We’ve watched quite a few episodes of House Hunters and noticed that many of the buyers appear to be only in their mid-late twenties but they’re shopping for homes that are 500, 600, even 700K. What in hell are these young’uns doing for a living to be able to afford such mortgages?
They can’t. Hence the housing crash.
I wondered this when I started this thread.
I’m STILL wondering…
Check the production dates. Anything from the early 2000’s is likely to feature people shopping around with ALT-A or NINJA loans and 103% financing.
Ah, for those heady days of “You have a pulse and can sign at the X? You can own a house!”
But these homes are upwards to a million dollars or more, and those people are in their 20’s.
Even during the “sign & drive” (and then take a dive) days of the housing market 20 somethings may have been getting homes they couldn’t afford, but they weren’t getting million dollar homes.
These people must have a good chunk of some money. I want to know where they work. (and where do I apply? 
)
If those shows were happening in Southern CA or someplace like that, that may have been all there was to buy.
The point that most can’t afford it is true but it isn’t always especially in the 500K housing range. If both spouses have degrees and work, it isn’t especially rare to have a combined household income well into the six figures by the time you are in your late 20’s. My ex-wife and I did and we had a house that cost as much as some of the ones on the show. We could afford it and still have it. Lots of twenty somethings have 500K houses in some markets. If you have good jobs in cheaper areas, you can buy a pretty impressive mansion with that if that is what you want.
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They used a credit card to buy $10,000 in MCI shares, then used the paper value of those shares to invest in Enron. In 2004, they were worth a million dollars. In 2005, not so much.
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I’m 27 and have just shy of 400K worth of mortgages if I was married to someone doing my job I see no reason that we couldn’t easily afford 800K worth of a mortgage. Heck, since our other living expenses wouldn’t double and I could quit spending a fortune chasing tail at the bars every weekend we might even be able to afford 1 mil. I’m a petroleum engineer to answer your question.
Is that better than a “petroleum transfer engineer”?
MtM
If these are in areas with a really high cost of living, their salaries are typically commensurately high, so they’re going to be able to buy a house that costs a lot more than someone doing the same job somewhere else. That’s not to say that they’ll be able to afford more house, just one that costs more.
And, as others have said, many of them can’t really afford it. They can keep up the payments, but only by being house poor.
So someone who buys a house for $800K has to come up with (roughly) $8,000 per month just for the mortgage? What about the taxes? And many of the houses on that show have homeowners’ associations with hefty dues. Then you have to heat and air condition the beast. What about yard maintenance?
The pressure to come up with that kind of money every month… I can’t begin to imagine it.
And okay, so you buy a zillion-dollar condo in downtown London or Paris, or an estate in Tuscany with olive groves and vineyards- THAT is something special… but most of the $500K-$1million houses on that program are downright ordinary. And they all look alike! Vaulted ceilings, granite countertops, deck, big fireplace, ho-hum.
I don’t get it.
There’s one of those hoity-toity subdivisions ('cause that’s all they are: subdivisiona) in the city near where I live. (There are lots of them, but one is extra-extra-expensive, and y’all know some of the people who live there.) I went to a Parade of Homes when it first opened, and hell, the houses are so close together you can stand on your balcony and spit in your neighbor’s swimming pool (if you’re so inclined).
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Well, this is what I do, although I went to a better school and I’m guessing that this is what a petroleum transfer engineer is. So no I’d rather be a petroleum transfer engineer, that way I could be the king of Oregon.
I suspect that at least a few buyers are spending an inheritance, or that they moved from a pricey area (and sold their home for big bucks) to a less pricey area where their bucks go farther. That’s what happened with us when we sold in Seattle and moved to a small town in Iowa. We paid cash for a better house than what we had in Seattle and had money left over.
From the episodes I’ve seen, it seems that quite a few of them work in the tech industry.
I’ve seen a couple (not many, mind you), where I hoped they ran a porn website.
But I’ve seen a lot more where I feared they ran a porn site.
I don’t know how to post a poll, but maybe someone who does can post one asking Dopers (anonymously) what they paid for their houses.
Watching HH makes me think there aren’t any houses on the coasts or in urban areas that cost less than $300K, and that can’t be right.
There really weren’t any livable or reasonable houses in the immediate Boston area less than 300K a couple of years ago. There are some now but a 300K house in Boston is generally still not very nice and is in a blue collar town whereas you could be living like a king in other parts of the country for that price. I honestly don’t know how many people afford it and never did. I guess the real answer is that they couldn’t. As someone who has means and likes to keep almost zero debt, I still see people that I know have a fraction of the money I do going out and buying large things I would not be comfortable with at all. The banks helped them do it a big way in the last decade but I would love to see how they pulled it off before that. It is almost like the most irresponsible magic trick there is but some people seem to keep it up for years or even decades.
I’m always surprised when the couple talks about all the cool shops and restaurants in the area, because once they buy that expensive house they’ll probably be broke and how fun will it be to take a walk downtown past all the shops and restaurants they can’t afford?
Perhaps they’re young enough that banks are willing to offer 50 year mortgages. Even a million dollar home isn’t impossibly expensive for a dual income household at that length.