Yes, $99,151 will buy you a home in New York--if you want to live in a closet.
If you think you can buy a million dollar house with an income of 200,000/year, you've got more problems than just a gigantic house payment.
14
Can you please stop referring to a house as a home?
No home has ever been bought or sold in the history of history. Ever.
4
Although a little bit interesting, there is one big problem with comparing the costs in the high cost cities - how one defines the boundaries of the city. San Francisco is a relatively small city at the core of a large metropolitan area, while NY city is a large city consisting of many boroughs, some of which are wealthy and some are not. It would probably be better to compare SF to Manhattan for example. San Jose I'm not sure of, but it may also be surrounded by some less expensive areas.
6
San Jose is in Silicon Valley, essentially suburban San Francisco.
2
I guess I run my finances a little bit differently than the folks who put together this analysis. There is NO WAY I could afford what this article suggests I could. For one, I need to save for retirement, and I don't agree with the notion that my house would be my retirement savings.
11
A lot of people who thought their homes were their future "retirement savings" -- or a piggy bank that could be used for remodeling, vacations, new cars -- found out the hard way that is not true in 2008-2012 when the housing market CRASHED.
We learned NOTHING from that experience, and are hard at work on a new real estate bubble and speculation. The "house flipping" shows are back on HGTV. Be very, very afraid.
1
Nonsense. Assumes you have the downpayment. In NYC, good luck accumulating $200K on a $99K salary.
22
One of the things that bothers me here -- the whole snobby elitist outlook -- "assumes" the downpayment comes not from savings over years of frugality (as it is with most buyers) but instead is "gifted" from wealthy parents or grandparents.
Now, I do know people who were simply "given" a downpayment that way -- but it is not everyone, and certainly not at the high prices levels that exist on the coasts. A million dollar home requires a $200K downpayment PLUS about $15K in closing costs!
Most Americans cannot come up with $400 cash in an emergency....
1
The figures for the rich cities are much too low. You've had articles about how couples earning $300,000 a year can hardly pay their rent. They can't afford to buy.
13
The list price on a home is the start point for a bidding war.
3
I'm not aware of anywhere in SF where someone with a $171K income can buy a house. Good luck with that. The analysis assumes that there will not be a cash buyer willing to do non-contingency with a 1 week close. So, maybe if you have $2 million in cash assets, and a $171K income, that could work.
25
The article says it is about metropolitan areas, not cities. The HSH article linked to says the same thing. The SF number is specifically applicable to the entire SF metro area, and not to the city of SF itself.
3
The SF Bay Area is comprised of nine counties, including Solano County, where you can find nice homes for $500,000 or less. East Contra Costa County is also a good place to look for deals (Antioch, for example). If you're willing to commute (which many in the Bay Area are forced to do), you can find a home you can afford on an income of less than $100,000 per year, IF you have the 20% down payment cash in hand.
1
c2396: let me guess. You live in a premium and convenient area, where you bought years ago before the present inflation.
It's easy to tell other people to commute 2 hours each way to work -- isn't it?
The author glosses over the issue of down payment. In San Francisco, for example, you need to be able to save up for a roughly $200k down payment while paying $48k-$60k annually in rent. High rents mean even highly salaried folks need to wait a long time to be able to prudently buy a house.
18
There is an unspoken assumption here that "everyone" has wealthy, deep-pocketed parents who will provide a six figure downpayment.
Oh the problems of rich white folks in the first world....
1
All those years ago, at a time when we made about 60k, we bought a modest house for 100k. We were told we could have qualified for more, but I am so glad we didn't. There were some rough and rocky years, but we were never close to losing our home, and it has been paid off now for years. You can't put a price on peace of mind.
22
That's how we proceeded too, Mrs. H. The only thing I can say is that people who purchased more expensive houses have seen their investment quadrupled, while ours has perhaps doubled. More important, those pricier houses are in the quieter sections of our neighborhood, while I've had to call 311 and 911 repeatedly over the years to try to stop the noise and assaults and drug dealing outside my windows. Things have calmed down now, but one always fears that a new generation will spring up and retake the streets. Sometimes it pays to pay a little more.
1
..."assuming a 20 percent down payment and industry-standard mortgage-debt-to-earnings ratios". How easy is it for a young family to save for a down payment, given the reality of college loan(s), the cost of health insurance, and "tax reform" which actually raises taxes? Who can save when so many young people are underemployed? The point...who can save?
17
Frankly, it is impossible to save that much if you earn the salaries quote here. It requires a YOUNG COUPLE -- often with children -- have to save up about 18 months take-home pay!!! and do so before they are old and gray and the children moved out!
I'd LOVE to know how anyone does this -- and I do not mean "the lucky few whose rich parents can give them $200K to put down". Or who inherit a lot of money or win the lotto.
I mean people who basically have nothing but a job and relatively good health -- how do THEY save up every penny of this, before PRICES RISE SO HIGH that the house costs twice as much????
2
This assumes that a household takes four times its annual gross income in a mortgage. Bad advice. Three times is max. Also, one must consider all the maintenance and home repairs when calculating expenses. Don’t be house-poor.
35
Excellent advice. I purchased as much house that I needed; not what i could afford. That left me with plenty of funds to take care of my house and ultimately, pay it off early. I am still living in the house and saving for retirement. One caveat, I do realize that being unmarried and without children does significantly change the financial equation.
14
Thank you. I thought it was fishy they said someone with a 170k annual salary could afford a home in San Francisco. My experience tells me its closer to 250.
14
Tapani: while I agree with you....in very high cost areas, banks have stretched the limits of borrowing, because otherwise, few would ever qualify.
So 4 times income is not unusual -- I've seen 5 times income used.
But it's a bad idea. If you borrow that much, you are over-extended and can easily get into trouble. And for some of these folks, they are paying almost 75% of their take-home pay on the mortgage, taxes and PMI. That leaves them very little to actually live on, and if anything goes wrong....bad health, a job loss...they are screwed.
A fair analysis, especially in places like Pittsburgh or Memphis would be THREE times income. That would give that person with $35k a year only a house worth about $105,000 -- NOT a house worth $149,000. They are off by 50%, which is a pretty big error.
This is typical of the scorn and contempt with which the elites working here at the NYT view working class America.
And people wonder why Trump was elected. Yeesh.
1
Where in New York?
27
I looked at the link. It says New York City, and based it on the median home price in NYC of around 420,000....are they crazy, or are there a lot of small coops and condos in outer boros that make up the vast amount of sales? Obviously Manhattan and Brooklyn are twice this probably.
9
My guess is Elmira and not Chelsea.
5
There are plenty of2 bedroom condos available for 200 K in Queens and houses for 300 K and up in various parts of NYC. Highrise luxury towers are not the only definition of a home in NYC.
4