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Comment by alephnerd | Hacker News Reader

> average home now tops $5,500 — if you can put 20% down

$5500/mo for a 3 bedroom property with additional appreciation is a great deal in any market.

If you're in a white collar dual income household (as most of the US and especially Torrance, California which is mentioned in the article is becoming), this is relatively affordable.

You're anyhow paying $3500-4000 to rent a similar house or apartment, and paying the landlord's principal off.

Additional building is happening in California, but it's targeting this specific demographic now.

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> $5500/mo for a 3 bedroom property with additional appreciation is a great deal in any market.

What are you smoking? This is insane even on two $150k salaries. It’s 60k a year on the mortgage alone, when your households total take home pay is under $200k.

Traditionally the guideline was that housing costs (rent, utilities, etc) shouldn't be above 30% of gross income. $66K / $300K is only 22%. So, I wouldn't call it insane.

I’m not sure where this $5500 figure came from but if you want a decent sized home in a good area with good schools there are not homes for sub $1m to be found.

$1.5m is a much more realistic sale price for a modest home in a good area, and with 20% down that’s more like $10k a month between mortgage and taxes and insurance.

> where this $5500 figure came from

It's SoCal - Torrance CA specifically as mentioned in the article. Prices are slightly lower because salaries are slightly lower (or maybe it's the other way around)

Well the article is wrong.

Median detached home sale price in Torrance is 1.275m. The $900k figure probably includes condos and is not what a house costs.

https://www.redfin.com/city/20094/CA/Torrance/housing-market

Yes, that's the house builder standard guideline. Not the conservative financial advisor advice

Except housing costs don’t stop beyond the $5500 on the mortgage. Add all the utilities, property taxes, insurance, and the monthly average of maintenance fees and it’ll probably be closer to $8-9k/mo.

Yes, that's why I wrote "(rent, utilities, etc)"... And for a rental, which is what my comment was in relation to, there are generally no property taxes or maintenance fees.

The kind of house going for $5500/mo mortgage in SoCal will be in a very affluent town like Irvine, where most households will be dual income white collar.

The article itself references Torrance, CA which has gentrified from working class Latino American and Asian American to upper middle class Asian American

In Irvine the average is 10k a month. 5500 is more I.E

Yea, my Irvine numbers are off. Torrance is becoming the next Irvine, due to a large Asian American community, decent schools, and relatively high paying employers nearby.

School district matters to Asian Americans, and Asian Americans skew in the highest income brackets in the US now, but we also prefer living in other AA neighborhoods because of cultural affinity.

Where I'm from a 3BR would run you $1.6M if it's in mediocre shape. $2M in good shape with a yard.

Agreed that it's insane. The only people paying that for such a low bedroom count house are wealthy people who want location and specific schools. Add childcare to that, and you're close to $10,000 a month for just basic living. Only 5% of people can afford that. This is especially for the middle to slightly upper middle class (someone making $300,000 as a household) not being able to afford it, because they get absolutely hammered by the asinine tax structure, more than any other class percentage wise.

Yeah I'm really wondering what OP's income is like now

Standard Bay Area tech salary for someone with around a decade of experience: 150k-500k

With an SO in the Life Sciences space: $100-300k

That's why a lot of Californians can afford it. A lot of us marry peers in the same income brackets.

Pretty much anyone with a decade of experience at the big tech companies is making at least the top end of that range.

Not even BigTech.

Even medium sized startups can pay a $500k TC for someone with a decade+ of experience (how else do you see so many L5 Engineers turned EMs or Tech Leads at startups after a bad review cycle)

Median _household_ income in California was right around $91k a few years ago.

https://www.census.gov/quickfacts/fact/table/CA/INC110222#IN...

After taxes and payroll deductions from your average paycheck you barely get $5,500 to take home...

It might be but you need to appreciate at least 15% over the time you buy it to beat closing costs and (likely in these markets) home prep costs/staging. If you know you’re going to be there 5 years it’s probably a safe bet, but the value appreciation in California has slowed quite a bit (or dropped, in the case of the bay area) so it’s not as safe as a bet as it was, especially considering rental prices are down and there’s probably a 10-30% premium to own.

This feels out of touch for most of the work force, including CA.

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