Re: How do people afford houses in places like NY, Cali, and other expensive areas?
I am suprised Mr Fraudia, being in GS for over 6 years, you are asking me where I am at? :p I thought that you would know so much about me.
I am dissapointed.
Alhumdulillah, also have no plans to move to US. I like my cosy europe. I am suprised that u pay around 1100 monthy taxes like Mamaof3 stated. Even if we were have properity taxes, it would be around 1000 for whole year. So its the relation that is disturbing
Re: How do people afford houses in places like NY, Cali, and other expensive areas?
I am suprised Mr Fraudia, being in GS for over 6 years, you are asking me where I am at? :p I thought that you would know so much about me.
I am dissapointed.
I just did not want to openly start talking about where you live in respecting your privacy.
Alhumdulillah, also have no plans to move to US. I like my cosy europe. I am suprised that u pay around 1100 monthy taxes like Mamaof3 stated. Even if we were have properity taxes, it would be around 1000 for whole year. So its the relation that is disturbing
the thing is that you have significantly higher income taxes, and little control over where they are spent, the one good thing about property taxes is that they are used in your county.
and its not a question of even having property taxes, you guys have a federal property tax which is low, and then you have municipal taxes on the property as well. and it can be significantly higher than 1000 :) u may want to check real estate laws in your area.
and while there are some areas which have higher property taxes, there are others that have low taxes, you are free to move about if you want to a place with lower property taxes. its justthat in many cases areas that have high property taxes are located in cities or proximity to cities where the incomes are higher as well.
Re: How do people afford houses in places like NY, Cali, and other expensive areas?
anyways going back to the topic, here are some other ways ppl can afford expensive homes aside from the juggling expenses and cutting on other things.
1) they earn more.
2) they go for interest onlyloans on low APR ARMs (recipe for disaster if market goes south)
3) they were in real estate and took advantage of the appreciation on their homes as they traded up, having larger chinks avaiulable for down payment.
4) places appreciated after the people bought them, e.g. someone may have bought a place for $500K and now its up to $700K, they cant afford a $700K but they are living in one, because to them its a $500K house, cuz thats what their payemnts are based on.
Re: How do people afford houses in places like NY, Cali, and other expensive areas?
anyways going back to the topic, here are some other ways ppl can afford expensive homes aside from the juggling expenses and cutting on other things.
1) they earn more.
2) they go for interest onlyloans on low APR ARMs (recipe for disaster if market goes south)
3) they were in real estate and took advantage of the appreciation on their homes as they traded up, having larger chinks avaiulable for down payment.
4) places appreciated after the people bought them, e.g. someone may have bought a place for $500K and now its up to $700K, they cant afford a $700K but they are living in one, because to them its a $500K house, cuz thats what their payemnts are based on.
Re: How do people afford houses in places like NY, Cali, and other expensive areas?
sorry bro but with the whole subprime bailout talks and the issues with ARMs adjusting is because ppl got into homes that they could nto afford so that is among the "other" ways.
The question was how ppl can afford such homes, and those are other ways ppl can get into such homes, whether it makes sense i.e. higher incomes and/or cutting other expenses and/or trading up . or if it does not make sense i.e. interest only ARMs for homes one otherwise cant afford.
Re: How do people afford houses in places like NY, Cali, and other expensive areas?
No, what I meant was other than point # 2, those are the ways ppl should be buying houses. They have to earn more and spend less, that's a given. So is the appreciation and trading up.
Interest only loans are just wrong. I still cannot understand why people go for those. I'd rather just rent a place than going for that.
Re: How do people afford houses in places like NY, Cali, and other expensive areas?
yeah its oretty ridiculous, There are many "real estate tycoons" who were flipping homes using interest only mortgages, who just had not factored the market going south due to the subprime default rates, prices outpacing earnings majorly, excess short term supply and dip in short term demand.
we had a discussion about interest only ARMs etc on gS less than 2 yrs ago and that was the risk I had noted then based on what could go wrong.