There are a lot more than a subdivision’s worth of people making more than $30k a year. There are around 7 million people in the Metroplex. That means there are 70,000 people in just the top 1% and 700,000 in the top 10%. They’re going to have some houses.
These houses aren’t being bought by people making $15/hr.
In fact, the annual median household income in America is around 50K. Which means that half of the households are making more than that. In fact, if you had two income earners* making $15 an hour, they would still struggle to make the payments, but it would be possible if they could actually get the loan. Payments for the mortgage would only be around $1200 which is only a few hundred more than my housing payment. I only make a bit more than that couple and have loads of slack in what I could theoretically afford (but choose to save the remainder instead.)
*Which is why you’d want that big of a house: as a single person I wouldn’t even want to live in a house that big, but if I had a large family I might.
And two people making $15/hour bring in ~$60/year. $300k isn’t a huge stretch there.
Although property taxes in TX can be beastly. That might push it out of reach.
believe me, when I was in Plano there were several banquets/functions being held at the hotel in which I was staying. There are plenty of well-to-do people/families there. McKinney is infamous for approving $70 million for a football stadium.
For a high school football team.
$70 million.
For a high school football team.
We have really cheap housing here compared to similar cities in the US.
But $300k is still not a big deal. And around us the new housing going up have signs advertising $600k and up.
It’s when you get to the bigger west coast cities where a old basic house goes for $1m that things get unbelievable.
I’m eyeing older $500k 2bedroom condos around DC. They’re hard to find.
Just for the hell of it I went to a West Coast new homes website and plugged in $400-500,000 for the San Francisco area. After the site got done laughing at me, I eventually got this:
http://www.newhomesmag.com/home_finder/d/city_ventures_residences/south_city_place_sf
I’m betting the new Walsh homeowners will have quite a bit more square footage at half that price or less.
This web site says Walsh is 12 miles from downtown Ft Worth.
In addition to the good ones raised above, I can think of a couple more issues with your analysis.
With regard to “jobs in the area”, not everyone works in the vicinity of their home. At one point, for example, my uncle maintained a small apartment and came home only for extended weekends/holidays, because otherwise he would’ve had a 5-6 hour commute each way. Theoretically, these people could work as far away as Houston, if not further, but opt to live in that neighborhood for whatever reason.
The other thing to keep in mind is that people making big money doesn’t necessarily have a job that would require them to go in to an office at all (and thus wouldn’t come up in your search of area jobs). With teleconferencing capabilities (note what was said earlier about the Internet connection), they could hold jobs practically anywhere and work from a home office.
With regard to income statistics, I think this is a good time to quote “Field of Dreams”: “if you build it, they will come.” It’s not about the people who are already there, it’s about the people who will move there.
There are over a million people in the Dallas-Fort Worth area. I’m sure at least some of them are doctors, lawyers, corporate executives, people in finance, tech people and other professions that earn enough to buy a $300k - $1 MM house.
My husband has been in off and on negotiations for a job in that area. Its a high tech job. Salary would be north of $250k, plus bonuses, stock options.
Plus, we are in our 50s. Our kids are about to leave the nest. College is saved for. We have a positive net worth. We have a house that is paid for. If we move to Dallas, we are moving to Dallas with $300k from the sale of this house in our pockets, $100k from the liquidation of our portion of a partnership, plus all of our investments and savings.
People who have decent paying jobs and don’t spend years spending what they earn (or more acquire wealth that can be invested in housing, should they choose.
Should we make the move (which is doubtful - my husband leaving his mother is laughable), I’d stay here with the kids until my youngest gets off to college in a year and a half, he’d rent an apartment. Then I’d move and we’d buy. But we’d probably buy a house in the $300k range - we just don’t need - or want - that much house.
The other thing people don’t realize is that the sort of jobs that pay $200k a year don’t tend to be posted out on jobs.com. There are actually lots of these jobs (if you are in the right industry), but they find you. i.e. recruiters find you. your former coworkers find you. your network finds you. Last night my husband got a call from another former coworker “hey, we need someone like you, would you be interested” - now, most of the time he isn’t, or it never pans out (the one in Texas might never turn into a job for anyone), or he isn’t a good fit.
Moreover, there are tons of small business owners all over the country running successful trade businesses, or law offices, or accounting firms, or salons, or Subway franchises that make that.
There’s a trade-off between time and space, too. The people that are going to buy those houses don’t live near there now, and they don’t work near there. They live where ever right now but they work in Dallas or Ft. Worth. They have 300k to spend on a house, and they can buy a 4 bedroom, 50 year-old, reasonably nice ranch fifteen minutes from work, or they can by a brand new sprawling McMansion 45 minutes away in rush hour traffic. Some people pick the former, some the latter. So these aren’t the people in the area, they are the people in the high rises downtown.
I can’t help but thinking… $300k. That might be just enough for a DOWN PAYMENT for a pretty decent house in the SF Bay Area.
:smack::D:D:D:D:D
Thanks for the responses.
Yes, I know that there are some very specialized jobs that pay really well (if you have the right skill set and are in the right place at the right time)
It still amazes me with the size and cost of these various houses and how far some people will commute.
Thanks
It’s not as if there are only people making fifteen bucks an hour (or $30,000 per year) and those making $300,000 per year. Plenty of people make around $100,000, and if both halves of the couple earn that much, a $300,000 is easily affordable. The formula (or rule of thumb) I remember hearing was that an affordable house might cost 2 1/2 times gross annual income, so if both spouses make $100,000, they could probably afford a $500,000 house.
And if that’s still inconceivable, look at the car companies. Ford and GM make hardly any money on subcompact cars, but make a lot on luxury cars and the big SUVs. Similarly here, the builder will make a lot more on the expensive homes than on the starter ones. So that’s what they prefer to build.
I think it’s easier to understand if you don’t think of it as putting up with a commute for a house, but rather because they want their kids to have a certain kind of life–good schools, “safe” community, etc. Even the big house part is about wanting their kids to have a yard and a cool bedroom etc. etc. People put up with a lot both for their kids–this fits in that pattern.
About 7 million which is OVER a million. No snark intended.
You need to watch more HouseHunters and Property Brothers shows. It’s so rare on there to have a house under $300,000. But where I live, you can get tons of house for much less. And my guy bought a development house outside San Antonio for half that, so there still is affordable housing.