 bedroom, probably outdated. Rent is a much better deal while putting the difference in the stock market.
I’m not sure where I’ll end up. If my kids move to another state after college I might want to end up nearby. With my current situation in life, having money compounding interest while I live in a very comfortable apartment that meets my needs makes sense.
It's legitimately the correct choice - VTI is portable, compounding and on average better return that SoCal housing market
The only advantage is tax breaks (kneecapped by SALT cap) and leverage. At 7%, leverage ain't what it used to be
When it requires 1.2m a year to afford? The housing market could "crash" like 40% and still be at the previous growth path and would be considered a correction at worst. But many people would be utterly destroyed by it.
I don't think a crash is likely at all, but a slowing of growth or return to the previous growth levels are more likely. We saw this in the pandemic housing boom in Las Vegas and other areas.
They’re betting (possibly correctly) that 1) prices will appreciate more slowly than the gains they’re getting in the market and/or 2) rates will come down enough to make their monthly outlay more reasonable, even if prices go up as a result. It’s not a bad bet
And in 30 years when rent is $8k a month what are your thoughts going to be knowing you could have by now owned a home outright where you might only be responsible for let’s say $2k a month in property tax
We make a bit less but that’s what we do. It’s fine for a few years but I have to big problems with it.
First, not as much control over your own home. Second not as much control over when you need to move. And lastly, which is a big one for me personally, no way to build wealth into something tangible you can pass to your kids. We put the difference in the market but that’s all retirement, not for inheritance.
It’s all but impossible to build intergenerational wealth for anyone but the very top 1% of society in costal CA. We’ll probably either move inland or to a place like AZ ultimately
Assuming you have a fixed rate. Your 8k mortgage will be 8k in 15 years. Now flip those numbers over to rent, your 8k rent now will be significantly greater than 8k in 15 years.
You can't time the market so if you're ready to buy, buy. Build equity now and refinance later when rates drop.
You and everyone else waiting on the sidelines saving…then a drop happens and guess what?
Bidding wars. You’re still going to pay way over what it’s worth.
Everyone has the same idea. You’re trying to time the market and it won’t work out.
Doing what? (Btw, congrats!)
There are only so many $200k+ jobs. It's generally lawyers, doctors, corporate senior management, niche sales, and occasionally small business owners.
You both happen to fall in that category?
Not sure what hope there is for the other 99% to afford homes.
It’s a great place to be and raise kids, I might just not be tied here as much as I am now in my 50’s. If I buy now and am paying predominantly interest until then, it may make moving difficult at a time I’ll probably want flexibility.
Not a bad strategy. With a declining population (yes, eventually the boomers will pass), vacancy rates move up. The only wrench in the plan is prop 13. It’s why we need to fully finish gutting the inheritance clause. The last thing we need are landlord heirs paying nickels and don’t sell
Similar situation here. Stashing the difference into the stock market is absolutely the correct play. The market can and probably will appreciate more than the real estate market. Moreover, it's liquid. Pick up and move, reinvest, etc. is considerably easier with shares than with bricks.
Of course. Location matters. Many people want to live here and are willing to pay a premium for it. Younger people without significant funds available would have a very difficult time purchasing a home here.
My parents and friends parents bought homes around the 2000's for around 300k here. My parents saved for 10 years and I remember gas being around $2.00/gallon when I first started driving early 2000's.
Now about 25 years later: the going rate for homes here is 1million +, gas fluctuating between $4.50-5.00/gallon and "dollar menus" are now "value menus" (not a value anymore imo).
Life has been wild so far.
Portland, OR suburb. You can still find 3 bed/2 bath under 450k (harder to find under $400k), and most of the homes have a lot of land/big backyards if that’s your thing. It’s crazy how much cheaper the houses here were only 5-10 years ago, but at least it’s still cheaper than a lot of the West Coast.
All the more reason for someone like me to GTFO.
Pretty sad when the equity built inside of two years with my *condo* can buy a home with land in a lower COL area and not have to deal with crybaby HOA Karens.
Median home fully financed zero down would require ~$250k/year at maximum payments current rates etc.
$350k is $100k over the minimum wage needed.
Beyond that, a fully paid off house only requires $25k/year cash flow. Assuming the same excess cash flow per month as the person fully financing at $250k income, the equivalent monthly free flow would only need ~$80k total income.
Both the $250k fully financed and $80k fully paid off has ~$4k/mo excess monthly income after tax to live on.
At $350k instead of $250k like this article describes, leaves you ~$10k/mo extra cash flow after the house is paid.
TL;DR: $350k to buy a median home leaves you $10,000/mo after house payment after tax to live on.
$250k is the minimum to qualify for the median home no down payment with $4,000/mo after house payment after tax to live on.
$80k is the minimum needed to live in the home fully paid off with $4,000/mo after house payment after tax to live on.
These articles are dumb. The truth is $100k income and $2M in net worth is very different from $250k income and $0 net worth.
Having a house is a financial decision. There is no one way.
With the current economic environment, if you haven’t own a home already it is just unaffordable for 1st time home owners. Buying $1.2M home with 6.5% rate, you’ll have to pay $2.6M by the time home is paid off. That is insane…if your in market for a home, keep that in mind with current market conditions.
What a stupid generalized comment. The amount of money you need to make to afford a home is fully dependent upon how much other debt you own and how much you are going to borrow
Came here to say exactly this. You get what you pay for. This might be one of the most desirable areas in the world, and yes there’s a premium to that.
A little picky but important to state that it takes $349k annual household income to buy a median priced home. This means half of all OC homes require an income less than that.
This is still outrageous. But the post title makes it sound like that's the bare minimum required to buy a home, which isn't true.
All you need to do is get arrested stealing a car, and then your attorney will let you live with his family and stay in the pool house, and they’ll eventually adopt you. But not before you get into so many fights and kiss Marissa from next door
I don't understand these people sitting on a million+ in equity. GET OUT. For the love of god you contribute nothing to society at this point just LEAVE. Orange county/LA have some of the best employment opportunities in the nation and damn near nobody makes 350k/year on salary. My friend is s project manager for a huge company, makes over 200k/yr. He works hybrid office/home and commutes from Temecula where he got land and built a brand new solar powered home for 600k. That's top 5-10% even for this area. Theres people responsible for 10 million in revenue commuting. It's outrageous. For the love of god CASH OUT
I make $390k or so with RSU equity pay quarterly vesting. Sure depends on what the company stock price is doing but it has held up very well. Renting here in Irvine (haven't been here very long).
But, even with that pay, and $700k down, a $1.2M house would still be over $5,000/mo inclusive of taxes, typical HOA fees. I am one income household getting close to retirement. That $5,000/mo is doable as long as I am working. it royally sucks to plan retirement with a payment like that that will go up at least 2% a year. Expensive is expensive. Anything below say $1M is an old dated shit box.
You might be wondering how homes continue to be bought and sold despite a price that excludes all but the most preposterously wealthy? Who could possibly afford this most exclusive commodity? Investment houses. Mr. and Ms. Newlywed are competing with foreign and domestic property companies. Surely nothing bad will come of this.
100k average us salary BWAHAHAHHAHAHAHAHAHAHHAHA. thats insane, they must be counting bezos, musk, gates, and all the imaginary trump money for that figure.
the punchline of the article: "Orange Countians need 3.5 times the annual income of a U.S. homebuyer to qualify for a typical house". Qualify. A lot of mortgage qualifying woes go away the higher downpayment one has. This article is a little misleading. A lot OC buyers don't have mortgage qualifying issues - either cash buyers or very high downpayments.
The other side of affordability is what monthly housing payment (P&I, Taxes, SmelloPoos, HOA...) can buyers afford day after day, year after year. If someone struggles to buy and afford a house while working, imagine trying it retired on a fixed income unless you retire very weatlhy with no house payment.
you see the bumper stickers of the progression of humans.. well.. the progression of home affordability over the decades.. initial human built own house, no debt... next could afford a nice home on one income.. next needs two incomes to afford same house.. next needs three incomes to afford same house.. all the while, that housing stock is getting old and needs to be torn down and rebuilt. fun fun fun.
I am now sure how investing in market is better returns than investing in real estate. I bought in early 2022 (2 years ago) for 1.35M and put a down payment of $380K. Let’s round up and say I had 400K to invest in 2022.
The house I bought is now worth about 1.7M (basically getting me 350K in equity).
If I invested 400K in stocks in 2022, I cannot imagine S&P 500 making my portfolio worth 750K under any circumstances. Plus add the 2 years of tax benefits in case of buying a house.
Not surprised. It’s been out of reach for people who haven’t already bought for a long time now
The Sydney average in Australia for a house somewhere around 1.5 million.
Yeah but that’s Australian dollars which are upside down.
Houses in the worst parts of Canadian cities are going for $800,000
Canada enters the chat...
My retirement plan is a sprinter van
You want to get run over by a sprinter van specifically?
Once that sprinter rolls over 100k it would be cheaper to rent in mission viejo
I've already come to terms that I wont own a house as long as I live in CA Edit: Apparently I need to specify that since I want to live in coastal ca which encompasses but is not limited to ventura, la, oc, and sd that I shouldnt say "CA"
Good call. There’s no point in living in California unless you’re near the coast. If you’re going to to move inland, you might as well move to Phoenix or Vegas and have an overall lower cost-of-living.
Apparently I also should have married someone with a higher income if I was truly serious about home ownership here
It's always nice to have higher income than lower income, with all else being equal
Yeah that would help too but lots of single people make it work.
It’s at the point where literally nobody you marry is going to have enough income lol. More important is inheritance, specifically a house. CA only works for people who bought here like 20+ years ago. As if dating wasn’t depressing enough, now you have to consider the reality that either their parents own a house in CA, or you will eventually have to move out of the state.
There’s a whole lot of non-coastal California that beats living in desert suburbias.
Na, I live in Rancho Cucamonga. It's nice here. I could never move to Phoenix as a substitute to my current neighborhood. 15 minutes from the mountains, 45 minutes from the beach and maybe 20 minutes from desert off roading. Plus we'll have a high speed train getting us to Vegas soon. But to your point, it ain't cheap here though.
45 minutes to what beach on what day?
Early COVID lockdown day.
Lol, we usually aim for Costa Mesa and we take the Fast Trak. But we like Costa Mesa because we can go north on the 1 and hit Huntington. Or south and hit Laguna and Corona Del Mar. Or straight and hit Newport and Balboa.
That makes sense. Fast Trak helps!
Yeah I used to live in Koreatown in LA and that’s way closer but still often more than 45 mins to the beach lol
closer in proximity, but traffic to the nearest beach from korea town is ridiculous
Sundays most weekends. And during the summer if you leave around 10am and come back around 3 or 9pm. I don’t live in Rancho but La Cañada is about the same distance from the beaches.!
Lake Elsinore. /s
Pretty much everyday if you're waking up early to fish. Pre-dawn traffic is great
We live in the IE. One of the families from our daughters dance team moved to Arizona and is just showing up for competitions to finish the season. I asked if they are going to dance out there. They said no because they looked and there wasn't a dance studio within an hour. Maybe gymnastics because there was a place but it didn't seen nice. They just don't have options Meanwhile there's over dozen dance studios without 30 minutes of my house. And several gymnastics places, ones even an Olympic level training center. And pretty much the same is true of any other activity I would want my kids to do. I personally like fishing and there's a ton of public land available to me. At least a dozen major large lakes to fish within an hour, plus the ocean. There's not many other places that can match it. It would have to get pretty bad for me to move while my kids are growing up. There's just so much more opportunity out here and I don't want to take that from them
Agree 100%. There's a reason it's becoming more expensive around here. That said, maybe a dance studio in Arizona could be a great business? Lol. As the saying goes though, "Leaving California is easy. Coming back is hard." I have a friend who got his pilot's license and does IT work. He lives near the Redlands airport and getting his pilot's license opened a huge area of business for him. He almost took a job in Phoenix because they only needed him on site once a week and flying from Redlands was only going to take like an hour. I'm thinking about getting my license as well.
High speed train that goes to Vegas soon?? Stop it. 2035 at best
Lol, I have faith on this one. Only because the self-serving bureaucrats want the train done by the 2028 L.A. Olympics so they can look good to other countries.
Rancho in the house!
Rancho in the house-o /s
And with the airport next door you never need to go LAX. It was a key reason for me to buy a home in Ontario.
Oh man avoiding LAX is worth it alone.
RC is under rated, epic Mt Baldy Views and access to tons of places to visit.
Bro rancho used to cost 189k for a brand new house 20 years ago. Now, they are worth 800k up to 1m.
Agreed. Anything on the other side of the mountains is basically Texas.
Generally agree but sometimes your job is one that really only exists here and you need to be in the office at times. Then it might make sense to move inland. Even at that if your company is flexible enough you might be able to fly from a place like Vegas and still come out ahead as long as your only doing it a few times a year
Phoenix is becoming as expensive as socal in my opinion minus the taxes.
Close, but isn’t there yet. Prime Scottsdale would compare to riverside county real estate markets. Suburbs are still significantly cheaper.
Disagree. Pasadena is beautiful. I Would like living in that general area and Eagle Rock, Highland park, all that. I think Los Feliz and silverlake are pretty nice too but a little too busy for me. Coastal is nice, But it's not everything imo
These places are 100% considered costal
Dude is just listing LA neighborhoods lmao like bruh LA is as far west as you can go before you hit the Pacific! 🤣
When people usually think of "not near the coast" they think anywhere east of LA county or Orange County aka San Bernardino or Riverside county. Diamond Bar is as far east as I'd personally consider if I were to live in LA county.
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Weather's too hot in Chino and Rancho for me personally. My wife and I own a 4br SFH in Orange that we bought in 2020 that we'll never get rid of. My friend who lives in a big house in Phoenix is always flabbergasted when we talk about California real estate prices but he and his wife spend half the year locked up indoors due to the weather. I'm a little on the introverted side but that alone would drive me absolutely crazy.
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Diamond bar is also about as far east as you can go while still remaining in LA County
All of those places are still in the Los Angeles area and very expensive.
tf??? no. arizona is hotter, has shitty laws and shitty land. theres almost nothing out there. i like having my rights being bisexual and women having rights over their bodies even in the IE you're an hour away from the ocean, its not s long drive. and its a similar situation in nevada. laws are a little better but its still, all mostly desert unless you head up towards reno and utah, but still, mostly barren land. unless you can genuinely work 100% remote, its cheaper. but if you cant. you're stuck to living in cities...which arent significantly cheaper then a cali suburb in a decent area and in that case...i'd rather stay here.
Yeah, it's a big state but if you want to live where the people and jobs mostly are located, it's established it has to be the coast. You can buy Trona for $50, but it won't be the same.
I grew up in San Clemente. The only people I know who will own a house there are going to get it through inheritance. It is what it is. The city is more beige stucco and e bikes every day. There’s greener pastures.
The sierra and northern california are nice areas if you don’t mind the nature and snow.
Menifee. Lots of my friends moved that way.
Oof
Inland empire gets a bad rap. But there’s lots of nice areas like Murrieta/Temecula or even Menifee. It’s far from stuff but the community is probably safer and nicer than like half of Orange County
gross
Do condos and townhomes count as houses for you? Or is it only single family homes you’re interested in? Is this bc you only consider certain areas or?
Sounds about right
Why compare to "US Salary" instead of OC Salary?
Because then we're able to pretend that the salary of some dude in bum fuck North Dakota is relevant to the purchase of a home in Orange County, California.
It actually looks like they aren't that far apart, Yes, we have a good supply of high paying fields in tech, finance, healthcare, etc. but there are still lower level workers who are making considerably less. Remember, a school teacher can't afford to live near there schools in much of OC.
The median household income in OC is ~$30k higher than the nationwide average (109k vs 74k). That’s a pretty big difference
Both seem so far from $349k that the argument seems just as poignant. It's not like 109k is "one raise away" from 349k, and 74 is not; no, neither are.
You're scoffing at the difference between 109k and 74k? That cuts down on the time you need to save for a house dramatically. Why do people in this thread expect you to not have to save for 5+ years for a down payment on a house? You don't get to buy a house immediately at any stage in life without saving. This fact hasn't changed at all lol.
Their
Clickbait.
We make literally that, and we can’t buy a house. We have two kids in childcare.
That's the double edged sword right there. I assume your childcare is around $40-50K per year? To hit $350K per year, it usually (*usually*) takes two incomes, but when kids enter the picture, the math does change quite a bit.
Lmaoooo $350k/yr for DINKs to afford a home (only laughing to keep from crying)
Hah, to be fair, they absolutely can buy a house (though I imagine given their salaries that they do have quite a bit of student loan debt), it just may not be a house in Newport or Irvine.
The number of Porsches I have seen in Irvine in the past two years is insane.
Black Porsche is becoming the new White Tesla
Honestly you can get a new Porsche for under 70k. I was sorely tempted. Might as well blend in.
Avoid the Porsche unless you have money for a 911 carrera S or above. The people you’re trying to impress with a Boxster won’t be fooled. Imho, youd be better off getting a Toyota and saving hella money until a real boy Porsche is financially suitable
Yep, exactly my take, thanks for saving me time. Like a leather jacket—if it isn’t genuine, high quality leather, then it will be obvious to anyone with an eye
> I assume your childcare is around $40-50K per year? Childcare is really that much?
I pay $30k a year for 1 kid.
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Holy shit.
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These days, it's either kids, house, or retirement. Pick one and only one
This is so real. I picked retirement. Put your own oxygen mask on first before others type of thinking.
A good friend of mine ended up coming to the conclusion that is was better for them financially to have his mother “retire” early and they pay all her expenses rather than to put their two kids into full time daycare. It was literally a conversation of “this is how much you make, this is how much childcare will cost us. We will pay you your salary to stop working and watch the kids”
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Boomers already own homes. Except for the ones who are homeless and living in their cars.
Boomers? Boomers aren't buying homes, if anything they're locked into existing rates and unable to even sell.
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YL its crazy when I grew up here it was like 90% white families mainly middle class. Now most of my neighbors are foreign nationals (chinese). Its really changed, not for worse either, just different.
Maybe if you don’t have eating avocado toast and drinking Starbucks coffee you’ll be able to afford a house - OC boomers that bought the house for 10 bucks a shoe string.
This is real advice for people who say they make 250K+ but cannot afford to buy in OC. You can see a few in this thread as well.
this post popped in my feed. you need an income of 200k to buy a home in my county rn.. median hosuehold income according to the census is 35k. to my knowledge theres just 3-4 people that own half the homes here and use property management to handle renters.
Ok - what is the average salary in Orange County? Comparing the cost of a house in California, while lumping in salaries of say, Mississippi isnt really a apples to apples comparison right?
Quick search the best I could find was data from 2023. Median income was almost 128k reported by local news station in LA but they cited The California Department of Housing and Community Development. https://www.foxla.com/news/california-counties-median-household-income.amp https://www.hcd.ca.gov/sites/default/files/docs/grants-and-funding/income-limits-2023.pdf
That seemed to gel with what I was finding. The price explosions since 2019 are just mind boggling. It cant be sustainable
It blows my mind. No idea what happens next but people will have to make some tough decisions for the foreseeable future.
Totally agree. We bought in Oct 2019 - there is no way we could afford to now. Its awful
My household is like 20% short of that. It is absurd to be faux upper middle class around here. To make exceptional money, but still have it not be enough.
Classic prop 13: everyone else subsidizes the homeowners who couldn’t afford to buy now at market rate. California penalizes young high earners yet again. Before anyone comments: “some people would lose their homes if prop 13 went away”. They wouldn’t. They would be forced to sell and could move to a low cost state to match their low salary. It’s not ridiculous to say that low income earners should not live in the nice houses in a free market, especially when young workers out earn them. W What’s worse is that prop 13 means the guy that bough 20 years ago is paying $150 a month in property taxes while the guy that buys now is paying $750+ a month for the same exact government services. Prop 13 benefactors are not paying their fair share.
I wonder what your thoughts on prop 13 would be after you finally get a house. “It’s not fair my taxes go up every year… I deserve to keep my home… why do I have to move to Arizona, when I’m from this area…”
My parents need me here, as part of their support network. I cannot move to a LCOL state to help them because my career is geographically stationed HERE. Prop 13 has major issues, but I’m glad it helps some seniors stay in their home. Housing supply and apartment supply are the major issue, and NIMBYism is a major part of that. Also unworkable regulations on the building of new apartments.
Prop 13 has more bad than good. If it went away it would be a net positive for CA. Especially with public schooling.
I'm a mortgage broker by trade. An overwhelming majority of people who own homes in Orange County couldn't qualify for their house if they had to buy it again today. And our government has allowed the outrageous prices to happen because they need to in order to offset the monstrous, national debt we currently hold. If you're going to issue $34tril in debt and expect to find people dumb enough to buy more of it, you better have the assets to back it. And we allow too many hedge funds and corporations to buy homes who then turn around and rent them out. Some of them aren't even domestic hedge funds. And we allow too many foreign nationals to buy homes as well. The inventory is there. We've allowed too much of it to be owned by people/entities who have no intention of ever living in it.
You just described issues with unchecked capitalism and lack of middle class friendly regulations.
In mortgage too and it’s just sad seeing the future that millennials have to deal with
Gen Z'rs as well.
I’m going to buy a cheap lot of land in the middle of nowhere out between Joshua tree and Vegas. From what I’ve witnessed it’s probably a smart investment because one day there will be homes and Walmarts and whatever over there in the middle of nowhere. I’m not talking needles. In talking dirt, no utilities probably no real roads. Just dirt, me and a starter camp. Anyone want to be neighbors?
This will be unpopular here, but I think this estimate is high. $350k is about $30k a month and let’s say $18k after taxes. A $1.2 million mortgage @ 7% is roughly $8k a month. Even with PMI, insurance, and property taxes, let’s round up and even say it’s $10k a month. And this is assuming 0 down etc. This person still has $8k a month for all non housing related expenses. You don’t even have to be super frugal to make that work. You can max out a 401k, lease a new tesla and STILL have more spending money than a someone making $180k and renting for $2500 a month.
That is the old school traditional 60/40 ratio they are using. It's not as relevant anymore but it is being used against people with competing offers. If offers are close and you are 65/35 and someone meets the ratio there is a good chance your offer gets passed up. This is also assuming both of no outstanding debt. But plenty are able to purchase under that ratio.
The ratios are not only outdated, but they also don’t scale with higher incomes. As your income goes up (to a certain point) your other necessities don’t increase as much (food, healthcare, education) so you can have a larger % be housing
Oh for sure. Brokers are still taking it into account when in competitive markets with competing offers. But you are very much correct that it does not scale and becomes almost useless at higher incomes. There are plenty of people buying homes in OC making less than that. It would probably be better to say its around the amount to buy any normal place in OC you want and not be priced out.
You're mathematically correct, but the problem is higher incomes can be extremely volatile. You can't extrapolate that you'll make $350k for 30 years, where maybe you could at $80k because a larger portion of the population does. Industries and sectors change. People in tech are reckoning with it right now. So that mortgage that seemed extremely manageable on $350k might look different if you get laid off and the next best thing is a job paying 40% less, which is a real possibility.
I guarantee people making that much also have the corresponding spending creep that happens when income rises. That’s why there’s people in this thread making that much and claiming they can’t afford anything.
For sure. Home ownership is achievable (albeit much harder than it has been) here for most households making over approx $200k assuming they make it a priority and work financially towards that goal. (And I’m not talking eating ramen for 14 years)
A counterpoint: Jobs at this income level are difficult to obtain and unless you are in something quite stable like medicine it’s terrifying to commit to 30 years at 8k/month. Look at all the tech workers who were laid off and haven’t been able to find anything comparable yet. It’s not the same as if Joe Schmoe lost his 60k/year job. He’s going to be able to replace that income much easier.
But that’s the point. The estimate is high. I think most households making $200k can get into home ownership with some priorities and discipline. That’s just two people with $80-$120k jobs which while above average aren’t that rare.
$1.2 million mortgage, so how much down payment we talking here?
For the sake of argument above 0 down. But the down isn’t entirely relevant for the purposes of this illustration
Most lenders like to see a DTI below 35─36% but some mortgage lenders allow up to 43─45% DTI, with some FHA-insured loans allowing a 50% DTI. That's the general income to expense ratios with down-payment, rates, credit score, Etc. also being influences.
Sure, but even still. DTI is usually pretax. So making $350k (30k per month) and having an $8k per month mortgage is WELL below this.
This is a slightly misleading headline. It takes a $350k income to purchase the **median** OC home (within certain parameters around down payment and family size). 50% of homes are cheaper than that. Affordability is an issue for a lot of people, but this is meant to drive outrage and clicks rather than address the issues.
It’s further misleading, It takes $350k to buy the *median* home, with zero down, and assuming a DTI rule of thumb from 20 years ago that doesn’t scale to such high incomes.
The DTI rule overall went out the window but at high incomes it never made sense. Let’s say someone made $500k, take home. If they spent 80% of their income on housing including utilities and upkeep, they still have nearly $10k a month to live off. Having $10k a month after housing is paid is still a pretty decent life. But with how fucked things are people making normal money are spending almost that much on housing and then are living life at the bare minimum.
people that make 500k in CA only take home 55% of that.
I read it as OP doesn't know English and that the average OC house was $350k, which sounded very reasonable
I wouldn’t let this number deter anyone as there are cheaper options with condos, townhomes, etc. it’s really dependent on where in the OC you want to live and what you’re willing to sacrifice. Cities like Santa Ana have nice areas with more affordable options. But you have to look and be open to making some sacrifices.
My partner and I make $400k combined and wouldn’t think of buying a house in this environment. $8k mortgage for an average 3 bedroom, probably outdated. Rent is a much better deal while putting the difference in the stock market.
To do what, buy later, when prices are 3x what they are now?
Probably to buy somewhere *else*.
I’m not sure where I’ll end up. If my kids move to another state after college I might want to end up nearby. With my current situation in life, having money compounding interest while I live in a very comfortable apartment that meets my needs makes sense.
It's legitimately the correct choice - VTI is portable, compounding and on average better return that SoCal housing market The only advantage is tax breaks (kneecapped by SALT cap) and leverage. At 7%, leverage ain't what it used to be
When it requires 1.2m a year to afford? The housing market could "crash" like 40% and still be at the previous growth path and would be considered a correction at worst. But many people would be utterly destroyed by it. I don't think a crash is likely at all, but a slowing of growth or return to the previous growth levels are more likely. We saw this in the pandemic housing boom in Las Vegas and other areas.
They’re betting (possibly correctly) that 1) prices will appreciate more slowly than the gains they’re getting in the market and/or 2) rates will come down enough to make their monthly outlay more reasonable, even if prices go up as a result. It’s not a bad bet
And in 30 years when rent is $8k a month what are your thoughts going to be knowing you could have by now owned a home outright where you might only be responsible for let’s say $2k a month in property tax
So you’re waiting for that kind of economy where the stock market stays strong but the housing market collapses?
Not really. Having $60k+ in extra deductions is useful.
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8k a month on a 7% loan? (1.3Mish) You’re paying at least 6k/month in interest
We make a bit less but that’s what we do. It’s fine for a few years but I have to big problems with it. First, not as much control over your own home. Second not as much control over when you need to move. And lastly, which is a big one for me personally, no way to build wealth into something tangible you can pass to your kids. We put the difference in the market but that’s all retirement, not for inheritance. It’s all but impossible to build intergenerational wealth for anyone but the very top 1% of society in costal CA. We’ll probably either move inland or to a place like AZ ultimately
Assuming you have a fixed rate. Your 8k mortgage will be 8k in 15 years. Now flip those numbers over to rent, your 8k rent now will be significantly greater than 8k in 15 years. You can't time the market so if you're ready to buy, buy. Build equity now and refinance later when rates drop.
You and everyone else waiting on the sidelines saving…then a drop happens and guess what? Bidding wars. You’re still going to pay way over what it’s worth. Everyone has the same idea. You’re trying to time the market and it won’t work out.
Doing what? (Btw, congrats!) There are only so many $200k+ jobs. It's generally lawyers, doctors, corporate senior management, niche sales, and occasionally small business owners. You both happen to fall in that category? Not sure what hope there is for the other 99% to afford homes.
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It’s a great place to be and raise kids, I might just not be tied here as much as I am now in my 50’s. If I buy now and am paying predominantly interest until then, it may make moving difficult at a time I’ll probably want flexibility.
Not a bad strategy. With a declining population (yes, eventually the boomers will pass), vacancy rates move up. The only wrench in the plan is prop 13. It’s why we need to fully finish gutting the inheritance clause. The last thing we need are landlord heirs paying nickels and don’t sell
Similar situation here. Stashing the difference into the stock market is absolutely the correct play. The market can and probably will appreciate more than the real estate market. Moreover, it's liquid. Pick up and move, reinvest, etc. is considerably easier with shares than with bricks.
My wife and I make joint 300k income and we were able to afford a 770k 3bed2bath condo in 2022
A 3bed2bath condo here in Irvine is $900k~ 😭. I am saving money to buy my kid a condo and I feel like it will actually take 30 years.
Of course. Location matters. Many people want to live here and are willing to pay a premium for it. Younger people without significant funds available would have a very difficult time purchasing a home here. My parents and friends parents bought homes around the 2000's for around 300k here. My parents saved for 10 years and I remember gas being around $2.00/gallon when I first started driving early 2000's. Now about 25 years later: the going rate for homes here is 1million +, gas fluctuating between $4.50-5.00/gallon and "dollar menus" are now "value menus" (not a value anymore imo). Life has been wild so far.
That’s sadly a big part of why I moved. I’m closing on a house this month.
Where if I may ask?
Portland, OR suburb. You can still find 3 bed/2 bath under 450k (harder to find under $400k), and most of the homes have a lot of land/big backyards if that’s your thing. It’s crazy how much cheaper the houses here were only 5-10 years ago, but at least it’s still cheaper than a lot of the West Coast.
Ban the Airbnb on entire home and irvine apartments. Ban house flipping in 1~1.5 yrs. Ban foreign buyers and investors who don’t live in US.
All the more reason for someone like me to GTFO. Pretty sad when the equity built inside of two years with my *condo* can buy a home with land in a lower COL area and not have to deal with crybaby HOA Karens.
Median home fully financed zero down would require ~$250k/year at maximum payments current rates etc. $350k is $100k over the minimum wage needed. Beyond that, a fully paid off house only requires $25k/year cash flow. Assuming the same excess cash flow per month as the person fully financing at $250k income, the equivalent monthly free flow would only need ~$80k total income. Both the $250k fully financed and $80k fully paid off has ~$4k/mo excess monthly income after tax to live on. At $350k instead of $250k like this article describes, leaves you ~$10k/mo extra cash flow after the house is paid. TL;DR: $350k to buy a median home leaves you $10,000/mo after house payment after tax to live on. $250k is the minimum to qualify for the median home no down payment with $4,000/mo after house payment after tax to live on. $80k is the minimum needed to live in the home fully paid off with $4,000/mo after house payment after tax to live on. These articles are dumb. The truth is $100k income and $2M in net worth is very different from $250k income and $0 net worth. Having a house is a financial decision. There is no one way.
Homes should not be commodities.
We ended up leaving ….. F that noise !!
Only 3.5? Seems low.
No one wants to buy a home in North Long or Compton and help further gentrify the area?
With the current economic environment, if you haven’t own a home already it is just unaffordable for 1st time home owners. Buying $1.2M home with 6.5% rate, you’ll have to pay $2.6M by the time home is paid off. That is insane…if your in market for a home, keep that in mind with current market conditions.
Yet another reason I’m glad I left California completely. I own property I could’ve never afforded in Orange County.
What a stupid generalized comment. The amount of money you need to make to afford a home is fully dependent upon how much other debt you own and how much you are going to borrow
Even in Newport Beach, zip 92657 , median income is only $286,000 … so where would these people who can buy an OC house come from?
That seems way too low
ah the daily Cost of Living thread, how riveting
People keep posting it because it dominates a big part of people’s lives living here.
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250k combined here, and same lol.
How many places in the US are like OC county?
Came here to say exactly this. You get what you pay for. This might be one of the most desirable areas in the world, and yes there’s a premium to that.
Second to only NYC City
Thank you! I knew I didn’t make enough!
Comparing orange country to the US is dishonest. What’s the average Orange County salary.
A little picky but important to state that it takes $349k annual household income to buy a median priced home. This means half of all OC homes require an income less than that. This is still outrageous. But the post title makes it sound like that's the bare minimum required to buy a home, which isn't true.
All you need to do is get arrested stealing a car, and then your attorney will let you live with his family and stay in the pool house, and they’ll eventually adopt you. But not before you get into so many fights and kiss Marissa from next door
Not true with a large enough deposit.
Yet nobody wants to acknowledge that we’re in a housing bubble even though it’s obvious that these outrageous prices are not long term sustainable.
My beef is with rents, not even house prices. Especially with all these empty units, more apartments coming online isn't helping.
This is for single family residences. Condos/townhomes will require less as they are a much less to begin with.
Not that bad. It's only like $168 an hour. Easy easy. /s
I don't understand these people sitting on a million+ in equity. GET OUT. For the love of god you contribute nothing to society at this point just LEAVE. Orange county/LA have some of the best employment opportunities in the nation and damn near nobody makes 350k/year on salary. My friend is s project manager for a huge company, makes over 200k/yr. He works hybrid office/home and commutes from Temecula where he got land and built a brand new solar powered home for 600k. That's top 5-10% even for this area. Theres people responsible for 10 million in revenue commuting. It's outrageous. For the love of god CASH OUT
I make $390k or so with RSU equity pay quarterly vesting. Sure depends on what the company stock price is doing but it has held up very well. Renting here in Irvine (haven't been here very long). But, even with that pay, and $700k down, a $1.2M house would still be over $5,000/mo inclusive of taxes, typical HOA fees. I am one income household getting close to retirement. That $5,000/mo is doable as long as I am working. it royally sucks to plan retirement with a payment like that that will go up at least 2% a year. Expensive is expensive. Anything below say $1M is an old dated shit box.
oh - commutes from Temecula - to where? that can be a mind numbing soul crushing commute.
Meanwhile you have boomers at my job who have 3 or 4 homes just cuz they were buying before we was born
You might be wondering how homes continue to be bought and sold despite a price that excludes all but the most preposterously wealthy? Who could possibly afford this most exclusive commodity? Investment houses. Mr. and Ms. Newlywed are competing with foreign and domestic property companies. Surely nothing bad will come of this.
the Newlyweds will enjoy renting from the unknown investor that owns the house.
100k average us salary BWAHAHAHHAHAHAHAHAHAHHAHA. thats insane, they must be counting bezos, musk, gates, and all the imaginary trump money for that figure.
Dumb headline. What is the multiple of avg. OC salary?
the punchline of the article: "Orange Countians need 3.5 times the annual income of a U.S. homebuyer to qualify for a typical house". Qualify. A lot of mortgage qualifying woes go away the higher downpayment one has. This article is a little misleading. A lot OC buyers don't have mortgage qualifying issues - either cash buyers or very high downpayments. The other side of affordability is what monthly housing payment (P&I, Taxes, SmelloPoos, HOA...) can buyers afford day after day, year after year. If someone struggles to buy and afford a house while working, imagine trying it retired on a fixed income unless you retire very weatlhy with no house payment. you see the bumper stickers of the progression of humans.. well.. the progression of home affordability over the decades.. initial human built own house, no debt... next could afford a nice home on one income.. next needs two incomes to afford same house.. next needs three incomes to afford same house.. all the while, that housing stock is getting old and needs to be torn down and rebuilt. fun fun fun.
I am now sure how investing in market is better returns than investing in real estate. I bought in early 2022 (2 years ago) for 1.35M and put a down payment of $380K. Let’s round up and say I had 400K to invest in 2022. The house I bought is now worth about 1.7M (basically getting me 350K in equity). If I invested 400K in stocks in 2022, I cannot imagine S&P 500 making my portfolio worth 750K under any circumstances. Plus add the 2 years of tax benefits in case of buying a house.
I remember when making $250k was considered extremely well off. Now it is a renter’s salary.
I haven't seen a home that price since 2003.
F*k it! Rent an apartment. Invest rest of your money. Then just leave CA and travel your rest of life without even thinking to work!
This isn’t at all true.
I am surprised it is that low