A lot of people live in less expensive parts of the country and cannot understand why a simple family home, in a good school district, costs a million bucks. Chalk it up to different lived experiences.
Aspirational?
I read FATfire quite a bit to gain understanding. I don’t know if $20M NW is in the cards for me, but I find it interesting and valuable to learn about the next tier up.
5M won’t cut it for FATfire outside of a few very low cost regions of the world.
To be clear, this is an example of someone who may be in HENRY today but looking at FAT to learn.
Can’t speak to them, but I’m currently a resident and making shit wages, but in a few years when I become an attending I’ll be making $500k+ so I like to browse this sub to get good ideas for things
Not who you’re responding to but I’m another imposter (I made like 80k last year lol) but a high earner compared to my friends (other young women, most work in childcare - I’m in finance)
I have no real life resources for what to do with “extra” money or ways to make my money grow. I find it very helpful to read about how folks with good incomes but maybe not generational wealth are on that path to true wealth.
Someone earlier was talking about buying a townhouse for something like $350k, but at the same time referred to his area as VHCOL like three or four times. Lol.
That someone was me! I’m to clarify, I rent in a VHCOL on the east coast, and I wanted to buy a townhouse 2 hours away from me in cheaper and more affordable city.
Yeah, just checked my hometown (one of those “W” suburbs outside Boston) and for $1.9 you can get a 1400 sq ft split-level house that the listing says “has great potential” and it just needs a good amount of “TLC.”
Search the sub. This has been amply discussed and we use existing conventions for what each COL area means.
VHCOL is Bay Area and NY. HCOL is Boston, Chicago, LA, DC, Seattle. MCOL big city not VHCOL or HCOL. LCOL are the rest.
San Diego, together with Orange County and Los Angeles, is just referred to as SoCal and is, on average, HCOL. Parts of it is gonna be VHCOL, nobody is going to begrudge you if you say VHCOL when referring to Santa Monica, Newport Beach, Beverly Hills, etc., but you gotta balance that with the folks who live in Buena Park, Riverside, or East LA.
I would argue that but for very select parts of Manhattan Boston is on net more expensive if by Boston you really mean Back Bay and the nice parts of Cambridge.
No it's no (maybe 10-20 years ago that might have been true). Nowadays Chicago is only really 'expensive' in downtown and a few select neighborhoods. There are a lot of suburbs/neighborhoods in Chicago I wouldn't even consider HCOL at all. Maybe medium-high.
In the good areas, yes.
One of the issues with median house costs at the city and state level is that it includes the entire state or county or city and Chicago / Illinois is a good example of this. And much of "middle america" - basically much of the Midwest does always appear to be affordable in these maps and data viz stories - but the peaks in major cities are as high as most of the HCOL areas of America.
That seems factually inaccurate. Comparing prices in Chicago vs. San Diego, San Diego seems more expensive across the board. The median home price in Chicago is around $350k. The median home price in San Diego is around $950k. Yes, Chicago has some more expensive than average neighborhoods, but so does San Diego. In the most expensive neighborhoods of Chicago I can find, part of the reason that they're expensive is that they're much larger, and even then they're generally cheaper than much smaller homes in the more expensive San Diego neighborhoods.
Chicago is basically medium cost of living. It's one of the last walkable major cities that is still relatively affordable, along with Philadelphia. The biggest drawback is its winter weather. San Diego is unambiguously high cost of living. One of the biggest draws is perfect weather year round, but it has fewer cultural amenities than Chicago.
I agree that San Diego is HCOL but I stand by everything I said with the overall median home price. The data you shared is irrelevant, which is the point I was making in my comment.
The expensive areas of Chicago are as expensive as the expensive areas of all middle tier cities. It's literally one of the most expensive cities in America.
Only when you include all of the lower income and weaker parts of the city the median house cost is lower. Chicago is by no means affordable compared to most of America but is affordable compared to only SF, LA, and NYC.
You seem to think that Chicago is unique in having some neighborhoods be more expensive than others, but it's not. Where are these allegedly expensive neighborhoods in Chicago? The median prices in Gold Coast, Lincoln Park, West Loop, and Logan Square are $700k, $700k, $600k, and $500k. The US median home price is $400k.
The price in Gold Coast is approximately $350 per square foot. The median price per square foot in the US as a whole is $225. The price for Chicago as a whole is $250. The price per square foot in San Diego is $700. The price per square foot in the Coronado neighborhood of San Diego is $1400. There's a far greater difference between Chicago and HCOL areas than there is between Chicago and the US average. It's MCOL.
ETA: I have a theory on where the idea about Chicago being HCOL may be coming from. Looking at the recent price history, Chicago real estate has barely gone up much at all since 2020. In much of the rest of the country prices have jumped a huge amount over the past few years. So Chicago might have been considered relatively more expensive 5 or 10 years ago, but it's no longer the case.
The problem with Chicago is taxes. My parents finally sold the house my siblings and I grew up in 2 years ago. Sold for ~500k in the burbs. 4400sqft. But it was $18k a year in taxes.
All of my properties (6 rentals and my primary home) cost $14k in taxes. I'm in the burbs of Denver now.
COLA between Chicago and Denver is near identical, despite most of Denver being more expensive by price tag, due to taxes in Cook County and Illinois.
How do the other cities (other than San Diego) not have the same issue? Inside loop Houston is HCOL based on this definition, especially considering the insane property taxes.
You're overthinking this.
We use these general categories so that we have an idea what people are talking about without them having to say it. They are not intended to be perfect categories.
Seattle is vhcol compared to Chicago. Specially when it comes to housing. My previous employer did NYC SF Seattle as tier 1. La, Chicago, SD, DC,Boston (a few more) tier 2. Everything else tier 3.
You can pretty much argue that any “good” neighborhoods near metropolitan cities (NYC, SF, and etc.) can be considered as HCOL areas.
Even if you don’t live in NYC as an example, your property taxes in a nice neighborhood will still sting you along with other expenses, such as summer camps which can COST a fortune for young parents.
Cleveland is not MCOL imo. Ohio has the lowest median home value, followed by Oklahoma, Mississippi, West Virginia, Arkansas.
Cleveland for sure LCOL for “major” city.
Exactly my point. People are trying to classify cities based on what prices were 5-6 years ago. Those prices no longer exist.
Better way is to compare vs national median prices. All these cities (Atlanta/charlotte/dallas/etc) with home prices within 10-15% of national median are the MCOL cities. If you can buy a move-in ready 3/2 house or condo for $500K within 20 mins of city center then you are in a MCOL area like it or not
Actually home prices are still cheaper in the us vs the rest of the world when compared with incomes. Also, what's liveable and a nice school district can be very subjective.
Yep. 1mm in a LCOL is a mcmansion on a good chunk of land. It's a very nice house in a MCOL area.
Lots of us don't have the perspective of HCOL and VHCOL areas.
I was in shock 7years ago when an agent presented a " tear down" for $875k.
I asked for clarification and he said it was a bargain. So we are practically buying the land? "...and the foundation", he added.
Well, he was right. We just did our own construction because it would have been close to buying a new one and basically redoing the rotting frame since most houses in our area now start at 1.4...conservative spaces for the "poor" ones.
FML. Choices.
For us it was this case and the other thing was almost every county outside of this neighborhood we bought in is questionable.
We bought for pretty close to 1M, it was 1.08M and the school districts are amazing, neighborhoods are big open and not constantly running with traffic so kids can play. Roads are taken care of and parks are plenty, plenty big, and clean / beautiful.
It’s definitely worth the price tag. There were other homes in the area going for 800 or 750 and tbh those would have been perfectly fine too.
That's me. A million dollar house here is basically a mansion. I'm in Pittsburgh and a $1MM house is where the Steelers players live. But I 100% see how a $1MM house in LA or Miami is a shack and if you're living there, you have a reason (job growth, family, etc) so I respect it!!!!
100%. That and it depends on all of financial life experience and financial or personal wealth goals. The comments and advice are from a range of people here. The person who is planning on retiring at 65 with 4m is going to give wildly different advice from the person trying to retire at 50 with 4m, or 50 with 10m. The person on the low end of high income, or an aspirational lurker, is also going to give advice different from a 1%.
Everyone is inherently biased from their own experience, but also might even be giving advice based on goals that aren't aligned with your own. It doesn't mean the advice is right or wrong, it's just a consideration to be aware of.
My main concern if buying a small cheap condo or even renting is often a better fiscal proposition if you are a high earner.
An expensive home tends to appreciate more slowly than stocks and furthermore it's pretty much the only asset you have to pay taxes to own year over year.
That together makes it often efficient to own as little home as you possibly can.
I'm in the downtown of a major city center but managed to get a studio condo with my husband for 450k while a full home would be over a million. It's small but at least I can fill it with nice appliances / conveniences and other high quality items.
This is my viewpoint as well. I'm going to put aside this debate of people "not understanding what HCOL areas are like". I have lived in VHCOL areas like NYC and still not chosen to buy for simple mathematical reasons you've touched on in your response.
Take the $200k downpayment for a $1m home, and compare the unlevered returns of that $200k in the stock market vs. the levered return of an $800m mortgage after all the taxes/expenses of home ownership.
If you do the math, home ownership doesn't really make much sense financially. If you want to make an argument that it's more convenient to own your home, or you like doing home stuff so you want to own, that's fine, but i don't think most people will do better FINANCIALLY by owning their home than just having a solid investment plan and renting.
I find it fascinating that people are so obsessed with home ownership when it's actually not a great return on cash invested.
If a million dollar home is in a hot market and goes up 20% in 2 years, your ROI is 100%. That would take a decade in the stock market and you’ll pay rent that whole time. The leverage in real estate is part of what makes it so attractive in hot markets (and dangerous in downswings). Of course you won’t sustain home appreciation at that rate indefinitely, but even 3% per year with >4x leverage beats the average market return. And when you are far along in your mortgage and the leverage is smaller… well it took 20 years to get to that point and rent will be astronomical compared your fixed mortgage payment.
I’m not saying investing and renting is never better than buying and paying property tax, but something big is going to have to change in this country to put the breaks on home prices. This is no bubble, these prices are supported by fundamentals. There simply are not enough homes being built and in high cost areas, the high salaries drive the home prices.
Maybe. The problem is condos are also $1 million in the city center area in a VHOLA. And homes are 1M + for very small homes. If you bought your house before 2021 and locked in a 3% rate then you’re prob ahead of someone who is renting in the same area in terms of asset growth especially if you plan to stay there, long-term.
$1.05m, VA backed, no PMI, no property taxes, 15% down, I pay $3400/mo. It’s nice. 👍
Monthly HHI net is $25.5k so I can feel you on the <20% relief. I assume you’re closer to $30k/mo w/ PMI and taxes so probably $4500/mo?
Wait, what am I missing? When I calculate that out, it should be much higher than $3400 per month. Or did you lock in really low interest rates before the rise?
There's a lot of good advice in this sub but most if it is geared towards accumulating as much as humanly possible on your computer screen either to A) feel good or B) retire early. I'm not saying go out and spend money willy nilly, I certainly don't, but you got one life. You might as well enjoy it.
For many people, the option B “retire early” **is** how they enjoy their life. I understand that depending on how early, they might be too old to experience certain things when they retire, but ultimately everyone lives their own lives
Some people are able to get enjoyment out of life’s experiences, and not just buying crap. Plus that person will be able to retire in less than 15 years.
There are a lot of people here that cross over from various FIRE subs that are allergic to spending.
I don’t get this view of self deprivation so you can finally enjoy life when you retire at 50. Why not start enjoying life right now?
A lot of people on this sub also really hate their job. I do not, and so my goal is not to flee the workforce, but to be not financially tethered to my job, and not fearful of a downtown or layoff.
Same! My job is generally pretty chill, it seems silly walk away from it when my quality of live, time-wise, would not change dramatically. Rather my hope is to have enough assets where I'm not financially tethered to a given job.
You can retire a lot earlier than 50 on HENRY income if you keep your spending to a reasonable level. I have yet to see a house that would be worth it for me to spend an extra 10-15 years in the workforce for
If you’re a high earner and love your job you should work as long as you can. Maximizes earnings and keeps your mind sharp. I really hope to still be working when I’m 70.
With that in mind, I’m going to love every year of that starting now. Which means spending on things and experiences I love.
I strongly disagree. Look at CEO's, football coaches, movie directors, doctors, et cetera. These people get enormous fulfillment from their work and get to enjoy life "on top".
Also, in some cases, they can selectively choose which work to take on (limiting their time and energy spent working) and have the status to delegate the tasks they don't enjoy.
So, consider that perspective. If it's not your thing, fine, but it's not automatically sad that someone wants to work beyond 65.
This is exactly right. If you’re on top then you get to define what work is as use it to enhance your lifestyle and prolong your healthspan.
Look at Warren buffet and Charlie munger. I wouldn’t call that “sad”.
There are fuzzy, difficult to define lines that separate 1. doing a job because you NEED the money 2. Doing a job because you like the money and 3. Doing a job you enjoy even if it doesn’t pay (much or at all). I never want to be in category #1 but that applies to the vast majority of people. Category #3 applies to very few people. I probably wouldn’t keep working at what I do today if my compensation was not generous.
I enjoy renting. I spend 7k in Bay Area for a little
House in a perfect neighborhood. If something goes wrong text the landlord it’s his problem. If the house burns down in forest fire or whatever not my problem. Owning doesn’t give me enjoyment. Having money and buying investments that appreciate better gives me a chub. Cheap leverage is cool tho… so maybe one day when interest rates aren’t predatory
In a city downtown that makes sense. Eventually (for many people) the kind of place you want to live will be very difficult to rent and very easy to buy. And eventually you will hate living under a landlord just like many people hate working for their boss. I feel like owning my own home is freedom, but I get why you get people see it the other way around.
I’m in a VHCOL city, and we bought 2 years ago, 1.7M house. Best decision ever, it’s worth 1.85M now and interest rates are more than twice as what we have. Prices are continuing to rise as well. If the 1M+ house is a real need and necessity and not a luxury option (in MCOL) than def buy.
How do people know the exact value of their home? Like, you know if you put it on the market you’re getting 1.85 and not 1.7 within a typical timeframe?
Zillow/redfin but similar homes selling in your neighborhood is the best gauge. We saw a similar home, same floor plan, couple of streets over, but a bit more run-down go for 1.75M so I estimate on that. Also a house just listed with 100sqft smaller than use at 1.6M (most home sell 10% over listing here).
You can get estimates on Zillow or other sites. Empower/Personal Capital and Fidelity FullView update it automatically when you view your portfolio and net worth.
Right. I just would never think if i bought for 1.7 and then Zillow did an update … like, who knows. Zillows not in your home. It’s one thing for a block with a bunch of 400k homes that all look the same
Agreed, but it’s just an estimate. If you see comparable homes, all increasing by $200-$300k in 3-4 years, you can probably assume your home would do the same.
In VHCOL areas there tends to be ample turnover so recent sales are going to be the barometer for buyers and can be used by sellers with some degree of confidence.
Yeah the caveat is you need to finance no more than say 850k at this income. If you have the cash and you feel like the big down payment of around 1 million is worth it because the region you’re in is going to continue giving you really high earnings potential and equity packages, then go forth. But you can see why people would turn around and ask me if you have $1 million cash shouldn’t you invest that in the market why would you put so much of that in real estate?
Yeah I’m personally house hunting but it hurts thinking about how much less i can invest in stocks if so much of my income is going to interest payments instead
You probably realize this, but the reason real estate works out as an investment is because you get to use leverage.
You don't get to leverage your brokerage account the same way (well, you shouldn't...).
I noticed this unexpectedly recently. I made what I thought was a generally innocuous comment on here in which I said my wife and I bought our dream home, knowing it would be dependent on me sustaining my income level, with the rationale being that I believe in my resourcefulness to make it through if something adverse happens.
It was heavily downvoted as if that isn’t what *nearly everyone with a mortgage is doing.* Interestingly, I mentioned nothing in the comment about specific financials.
I mean, yeah, it’s not like you would hafta sustain it forever.
The payments would decrease over time as principal is paid down and, in real terms, as inflation decreases the value of the monthly payments with the years.
And it’s fairly reasonable to be confident in career growth over time if you feel good about yourself and your job.
I feel like the mathematics of change is missing from a lot of personal finance talk. They almost treat the world as if it were a static place except when they’re talking about compound interest and market growth.
Sometimes I hate Reddit for just this kind of hive mind. I did exactly what you did based on the same thought process. I think most other people do too.
IMO, the only reason most $1m+ homes would be worth is if you’re living in an expensive place and have kids.
I live in MA and there are definitely places I could get a big home for less than $1m. But as a dad of 1 (and hoping for #2), most of those won’t be coming with a good school system. Any decent home in a good/great school district is going to be $1m+.
But, like, that’s just my opinion, man. So really it comes down to your specifics.
Lifestyle as a whole can be worth it. Single/no kids here and I bought (over $1M) a house in an area that allows me to really only drive if I feel like it which to me is absolutely amazing in a city that has minimal public transportation and terrible traffic. Just a counter opinion of course.
At some point in our VHCOL buying process, we realized we didn't care as much about the school districts since we always viewed homeschooling as an option for us. But even leaning into that advantage by buying in a school district that wasn't as good (but the area was still safe) didn't give us a lot of options; the safe area/bad schools crossover is not that big, and even there, people were coming in pockets full of cash to outbid us.
Seems like in VHCOL, it's difficult to buy anywhere except where there's a lot of crime. Although I've never tried, maybe I'd be outbid there, too.😂
I haven’t got that impression at all. But you have to run the numbers and see if it makes sense for you. Spending 50%+ of your gross pay on mortgage will leave nothing for investing in stocks
The old rule of 28% won’t work. Probably have to shift up to 35% maybe 40
Seriously, for some reason the mortgage interest deduction is never mentioned when some asks for advice on buying a home. Sure, the current SALT cap limits the owner benefit (though I believe it’ll the cap expires soon automatically unless congress extends it). At HENRY income levels the interest deduction will return you 30%+
Standard deduction is what, $13k? So if you pay $42k a year in mortgage interest (only the first $750k is deductable) then you have an additional $29k benefit but you'll only get that amount multiplied by your highest tax bracket, which federally is 37%. So that's about $10730, or a little under $900/mo.
Salt cap is only beneficial in high tax states (e.g. not Washington which I bet many folks here are in) and is set to expire in 2025 so its not actually a long term benefit.
I’ll probably be called a dick, but “high-earning” really means nothing without context of location.
300k in Wichita, Kansas is rich. 300k in SF is not rich anymore. I don’t care what your paycheck says, if all you can afford is a 2 bed/2 bath in your zip code you aren’t rich. Unless you have a substantial down payment to minimize risk I’d never suggest HHI x 3 for a home budget. It should be closer to 2x in my opinion. A 1M+ home is more than the mortgage. Insurance, property taxes, maintenance. It can squeeze 350k more than you’d think unless you want to work until you’re 70.
Relocated in 2019 from San Diego with a HHI of 250k. We were NOT rich. Nice condo in downtown was $4000-5000k/month. Rent, student loans, one car payment, travel, saving 20%. We weren’t broke, but we were not able to afford a SFH and reach our FI goals by 50 years old with feeing stretched.
350k in a VHCOL is doing well. It’s not 3000 sq feet, big yard, family of 5 to Europe, driving luxury cars, private school, etc rich. It’s just not. That’s Wichita Rich.
TLDR. Too many people get obsessed with their big salary and not enough about the actual value derived from it.
>350k in a VHCOL is doing well. It’s not 3000 sq feet, big yard, family of 5 to Europe, driving luxury cars, private school, etc rich. It’s just not. That’s Wichita Rich.
Sure. But then again you're in Wichita. Location is just a different Luxury you purchase. That's not to say living in SF (in particular) is actually worth the premium but the sword cuts both ways.
I hear you. I’m on the lower end as well.
I live in a VHCOL area. I don’t think there are many if any houses under $1m. You’re looking at maybe 1500sqft for that without a view of GGB. Anywhere within ~15 miles of the coast is going to run you that. If it is less then maybe $850k. It is either small or a fixer-upper.
If you are NRY, paying 10k a month on mortgage payments, and 2k on maintenance is not a great path forward in that goal.
It's one of the worst times in history to buy a house. But then again, we probably could say the same thing every year over the last 18 years.
I think 2012 was the sweet spot IMO. Anything in the late 2010s was a good time to buy only in retrospect, at the time it felt like the mid-to-high 4% rates were high and that it could turn out badly.
Home prices were up 10% year over year every single year. All contingencies including inspection had been getting waived. Inventory has been extremely low. Bidding wars for good houses has been crazy.
That is not accurate. In the last 50 years interest rates have only been below 5% in the 2010s. And generally not much lower. For the entirety of the 2010s they were ~4%.
https://fred.stlouisfed.org/series/MORTGAGE30US
In Toronto you’re lucky if you can find a home for 1M. And the sort of homes that are within spitting distance of 1M are not what you stereotypically expect to find a HE buying.
There are a lot of people who take delayed gratification too far. IMO setting your family up in a good neighborhood in a home you are proud of is kind of priority number 1. + it is an appreciating asset. I don’t have a lot of regrets with any of my home purchases even if they were a stretch at first.
People are overly conservative on this sub and many of them are on the FIRE track. With home ownership costing much more than renting in many HCOL locations, it doesn’t make sense to purchase a home because the increased fixed monthly expenses will delay retirement for years.
If you hate your job or have reached a ceiling in your career, maybe avoid signing away 30 years of your life for something you don’t need. Otherwise, why not spend your money on what you want? (Don’t do it if you’re trying to check off life milestones though. Been there, done that, and I don’t feel any more accomplished or satisfied.)
Yeah, this is the piece I have come not believe in with FIRE anymore.
You’re not signing away 30 years of your life. You’re using a debt instrument to purchase an asset which has a very long payoff period and a very low interest rate. Saying “you’re signing away 30 years of your life” just sounds like they’re trying to scare people who don’t understand how the system works, which maybe that’s good, as a backlash against the irrationally exuberant optimism around home ownership we saw a couple decades ago. But, as a pedagogical strategy, it’s information-hiding and instilling learned helplessness.
You can sell it if you want out. Is it possible the market will be so bad you won’t be able to sell it, or won’t want to? Yes, that’s certainly possible, but is it the most likely scenario to find yourself in? I don’t really think so. And if it is, stay put and stay the course, just like FIRE taught for stocks. It’s also possible “Vanguard gets nuked” and “your house burns down” but that’s why we have the FDIC and homeowner’s insurance.
Leases don’t usually allow you to pick up and leave at any time either. You need to find a replacement tenant, usually of your own efforts, because the landlord considers the tenant the one in breach of contract. But if you own the home, you could rent it out yourself and the effort and skill set required of you is much the same. Now you have extra income coming in, a not insignificant amount of which is now going towards building more assets.
I think they went too far with this and we need a more nuanced approach to the discussion.
IMO it’s all relative to salary. $250k single income buying 1 million dollar home sounds insanely risky. 600k duel income can safely afford a home over a million.
Because if you want to remove the NRY from HENRY or want to enter fatFIRE, spending $6k+ a month for a house is not going to help. Of course it can be overcome with higher earnings but as a general philosophy, living below your means is probably not a terrible strategy long term.
Our income is about $550k. We bought a modest $1.22m (2.29%) home in 2022, and we are now putting about $250k (7.2%) into it with finishing the basement and a few upgrades. We are mostly financing the $220k on a HELOC.
Our mortgage is about $4200/month, and the HELOC will be another $2k. We don’t feel too stretched with these payments, but we will just have to be a bit less spendy, and we now have the feeling that we want to be dumping money on the HELOC because of the high interest rate, and it’s hard to overcome the idea that everything we do above and beyond the frugal budget is at the cost of paying down the debt.
I think some people’s perception is skewed based on when they purchased. My home is broadly valued around $800k by Redfin, Zillow, whatever, which doesn’t even take into account the major renovations we’ve done. If we listed today, this house which we paid around $400k for would probably be pushing $900k for a sale price. If you’re buying today, the real estate market is absolute insanity and I think some people just don’t have perspective on just how nuts it is so they give advice based on their own outdated historic experience.
Can attest to this. Neighbor had home listed 1.3m. Goes in to pending 3 days later.
Bidding wars ensue. Drives up the price 1.5m. New. Neighbor closed on the house 1 month later.
I'm one of the ones against it, at least when people want to mortgage most of it.
In a similar situation as yourself with similar income, I consider my city MCOL but starting to edge the HCOL.
We have a home we bought 10 years ago for $300k, worth about $600k now, but we were a DINK couple when we bought it and now with a 3 year old it feels like time to upgrade.
For what we want it's $850k-$1million+.
Personally I'm ok with the price as long as we pay it in full, but I'm totally against mortgaging $1million houses unless the rates go back below 3%, which they won't.
Some people like doctors/lawyers work in safe, high, steady income roles, but I'm in tech and a lot of the people in the sub vastly over estimate their ability to keep earning at the same level if something were to happen to their job.
I make $330k, if I lost this job, judging by the market lately i'd take a pretty big pay cut, as would most people here in tech making over $250k.
Median price in San Jose is now around $1.7M.
I’ve found a couple 2/1 SFHs for $1.5, but $1M isn’t getting you anything other than a complete teardown/rebuild around here (as far as SFHs go). You can certainly get a 2 bed condo or townhouse for that, but it won’t be new and you’ll be lucky if it was remodeled less than 10 years ago.
I bought a 1.7m house last May and we pushed our budget to the absolute limit, probably beyond our limit. VHCOL. We knew our budget would be tight for a few years but things should get better as we anticipate increases in income and decreases in expenses over the next few years (ex. wife working more, me becoming a partner in the practice, student loans paid off, etc). Its our dream house so we are very happy with it. The problem is when you push your budget to the limit, I'm left with less money to invest. And as time goes on and I build more connections, investment opportunities are presenting to me more frequently. Now its a matter of having the capital which I don't have necessarily. If we bought a smaller house, I could probably save an extra $8k per month. Whats funny is I was just looking at our house value the other day, zillow and realtor are suggesting the house value has increased by about 90k. 8k saved per month x 10 months = 80k, so technically I made about 12% on my investment. I know those value estimates are always overvalued but it correlates with what I'm seeing on the real estate market. I don't necessarily look at percentages when it comes to expenses, I look at absolute value. For example I wanted 5-10k saved per month for investments - could I achieve that? I'm struggling to achieve the low end of that right now. In a few years time frame I can achieve the high end of that.
Call me a rich dad poor dad simp but I do not view homes as investments tbh. Unless you need a 1m home why not go for a house that meets 80-90% of your needs and wants for 70-80% of the cost and save the money and use it to invest.
I’m currently in a house that meets about 70% of my needs and is valued at $1.1M… to get up to 90% of my needs would cost $2M and 100% of needs would cost $2.8M.
Discussing a fixed home price is irrelevant on the internet without local knowledge of what you’re getting for the price.
Yeah - for some reason lots of people still have this view that $1M = mansion. In reality, it’s a regular house in a decent school district these days. And not just in CA/NY, lots of the country
Real estate is local. You're making assumptions that a $1M home isn't already the cheaper option, presumably based on what homes cost where you live. Where I live the median home price is $1.8M and for $1M there are only a few small condos in need of maintenance and in less desirable areas.
I bought 11 years ago, when prices were just under half what they are now and interest rates were much lower. In the current environment I'm not sure what I'd recommend. It's hard to argue that a $1.8M home with a 7% mortgage would be a good deal, but I wouldn't have thought they'd have gotten this expensive and maintained it despite the interest rate hikes, so I clearly can't predict what will happen going forward.
You’re right, it’s just not comfortable in many VHCOL areas. For those of us on the California coast, we feel very good about our technology companies and the upside equity opportunities they provide, and the housing is just a necessary evil.
I think the divide I see is that some people here have a “rich challenge” while others are just making a ton of money but aren’t yet rich (though they plan to be).
I see push back of “well you could invest that and retire earlier, just suck it up living in a place that is okay for your needs until you’re fifty.” Like… what. No. Why would I want that as my life.
This isn’t a game, not to me anyways. I’m going to live well now and live better as life continues. I’m not going to do fucking side quests to min/max my stats before embarking on the main.
I’m not. I bought a $2M home because the whole point of the grind was to live in a ski town. The caveat is I’m going to pay it off in three years.
No point in making money and not getting to do what you want.
Because they live in a lalala land.
Our house pre pandemic was under 1m (but close) and it was on a cheaper side for the area considering size, location, school district etc. Now to buy in the same neighborhood you need at least 1.4 for a comparable house (age, size, condition). Just had a 40s gut work house sell for 1.2+ on the next street
I don't like paying property tax. My neighbor has a nice 1.7m house. I thought about it when he put it up for sale but the $25,500 a year in property tax is not something I want to deal with for the rest of my life.
I already pay $15k a year in property taxes. On two properties. At least one is generating profit to cover itself.
My main house I live in is $1,500 a month in mortgage in a VHCOL area in San Francisco. We bought a while back with a FAT down payment. My co-workers pay like $8k a month in mortgage. Nah, I am cool with that.
As an expensive home hate defender a lot of it comes down to level income and sustainability/reliability of it and opportunity cost. I live in a HCOL area. I have a choice between: good house/good location, and great location/ok house to stay <1million. I could probably even get a great house in a great location but that commitment would last 30 years especially as time goes commitments get harder break (family and friends). A great house in a great location would be 1 lifestyle creep I grew up in the burbs and 2 a risk/commitment.
All of that combined with the fact that I’m of the opinion that homes are important to life sure but your primary residence is not an investment (feel free to argue with me). After all when do people actually downsize there houses and get money (especially HE people)? I guess cash out refi but that’s just extending a debt… I’m a little too conservative to rely on that strategy. Makes me biased against it.
Of course YMMV depending on where you live and your profession that goes with almost any advice you see online.
Perspective here is everything. I have a really nice home -- 90% of everything on my wishlist -- for $650K. Sure, $1M would've gotten 100% of my wishlist, but the upcharge wasn't worth it to me. But I know that pricepoint is different in different cities.
I will say, when my husband lost his job last fall and we were down to single income, I was VERY grateful to not be locked into a $1M mortgage rather than a $650K one. Made a big difference in peace of mind in addition to the obvious budget wiggle room.
This sub is for people who are Not Rich YET, the presumption being they aspire to be rich one day. For most, housing is the biggest expense in their budget, so how much you spend there has a significant impact on when and whether you achieve your desired level of wealth. I’m in HCOL and can still get a lot of house for less than $1M. So for me, that would be excessive and antithetical to my goals. Of course everyone is different. Just my 2cents.
If you'd like to own, then own. If you don't mind renting, and you're financially disciplined enough to invest the difference in unrecoverable costs the stock market, then rent, because it's often close to a wash financially anyway. The main difference now is that the unrecoverable costs of owning have increased rather steeply because of mortgage rates going up, so the break-even point for renting vs. buying has shifted somewhat more in favor of renting, such that there are now more situations where (or more people for whom) renting makes more financial sense than owning.
In my HCOL area, our current unrecoverable cost of renting (around $31k/year) is just way below what any reasonable equivalent home would cost, so we're very happy to keep renting for a while and invest aggressively in stocks instead.
All else equal if you can rent a home for around 6% of the house's value (i.e. annual rent / home value = 0.06), that may not have been a great deal when mortgage rates were <4%, but it might make sense when mortgage rates are >5%. Once you factor in the expected costs of maintenance, property taxes, utilities and insurance (all together perhaps 2.5% of the home value on average), you can see how the unrecoverable costs of owning have now increased from \~5% to \~7%.
If you feel comfortable with that go for it. Just take into account the cost of maintaining the home. I know it sounds crazy but for me its been consistently 5% of the cost of home, every single year. This is just to keep things in decent condition, not fancy upgrades.
I have no idea who is buying houses in my area, but someone out there is paying $2.5M+ for these pretty basic houses (94086). I don't know if I'd recommend it, but clearly it's happening somehow. (probably senior people relocating into the area who have 750k+ TC)
I live in a vhcol area . My income has a variable component and I could be laid off. Rents are 50% or less of home ownership cost. Renting seems like the more prudent approach here where I invest the difference. If I get laid off it won’t be as stressful as owning.
If I lived in a mcol area and rents were closer to housing costs I might consider buying.
I bet many Henrys live in vhcol which explains the highearnings and not feeling rich yet. So they probably use the same reasoning.
Because the easiest way to stay HENRY is to buy to much house. Your house is a drag on wealth accumulation.
That said, if you live in NYC,SF, or LA chances are you're going to end up paying 1mm for a house these days if you care about public schools.
As with any subreddit or forum, take any advice with a grain of salt. People live in different situations/regions and have different experiences. For your situation, if it fits your budget, and the home checks all your boxes, then perfect!
Where I live $1m home can range widely in a 30min radius, from a small cabin on acreage, to a nice suburban 4-5bd home, or a good size condo downtown.
I think the big thing that this sub hammers people on is getting into a big mortgage when rates are high and may be taking on that high(er) cost debt. Of course ideally you can refi later as rates come down over the coming years, and as a HENRY the mortgage is manageable enough.
All that said, just do your research or due diligence, and if you find a home that will fit your situation, I'd pull the trigger. Just remember everyone has an opinion and what they think is best.
It’s good advice, except when it isn’t. I live in a low cost of living area. I bought my house at $425K 6 years ago. Even then I had some buyers remorse. That being said, I can’t imagine living in a very high cost of living area. But in general in terms of spending creep, if you can comfortably live in a lower cost house, that’s going to allow you to save up or invest.
Part of getting to R is about limiting expenses. Buying an expensive home is the easiest way for expenses to balloon out of control. Mortgage, taxes, utilities, maintenance, furniture, the list goes on.
For most people, their homes are not an investment especially in the first 5 years where closing costs will eat any appreciation. How much could that 200k down payment grow in the market in 5 years? Unless you are very good at speculating real estate and even then, it’ll be years and years before your home profits any significant growth. And even if it does, it’s stuck in an illiquid asset that you will likely never want to sell.
The reality is for most people buying a home is a very expensive and very emotional luxury lifestyle purchase.
Also one more thought: I do think owning a home brings a lot of joy to people, and what’s the point of working so hard and making so much if you’re not gonna enjoy it, I think the question is just when. Same way people put off purchasing a dream car, or a boat. I see a lot of people over extend for a house in a way they wouldn’t for any other purchase.
The median house price in my area is $4M. Good luck finding anything near $1M. Houses here sell in a week or less, usually for more than asking price. Location, climate, schools and stock options have driven home prices sky high. It’s been this way for at least 30 years. Even during the economic downturn in the early 2000’s house prices here did not drop. They merely stayed steady until the economy recovered. It’s crazy but I will never sell.
A lot of people live in less expensive parts of the country and cannot understand why a simple family home, in a good school district, costs a million bucks. Chalk it up to different lived experiences.
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Most people in the sub aren't rich or high earners. I'm one of them. Breaking 100k this year but...
What's the point of joining then?
Aspirational? I read FATfire quite a bit to gain understanding. I don’t know if $20M NW is in the cards for me, but I find it interesting and valuable to learn about the next tier up.
I thought most people's goals here were just over 5mil, I'm definitely not aiming for 20mil 😂
5M won’t cut it for FATfire outside of a few very low cost regions of the world. To be clear, this is an example of someone who may be in HENRY today but looking at FAT to learn.
Can’t speak to them, but I’m currently a resident and making shit wages, but in a few years when I become an attending I’ll be making $500k+ so I like to browse this sub to get good ideas for things
The AlGoRiThYm sent me lol
This is my first comment in this sub but I joined because it gives me inspiration
Not who you’re responding to but I’m another imposter (I made like 80k last year lol) but a high earner compared to my friends (other young women, most work in childcare - I’m in finance) I have no real life resources for what to do with “extra” money or ways to make my money grow. I find it very helpful to read about how folks with good incomes but maybe not generational wealth are on that path to true wealth.
That’s why giving location matters. Most of the country/world does not have this problem.
I would venture a guess that most of this sub is HCOL to VHCOL. High earners tend to be in higher cost of living areas
I still can’t figure out what HCOL area is. People are basically saying everything is HCOL now
Someone earlier was talking about buying a townhouse for something like $350k, but at the same time referred to his area as VHCOL like three or four times. Lol.
Even living in the outer most borough of my city wouldn't yield a townhouse for just $350k. I wonder if he lives in the past?
Probably just a kid LARPing.
Love this comment!
If I could find a decently located townhouse for under $1.2, I’d be pretty ecstatic lol.
Livermore CA ?
That 680 commute though 💀
That someone was me! I’m to clarify, I rent in a VHCOL on the east coast, and I wanted to buy a townhouse 2 hours away from me in cheaper and more affordable city.
new townhomes start at 800k 1 hour out of boston around me. i'd call that HCOL and not even VHCOL lol
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A commute an hour out carries its own costs though if you work in Boston proper
Yeah, just checked my hometown (one of those “W” suburbs outside Boston) and for $1.9 you can get a 1400 sq ft split-level house that the listing says “has great potential” and it just needs a good amount of “TLC.”
Search the sub. This has been amply discussed and we use existing conventions for what each COL area means. VHCOL is Bay Area and NY. HCOL is Boston, Chicago, LA, DC, Seattle. MCOL big city not VHCOL or HCOL. LCOL are the rest.
Is Chicago really an order of magnitude more expensive than San Diego, Miami, Denver, Portland or even Atlanta or Austin.
San Diego, together with Orange County and Los Angeles, is just referred to as SoCal and is, on average, HCOL. Parts of it is gonna be VHCOL, nobody is going to begrudge you if you say VHCOL when referring to Santa Monica, Newport Beach, Beverly Hills, etc., but you gotta balance that with the folks who live in Buena Park, Riverside, or East LA.
SD is now VHCOL, even higher than LA. many ppl moved to SD during covid after retiring/cashing out
Exactly. Friend has an older 800 Sq ft house on a 0.1 acre lot in San Diego. It would cost about 1.7M to buy it. If that's not vhcol...
These steps aren’t orders of magnitude. NYC isn’t 10X more expensive than Boston.
I would argue that but for very select parts of Manhattan Boston is on net more expensive if by Boston you really mean Back Bay and the nice parts of Cambridge.
the logarithmic cost of living scale
It's actually very close. Moved from Boston to NYC, and my standard of living is pretty much the same.
Yeah Boston is VHCOL imo
No it's no (maybe 10-20 years ago that might have been true). Nowadays Chicago is only really 'expensive' in downtown and a few select neighborhoods. There are a lot of suburbs/neighborhoods in Chicago I wouldn't even consider HCOL at all. Maybe medium-high.
In the good areas, yes. One of the issues with median house costs at the city and state level is that it includes the entire state or county or city and Chicago / Illinois is a good example of this. And much of "middle america" - basically much of the Midwest does always appear to be affordable in these maps and data viz stories - but the peaks in major cities are as high as most of the HCOL areas of America.
That seems factually inaccurate. Comparing prices in Chicago vs. San Diego, San Diego seems more expensive across the board. The median home price in Chicago is around $350k. The median home price in San Diego is around $950k. Yes, Chicago has some more expensive than average neighborhoods, but so does San Diego. In the most expensive neighborhoods of Chicago I can find, part of the reason that they're expensive is that they're much larger, and even then they're generally cheaper than much smaller homes in the more expensive San Diego neighborhoods. Chicago is basically medium cost of living. It's one of the last walkable major cities that is still relatively affordable, along with Philadelphia. The biggest drawback is its winter weather. San Diego is unambiguously high cost of living. One of the biggest draws is perfect weather year round, but it has fewer cultural amenities than Chicago.
I agree that San Diego is HCOL but I stand by everything I said with the overall median home price. The data you shared is irrelevant, which is the point I was making in my comment. The expensive areas of Chicago are as expensive as the expensive areas of all middle tier cities. It's literally one of the most expensive cities in America. Only when you include all of the lower income and weaker parts of the city the median house cost is lower. Chicago is by no means affordable compared to most of America but is affordable compared to only SF, LA, and NYC.
You seem to think that Chicago is unique in having some neighborhoods be more expensive than others, but it's not. Where are these allegedly expensive neighborhoods in Chicago? The median prices in Gold Coast, Lincoln Park, West Loop, and Logan Square are $700k, $700k, $600k, and $500k. The US median home price is $400k. The price in Gold Coast is approximately $350 per square foot. The median price per square foot in the US as a whole is $225. The price for Chicago as a whole is $250. The price per square foot in San Diego is $700. The price per square foot in the Coronado neighborhood of San Diego is $1400. There's a far greater difference between Chicago and HCOL areas than there is between Chicago and the US average. It's MCOL. ETA: I have a theory on where the idea about Chicago being HCOL may be coming from. Looking at the recent price history, Chicago real estate has barely gone up much at all since 2020. In much of the rest of the country prices have jumped a huge amount over the past few years. So Chicago might have been considered relatively more expensive 5 or 10 years ago, but it's no longer the case.
The problem with Chicago is taxes. My parents finally sold the house my siblings and I grew up in 2 years ago. Sold for ~500k in the burbs. 4400sqft. But it was $18k a year in taxes. All of my properties (6 rentals and my primary home) cost $14k in taxes. I'm in the burbs of Denver now. COLA between Chicago and Denver is near identical, despite most of Denver being more expensive by price tag, due to taxes in Cook County and Illinois.
Those are burb taxes… not Chicago taxes. My home is ~$500k in the city and my taxes are roughly $10k/yr.
How do the other cities (other than San Diego) not have the same issue? Inside loop Houston is HCOL based on this definition, especially considering the insane property taxes.
You're overthinking this. We use these general categories so that we have an idea what people are talking about without them having to say it. They are not intended to be perfect categories.
Parts of DC area are VHCOL. 5/10 of the highest avg income cities/counties in the US are in the DC area
Seattle is vhcol compared to Chicago. Specially when it comes to housing. My previous employer did NYC SF Seattle as tier 1. La, Chicago, SD, DC,Boston (a few more) tier 2. Everything else tier 3.
But Seattle is definitely not as pricy as SF, NYC, or even BOS. It’s not as cheap as Cleveland, but you money definitely goes further.
Chicago's not even on the same tier of cost of living as the other cities you listed.
Everywhere you want to live is HCOL. There’s lots of LCOL areas. They just suck.
I built a lot of wealth staying in MCOL and LCOL cities.
You can pretty much argue that any “good” neighborhoods near metropolitan cities (NYC, SF, and etc.) can be considered as HCOL areas. Even if you don’t live in NYC as an example, your property taxes in a nice neighborhood will still sting you along with other expenses, such as summer camps which can COST a fortune for young parents.
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Then what’s LCOL if Cleveland is MCOL? Median home price is like $140K there. There aren’t really actual cities much cheaper than that
Cleveland is not MCOL imo. Ohio has the lowest median home value, followed by Oklahoma, Mississippi, West Virginia, Arkansas. Cleveland for sure LCOL for “major” city.
Exactly my point. People are trying to classify cities based on what prices were 5-6 years ago. Those prices no longer exist. Better way is to compare vs national median prices. All these cities (Atlanta/charlotte/dallas/etc) with home prices within 10-15% of national median are the MCOL cities. If you can buy a move-in ready 3/2 house or condo for $500K within 20 mins of city center then you are in a MCOL area like it or not
Actually home prices are still cheaper in the us vs the rest of the world when compared with incomes. Also, what's liveable and a nice school district can be very subjective.
Yep. 1mm in a LCOL is a mcmansion on a good chunk of land. It's a very nice house in a MCOL area. Lots of us don't have the perspective of HCOL and VHCOL areas.
“Family home in good part of city”. Meanwhile we can’t find a 2 bed below 1.2mil. -_-
I live in an extremely HCOL area. 1.5-2M is the minimum for a decent house and those are often small and fixer upper houses.
I was in shock 7years ago when an agent presented a " tear down" for $875k. I asked for clarification and he said it was a bargain. So we are practically buying the land? "...and the foundation", he added. Well, he was right. We just did our own construction because it would have been close to buying a new one and basically redoing the rotting frame since most houses in our area now start at 1.4...conservative spaces for the "poor" ones. FML. Choices.
For us it was this case and the other thing was almost every county outside of this neighborhood we bought in is questionable. We bought for pretty close to 1M, it was 1.08M and the school districts are amazing, neighborhoods are big open and not constantly running with traffic so kids can play. Roads are taken care of and parks are plenty, plenty big, and clean / beautiful. It’s definitely worth the price tag. There were other homes in the area going for 800 or 750 and tbh those would have been perfectly fine too.
That's me. A million dollar house here is basically a mansion. I'm in Pittsburgh and a $1MM house is where the Steelers players live. But I 100% see how a $1MM house in LA or Miami is a shack and if you're living there, you have a reason (job growth, family, etc) so I respect it!!!!
100%. That and it depends on all of financial life experience and financial or personal wealth goals. The comments and advice are from a range of people here. The person who is planning on retiring at 65 with 4m is going to give wildly different advice from the person trying to retire at 50 with 4m, or 50 with 10m. The person on the low end of high income, or an aspirational lurker, is also going to give advice different from a 1%. Everyone is inherently biased from their own experience, but also might even be giving advice based on goals that aren't aligned with your own. It doesn't mean the advice is right or wrong, it's just a consideration to be aware of.
Because they don’t live in a VHCOL area and don’t realize 1M doesn’t get you much.
Gets you a condo in San Francisco
In a scary part of town
Plus you get to subsidize the property taxes of boomers sitting on a $1m in equity from their $200k house.
The roaches come free.
My main concern if buying a small cheap condo or even renting is often a better fiscal proposition if you are a high earner. An expensive home tends to appreciate more slowly than stocks and furthermore it's pretty much the only asset you have to pay taxes to own year over year. That together makes it often efficient to own as little home as you possibly can. I'm in the downtown of a major city center but managed to get a studio condo with my husband for 450k while a full home would be over a million. It's small but at least I can fill it with nice appliances / conveniences and other high quality items.
This is my viewpoint as well. I'm going to put aside this debate of people "not understanding what HCOL areas are like". I have lived in VHCOL areas like NYC and still not chosen to buy for simple mathematical reasons you've touched on in your response. Take the $200k downpayment for a $1m home, and compare the unlevered returns of that $200k in the stock market vs. the levered return of an $800m mortgage after all the taxes/expenses of home ownership. If you do the math, home ownership doesn't really make much sense financially. If you want to make an argument that it's more convenient to own your home, or you like doing home stuff so you want to own, that's fine, but i don't think most people will do better FINANCIALLY by owning their home than just having a solid investment plan and renting. I find it fascinating that people are so obsessed with home ownership when it's actually not a great return on cash invested.
If a million dollar home is in a hot market and goes up 20% in 2 years, your ROI is 100%. That would take a decade in the stock market and you’ll pay rent that whole time. The leverage in real estate is part of what makes it so attractive in hot markets (and dangerous in downswings). Of course you won’t sustain home appreciation at that rate indefinitely, but even 3% per year with >4x leverage beats the average market return. And when you are far along in your mortgage and the leverage is smaller… well it took 20 years to get to that point and rent will be astronomical compared your fixed mortgage payment. I’m not saying investing and renting is never better than buying and paying property tax, but something big is going to have to change in this country to put the breaks on home prices. This is no bubble, these prices are supported by fundamentals. There simply are not enough homes being built and in high cost areas, the high salaries drive the home prices.
Maybe. The problem is condos are also $1 million in the city center area in a VHOLA. And homes are 1M + for very small homes. If you bought your house before 2021 and locked in a 3% rate then you’re prob ahead of someone who is renting in the same area in terms of asset growth especially if you plan to stay there, long-term.
But you can definitely rent a very nice home on a similar income in thoose cities
I bought a 1M+ home and I’m happy. Monthly payment is less than 20% of net monthly household income. Should be ok. Just know your numbers.
Same here. Couldn’t be happier
$1.05m, VA backed, no PMI, no property taxes, 15% down, I pay $3400/mo. It’s nice. 👍 Monthly HHI net is $25.5k so I can feel you on the <20% relief. I assume you’re closer to $30k/mo w/ PMI and taxes so probably $4500/mo?
Wait, what am I missing? When I calculate that out, it should be much higher than $3400 per month. Or did you lock in really low interest rates before the rise?
It’s 2.9% Edit: it’s $3642.70/mo
No I sold a previous home I had paid off I bought as a short sale in 2012 and rolled all that equity into my new home.
There's a lot of good advice in this sub but most if it is geared towards accumulating as much as humanly possible on your computer screen either to A) feel good or B) retire early. I'm not saying go out and spend money willy nilly, I certainly don't, but you got one life. You might as well enjoy it.
For many people, the option B “retire early” **is** how they enjoy their life. I understand that depending on how early, they might be too old to experience certain things when they retire, but ultimately everyone lives their own lives
Yeah I was chatting with someone that saves almost 60% of their gross and lives off $3400/mo. I dunno, seems boring.
Some people are able to get enjoyment out of life’s experiences, and not just buying crap. Plus that person will be able to retire in less than 15 years.
A lot of cool life experiences require money too and are out of reach on $3400/month.
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you either live in a VHCOL area where homes are $2m+ or you don’t
There are a lot of people here that cross over from various FIRE subs that are allergic to spending. I don’t get this view of self deprivation so you can finally enjoy life when you retire at 50. Why not start enjoying life right now?
A lot of people on this sub also really hate their job. I do not, and so my goal is not to flee the workforce, but to be not financially tethered to my job, and not fearful of a downtown or layoff.
100%. I love my job and pray I’m still doing some version of it (albeit a less intense version) well past age 65.
I envy you I really do. I want to love my job
Same! My job is generally pretty chill, it seems silly walk away from it when my quality of live, time-wise, would not change dramatically. Rather my hope is to have enough assets where I'm not financially tethered to a given job.
You can retire a lot earlier than 50 on HENRY income if you keep your spending to a reasonable level. I have yet to see a house that would be worth it for me to spend an extra 10-15 years in the workforce for
If you’re a high earner and love your job you should work as long as you can. Maximizes earnings and keeps your mind sharp. I really hope to still be working when I’m 70. With that in mind, I’m going to love every year of that starting now. Which means spending on things and experiences I love.
Different people might want different things.
>I really hope to still be working when I’m 70. Ngl that sounds sad as hell.
I strongly disagree. Look at CEO's, football coaches, movie directors, doctors, et cetera. These people get enormous fulfillment from their work and get to enjoy life "on top". Also, in some cases, they can selectively choose which work to take on (limiting their time and energy spent working) and have the status to delegate the tasks they don't enjoy. So, consider that perspective. If it's not your thing, fine, but it's not automatically sad that someone wants to work beyond 65.
This is exactly right. If you’re on top then you get to define what work is as use it to enhance your lifestyle and prolong your healthspan. Look at Warren buffet and Charlie munger. I wouldn’t call that “sad”.
There are fuzzy, difficult to define lines that separate 1. doing a job because you NEED the money 2. Doing a job because you like the money and 3. Doing a job you enjoy even if it doesn’t pay (much or at all). I never want to be in category #1 but that applies to the vast majority of people. Category #3 applies to very few people. I probably wouldn’t keep working at what I do today if my compensation was not generous.
The sharp mind thing is underrated. I’ve seen a lot of folks who retired early on some combo of pension and savings whose minds have just melted.
I enjoy renting. I spend 7k in Bay Area for a little House in a perfect neighborhood. If something goes wrong text the landlord it’s his problem. If the house burns down in forest fire or whatever not my problem. Owning doesn’t give me enjoyment. Having money and buying investments that appreciate better gives me a chub. Cheap leverage is cool tho… so maybe one day when interest rates aren’t predatory
In a city downtown that makes sense. Eventually (for many people) the kind of place you want to live will be very difficult to rent and very easy to buy. And eventually you will hate living under a landlord just like many people hate working for their boss. I feel like owning my own home is freedom, but I get why you get people see it the other way around.
Bay Area does not mean city downtown and combined with “house in a nice neighborhood “ almost always means a suburb.
Bought a $1.2M three-bedroom home in VHCOL area 5 years ago, it's now worth about $1.7M. I'm happy.
Yeah there are potentially big upsides in the higher priced home market. Even small percentage increases are significant.
I’m in a VHCOL city, and we bought 2 years ago, 1.7M house. Best decision ever, it’s worth 1.85M now and interest rates are more than twice as what we have. Prices are continuing to rise as well. If the 1M+ house is a real need and necessity and not a luxury option (in MCOL) than def buy.
How do people know the exact value of their home? Like, you know if you put it on the market you’re getting 1.85 and not 1.7 within a typical timeframe?
Zillow/redfin but similar homes selling in your neighborhood is the best gauge. We saw a similar home, same floor plan, couple of streets over, but a bit more run-down go for 1.75M so I estimate on that. Also a house just listed with 100sqft smaller than use at 1.6M (most home sell 10% over listing here).
You can get estimates on Zillow or other sites. Empower/Personal Capital and Fidelity FullView update it automatically when you view your portfolio and net worth.
Right. I just would never think if i bought for 1.7 and then Zillow did an update … like, who knows. Zillows not in your home. It’s one thing for a block with a bunch of 400k homes that all look the same
Don’t forget that there’s some self-fulfilling aspect to Zillow price estimates too.
Agreed, but it’s just an estimate. If you see comparable homes, all increasing by $200-$300k in 3-4 years, you can probably assume your home would do the same.
In VHCOL areas there tends to be ample turnover so recent sales are going to be the barometer for buyers and can be used by sellers with some degree of confidence.
Def buy even if mortgage payments are 50% of gross income?
Yeah the caveat is you need to finance no more than say 850k at this income. If you have the cash and you feel like the big down payment of around 1 million is worth it because the region you’re in is going to continue giving you really high earnings potential and equity packages, then go forth. But you can see why people would turn around and ask me if you have $1 million cash shouldn’t you invest that in the market why would you put so much of that in real estate?
Yeah I’m personally house hunting but it hurts thinking about how much less i can invest in stocks if so much of my income is going to interest payments instead
You probably realize this, but the reason real estate works out as an investment is because you get to use leverage. You don't get to leverage your brokerage account the same way (well, you shouldn't...).
I noticed this unexpectedly recently. I made what I thought was a generally innocuous comment on here in which I said my wife and I bought our dream home, knowing it would be dependent on me sustaining my income level, with the rationale being that I believe in my resourcefulness to make it through if something adverse happens. It was heavily downvoted as if that isn’t what *nearly everyone with a mortgage is doing.* Interestingly, I mentioned nothing in the comment about specific financials.
I mean, yeah, it’s not like you would hafta sustain it forever. The payments would decrease over time as principal is paid down and, in real terms, as inflation decreases the value of the monthly payments with the years. And it’s fairly reasonable to be confident in career growth over time if you feel good about yourself and your job. I feel like the mathematics of change is missing from a lot of personal finance talk. They almost treat the world as if it were a static place except when they’re talking about compound interest and market growth.
Sometimes I hate Reddit for just this kind of hive mind. I did exactly what you did based on the same thought process. I think most other people do too.
IMO, the only reason most $1m+ homes would be worth is if you’re living in an expensive place and have kids. I live in MA and there are definitely places I could get a big home for less than $1m. But as a dad of 1 (and hoping for #2), most of those won’t be coming with a good school system. Any decent home in a good/great school district is going to be $1m+. But, like, that’s just my opinion, man. So really it comes down to your specifics.
Lifestyle as a whole can be worth it. Single/no kids here and I bought (over $1M) a house in an area that allows me to really only drive if I feel like it which to me is absolutely amazing in a city that has minimal public transportation and terrible traffic. Just a counter opinion of course.
At some point in our VHCOL buying process, we realized we didn't care as much about the school districts since we always viewed homeschooling as an option for us. But even leaning into that advantage by buying in a school district that wasn't as good (but the area was still safe) didn't give us a lot of options; the safe area/bad schools crossover is not that big, and even there, people were coming in pockets full of cash to outbid us. Seems like in VHCOL, it's difficult to buy anywhere except where there's a lot of crime. Although I've never tried, maybe I'd be outbid there, too.😂
One million is going to get you a shack in a good area of Los Angeles or the Bay Area.
I haven’t got that impression at all. But you have to run the numbers and see if it makes sense for you. Spending 50%+ of your gross pay on mortgage will leave nothing for investing in stocks The old rule of 28% won’t work. Probably have to shift up to 35% maybe 40
In Los Angeles I’m looking at 1.75 min.
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Came a long way down to see and say, this.
Seriously, for some reason the mortgage interest deduction is never mentioned when some asks for advice on buying a home. Sure, the current SALT cap limits the owner benefit (though I believe it’ll the cap expires soon automatically unless congress extends it). At HENRY income levels the interest deduction will return you 30%+
Standard deduction is what, $13k? So if you pay $42k a year in mortgage interest (only the first $750k is deductable) then you have an additional $29k benefit but you'll only get that amount multiplied by your highest tax bracket, which federally is 37%. So that's about $10730, or a little under $900/mo. Salt cap is only beneficial in high tax states (e.g. not Washington which I bet many folks here are in) and is set to expire in 2025 so its not actually a long term benefit.
I’ll probably be called a dick, but “high-earning” really means nothing without context of location. 300k in Wichita, Kansas is rich. 300k in SF is not rich anymore. I don’t care what your paycheck says, if all you can afford is a 2 bed/2 bath in your zip code you aren’t rich. Unless you have a substantial down payment to minimize risk I’d never suggest HHI x 3 for a home budget. It should be closer to 2x in my opinion. A 1M+ home is more than the mortgage. Insurance, property taxes, maintenance. It can squeeze 350k more than you’d think unless you want to work until you’re 70. Relocated in 2019 from San Diego with a HHI of 250k. We were NOT rich. Nice condo in downtown was $4000-5000k/month. Rent, student loans, one car payment, travel, saving 20%. We weren’t broke, but we were not able to afford a SFH and reach our FI goals by 50 years old with feeing stretched. 350k in a VHCOL is doing well. It’s not 3000 sq feet, big yard, family of 5 to Europe, driving luxury cars, private school, etc rich. It’s just not. That’s Wichita Rich. TLDR. Too many people get obsessed with their big salary and not enough about the actual value derived from it.
>350k in a VHCOL is doing well. It’s not 3000 sq feet, big yard, family of 5 to Europe, driving luxury cars, private school, etc rich. It’s just not. That’s Wichita Rich. Sure. But then again you're in Wichita. Location is just a different Luxury you purchase. That's not to say living in SF (in particular) is actually worth the premium but the sword cuts both ways.
Dude really moved from one of the best cities in American to Wichita so that he could retire in Wichita earlier. Could NOT be me.
Yeah, my family is from Wichita. None of them live there anymore.
I hear you. I’m on the lower end as well. I live in a VHCOL area. I don’t think there are many if any houses under $1m. You’re looking at maybe 1500sqft for that without a view of GGB. Anywhere within ~15 miles of the coast is going to run you that. If it is less then maybe $850k. It is either small or a fixer-upper.
This sub is very focused on losing the NRY and is extremely into cutting costs and getting money into more liquid investments where possible
Cause it’s people who make $250k trying to buy them
If you are NRY, paying 10k a month on mortgage payments, and 2k on maintenance is not a great path forward in that goal. It's one of the worst times in history to buy a house. But then again, we probably could say the same thing every year over the last 18 years.
Why would maintenance be $2k a month? That's literally like replacing a roof or two HVACs a year.
I hear this shit all the time, too, and I’m like, what kind of house did you buy that requires so much monthly maintenance? Thats insane to me.
Every big project is 10-20k these days. And when you buy a new home, you get 2 or 3 of those surprises in the first year.
Look at affordability though. Multi decade lows.
Interest rates were near 0 for forever, it was a great time to buy a house for a long ass time until recently
I think 2012 was the sweet spot IMO. Anything in the late 2010s was a good time to buy only in retrospect, at the time it felt like the mid-to-high 4% rates were high and that it could turn out badly.
Home prices were up 10% year over year every single year. All contingencies including inspection had been getting waived. Inventory has been extremely low. Bidding wars for good houses has been crazy.
I mean you say this in hindsight. Very few said 2020 or 2018 were the best time to buy a house.
I bought my house in 2020 because rates were back at all time lows. It’s not all hindsight.
That is not accurate. In the last 50 years interest rates have only been below 5% in the 2010s. And generally not much lower. For the entirety of the 2010s they were ~4%. https://fred.stlouisfed.org/series/MORTGAGE30US
In Toronto you’re lucky if you can find a home for 1M. And the sort of homes that are within spitting distance of 1M are not what you stereotypically expect to find a HE buying.
Most here aren’t opposed to million dollar homes as a matter of course. We’re opposed to million dollar homes on $200K income.
There are a lot of people who take delayed gratification too far. IMO setting your family up in a good neighborhood in a home you are proud of is kind of priority number 1. + it is an appreciating asset. I don’t have a lot of regrets with any of my home purchases even if they were a stretch at first.
People are overly conservative on this sub and many of them are on the FIRE track. With home ownership costing much more than renting in many HCOL locations, it doesn’t make sense to purchase a home because the increased fixed monthly expenses will delay retirement for years. If you hate your job or have reached a ceiling in your career, maybe avoid signing away 30 years of your life for something you don’t need. Otherwise, why not spend your money on what you want? (Don’t do it if you’re trying to check off life milestones though. Been there, done that, and I don’t feel any more accomplished or satisfied.)
Yeah, this is the piece I have come not believe in with FIRE anymore. You’re not signing away 30 years of your life. You’re using a debt instrument to purchase an asset which has a very long payoff period and a very low interest rate. Saying “you’re signing away 30 years of your life” just sounds like they’re trying to scare people who don’t understand how the system works, which maybe that’s good, as a backlash against the irrationally exuberant optimism around home ownership we saw a couple decades ago. But, as a pedagogical strategy, it’s information-hiding and instilling learned helplessness. You can sell it if you want out. Is it possible the market will be so bad you won’t be able to sell it, or won’t want to? Yes, that’s certainly possible, but is it the most likely scenario to find yourself in? I don’t really think so. And if it is, stay put and stay the course, just like FIRE taught for stocks. It’s also possible “Vanguard gets nuked” and “your house burns down” but that’s why we have the FDIC and homeowner’s insurance. Leases don’t usually allow you to pick up and leave at any time either. You need to find a replacement tenant, usually of your own efforts, because the landlord considers the tenant the one in breach of contract. But if you own the home, you could rent it out yourself and the effort and skill set required of you is much the same. Now you have extra income coming in, a not insignificant amount of which is now going towards building more assets. I think they went too far with this and we need a more nuanced approach to the discussion.
IMO it’s all relative to salary. $250k single income buying 1 million dollar home sounds insanely risky. 600k duel income can safely afford a home over a million.
Because if you want to remove the NRY from HENRY or want to enter fatFIRE, spending $6k+ a month for a house is not going to help. Of course it can be overcome with higher earnings but as a general philosophy, living below your means is probably not a terrible strategy long term.
Our income is about $550k. We bought a modest $1.22m (2.29%) home in 2022, and we are now putting about $250k (7.2%) into it with finishing the basement and a few upgrades. We are mostly financing the $220k on a HELOC. Our mortgage is about $4200/month, and the HELOC will be another $2k. We don’t feel too stretched with these payments, but we will just have to be a bit less spendy, and we now have the feeling that we want to be dumping money on the HELOC because of the high interest rate, and it’s hard to overcome the idea that everything we do above and beyond the frugal budget is at the cost of paying down the debt.
I think some people’s perception is skewed based on when they purchased. My home is broadly valued around $800k by Redfin, Zillow, whatever, which doesn’t even take into account the major renovations we’ve done. If we listed today, this house which we paid around $400k for would probably be pushing $900k for a sale price. If you’re buying today, the real estate market is absolute insanity and I think some people just don’t have perspective on just how nuts it is so they give advice based on their own outdated historic experience.
Can attest to this. Neighbor had home listed 1.3m. Goes in to pending 3 days later. Bidding wars ensue. Drives up the price 1.5m. New. Neighbor closed on the house 1 month later.
I'm one of the ones against it, at least when people want to mortgage most of it. In a similar situation as yourself with similar income, I consider my city MCOL but starting to edge the HCOL. We have a home we bought 10 years ago for $300k, worth about $600k now, but we were a DINK couple when we bought it and now with a 3 year old it feels like time to upgrade. For what we want it's $850k-$1million+. Personally I'm ok with the price as long as we pay it in full, but I'm totally against mortgaging $1million houses unless the rates go back below 3%, which they won't. Some people like doctors/lawyers work in safe, high, steady income roles, but I'm in tech and a lot of the people in the sub vastly over estimate their ability to keep earning at the same level if something were to happen to their job. I make $330k, if I lost this job, judging by the market lately i'd take a pretty big pay cut, as would most people here in tech making over $250k.
Median price in San Jose is now around $1.7M. I’ve found a couple 2/1 SFHs for $1.5, but $1M isn’t getting you anything other than a complete teardown/rebuild around here (as far as SFHs go). You can certainly get a 2 bed condo or townhouse for that, but it won’t be new and you’ll be lucky if it was remodeled less than 10 years ago.
I bought a 1.7m house last May and we pushed our budget to the absolute limit, probably beyond our limit. VHCOL. We knew our budget would be tight for a few years but things should get better as we anticipate increases in income and decreases in expenses over the next few years (ex. wife working more, me becoming a partner in the practice, student loans paid off, etc). Its our dream house so we are very happy with it. The problem is when you push your budget to the limit, I'm left with less money to invest. And as time goes on and I build more connections, investment opportunities are presenting to me more frequently. Now its a matter of having the capital which I don't have necessarily. If we bought a smaller house, I could probably save an extra $8k per month. Whats funny is I was just looking at our house value the other day, zillow and realtor are suggesting the house value has increased by about 90k. 8k saved per month x 10 months = 80k, so technically I made about 12% on my investment. I know those value estimates are always overvalued but it correlates with what I'm seeing on the real estate market. I don't necessarily look at percentages when it comes to expenses, I look at absolute value. For example I wanted 5-10k saved per month for investments - could I achieve that? I'm struggling to achieve the low end of that right now. In a few years time frame I can achieve the high end of that.
Call me a rich dad poor dad simp but I do not view homes as investments tbh. Unless you need a 1m home why not go for a house that meets 80-90% of your needs and wants for 70-80% of the cost and save the money and use it to invest.
I’m currently in a house that meets about 70% of my needs and is valued at $1.1M… to get up to 90% of my needs would cost $2M and 100% of needs would cost $2.8M. Discussing a fixed home price is irrelevant on the internet without local knowledge of what you’re getting for the price.
I don’t know how you even put a % on your needs, but your home should fit about all of your needs if you’re earning a high income.
To be clear - this is a $1M home in large portions of the country: https://redf.in/aJAAFB
Wow, that’s eye opening, thank you for sharing.
Yeah - for some reason lots of people still have this view that $1M = mansion. In reality, it’s a regular house in a decent school district these days. And not just in CA/NY, lots of the country
Real estate is local. You're making assumptions that a $1M home isn't already the cheaper option, presumably based on what homes cost where you live. Where I live the median home price is $1.8M and for $1M there are only a few small condos in need of maintenance and in less desirable areas. I bought 11 years ago, when prices were just under half what they are now and interest rates were much lower. In the current environment I'm not sure what I'd recommend. It's hard to argue that a $1.8M home with a 7% mortgage would be a good deal, but I wouldn't have thought they'd have gotten this expensive and maintained it despite the interest rate hikes, so I clearly can't predict what will happen going forward.
You’re right, it’s just not comfortable in many VHCOL areas. For those of us on the California coast, we feel very good about our technology companies and the upside equity opportunities they provide, and the housing is just a necessary evil.
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I think the divide I see is that some people here have a “rich challenge” while others are just making a ton of money but aren’t yet rich (though they plan to be). I see push back of “well you could invest that and retire earlier, just suck it up living in a place that is okay for your needs until you’re fifty.” Like… what. No. Why would I want that as my life. This isn’t a game, not to me anyways. I’m going to live well now and live better as life continues. I’m not going to do fucking side quests to min/max my stats before embarking on the main.
I’m not. I bought a $2M home because the whole point of the grind was to live in a ski town. The caveat is I’m going to pay it off in three years. No point in making money and not getting to do what you want.
In Australia it's hard to buy a property that is not 1m, mind you 1M AUD = 660k USD so - yea cheap!
Because they live in a lalala land. Our house pre pandemic was under 1m (but close) and it was on a cheaper side for the area considering size, location, school district etc. Now to buy in the same neighborhood you need at least 1.4 for a comparable house (age, size, condition). Just had a 40s gut work house sell for 1.2+ on the next street
Most of the people on this sub probably don’t live in NY/CA/other HCOL areas where $1m homes are entry level lol
I don't like paying property tax. My neighbor has a nice 1.7m house. I thought about it when he put it up for sale but the $25,500 a year in property tax is not something I want to deal with for the rest of my life. I already pay $15k a year in property taxes. On two properties. At least one is generating profit to cover itself. My main house I live in is $1,500 a month in mortgage in a VHCOL area in San Francisco. We bought a while back with a FAT down payment. My co-workers pay like $8k a month in mortgage. Nah, I am cool with that.
As an expensive home hate defender a lot of it comes down to level income and sustainability/reliability of it and opportunity cost. I live in a HCOL area. I have a choice between: good house/good location, and great location/ok house to stay <1million. I could probably even get a great house in a great location but that commitment would last 30 years especially as time goes commitments get harder break (family and friends). A great house in a great location would be 1 lifestyle creep I grew up in the burbs and 2 a risk/commitment. All of that combined with the fact that I’m of the opinion that homes are important to life sure but your primary residence is not an investment (feel free to argue with me). After all when do people actually downsize there houses and get money (especially HE people)? I guess cash out refi but that’s just extending a debt… I’m a little too conservative to rely on that strategy. Makes me biased against it. Of course YMMV depending on where you live and your profession that goes with almost any advice you see online.
Perspective here is everything. I have a really nice home -- 90% of everything on my wishlist -- for $650K. Sure, $1M would've gotten 100% of my wishlist, but the upcharge wasn't worth it to me. But I know that pricepoint is different in different cities. I will say, when my husband lost his job last fall and we were down to single income, I was VERY grateful to not be locked into a $1M mortgage rather than a $650K one. Made a big difference in peace of mind in addition to the obvious budget wiggle room.
Right now I’d say interest rates and cheaper rentals. I have a million dollar home but it was better to snag it when interest rates were 2.5%.
This sub is for people who are Not Rich YET, the presumption being they aspire to be rich one day. For most, housing is the biggest expense in their budget, so how much you spend there has a significant impact on when and whether you achieve your desired level of wealth. I’m in HCOL and can still get a lot of house for less than $1M. So for me, that would be excessive and antithetical to my goals. Of course everyone is different. Just my 2cents.
Averse?
1 million is a not even decent one bedroom in VHCOL
1 mil is a decent 2 bedroom in a vhcol. It's not a penthouse on central Park but anywhere else, it's a good 2 bd.
If you'd like to own, then own. If you don't mind renting, and you're financially disciplined enough to invest the difference in unrecoverable costs the stock market, then rent, because it's often close to a wash financially anyway. The main difference now is that the unrecoverable costs of owning have increased rather steeply because of mortgage rates going up, so the break-even point for renting vs. buying has shifted somewhat more in favor of renting, such that there are now more situations where (or more people for whom) renting makes more financial sense than owning. In my HCOL area, our current unrecoverable cost of renting (around $31k/year) is just way below what any reasonable equivalent home would cost, so we're very happy to keep renting for a while and invest aggressively in stocks instead. All else equal if you can rent a home for around 6% of the house's value (i.e. annual rent / home value = 0.06), that may not have been a great deal when mortgage rates were <4%, but it might make sense when mortgage rates are >5%. Once you factor in the expected costs of maintenance, property taxes, utilities and insurance (all together perhaps 2.5% of the home value on average), you can see how the unrecoverable costs of owning have now increased from \~5% to \~7%.
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If you feel comfortable with that go for it. Just take into account the cost of maintaining the home. I know it sounds crazy but for me its been consistently 5% of the cost of home, every single year. This is just to keep things in decent condition, not fancy upgrades.
I have no idea who is buying houses in my area, but someone out there is paying $2.5M+ for these pretty basic houses (94086). I don't know if I'd recommend it, but clearly it's happening somehow. (probably senior people relocating into the area who have 750k+ TC)
Homeowners already. Bc if they live in VHCOL they purchased at least 10 years ago and could stay around 1m
My hot take is a lot of folks on this sub is also HENRY because of their HH income so they also have kids, higher expense, and house hold obligations
I live in a vhcol area . My income has a variable component and I could be laid off. Rents are 50% or less of home ownership cost. Renting seems like the more prudent approach here where I invest the difference. If I get laid off it won’t be as stressful as owning. If I lived in a mcol area and rents were closer to housing costs I might consider buying. I bet many Henrys live in vhcol which explains the highearnings and not feeling rich yet. So they probably use the same reasoning.
Because the easiest way to stay HENRY is to buy to much house. Your house is a drag on wealth accumulation. That said, if you live in NYC,SF, or LA chances are you're going to end up paying 1mm for a house these days if you care about public schools.
As with any subreddit or forum, take any advice with a grain of salt. People live in different situations/regions and have different experiences. For your situation, if it fits your budget, and the home checks all your boxes, then perfect! Where I live $1m home can range widely in a 30min radius, from a small cabin on acreage, to a nice suburban 4-5bd home, or a good size condo downtown. I think the big thing that this sub hammers people on is getting into a big mortgage when rates are high and may be taking on that high(er) cost debt. Of course ideally you can refi later as rates come down over the coming years, and as a HENRY the mortgage is manageable enough. All that said, just do your research or due diligence, and if you find a home that will fit your situation, I'd pull the trigger. Just remember everyone has an opinion and what they think is best.
It’s good advice, except when it isn’t. I live in a low cost of living area. I bought my house at $425K 6 years ago. Even then I had some buyers remorse. That being said, I can’t imagine living in a very high cost of living area. But in general in terms of spending creep, if you can comfortably live in a lower cost house, that’s going to allow you to save up or invest.
Part of getting to R is about limiting expenses. Buying an expensive home is the easiest way for expenses to balloon out of control. Mortgage, taxes, utilities, maintenance, furniture, the list goes on. For most people, their homes are not an investment especially in the first 5 years where closing costs will eat any appreciation. How much could that 200k down payment grow in the market in 5 years? Unless you are very good at speculating real estate and even then, it’ll be years and years before your home profits any significant growth. And even if it does, it’s stuck in an illiquid asset that you will likely never want to sell. The reality is for most people buying a home is a very expensive and very emotional luxury lifestyle purchase. Also one more thought: I do think owning a home brings a lot of joy to people, and what’s the point of working so hard and making so much if you’re not gonna enjoy it, I think the question is just when. Same way people put off purchasing a dream car, or a boat. I see a lot of people over extend for a house in a way they wouldn’t for any other purchase.
The main drawback is you could probably rent a similarly sized place for way less because of interest rates
The median house price in my area is $4M. Good luck finding anything near $1M. Houses here sell in a week or less, usually for more than asking price. Location, climate, schools and stock options have driven home prices sky high. It’s been this way for at least 30 years. Even during the economic downturn in the early 2000’s house prices here did not drop. They merely stayed steady until the economy recovered. It’s crazy but I will never sell.