Parasol Park

[paperboyNC]

Home cost vs income is overly simplistic. Even mortgage size vs income changes based on interest rates. Since this thread is about Parasol Park, for those with a large down payment the property taxes can easily exceed the mortgage.

Heck, I bought in the downturn and my property tax is 50% the size of my mortgage. Property tax plus HOA plus home insurance is 70% of the mortgage.

 

[irvinehomeowner]

If they have cars paid off, no loans, no private school, take home is like $20-25k per month and mortgage is ~$5k/mo.

Holy smokes! Take home pay after tax of $25k? That's an annual income of close to $450K. How many buyers like this exists Irvine, especially for a house with no drive way?

Actually from the original post, it's $500k annual income.

I actually think if a household has been making that kind of income for a few years (at least ramping up to it), they should have enough savings (or at least current real estate to cash in) that they could afford more than $1.2m.

 

[homer_simpson]

If they have cars paid off, no loans, no private school, take home is like $20-25k per month and mortgage is ~$5k/mo.

Holy smokes! Take home pay after tax of $25k? That's an annual income of close to $450K. How many buyers like this exists Irvine, especially for a house with no drive way?

Actually from the original post, it's $500k annual income.

I actually think if a household has been making that kind of income for a few years (at least ramping up to it), they should have enough savings (or at least current real estate to cash in) that they could afford more than $1.2m.

Or they could have blown in on exotic cars and lavish vacations 

 

[Bullsback]

I've said it before in my past post. Shouldn't purchase something more than 2x your total income

Easy for Mr. 7 Figures to say.

Us 99%ers have to stretch to 4-5x in Irvine.

I dunno,  $500k household with 20% down seems like okay ratios to purchase $1.2m.

Yeah - I'd agree with you. In general, I'd think the average buyer in Irvine would be at 4-6x (at least for those putting money down).  Probably closer to 5-6 vs. on the 4 side. Would think there is a much smaller percentage of new buyers at 2x.  That said, I think there are quite a few who put down a lot more money (wait to save) and thus, if you looked at it more from a loan amount perspective, there I think you get to where quite a few would be in that 2-3x argument (due to putting 30-50% down). 

 

[Bullsback]

If they have cars paid off, no loans, no private school, take home is like $20-25k per month and mortgage is ~$5k/mo.

Holy smokes! Take home pay after tax of $25k? That's an annual income of close to $450K. How many buyers like this exists Irvine, especially for a house with no drive way?

Actually from the original post, it's $500k annual income.

I actually think if a household has been making that kind of income for a few years (at least ramping up to it), they should have enough savings (or at least current real estate to cash in) that they could afford more than $1.2m.

I generally thought I was conservative, but 500K at 1.2M seems more then reasonable (especially if they have been making it for a while).  That said, everything is relative and they might have significant investments in whatever business is generating the half mill per year, thus liquid cash is much smaller (or spend lots of money on cars, etc). 

 

[irvinehomeowner]

If they have cars paid off, no loans, no private school, take home is like $20-25k per month and mortgage is ~$5k/mo.

Holy smokes! Take home pay after tax of $25k? That's an annual income of close to $450K. How many buyers like this exists Irvine, especially for a house with no drive way?

Actually from the original post, it's $500k annual income.

I actually think if a household has been making that kind of income for a few years (at least ramping up to it), they should have enough savings (or at least current real estate to cash in) that they could afford more than $1.2m.

Or they could have blown in on exotic cars and lavish vacations 

Confession time?

I come from a 99%er lifestyle... so I don't factor in Lambos and 8-week European luxury vacations.

 

[capboba]

Is there a price sheet and site plan that anyone can share?

were you looking for the somerset one or..?

 

[Goriot]

Kinda have to agree with themarketing guy on this.  A household pulling $500k shouldn't be looking at a $1.2m home.  After taxes, investments, misc. expenses there isn't much left over. 

I've said it before in my past post. Shouldn't purchase something more than 2x your total income unless you got a lot to put down or a lot saved up for a rainy day.  I have a lot of friends who made this mistake and have paid for it when SHTF. 

Be smart with your money and don't over stretch.  There's more to life then buying the biggest and baddest house or car. 

#Don'tkeepupwiththeLees

2x your income is way too conservative.  Ofcourse this is over simplification, but if you use this calculation obviously most people in Irvine/SF would have missed the RE appreciation Boat in the past 5 years and regretting it by now.  What are most of Asian cities running at these days? 8x to 12x annual income without tax benefit from interest deductions because they usually put down 50%+ down?  I say people with sustainable $500k annual income most likely would have enough savings to make 30%+ down payment and can stretch beyond $1.5mm.  I wonder how many of Irvine households would have $500k+ incom?

 

[someguy]

It's beginning to smell a lot like Chri... bubbles.

 

[irvinehomeowner]

P.S. At $500k income, there are better places to buy than Parasol Park.

 

[eyephone]

P.S. At $500k income, there are better places to buy than Parasol Park.

In other words, that's not my first choice? 

 

[bones]

Maybe this is less about ratios and more about millenials' general disinterest in homeownership

 

[AW]

Maybe this is less about ratios and more about millenials' general disinterest in homeownership

That and cars...

 

[Bullsback]

Maybe this is less about ratios and more about millenials' general disinterest in homeownership

I don't think millennials disinterest in homeownership is tied to them not wanting to own homes...more to them being unable to afford them. They do want and appreciate different things, so how much they set aside for houses vs. other spend could differ, and what they look for in a house differs, but in general, most of them still want to own a home. 

I am a millenial so I figure I can speak for all of them, haha.

 

[usctrojancpa]

I've said it before in my past post. Shouldn't purchase something more than 2x your total income

Easy for Mr. 7 Figures to say.

Us 99%ers have to stretch to 4-5x in Irvine.

I dunno,  $500k household with 20% down seems like okay ratios to purchase $1.2m.

Yeah - I'd agree with you. In general, I'd think the average buyer in Irvine would be at 4-6x (at least for those putting money down).  Probably closer to 5-6 vs. on the 4 side. Would think there is a much smaller percentage of new buyers at 2x.  That said, I think there are quite a few who put down a lot more money (wait to save) and thus, if you looked at it more from a loan amount perspective, there I think you get to where quite a few would be in that 2-3x argument (due to putting 30-50% down). 

From my experience, many Irvine buyers tend to underbuy their homes by 15-25%.  What I mean by that is that the buyer may be qualified by the lender to buy up to $1m but end up buying around $800k.  Irvine buyers tend to be stronger financially than non-Irvine buyers (I'm excluding Newport buyers) with higher incomes and higher downpayments.  I don't think there are a lot of Irvine buyers who buy a home at 2x their annual household income, but I do think there are many who buy a home with a mortgage at 2-3x their annual household income (i.e. using larger downpayments from 30-50% down).  Obviously rates being low allow buyers to buy a higher multiple home.

 

[usctrojancpa]

Maybe this is less about ratios and more about millenials' general disinterest in homeownership

That and cars...

I'm a weak man when it comes to cars, thankfully the expensive cars that I've bought either have appreciated or barely depreciated so I've been lucky there.

 

[usctrojancpa]

Maybe this is less about ratios and more about millenials' general disinterest in homeownership

I don't think millennials disinterest in homeownership is tied to them not wanting to own homes...more to them being unable to afford them. They do want and appreciate different things, so how much they set aside for houses vs. other spend could differ, and what they look for in a house differs, but in general, most of them still want to own a home. 

I am a millenial so I figure I can speak for all of them, haha.

From what I've heard and experienced having dated millennial women, millennials tend to value experiences over acquiring tangible things like cars or homes.  They value their freedom and flexibility more than gen-X folks.  Their attention span is shorter and can be a little all over the place at times.  I can see how many of them aren't interested in home ownership. 

 

[Bullsback]

I've said it before in my past post. Shouldn't purchase something more than 2x your total income

Easy for Mr. 7 Figures to say.

Us 99%ers have to stretch to 4-5x in Irvine.

I dunno,  $500k household with 20% down seems like okay ratios to purchase $1.2m.

Yeah - I'd agree with you. In general, I'd think the average buyer in Irvine would be at 4-6x (at least for those putting money down).  Probably closer to 5-6 vs. on the 4 side. Would think there is a much smaller percentage of new buyers at 2x.  That said, I think there are quite a few who put down a lot more money (wait to save) and thus, if you looked at it more from a loan amount perspective, there I think you get to where quite a few would be in that 2-3x argument (due to putting 30-50% down). 

From my experience, many Irvine buyers tend to underbuy their homes by 15-25%.  What I mean by that is that the buyer may be qualified by the lender to buy up to $1m but end up buying around $800k.  Irvine buyers tend to be stronger financially than non-Irvine buyers (I'm excluding Newport buyers) with higher incomes and higher downpayments.  I don't think there are a lot of Irvine buyers who buy a home at 2x their annual household income, but I do think there are many who buy a home with a mortgage at 2-3x their annual household income (i.e. using larger downpayments from 30-50% down).  Obviously rates being low allow buyers to buy a higher multiple home.

In general, I tend to think if your loan is 2-3x your annual household income (and you have some stability in your income), that should generally be pretty doable (with some conservatism built in).  Of course a lot of this depends on what you are stretching for...I'd be much more willing to stretch my "ratio's" to get a place to live vs. stretch my ratio's to buy the "perfect" place. By that I mean, if I'm moving from a 2000 sq ft house to a 3000 sq ft house, I'm much less likely to stretch and push myself then to get into the starter home that works. One is more of a "need" (albeit you can define need) while the other is more of a "luxury". 

 

[Bullsback]

Maybe this is less about ratios and more about millenials' general disinterest in homeownership

I don't think millennials disinterest in homeownership is tied to them not wanting to own homes...more to them being unable to afford them. They do want and appreciate different things, so how much they set aside for houses vs. other spend could differ, and what they look for in a house differs, but in general, most of them still want to own a home. 

I am a millenial so I figure I can speak for all of them, haha.

From what I've heard and experienced having dated millennial women, millennials tend to value experiences over acquiring tangible things like cars or homes.  They value their freedom and flexibility more than gen-X folks.  Their attention span is shorter and can be a little all over the place at times.  I can see how many of them aren't interested in home ownership.

On experiences, I agree, although I believe most of the recent data points to millennials still being interested in homes. What within the homes they are interested, absolutely differs. FivePoints has bet on this to some extent with what they have been doing with some of their recent builds/projects. 

 

[irvinehomeshopper]

Millennials have a lot more to spend on today such as trips, electronics, cars and eating out vs their parents generation. Saving up for a deposit is unlikely when it's so much easier to ask parents for it. It's the fault of the parents for spoiling their children and never taught them frugality while themselves have been super frugal and gave their children the very best money could buy.