HCOL areas?

MommaA117 · September 2012

I'm always watching House Hunters wondering how in the heck you guys do it? These people are paying $500,000 for these tiny, average houses. I know there is no way that many people here can afford a $500,000 home. Are the salaries higher? A $500,000 home here would probably be a brand-new six or seven bedroom, four or five bathroom mini mansion.

Are people in high cost of living areas maybe more frugal? I mean, we spend probably around $400 a month going out to eat. Are the property taxes less? Maybe the insurance is less? Our escrow is probably $600 a month extra when you tack on insurance and property taxes. When I'm watching House Hunters at the end they always say what the people's house payment is going to be in and it's really not outrageous for these expensive homes. Are they just not adding in the extra expenses like insurance or taxes or what?

I just don't get how you guys do it with everything being so much more.

SarahKate31 · September 2012

A regular 4 bdrm, 2+ bath SFH in my home town goes for $450-ish. We certainly have $500 and $600 homes around here and they are nice, but not mansions necessarily. My guess is that salaries in HCOL areas are higher so that's how people can afford the higher costs, but I'm not positive.

FTR, we live in a neighboring county where home prices are slightly more affordable since we cannot currently afford to move back to my home town as we would like to do. Daycare prices are still high though.

Sunidaze · September 2012

Yes...salaries are generally higher for HCOL areas.

MommaA117 · September 2012

Sunidaze:
Yes...salaries are generally higher for HCOL areas.

But like double? I mean here at teacher salary is probably around 45-50k. How in the heck would someone with an average salary even be able even afford a house?

Syncronicity09 · September 2012

We just left Orange County, CA. because there was no way we would ever be able to afford a house. I did make WAY more there than I am here in Colorado, however with the COL so high there, we are actually doing better now!

Not everyone in those areas (at least in OC) can afford a house, and many rent forever! Those that do buy them are making more, or sacrificing elsewhere. I am willing to bet that when they mention the payment on those shows they are not adding in the extra's. I had quite a few co-workers and friends who recently bought homes in California, and the expense was insane.

MommaA117 · September 2012

Here you can get a pretty new four-bedroom, two bathroom, two car garage home for like 160k. That's In a nicer school district, "good" area. If you go to an area that I wouldn't feel comfortable living in, a bigger brand new 4br home (2300 sq ft) will cost you around 115k.....but like I said it would be in a higher crime rate area. The 160k one would be in a nice area. Of course there's also four-bedroom, two bathroom, two car garage homes that run up to 400k but that would be custom and in a gated, master-planned community.

kimbo1216 · September 2012

MommaA117:
Sunidaze:
Yes...salaries are generally higher for HCOL areas.
But like double? I mean here at teacher salary is probably around 45-50k. How in the heck would someone with an average salary even be able even afford a house?

Yes. The same job in NYC, for example, that pays 80k there, might only pay like 40-50k here (in Dallas).

SarahKate31 · September 2012

MommaA117:
Here you can get a pretty new four-bedroom, two bathroom, two car garage home for like 160k. That's In a nicer school district, "good" area. If you go to an area that I wouldn't feel comfortable living in, a bigger brand new 4br home (2300 sq ft) will cost you around 115k.....but like I said it would be in a higher crime rate area. The 160k one would be in a nice area. Of course there's also four-bedroom, two bathroom, two car garage homes that run up to 400k but that would be in a gated, master-planned community.

Wow! You can get basically nothing in a decent area for 160k around here (Baltimore/DC metro). But as pp said, there are many people here who can't afford to buy a house either because the prices are so high.

just kita · September 2012

I live in a nice little town near Boston and small and sometimes very ugly 1000sq 3bed 1 bath capes are 350-450k+. Oh yeah and these homes are 60-100+ years old. Taxes are on the low end in my town because we have a lot of high end retail, so it's about $4k per year on those home. Many people do make higher salaries, but we don't make enough to feel comfortable with that size mortgage. None of our friends between us and Boston are homeowners, but many pay $1700+ rent on 2 bedroom apartments.

We have thought about settling for a town with just okay schools and some questionable neighborhoods, but I think we will wait until our downpayment is big enough to bring the payments down to a level we are more comfortable with. We are very frugal so I know someday will we have enough to buy a home here.

We thought a lot about moving south where we have family,COL is lower and homes are new, but I really love the Boston area and want my LO to grow up here. I feel so lucky to live where I do.

baseballcr8zd · September 2012

I was actually having a very similar conversation with a friend from hs last night. She lives in PA close to where we went to college and her and her H are looking at homes in neighboring towns. She was saying that 4 bedroom homes in her area were like $175. We live in Northern NJ right outside NYC and I don't know that you could buy a shed for $175,000. Most of the homes in our town are probably in the 3-4's but there are some sections with crappy housing that's in the 2's and a few blocks from us there are some $1mil plus. Reading this post makes me wish we didn't live in such a HCOL area, but I know DH will NEVER move.

MommaA117 · September 2012

just kita:
I live in a nice little town near Boston and small and sometimes very ugly 1000sq 3bed 1 bath capes are 350-450k+. Oh yeah and these homes are 60-100+ years old. Taxes are on the low end in my town because we have a lot of high end retail, so it's about $4k per year on those home. Many people do make higher salaries, but we don't make enough to feel comfortable with that size mortgage. None of our friends between us and Boston are homeowners, but many pay $1700+ rent on 2 bedroom apartments.
We have thought about settling for a town with just okay schools and some questionable neighborhoods, but I think we will wait until our downpayment is big enough to bring the payments down to a level we are more comfortable with. We are very frugal so I know someday will we have enough to buy a home here.
We thought a lot about moving south where we have family,COL is lower and homes are new, but I really love the Boston area and want my LO to grow up here. I feel so lucky to live where I do.

wow! It's rare to find a home that old here! Maybe downtown or some other historical ones in Galveston.

cvl105 · September 2012

You can't even by a townhouse/condo for $160K - at least not a nice one - around here (30ish minutes outside of Boston). It's crazy. I would imagine the salaries are higher here...but not double. I would say property taxes are mid range. Nothing like my family pays in NJ, but not super low. I think ours are about $4K, maybe more, for a 4 bedroom, 2 1/2 bath colonial on an acre or property. We live pretty tight between the mortgage and daycare now....the thought of adding a second one to daycare next year makes me a little sick...but we'll make it work.

Telly21182 · September 2012

We're in a MCOL area I'd say. HOwever, in my area, there are various price points for homes based on the area of town. For example, our house is 3BR, 2.5B, almost 100% finished basement and in my area of town it'd be about 100k less than if we moved 15 miles NW. However, if I lived 15m NW I'd make the same salary, so therefore, we don't live in that area of town.

I do know that COL does effect salary, but my company is based in the mid-west AND East Coast, and I would be super pissed to find out my EC counterpart made 2x what I do because of COL. Maybe 10k more, but her rent is probably more than my mortgage so I get it.

MommaA117 · September 2012

I'm speaking for our suburban town. Downtown area is definitely more expensive but that's typical.

MommaA117 · September 2012

cvl105:
You can't even by a townhouse/condo for $160K - at least not a nice one - around here (30ish minutes outside of Boston). It's crazy. I would imagine the salaries are higher here...but not double. I would say property taxes are mid range. Nothing like my family pays in NJ, but not super low. I think ours are about $4K, maybe more, for a 4 bedroom, 2 1/2 bath colonial on an acre or property. We live pretty tight between the mortgage and daycare now....the thought of adding a second one to daycare next year makes me a little sick...but we'll make it work.

that's a bit less in taxes. For a 4br in an average neighborhood, on only a fourth of an acre, taxes would be around 4500-7000 depending on area.

MommaA117 · September 2012

oh yeah. No basements here. Maybe that's part of why they're less too....

62406 · September 2012

Our property taxes are very high here ($3,500 - $5,000/yr). We live in a nicer suburb with good schools. We chose to pay higher house prices/taxes so that DD can be in a better school district and a safer community.

I don't know if people here are more frugal, they maybe just choose to spend their money on property vs. toys (boats, ATVs, etc.) and entertainment.

MommaA117 · September 2012

62406:
Our property taxes are very high here ($3,500 - $5,000/yr). We live in a nicer suburb with good schools. We chose to pay higher house prices/taxes so that DD can be in a better school district and a safer community.

I don't know if people here are more frugal, they maybe just choose to spend their money on property vs. toys (boats, ATVs, etc.) and entertainment.

See here 3500 is def low. 5000 is average to lower in a nice suburban area.

march2008 · September 2012

We're moving from a very LCOL area to a much higher COL area and there won't be a salary increase for DH. We've always lived well below or means, but we're expecting to just have a much smaller, older home than we had here in FL. On the flip side, we will have so many more things to do there and the public schools are SO much better than they are where we currently live.

MommaA117 · September 2012

march2008:
We're moving from a very LCOL area to a much higher COL area and there won't be a salary increase for DH. We've always lived well below or means, but we're expecting to just have a much smaller, older home than we had here in FL. On the flip side, we will have so many more things to do there and the public schools are SO much better than they are where we currently live.

Yeah. I'm from central Florida. Melbourne area. Prices are similar to here in Houston. Not sure about taxes though..

tulipblossom · September 2012

Syncronicity09:
We just left Orange County, CA. because there was no way we would ever be able to afford a house. I did make WAY more there than I am here in Colorado, however with the COL so high there, we are actually doing better now!

Not everyone in those areas (at least in OC) can afford a house, and many rent forever! Those that do buy them are making more, or sacrificing elsewhere. I am willing to bet that when they mention the payment on those shows they are not adding in the extra's. I had quite a few co-workers and friends who recently bought homes in California, and the expense was insane.

Like Sync said DH and knew if we stayed in So Cal we would never be able to buy anything.

Another way people "make it" in So Cal is you have more than one family pool together and buy a house or even in some cases rent nice apartments together. DH and I did both of these. We lived with my brother in an apartment so we had 3 incomes and we didn't have tons of money to save but we were able to put aside the money for our wedding.

Then when my brother lost his job and moved out of state we moved in with my friend (older women in her mid 50s, kinda like an extra mom to my brother and I) She owned a house and had even talked with her about once her mother passed she would be willing to rent us her home for less than the house payment and she would live in her moms paid off house down the street. If DH hadn't lost his last job last December we would have gone with this option.

tulipblossom · September 2012

Oh I also know tons of people who have said "Bye bye So Cal" and all up and went to Texas due to the much lower cost of living. And when I say many I am talking about between 30 to 50 people over the last 10 years.

MammaBear81 · September 2012

Our 2,000sq ft house (4 bd 1 1/2 bath 3/4 of an acre) was 400K when we bought it. Salaries are higher in NY than other places, but we lucked out because I bought a co-op, fixed it up and was able to put 100K down on this place (or we would have ended up in a 2 bedroom cottage somewhere on 1/6 of an acre).

This was (and still is) a "fixer upper" too, but to get a new house in this area (great schools etc) would have cost us well over 800K- so we considered this one a steal!

jcsumm0 · September 2012

Yeah, we live in a fairly LCOL area and it is always crazy to me on House Hunters how much people spend for tiny condos in some place like California or NYC.

It is fasicinating to think about how other people live and chose to spend their money. When we were living in Australia, we noticed that salaries there are about the same as the US (although minimum wage is much higher) but housing costs are much higher. People still buy nice homes though. DH and I were baffled as to how this worked until we talked to someone who explained that people basically put all their money into their homes. You don't need to save a lot for retirement or health care as you get older or even an emergency fund because you are covered under their "socialist" medical, disability, and retirement programs. I thought that was so interesting.

chuicafina · September 2012

I live in the SF Bay area and it's crazy here. Lowest end for a 3 bedroom fixer upper is 700-800k (further out from the tech area, where Apple and Google are, you can get a fixer upper for 500k). People who buy houses here work for one of those big tech companies, or have help from family. Salaries are definitely higher here, but not THAT much higher. As an example, one of the higher paid school districts starting teacher salary is 58k. Definitely not double the Texas salaries. The rental market is definitely strong here. Lots of renters.

Kymbirleigh · September 2012

I remember talking to a friend of mine that lives in LA. He is in a one bedroom 600 sq ft apartment and pays $1100 a month... I was in a 1000 sq ft apartment and paid $750 a month! I was like, holy cow dude, that's crazy!

Where I'm at $80K will get you a decent 2-3 BD home... $100K will get you a nicer neighborhood... And then it goes crazy on how much it varies. In my neighborhood, the prices range anywhere from $120K up to $300K. All different sizes of houses, building materials, bedrooms and bathrooms, etc. So many different options in my neighborhood. Not to mention whether or not the home has been updated or not.

Our property taxes are waaaay lower than some of what I've seen on here though! We're paying $300 a year. Though, we've got a hefty discount for being a disabled vet, oh and living in the county. My parents have a smaller house with an inground pool and their taxes are $1500 a year.

egpitt22 · September 2012

I always think the same thing when I watch that show! (which is often, I'm such a sucker for it, even though 99% of the time the people annoy me) we're in a fairly LCOL area (Pittsburgh) so I guess maybe I'm spoiled.

rlmanning · September 2012

I live in Southern California. About 50 mile east of Los Angeles.

2200 Square foot single story home (no basement)

6900 Square foot lot

Built in 2001

Built in Pool and Spa

3 bedrooms - 1 Office - 2 full bathrooms

$350K

1.75% annual tax rate (this is based off of purchase price)

simbaby · September 2012

L.A. area here. We have a modest 18k sq foot home and paid close to $700k. Mind you, we are in a "historical district" so it's a little more expensive. We had no help from family, insurance, estates, but Dh and I worked hard and blessed to find careers we love and make money. We purchased this based on what we can afford, so yes our salaries combined are higher than the average family. Dh is the main provider now as I work part time as a non profit consultant....so money isn't flowing in. We are surrounded by renters so it's quite common as PP from the bay area posted. SF btw is waaaaay expensive but sooooooo beautiful and full of culture. For 700k in SF, we'd get nothing!

Rachel5782 · September 2012

MommaA117:
Sunidaze:
Yes...salaries are generally higher for HCOL areas.
But like double? I mean here at teacher salary is probably around 45-50k. How in the heck would someone with an average salary even be able even afford a house?

We live in a HCOL area and I'm a teacher. There's no way we would be able to live in our house if we were both teachers. My salary is higher than most teachers in other states but no where near what it would need to be to be able to afford a decent size house. Luckily DH makes a good salary. The teachers I know get by by renting or owning a tiny home or they have to bust their butts working 2nd or 3rd jobs to make ends meet. Or they live in a lower cost area further away and have a really long commute.

Rachel5782 · September 2012

kimbo1216:
MommaA117:
Sunidaze:
Yes...salaries are generally higher for HCOL areas.
But like double? I mean here at teacher salary is probably around 45-50k. How in the heck would someone with an average salary even be able even afford a house?
Yes. The same job in NYC, for example, that pays 80k there, might only pay like 40-50k here (in Dallas).

My gf and SIL teacher in NYC both have masters degree and about 10 years experience and just make about 70k. 70k gets you no where when it comes to rent in NYC. I suppose they "get by" but barely. They both live in shoeboxes and really stress about money.

lauracoro · September 2012

62406:
Our property taxes are very high here 3,500 5,000/yr. We live in a nicer suburb with good schools.nbsp; We chose to pay higher house prices/taxes so that DD can be in a better school district and a safer community.nbsp;
I don't know ifnbsp;people herenbsp;are more frugal, they maybe just choose to spend theirnbsp;money on property vs. toys boats, ATVs, etc. and entertainment.nbsp;

If I saw a tax bill for 6k I'd cry with joy! We pay over 12k in taxes a year! Yes it's a HCOL area and we have a 3 family house. But it's tiny! The only reason we stay is because schools are excellent and so is the neighborhood and the rental income offsets most of our living expenses.

MammaBear81 · September 2012

lauracoro:
62406:
Our property taxes are very high here 3,500 5,000/yr. We live in a nicer suburb with good schools.nbsp; We chose to pay higher house prices/taxes so that DD can be in a better school district and a safer community.nbsp; I don't know ifnbsp;people herenbsp;are more frugal, they maybe just choose to spend theirnbsp;money on property vs. toys boats, ATVs, etc. and entertainment.nbsp;
If I saw a tax bill for 6k I'd cry with joy! We pay over 12k in taxes a year! Yes it's a HCOL area and we have a 3 family house. But it's tiny! The only reason we stay is because schools are excellent and so is the neighborhood and the rental income offsets most of our living expenses.

This is us too! Our taxes are included with our mortgage, but it's about 1K a month that goes into escrow for the school/town taxes.

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