Average income for $1 million home?

NEW -> Contingent Buyer Assistance Program
[quote author="acpme" date=1211336115][quote author="Masterofdamoney" date=1211335612][quote author="acpme" date=1211334782][quote author="Masterofdamoney" date=1211330091]3 CC's with a total balance of $2000 and monthly payments of $70 combined. </blockquote>


ugh... why do people do that? even with their income, just cut back for a while and just pay that off! they only consider the $70 pymt. that isn't too bad, yeah? spend another grand -- balance of $3000 makes the pymt around $100. hey, not that bad either. maybe i'll spend a wee bit more... $4000.... $5000...

before you know it they have 5-figure cc debt.</blockquote>


Not to seem mean... but that amount of total debt is absolutely unheard-of low. If I look at 100 credit reports, I would bet everything I own that all 100 would contain more than $3000 total debt with $70 in payments. This is on a national level.



If I was looking at California - it's almost unheard of to see debt under $10K. I am pleasantly surprised when I see debt under $25K, in all honesty.



Hell, in OC, $25K is less than the balance on 1 of their car loans. And they will probably have 2 of those. In addition to the $20-50K in revolving debt.



Bottom line - it is low in the EXTREME.</blockquote>




yeah i understand that $2000 in cc debt is nothing (compared to the national level). but when that low, just pay the damn thing off! the shame is society has let debt become acceptable. they're comfortable with $2000, what's next? oh yeah, the home with 97% financing.</blockquote>


It is actually good for your credit to have a small balance on your cards (under 30% of limit) that you pay on each month. And having 2-3 cards with this is the 'sweet spot' of getting that super duper credit rating.



I will agree that 97% financing is not exactly 'financially conservative', however, the FHA programs that allow this are actually designed to get people into homes that are able to afford them. In my mind, you probably can't 'afford' it if you can't put the down payment down... but the government thinks that certain people are socially/economically disadvantaged and need a way 'out' of renting. :)
 
[quote author="three sheets" date=1211345812]<blockquote>If you are a hard working associate at a top law firm (about 5-10 such firms in OC), you can be 1-5 years out of law school and make $200k. If you are married to another attorney, you can push half a million in household income by your late 20s. </blockquote>


I work at a top law firm in OC. As a third year associate I should make about $220k this year. My wife should make about $110k at her nonlaw job. We were penniless and in school when the housing bubble was growing. We are now in our very early thirties and have only been making six figures for two years so we don?t have enough liquid funds to plop down on an expensive (depreciating) home. Even if we did, and after considering the tax savings, I think an $800k + mortgage is quite a bit out of our price range. I don?t think we would be able to save much cash on a monthly basis. We could probably do it, but it wouldn?t be comfortable. I think a $700K (with 20% down) home is reasonable for us.



Many of my coworkers are saddled with $200k + of educational debt. Big law firm lawyers make a lot of money but typically are not extremely wealthy. The only associates I know that live in $1m + houses, bought before the bubble.</blockquote>


Agreed. I too work at a top firm in OC (sheets, are you down the hall?). Folks forget about the debt that young lawyers/doctors carry -- unless daddy paid for law/med school (an all too common situation at my place of work). My spouse and I are being extremely cautious because even though our current annual household income ($300k+) would qualify us for $1M house, there is no guarantee the gravy train will keep on rolling. In fact, the odds say that my income will peak in a year or two and then decrease significantly. The "odds" of which I speak result from the move-up-or-move-on structure at big law firms. This means that most young lawyers leave their firms after 2-4 years and take a big pay cut when they do so. Folks usually leave because of burn-out, a recognition that there is no place for them in the partnership, and/or not wanting to end up like the partners they work with.



I guess my point is that I feel people are overally optimistic that their income will stay steady and/or increase over time. Bottom line = my spouse and I will not even be buying a $0.5M house. We are waiting for a post-2000 3 Bed, 2.5 Bath at <$400,000. That is a ways off in Irvine, but I think/hope we'll get there. We just keep building our down payment in the interim.
 
I think that the median household will buy the lowest quarter of the housing market (since only 2/3 of households own, the rest rent). I suspect this will be condos, and smaller, older SFRs (like all those dogs that IrvineRenter profiles next to the 5 and train tracks).



so for Irvine, housing at the 25% level needs to be ~$250k, the 50% level ~$325k, and the 75% level ~$500k (and of course, the upper 5% still ~$1M)



Doesn't that match up pretty will with IrvineRenter's charted projections?









[quote author="Masterofdamoney" date=1211335734][quote author="freedomCM" date=1211334828][quote author="Masterofdamoney" date=1211330091]



I think the median OC income is $75,000? Something to think about. :)</blockquote>






Actually, worse than that. 2006 census estimates for whole household, not individuals:



Median household income (dollars)

OC: $70232

Costa Mesa: $61535

Irvine: $84720

Hunt. Bch: $75896



http://www.ocregister.com/ocregister/money/article_1834748.php</blockquote>


Your numbers do not bode well, sir.



How can the median home price be more than $250K if those are the median household incomes?



They HAVE to mimic each other... it is illogical to think otherwise.



As Mr. Reeves would say.... WHOA!</blockquote>
 
Sure, the sellers could sell their homes this cheap only if TIC is not releasing new homes. Once TIC releases the new home prices it will set a new price reference points for all resale comps. Sellers will be greedy and raise their dated properties within 12 % of new home price threshold.



On the otherhand may be TIC is reading this now and agrees with Freedom and sell all new homes at 50% off!!



[quote author="freedomCM" date=1211360615]I think that the median household will buy the lowest quarter of the housing market (since only 2/3 of households own, the rest rent). I suspect this will be condos, and smaller, older SFRs (like all those dogs that IrvineRenter profiles next to the 5 and train tracks).



so for Irvine, housing at the 25% level needs to be ~$250k, the 50% level ~$325k, and the 75% level ~$500k (and of course, the upper 5% still ~$1M)



Doesn't that match up pretty will with IrvineRenter's charted projections?









[quote author="Masterofdamoney" date=1211335734][quote author="freedomCM" date=1211334828][quote author="Masterofdamoney" date=1211330091]



I think the median OC income is $75,000? Something to think about. :)</blockquote>






Actually, worse than that. 2006 census estimates for whole household, not individuals:



Median household income (dollars)

OC: $70232

Costa Mesa: $61535

Irvine: $84720

Hunt. Bch: $75896



http://www.ocregister.com/ocregister/money/article_1834748.php</blockquote>


Your numbers do not bode well, sir.



How can the median home price be more than $250K if those are the median household incomes?



They HAVE to mimic each other... it is illogical to think otherwise.



As Mr. Reeves would say.... WHOA!</blockquote></blockquote>
 
[This goes back to a thread I started a few months back titled 'What jobs are in OC?". The bottom line is that OC is a mid-market economy without the large corporate entities requried to create thousands and thousands of $100K+ jobs in things like HR, Product Mgt, Engineering mgt, Office of the Treasurer, sales etc. OC had RE - now it is gone.</blockquote>


What about the Capital Group at Sand Canyon and Irvine Center Drive? A very successful investment management company and the largest private employer in Irvine.
 
Capital Group is a fine company, however with the turmoil in the markets we will see in the years ahead I doubt they'll be growing employment. The failure of the securitization business model has financial services leading the country into a deep and dark recession that IMO will lead equity markets to tank.



Regarding salaries, ipop's anecdotal info portrays a pretty average couple up here. Ipop, does your bro work for a small firm? I make a little more than what you state working as an individual contributor, and he's a VP of sales. There must be some equity component? I would think that role would be $275-400K. A Cisco Global Acct Mgr III starts at $260K as an individual contributor. I know senior engineers at my company that make $200K. An entry level MBA product mgr or MSEE/CS/CE will command $90K-100K. Jobs are plentiful and salaries are high up here. The other big factor up here is that with the plethora of jobs and relatively low population, one can plan strategic moves to scale income. Example: Put in 10-15 yrs with one of the big tech firms, hopefully attain some sort of title, then parlay that to an exec role at a smaller outfit. I saw one recent corporate filing where one of our midlevel execs, who when he left probably made ~$350K, got first year total comp at the new "smaller" firm of >$6M. This is but one example - I could cite many as my company spawned many of the top execs and VCs in the Valley.



Also, on the subject of putting 50% down, if that represents the lions portion of liquid assets/savings then it is not a prudent financial move. Pure OPM is always best (especially if one can afford the debt service at 31% DTI) but in general one wants as little down as possible. Buying less house and working with a best in class fee-only planner to maximize retirement goals with the bulk of the liquid assets would be a much better plan for one's family than buying the massive nest. Except if you're planning on inheriting $5M.
 
[quote author="Boston2theBay" date=1211371938]Capital Group is a fine company, however with the turmoil in the markets we will see in the years ahead I doubt they'll be growing employment. The failure of the securitization business model has financial services leading the country into a deep and dark recession that IMO will lead equity markets to tank.



Regarding salaries, ipop's anecdotal info portrays a pretty average couple up here. Ipop, does your bro work for a small firm? I make a little more than what you state working as an individual contributor, and he's a VP of sales. There must be some equity component? I would think that role would be $275-400K. A Cisco Global Acct Mgr III starts at $260K as an individual contributor. I know senior engineers at my company that make $200K. An entry level MBA product mgr or MSEE/CS/CE will command $90K-100K. Jobs are plentiful and salaries are high up here. The other big factor up here is that with the plethora of jobs and relatively low population, one can plan strategic moves to scale income. Example: Put in 10-15 yrs with one of the big tech firms, hopefully attain some sort of title, then parlay that to an exec role at a smaller outfit. I saw one recent corporate filing where one of our midlevel execs, who when he left probably made ~$350K, got first year total comp at the new "smaller" firm of >$6M. This is but one example - I could cite many as my company spawned many of the top execs and VCs in the Valley.



Also, on the subject of putting 50% down, if that represents the lions portion of liquid assets/savings then it is not a prudent financial move. Pure OPM is always best (especially if one can afford the debt service at 31% DTI) but in general one wants as little down as possible. Buying less house and working with a best in class fee-only planner to maximize retirement goals with the bulk of the liquid assets would be a much better plan for one's family than buying the massive nest. Except if you're planning on inheriting $5M.</blockquote>


Yes Boston, my bro's firm is small so even as VP, he carries a bag as well. I think he's only got 2-3 AE's working for him. I figure their gross revenue is only $15-20M per year. There is an equity component to his comp, but its only available on a liquidity event, so not counted in his average/normal comp I detailed.



He was working a larger publicly traded company and did make more annually, but traded that for a chance for bigger future potential as a result of an equity stake.
 
The bay area, especially silly valley is a different beast. Lot's of people made lots of money off of stock options. Nearly everybody that I know in the BA has at one point or another worked for Oracle. I know many who have cashed a boatload of options from Cisco, Peoplesoft, Siebel, CommerceOne, Arriba, Apple, eBay, Yahoo, Google, Mercury, HP, Symantec, Hyperion, Genentech, and on and on.



We miss the city quite a bit. Nothing like walking out your door and finding 10 great mom and pop restaurants to eat at, pick up some fruit at the corner market and go home. Now parking was a major biatch, but otherwise I loved it up in the city.
 
[quote author="ipoplaya" date=1211435775]

Yes Boston, my bro's firm is small so even as VP, he carries a bag as well.</blockquote>


is it a european carry-all or a purse?
 
[quote author="Boston2theBay" date=1211502808]"carrying a bag" is a term that refers to the old time tech salesguy, carrying a bag full of datasheets.</blockquote>


Furthermore, the term also has nothing to do with wearing a "man-sier" or a "bro."



<strong>Serenity now!</strong>
 
[quote author="IrvineRealtor" date=1211505529][quote author="Boston2theBay" date=1211502808]"carrying a bag" is a term that refers to the old time tech salesguy, carrying a bag full of datasheets.</blockquote>


Furthermore, the term also has nothing to do with wearing a "man-sier" or a "bro."



<strong>Serenity now!</strong></blockquote>


Its funny that you mention that, a plastic surgon buddy of mine just mentioned how he has alot of GUYS he knows that are getting boob jobs.... that is to either decrease the size of the moobs or to actually give themselves pecs.



Sheesh, just excerise ya lazy slobs!



-bix
 
[quote author="biscuitninja" date=1211516962][quote author="IrvineRealtor" date=1211505529][quote author="Boston2theBay" date=1211502808]"carrying a bag" is a term that refers to the old time tech salesguy, carrying a bag full of datasheets.</blockquote>


Furthermore, the term also has nothing to do with wearing a "man-sier" or a "bro."



<strong>Serenity now!</strong></blockquote>


Its funny that you mention that, a plastic surgon buddy of mine just mentioned how he has alot of GUYS he knows that are getting boob jobs.... that is to either decrease the size of the moobs or to actually give themselves pecs.



Sheesh, just excerise ya lazy slobs!



-bix</blockquote>


That's just wrong. Lazy is right. Go workout.
 
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