Who's buying?

[Bullsback]

There's so many scenarios for a couple to buy a $1m house in irvine.

Yup...the hard part is keeping the house.  Job and economic stability are not what it was 10-20 years ago...relatively stable jobs/careers can be gone in a flash.

This is SO true. I wonder what percentage of home buyers that take out loans for homes over 1 mil are able to keep them in the long-term? There are never any guarantees for employment.

You can only do the best you can at planning...losing a job is almost never a predictable event.  One of the reasons for buying in a place like Irvine is that if you have to sell, you can still get a good price.

Yes & No. Losing a job isn't predictable, but you should be in a position that if you lose your job, you aren't immediately negative on your housing payments, etc. You should have emergency funds to help you get through while finding a job and ideally you have some built in cushion so that if you had to take a job that paid less (within a reasonable projection), you'd still be able to get by (cut backs needed...absolutely, but could you get by, I'd hope).  Especially if you are looking for a more high-end house (if you are going high-end...you are buying for wants and not needs and should have other protections in place in advance).

so true about instability. hedge your bets.
if both spouses work, then buy a house that is affordable on one income. If you want the 1M+ house, save up enough downpayment to get the monthly mortgage to where its OK on one income.
for single earner families, get enough life insurance  to at least pay off the mortgage if the breadwinner passes away or enough disability insurance so that if the breadwinner can't work, to give you enough time to sell the house if you have to without going into foreclosure.
some may say this is too conservative, but I feel like I can sleep better at night this way.

It's not to conservative but just not "realistic"...you either have to "settle" for a house in such a price range or wait like twenty years before you can afford a house.  For most people, buying a house is really for their children and thus there is a time frame in which one can buy a house.

I agree with this. I think the difference I make is...if you are doing everything you can to get a 4BR house for your kids in a good area...great and I totally understand you might have to take those risks...but if you are talking about that or spending a few hundred K (raising your ratio from say 20% to 35% or 40% or more) more on a perfect 4BR house that is brand new and has you stretched all the way to the other side, well, at the end of the day, I don't think those are warranted risks (when you could already provide the alternative).  I'll take the smaller house or continue to save. What you need vs. what you want differs and for wants like that, you should make sure you have other protection's in place first. 

And I understand their are potential upsides that could be missed by the above, but my rule is, you stretch for that first starter house (within reason), so you have a place to live where you can build up some equity, etc.  But when you move up from there, unless it is a need, take the extra year or two to have the downpayment you need to build in for some conservancy. 

 

[yaliu07]

Why Americans wait longer than ever to buy first homes
http://www.cnbc.com/2015/08/17/why-americans-wait-longer-than-ever-to-buy-first-homes.html

 

[Irvinecommuter]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

I disagree with this assessment.  With student loans, cost of living, and job instabilities, it is unrealistic to believe that children should "support" their parents.  Traditionally, children used to live in their parents' house and then supported their parents.  However, such a model does not exist anymore.  I think most children want to help out their parents but it's not realistic. 

I do not expect my kid to support me in the future but she should not expect me to support her much beyond college.

 

[LongIrvine]

Different ethnicity's have different beliefs. 

But generally agree, that I wouldn't WANT my kids to support me in old age.  So I guess it comes down to philosophically if you pay for your kids college, which helps them out earlier in life, but at the higher probability/added risk to them that they will need to take care of you later.  There is a chicken and egg issue here.

 

[jerometl]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

 

[Irvinecommuter]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

I think s/he is referring to the concept that young people are more "lifestyle conscious" and don't care about making money as much.  It's basically a variation on "kids these day" criticism.

 

[Happiness]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

I think s/he is referring to the concept that young people are more "lifestyle conscious" and don't care about making money as much.  It's basically a variation on "kids these day" criticism.

Yes, that is what I'm trying to say although its not that young people don't care about money, it's that young people believe they have a right to live in any manner that makes them happy and parents have an obligation to support them no questions asked.  It can't be that surprising to you all that there are many young people out there conspiring to get their hands on their parents' assets and afterwards packing them off to the senior affordable housing.  Or is my observation hitting too close to home....

 

[nyc to oc]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

I think s/he is referring to the concept that young people are more "lifestyle conscious" and don't care about making money as much.  It's basically a variation on "kids these day" criticism.

that may be a generalization for the millenials overall in the US, but I don't think this applies to most 2nd gen Asian Americans. A high percentage of them went into practical fields like medicine, law, accounting, finance, engineering, IT, etc,  probably because they knew they couldn't rely on their immigrant parents to support them in adulthood, and much more, the support was expected in the other direction.  In general, there was no cushion of family wealth to fall back on. This may not apply to the current Asian immigrants to Orange County, but generally true for the previous generation of immigrants to the U.S. Of course, I would guess that the kids of these 2nd gen AA will end up more likely to "pursue their passions" with less regard to financial remuneration as they become more assimilated into mainstream American culture.

Who's more likely to be an english major? The kid from a rich family.
Who's more likely to major in math/science/business and other practical fields? Kids from more modest backgrounds who pick a major with an eye to their eventual career/earnings prospects.

 

[Irvinecommuter]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

I think s/he is referring to the concept that young people are more "lifestyle conscious" and don't care about making money as much.  It's basically a variation on "kids these day" criticism.

Yes, that is what I'm trying to say although its not that young people don't care about money, it's that young people believe they have a right to live in any manner that makes them happy and parents have an obligation to support them no questions asked.  It can't be that surprising to you all that there are many young people out there conspiring to get their parents' assets and afterwards packing them off to the senior affordable housing.  Or is my observation hitting too close to home....

Hmmm...fighting for inheritance pretty much existed since the beginning of human civilization.  I think this generation has a healthier view of work v. life balance.  There is nothing wrong with working hard and providing for your family but spending time with your family is also very important.  It is very hard to find the balance.

People with more money spend a lot of it to have more quality time with their kids.  If you have money, you can hire people to do tasks for you or eat out more...in turn spend more time with the family.  Past generation was about saving as much as one can for a raining day.

A small test of this is how you spend money on a vacation...I remember going to Disneyland as a kid but pretty much any and all food/beverage within the park was off-limits.  Also, non-main course dishes/drinks at a restaurant was pretty much non-existent.

 

[eyephone]

Irvine commuter - same here. Back in the day, eat before you go to the baseball/basketball game.

Disneyland, eat at mc Donald's across the street.

 

[happytales]

I always joke that my retirement plan = my kids (fingers crossed!). I am 2nd generation as well and my parents worked extremely hard to raise their kids and take care of their parents. I was lucky enough to be able to get a good education and good jobs and would do anything to take care of my parents. I can't bare the thought of seeing my grandparents or parents living by themselves, waiting for someone to drop by and visit them when "they have time." Only have one set of parents, gotta cherish the time!

 

[jerometl]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

I think s/he is referring to the concept that young people are more "lifestyle conscious" and don't care about making money as much.  It's basically a variation on "kids these day" criticism.

Yes, that is what I'm trying to say although its not that young people don't care about money, it's that young people believe they have a right to live in any manner that makes them happy and parents have an obligation to support them no questions asked.  It can't be that surprising to you all that there are many young people out there conspiring to get their hands on their parents' assets and afterwards packing them off to the senior affordable housing.  Or is my observation hitting too close to home....

I still think a big factor on why it turned out this way for these kids is how they were trained growing up.  If  they get all the  material things they want when they were still kids, if the parents left their kids most of the time to nannies/friends and does not spend regular time and develop close relationship with their kids (and worst replace their lack of time with material things), it would not be hard to imagine the kids to growup unattached and doesn't care about the parent's being when they grow old.

 

[Irvinecommuter]

I always joke that my retirement plan = my kids (fingers crossed!). I am 2nd generation as well and my parents worked extremely hard to raise their kids and take care of their parents. I was lucky enough to be able to get a good education and good jobs and would do anything to take care of my parents. I can't bare the thought of seeing my grandparents or parents living by themselves, waiting for someone to drop by and visit them when "they have time." Only have one set of parents, gotta cherish the time!

Of course...but a lot of the time.  That's not reality.  My parents used to live near SF and I live down here.  I visit them when I can but that's really just once or twice a year.

 

[jmoney74]

I'M BUYING!!!  MUHAHAHAHHAHAHAHA

 

[eyephone]

I'M BUYING!!!  MUHAHAHAHHAHAHAHA

What are you buying?

 

[Bullsback]

My parents still don't have much money. As the oldest son, I have to carry the burden of taking care of them. I pay for their cell bill, their mortgage,

You are my new hero.  Young people these days don't think like this anymore.  Nowadays, young people work (or not) for their spiritual well being, not to survive economically.  This is because they expect their parents to take care of them (and their loser spouse) forever. 

This is why 5P built the senior affordable housing in PP.  The young people expect their parents to use all of the parents resources to buy them a new PP house and then the now economically exhausted parents can stay close in the senior affordable housing to provide free daycare for the grandkids.

Am I reading this correctly ?  SO you are implying lots of young people now are becoming pastors and missionaries at the expense of their parents having to take care of them ?

I think s/he is referring to the concept that young people are more "lifestyle conscious" and don't care about making money as much.  It's basically a variation on "kids these day" criticism.

Yes, that is what I'm trying to say although its not that young people don't care about money, it's that young people believe they have a right to live in any manner that makes them happy and parents have an obligation to support them no questions asked.  It can't be that surprising to you all that there are many young people out there conspiring to get their hands on their parents' assets and afterwards packing them off to the senior affordable housing.  Or is my observation hitting too close to home....

Under no scenario am I conspiring to get my hands on my parent's assets and I don't know anyone my age that is, so this seems like a ridiculous comment.  In fact, the last thing I'd ever want to think about is getting my hands on those assets because that means my parents passed away and I don't want to even think about that. 

As far as my kids, I certainly hope they don't have to take care of me and that isn't my plan. I want them to be able to go to college and have those doors opened up to them with the help of me (paying for college, etc) and if they want to live in my house (so they can save for a house), then that is fine too (as long as they work and occasionally cook / clean from time to time for the family) and I will also absolutely repay (or pay it forward) the gift that my wife and I's parents gave us (in terms of helping out watching our kids) for our kids and do what we can to ensure they can focus on work and do everything in their power to save money, etc. 

 

[jumpinjacks]

Great discussion! Lots of factors here, some more info/my thoughts:

Our situation:
- Down: 30% down on home in Lake Forest. Hefty sum (in my book), kept right under Jumbo so got 3.75% 30 yr fixed a few months ago
- Parents: Taught us the value of money, didn't eat out or travel much (except to see family) growing up. Helped us through college mostly, a little here and there but 95% down came from our own savings of working 10+ yrs.
- Jobs: I'm in financial industry with big company, great benefits, not in sales. He is in IT/Engineering.
- Our choice: I think what we did in our situation is look at what we wanted to pay monthly (we could survive on 1 income and just not save much) and the space and chose Lake Forest. I guess we could have bought in Irvine, but either at 40%+ home expenses vs gross pay, or got a condo/townhome. I was just curious where all this $$ is from for these new builds and buyers coming up from.

I do agree a lot is luck, had we gotten any one of the short sales we bid on in 2009, we'd be 150+ in equity by now. Also I think Asian parents fall into 3 categories:
1) Came with nothing or from war torn or politically unstable country, worked blue collar (hardworking) jobs, may need some help later in life with finances from children
2) Above, maybe got into a good industry or got a degree, helped kids with college/living but in the end can take care of themselves financially into retirement and not much else
3) Either came with/from some money, or got into lucrative business and able to provide children with education, down payments, cars, etc.

I know people that have any variation of parents above. Also you got the Asian mentality of taking care of family whether that's you taking care of parents or other way around, being the dutiful child, and all that guilt jazz. In the end it would be nice if I had #3, but I have parents that valued education and I don't have to worry about their finances into their retirement years. I can definitely see how 2nd generation having children, it's hard to not raise entitled children, you give them all you can but try to temper and tell them how lucky they are compared to you/grandparents, etc.

Hopefully our current home goes up in value, we may stay or upgrade in 10, but can live with where we are at the time being maybe forever. Totally get the work/life balance thing too, got doctor friends that range from PCPs to specialists, and the life of a specialist is $$$ but hard if you have a family. Whatever works for each family, to their own. Mo money mo problems, he says sometimes, I want those problems, lol

 

[Angels_Baseball_2015]

This feels like an episode of Suze Orman on personal finance and financial freedom for those who want to live in high cost of living states. There's a reason why many financially rational folks move out of California every year to cheaper cost of living states rather than "roughing it out" in California. Unfortunately, in Southern California, the financial freedom to buy a house for your parents is usually, for the average person, a "nice to have" feature.

 

[eyephone]

Great discussion! Lots of factors here, some more info/my thoughts:

Our situation:
- Down: 30% down on home in Lake Forest. Hefty sum (in my book), kept right under Jumbo so got 3.75% 30 yr fixed a few months ago
- Parents: Taught us the value of money, didn't eat out or travel much (except to see family) growing up. Helped us through college mostly, a little here and there but 95% down came from our own savings of working 10+ yrs.
- Jobs: I'm in financial industry with big company, great benefits, not in sales. He is in IT/Engineering.
- Our choice: I think what we did in our situation is look at what we wanted to pay monthly (we could survive on 1 income and just not save much) and the space and chose Lake Forest. I guess we could have bought in Irvine, but either at 40%+ home expenses vs gross pay, or got a condo/townhome. I was just curious where all this $$ is from for these new builds and buyers coming up from.

I do agree a lot is luck, had we gotten any one of the short sales we bid on in 2009, we'd be 150+ in equity by now. Also I think Asian parents fall into 3 categories:
1) Came with nothing or from war torn or politically unstable country, worked blue collar (hardworking) jobs, may need some help later in life with finances from children
2) Above, maybe got into a good industry or got a degree, helped kids with college/living but in the end can take care of themselves financially into retirement and not much else
3) Either came with/from some money, or got into lucrative business and able to provide children with education, down payments, cars, etc.

I know people that have any variation of parents above. Also you got the Asian mentality of taking care of family whether that's you taking care of parents or other way around, being the dutiful child, and all that guilt jazz. In the end it would be nice if I had #3, but I have parents that valued education and I don't have to worry about their finances into their retirement years. I can definitely see how 2nd generation having children, it's hard to not raise entitled children, you give them all you can but try to temper and tell them how lucky they are compared to you/grandparents, etc.

Hopefully our current home goes up in value, we may stay or upgrade in 10, but can live with where we are at the time being maybe forever. Totally get the work/life balance thing too, got doctor friends that range from PCPs to specialists, and the life of a specialist is $$$ but hard if you have a family. Whatever works for each family, to their own. Mo money mo problems, he says sometimes, I want those problems, lol

So um, what are you looking for?
(Buying a house/career advice?)

 

[AW]

Or looking for some Irvine demographic information to create the next great neighborhood!