# Who's making all this money? **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [December 6, 2015, 6:42am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600 "2015-12-06T06:42:48Z")\ **Posts on this page:** 12\ **Page:** 3
**Author:** ![actualliberalnotoneofthose](https://avatars.discourse-cdn.com/v4/letter/a/e79b87/32.png) [@actualliberalnotoneofthose](https://boards.straightdope.com/u/actualliberalnotoneofthose)\ **Post date:** [December 7, 2015, 4:35am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/41 "2015-12-07T04:35:40Z")
I grew up in a place where no one I knew who actually worked there made over $10/hr at the time, but a housing boom resulted in many $1 million+ condos and houses for vacationers and people who inherited money (mostly). The thing was (this was about a decade ago), many of the developers were off on the timing and a lot of units went unsold and people lost millions. I knew a very successful builder who lost everything and ended up with a bad opiate addiction. 30 years earlier, in the same place, my Grandfather saw a 93% reduction in his yearly income when THAT building boom busted. Stuff goes in cycles. Is it time again? I guess it’s always that time somewhere. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [December 7, 2015, 5:15am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/42 "2015-12-07T05:15:31Z")
You guys have no idea how cheap some of the houses you’re talking about are. I am green with envy. 300K for a five bedroom house, my CHRIST. Here there are no detached homes for 300k. Not a few, not one in bad shape; none. Not unless you drive into the boondocks. 300k gets you a decent two bedroom condo. ---
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [December 7, 2015, 5:59am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/43 "2015-12-07T05:59:51Z")
I’ve found a way to anger visitors from each coast is to drive around Overland Park and the Kansas City area in general and show them real estate prices. Kansas City is very affordable and even actors working in theater can afford homes. We do get the occasional west coast transplants who sold a house in say Los Angeles and now can afford a palace here. You can tell them by their driving. I find that transplants from the east, with them this is often their first time owning a home and that is often a difficult transition from growing up in an apartment to owning a home. ---
**Author:** ![ITR\_champion](https://avatars.discourse-cdn.com/v4/letter/i/c67d28/32.png) [@ITR\_champion](https://boards.straightdope.com/u/ITR_champion)\ **Post date:** [December 7, 2015, 6:34am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/44 "2015-12-07T06:34:44Z")
> [@Urbanredneck](#): > > My wife and I dropped by to check out some new homes in our area of Overland Park Kansas ( a suburb of Kansas City). Homes start at around $450,000 and go up to around $700,000 ([EXAMPLE](http://www.realtor.com/realestateandhomes-detail/12600-Catalina-St_Leawood_KS_66209_M87144-59676?row=8)) with a couple at over $1 million. Granted, to you Californians that sounds like someones shack but around here that buys a 3500 square foot home easy. > > It’s like they cant seem to build these homes fast enough. > > What gets me is their are few new businesses coming in so I just dont see where these people are coming from who can afford these homes. Ex. For a $500,000 home you need a 20% down payment or $100,000 and interest of 3.97% on a 30 year loan and your talking about near $3,000 a month payment. To me that would mean a household income of over $200,000 a year and I just dont see that many jobs earning that much. > > Now are people getting some huge loan from family or something to afford all this? I just dont get it. Unfortunately, the answer to your questions is that we are in [the housing bubble, part 2](http://www.cnbc.com/2015/10/06/housing-today-a-bubble-larger-than-2006.html). Within the last year, prices are up 7% nationwide, and much more than that in certain states and cities. During the last housing bubble, loans with ridiculous terms were offered to people who never, ever should have gotten any loan. Today the most ridiculous and abusive types of loans have been outlawed. However, the industry has not returned to the basic guidelines that it ran by for generations before the first bubble. When my parents shopped for their first home (1977), it was simply an accepted fact that a 20% down payment was required. Today some buyers get in with down payments of 3% or 5%. That creates danger. Throw in foreign investors and anyone trying to get rich by flipping houses, and you have the recipe for a second bubble. ---
**Author:** ![Isamu](https://avatars.discourse-cdn.com/v4/letter/i/7c8e57/32.png) [@Isamu](https://boards.straightdope.com/u/Isamu)\ **Post date:** [December 7, 2015, 6:39am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/45 "2015-12-07T06:39:25Z")
It’s getting pretty ridiculous in Australia. My dad bought his 3 bedroom Melbourne house in 2003 for 650,000. It sold this year for 2,000,000. No improvements were made to it. ---
**Author:** ![Gordon\_Urquhart](https://avatars.discourse-cdn.com/v4/letter/g/db5fbb/32.png) [@Gordon\_Urquhart](https://boards.straightdope.com/u/Gordon_Urquhart)\ **Post date:** [December 7, 2015, 7:57pm UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/46 "2015-12-07T19:57:15Z")
We have a ~1,100-sq.-ft. 2BR, 2BA house in southeast Denver (the city proper, not a suburb) we bought for just over $200k 15 years ago; Zillow puts it around $330k now. Houses are still on the market in Denver for matters of a few days, if not hours. Those prices are still a bargain to someone coming from either coast; my parents in rural eastern Colorado would be absolutely shocked to find that their son lives in a $0.3-million-dollar home (as is their son – the house is absolutely nothing special). ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [December 7, 2015, 8:41pm UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/47 "2015-12-07T20:41:18Z")
> [@RickJay](#): > > You guys have no idea how cheap some of the houses you’re talking about are. I am green with envy. > > 300K for a five bedroom house, my CHRIST. Here there are no detached homes for 300k. Not a few, not one in bad shape; none. Not unless you drive into the boondocks. 300k gets you a decent two bedroom condo. 300K is a down payment. ---
**Author:** ![nearwildheaven](https://avatars.discourse-cdn.com/v4/letter/n/90db22/32.png) [@nearwildheaven](https://boards.straightdope.com/u/nearwildheaven)\ **Post date:** [December 7, 2015, 10:02pm UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/48 "2015-12-07T22:02:40Z")
> [@ITR\_champion](#): > > During the last housing bubble, loans with ridiculous terms were offered to people who never, ever should have gotten any loan. I remember one of these couples being interviewed on “60 Minutes”. They purchased (and quickly lost) a $400,000 McMansion in an area with reasonable home prices, and at first, it sounded like they owned a chain of day care centers. Nope; they had an in-home day care, and that was their sole source of income, and on top of that, maybe there was some creative editing going on, but they both appeared to have mild mental retardation. ☹ No, a lawyer never looked at the papers, either. They didn’t know they needed to hire one. Among other things, I hope their Realtor lost his or her license for being so unscrupulous. ---
**Author:** ![smokey78](https://avatars.discourse-cdn.com/v4/letter/s/82dd89/32.png) [@smokey78](https://boards.straightdope.com/u/smokey78)\ **Post date:** [December 8, 2015, 1:21am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/49 "2015-12-08T01:21:18Z")
United Health operates in Overland Park. I can see dinkies living there, so making 200,000 a year for a couple and buying a less-than-million dollar home. Doable. Guess my question, is how does the average person afford a home in California? Silicon Valley? Wasn’t there a blogger who says he lives in a van (down by a river?) in Palo Alto? ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [December 8, 2015, 2:18am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/50 "2015-12-08T02:18:53Z")
> [@smokey78](#): > > Guess my question, is how does the average person afford a home in California? Silicon Valley? Wasn’t there a blogger who says he lives in a van (down by a river?) in Palo Alto? Answer 1: They don’t. Lots of renters and lots of condos. Not everyone needs a home with a yard. Answer 2: Salaries are significantly higher than the rest of the country. Median salary is $77k in San Jose, as compared to $51k for the rest of the country. Answer 3: Because salaries are higher, people can afford to put a higher fraction of income towards their house. Answer 4: Also because of the high salaries, the mortgage interest tax writeoff is higher (since it’s coming off a higher tax bracket). A $1.5M mortgage is ~$84k/yr in mostly _pre_-tax money. That’s a lot, but just means that a couple making a combined $250k can afford it fairly easily, even with kids. That’s not an unusual household income at all if at least one of them has a tech job. The tax writeoff goes down as time goes on, but the expectation is that salaries go up as well… ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [December 8, 2015, 3:20am UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/51 "2015-12-08T03:20:36Z")
> [@Urbanredneck](#): > > My wife and I dropped by to check out some new homes in our area of Overland Park Kansas ( a suburb of Kansas City). Homes start at around $450,000 and go up to around $700,000 ([EXAMPLE](http://www.realtor.com/realestateandhomes-detail/12600-Catalina-St_Leawood_KS_66209_M87144-59676?row=8)) with a couple at over $1 million. Granted, to you Californians that sounds like someones shack but around here that buys a 3500 square foot home easy. To us New Yorkers, 3500 sq ft sounds like a mansion! Now maybe NY has warped my perception such that I feel like a hobo because I don’t earn $500k a year or more. But $200k a year is not that uncommon for a duel-income professional household. ---
**Author:** ![WildBlueYonder](https://avatars.discourse-cdn.com/v4/letter/w/ce7236/32.png) [@WildBlueYonder](https://boards.straightdope.com/u/WildBlueYonder)\ **Post date:** [December 8, 2015, 2:14pm UTC](https://boards.straightdope.com/t/whos-making-all-this-money/739600/52 "2015-12-08T14:14:24Z")
> [@Mudshark](#): > > The home you linked to was just over $700,000 for a 6500 square foot house, doesn’t seem that out of place for that price. > > Loans probably come from banks, with some money from another home being sold. Things are much looser with mortgages than they were in 2008/2009. Looser now? They were are tighter than (insert adjective if that is what it is) > [@FairyChatMom](#): > > I wonder how much of the lust for big houses is fueled by TV remodeling shows? I dont think so but what do I know All I know these huge houses are built with 10 bedrooms or some such. Who has families that big anymore? > [@Dangerosa](#): > > Few individual jobs pay that much, but for a two professional income couple, $200k is pretty easy. A guy in middle management with an MBA and his wife the attorney. An IT professional and a financial analyst. A sales person and an accountant. Also, lots of small business owners can make that - a plumber who employs a few people and runs a couple of trucks can clear $200k - say his wife is an RN and they have a pretty cozy income. Add in a down payment via inheritance when Grandma passes or maybe a stock option that paid out well, and there are lots of people who can afford that. Cant be that many people with those circumstances?? > [@guizot](#): > > 1. Foreign buyers ([many Chinese](http://www.zerohedge.com/news/2015-09-30/80-all-new-home-buyers-irvine-are-chinese)) there you go. Foreigners are buying not only homes but businesses. Farms up here are being bought and expanded exponentially. > [@Ravenman](#): > > Somewhere around one in six DC households have more than $200,000 in income. I wouldnt doubt that at all. People are still living above their means and their jobs are not forever. Unless you or they have a great deal of investments/savings, you’re going to be out of your expensive house in the distant future. Oh they buy those expensive houses are trying to keep up with the Jones. [Previous page](https://boards.straightdope.com/t/whos-making-all-this-money/739600.md?page=2)