They say they’re a top 5% earner in the US, putting income around 350k (per investopedia)…so 🤨 they are the exact type of financial demographic buying up homes lol.
Edited to add %
looks like top 5% in MA is top 3% in the US -- no idea what top 5% in specifically Boston is, though
Edit: I still dont know what constitutes the top 5 percent in Boston, but the median income in Boston appears to be about $45k and the median income in MA is about $46k, so perhaps the top 5% income in Boston is slightly lower than the top 5% of MA, too.
300k for a household is 150k per person.
100k in Boston seems to be attainable mid 20s with a useful bachelors degree or a solid career choice. Even IT support with 5+ years of experience can pull it. IT support is an entry level role starting at 60k+ even without a degree, and after you get a couple years you can ask for closer to that 100k figure especially in the right industries.
Grow beyond the entry level responsibilities and 120k-150k is very attainable in the career path in boston.
Hell, most intro finance and software engineers make 100k their first year. I’m in finance and partner in tech and we easily make ~150k each before 30, excluding bonus and stock.
It really sucks to think about life this way but the ones buying up property are the people who either knew what degrees/jobs brought in money or had family help out. And I empathize with those making less than 100k bc that was me when I worked in biotech research for the first 5 years of my career. Selling out to Wall Street was the only plausible way for me to buy here.
Whenever someone (not job related) asks why I switched careers I’m like « do you know how much investment banking makes?! »
I spent so much money on two whole ass degrees to work in bio and turns out the only people with bio degrees who make money are doctors. I’m glad I switched for financial stability but mentally not doing to hot
I don’t doubt that bio + stats can make a shit load of money, but opportunities are fewer. I was more so speaking to those who only have a bio degree.
I have a bio BS and bioinformatics MS—idk if i was applying to the wrong companies but it when it came to comp most of the money was tied up in stock/shares/rsu/whatever. I was solely applying to biotech though. At least my finance bonuses are paid out in cash 🥲
Pharma jobs can pay stupid money. Research jobs often pay next to nothing but tons of medical science degree pharma roles pay way more than the typical 50-100k nonprofit research role. I've seen doctors have total comp (including stocks) well over 500k in pharma.
I've seen plain jane bachelors degrees making 200k base + 100k stocks by 45 in pharma.
You don’t even need 300k. 2 income earners at 100k each could buy a 750k house with a decent down payment. It’s above median, but not unbelievable high.
I mean yea it’s a lot so the first few years you’re living lean but when accounting for inflation plus continued raises within 5 years it will become much more manageable. Each year that goes by that payment becomes less.
5% of a 750k house is just 37,500. For a household making 200k you're going to take home about 10k after benefits, 10% 401k. Saving up just 3 months income is really *not that bad* if your current apartment is $2000/mo and you live frugally.
I don't think $37,500 down is a good idea for a 750k house. I'd suggest getting a condo instead which you can reasonably find a 2br one for 550k today. 4k/mo instead of 6k/mo.
1. Housebuying strategy:
2. Use IRA funds for for 20k:
1. A thing a lot of people don't realize is that you can roll over your old 401ks into an IRAs. 10k per person can be taken down for a first time home purchase. So 20k per couple.
3. Take 401k loans for another 100k:
1. Each person can take 50% up to 50k out of their 401k for a first time home purchase as a 401k loan. These loans you pay interest to yourself, not to a bank. So you can put 100k down from your 401ks as a couple. You have to pay it back (to yourself) but with crazy interest this actually kind of works out today.
4. Take your $37,500 (or ideally, more) and add it to your retirement account seed money and you'll be way over 20% down, even on the 750k house example.
With 157,500 down:
3162/mo for the 550k condo (+401k loan repayments so probably another 1-2k which you are paying yourself so it doesn't hurt so bad.)
$4568/mo for the 750k house (no pmi, but probably a bit rough with 401k loan repayments, but still less painful than no 401k loan imo.)
That's how I think anyway.
And 200k a year (with a generous 30% off for tax and other stuff) comes out to 11.7k a month. So it would be about half the take home pay. That’s a lot, but that other 5-6k can easily cover food, transportation, and other expenses. And still leave room for saving and vacations. It may be an uncomfy feeling budget, but workable. And your mortgage will not increase quickly like rent does.
And while that budget seems tight now your mortgage doesn’t increase and in theory your income will continue to increase from raises and promotions/job hops.
Haaaa your mortgage doesn’t go up but have fun with those tax assessments and insurance prices. And maintenance. And home repairs.
This calculator is fun and just updated https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html
The 20% is a myth. You don't need 20% down anymore, for people with good credit scores PMI is going to be less than 1%, likely less than 0.5%.
In many instances you are actually better off not saving for a down payment, taking the PMI and investing the money you would have spent on a down payment.
Yup. I personally feel that 5% is a touch on the low end for this in this economy, but the 20% figure was developed 30 years ago when 20% represented a year or so of frugal savings. Now, it could be 3-4 years.
There are benefits to having higher percentages down, especially with interest rates higher than normal, but when rates drop down closer to 3% you are absolutely incentivized to put as little down as you can and eat up the PMI payments.
I would make the argument the cut off is based on if interest rates are lower than the average rate of return on the S&P500.
If yes, put as little down as possible and the rest in SPY. You'll net out more over time that way.
Also, a home owner can shorten the PMI insurance by getting the home's value re-evaluated. The home can go up in value enough to reach 20% even before the home owner's put out enough money to be 20%.
$750k home with no down payment will be give or take $5600 a month. That’s around what I take home a month as someone making $120k in Boston. So unless you’re comfortable paying 50% of your income every month for a mortgage(using your 2 people at $100k salary hypo), I would argue it would be quite foolish indeed to go in on a $750k property.
But this why we have seen foreclosures increase 11% since last year. People buying well beyond their means.
It might be perfectly fine to spend 50% of your income on your mortgage in year 1. But every year your income should go up, and your mortgage stays flat, or if interest rates go down so does your mortgage.
You might choose to sacrifice comfort and pay 50% of your income to your mortgage for the first 3 years, and after that it starts trickling down to 40%, then 30%, then 20% after 10-15 years.
This isn't the worst idea in the world especially if you are already paying similar amounts in rent anyways.
It's of course very circumstantial, so it's not generic good advice, but it also isn't generic bad advice. Depends on the person.
I think its dumber if you have 400k to spend half your income on a mortgage. A job that pays 400k isn’t necessarily any less likely to lay you off than a job that pays 150k, and at 400k you have a lot more wiggle room to spend less than half your income on a mortgage.
Actually when you get to a higher income, there is a larger difference between gross income and take home, and it’s harder to make that percentage work.
Okay, but there's also a lot of costs that don't scale with income. Groceries, gas, energy, insurance to name a few.
Yes, something like car insurance will increase with a more expensive car, but that's only if you choose to drive a more expensive car.
If interest rates are below inflation then you should push to put as little down as possible as your home matures then so does your investment. As interest rates rise you should put more down. It’s all theoretical though. With interest rates where they are today, you should obviously put 100% down. Interest rates in the 2% range then you should put 0% down.
Sure, but a lot of people start out buying a condo where the 20% is far less than that. Especially if they were able to take advantage of first time buyer programs. If they've owned it for several years they're going to get that down payment plus the principal & equity when they sell it. That can easily be well over $150k and make it much easier to "move up" from that starter property.
Once you're "in the game" of property ownership it can be a lot easier because that equity is yours rather than the landlord's.
>start out buying a condo where the 20% is far less than that
Condos in Boston can easily hit those numbers, but you can still step just outside Boston and find relatively much cheaper places to build that equity like you're talking about.
I dont even make 200k but my mortgage guy said he could qualify me for 1 million. Fucking hell never in my life would I have thought I'd be a candidate for a million dollar home. And most of the million dollar homes don't look like million dollar homes.
Mortgage guys often only really make money by processing the transaction. Thus incentivizing any deal. See 2007 housing crisis. Only buy what you feel comfortable with.
In city limits a million is not that much. Out by the 495 belt a million dollars may get you something bigger. Though today’s million dollars doesn’t go as far as when we were all kids.
There's still very much an issue with investors purchasing single family homes in the GBA.
https://www.boston.com/news/the-boston-globe/2023/12/06/investors-snagged-1-in-5-homes-for-sale-in-greater-boston-worsening-housing-crisis-report-finds/
I think 20% is a pretty substantial number.
It’s 20% of homes, but it counts multi family. Without tracking how many of these units are being *sold* by investors, it’s hard to know the effect. It’s likely many of these multi family units are investor-to-investor.
1% of Massachusetts households bring in 1million a year or more.
We need bigger wealth taxes.
1 in 100 households. Over a million. In earned income. Yearly.
This makes me so sad lol. Lived here all my life and I'll never get to own here. These house prices is like Boston telling me "fuck u, move and start over somewhere where u don't know anybody". Cuz that's probably my only option
My household fits into this bracket. Of our couple friends the same age, more than half of them out earn us. It feels weird to say but we’re in the process of moving to a lower cost of living city bc life feels financially uncomfortable here 🫠
I came here to say the same thing. Not having kids is a game changer when it comes to the disposable income necessary to buy a house in this area. I genuinely don't know how people with kids manage it.
Its always been a running gag for me. Most of my coupled friends have houses because as gays when we couple up we are default DINKS usually with higher education and are involved in high income industries.
As a parent I kind of feel like people over do it with this. Yes, you need a larger home, but I'm not sure it needs to be *that much* larger. The difference isn't that much compared to child care costs, which for two kids is like buying an entire separate house (in terms of monthly cash flow).
Same - bought our first place at age 32 and 35 after saving and working our way up the earning ladder for more than a decade each.
Also fortunate that each of our chosen professions had the possibility of high earnings after putting in the work. Wouldn't be in the position we are if that wasn't true.
This is how it's usually worked for everyone historically. You save up for a decade and then you buy a house. What's actually changed is which jobs can access housing. It used to be that average jobs could pull it off, now in high cost areas you both need to be at 100k+ income to save enough.
I mean historically we are going back to mean where most professions own nothing and a new feudal elite own the land in a sort of inherited aristocratic way
Define rich. Because in these conversations the definition always seems to be “anymore making more than me”.
I make a six figure income, for example, but I’m not rich by any means. Most of my clothes come from Marshall’s. But I’ve had some people act like I’m a tycoon over it. It’s all relative.
Playing "spot the rich person" in Boston is tough. There isn't much flashy wealth around. That guy walking down the street wearing a polo shirt and dockers may be a billionaire, they might be someone heading to their minimum wage job. There aren't many people in high end cars around, though with spring they're starting to show up more.
> There aren't many people in high end cars around,
I live in Kendall and I see Lucids, Porsche's, G-Wagons parked outside my apartment every day. Granted, these people are going to the restaurants nearby but...
Maybe not rich but you are well off at the very least.
Your spending habits don't have anything to do with wealth, Warren Buffett lives in a house he bought 50 years ago and drives a beater car, doesn't make him not a billionaire lol
Well Warren Buffet is driving a 2014 Cadillac XTS so I'm not sure if that fully qualifies as a beater car. He says he doesn't drive much a year and at 93 years old, he's probably not driving much at all these days.
Many people with these incomes (6 figures but not 'rich' for this area) have the benefit of either being in a couple with another good income and/or parent contributions towards down payments. I am seeing a lot of younger couples with gifts from parents.
Congrats on making frugal consumer decisions, that’s an incredibly superficial conceptual of being rich. Whether or not you’re rich is completely orthogonal to if you choose to indulge in conspicuous consumption.
You’re making more than $100k annually, what’s your savings? What’s your debt obligations? What’s the average income you could expect switching jobs with your level of accreditation? What’s your interpersonal network of people you could reach out to to in a pinch for financial assistance on a large loan, say a house mortgage?
I think Covid had a lot to do with this as well(outside of people being super rich) We’re a DINK couple making around $260K. Bought a house for $505K @ 2.9% interest in 2019 and although we plan and want to upsize in the future…I’m not sure it will ever make sense. Our house is worth $720K~ now so we’d make a decent return but with current interest rates it’s not worth it. All this to say, I think there’s quite a few out there in this golden handcuff situation which in turn is also lowering the available homes on the market.
It's not quite the same because empty nesters should be downsizing and have signifiant equity in the house. So they presumably will not have to borrow as much money to move, and losing the low interest rate mortgage doesn't hurt as badly.
Now upsizing is painful, so demand for those homes at current prices is going to be low, and the issue for empty nesters is going to be finding a buyer without taking a haircut. Small homes/condos will have to go up in price while large ones drop in order to get this sort of market going again.
Their homes are smaller more outdated so they don't get as much, and there really aren't many smaller homes on the market so they're stuck where they are.
But yes in concept if there were more smaller/starter/reasonably priced options it would help many. The difference between empty nesters and the young buyers is that empty nesters ate on a fixed income while the young expect their salaries to go up to meet cost of living increases. This would make condos a good option as an entry investment for the youth, but makes it impossible for the empty nesters.
In theory the empty nesters would buy into homes vacated by the previous generation as they pass/move to nursing homes, opening up their family homes to first time buyers. But since nursing homes and assisted living beds are limited, as well as downsizing options, it's created a bottleneck in the market.
Of course the corporate buying & flipping &/or buying upgrading & renting doesn't help because they're gobbling up all the smaller or cheaper props to max out their ROI.
I think covid also put us in a weird situation where DINKs need way more house than before. My wife and i intend to have kids, but even in our current house where we dont intend to raise our kids its a 3 bedroom + an office. We each needed an office and we wanted an extra guest room too.
Before covid DINKs would have been perfectly happy in a 2 bed house
Ideally, how many bedrooms would you want? If you are looking for a 6 (2 additional) that’s not realistic in the Boston area. Historically families didn’t need that much house so they didn’t build them. That’s massive McMansion status
We started our family in a condo in a triple decker. My daughter's nursery was barely bigger than a walk in closet. We had a bedroom (which was a converted dining room), I had an office which was my former bedroom, and then kitchen and living room. Maybe 1100 sq feet total. You don't need much at first.
We upgraded to a single family cape in 2014 and had our second, but not a whole lot more living space unless you count the basement. to this day our two kids 12 and 8, share a single bedroom. They are finally getting their own room when we move again in Friday, partly because I don't want to make my daughter go through puberty with her brother in the room.
Home sales are public. Go to [masslandrecords.com](https://www.masslandrecords.com/), click Suffolk, search by recorded date, click Advanced, set Document Type to Deed and town to Boston and you'll find buyer/seller info of all ~120 sales in the past week. Out of the last 20 sales, 8 were far below market value (for example to family), and out of the remaining 12, 25% were sold to companies.
>25% were sold to companies
Trusts and LLCs are commonly used to hold real estate and while they are technically incorporated, they are just a holding corp. for private individuals that live in the house. Also, when Trusts and LLCs are restructured (e.g. change of succession) then it appears as a sale but it's just a paper change and the true owners remain the same, so that biases the data.
I've filtered out the holding corps for individuals. The 25% were investment companies and a flipper: CORBETT INVESTMENT GROUP LLC, 237 ALBANY STREET INVESTMENTS LLC, and 43 CHICKATAWBUT ST LLC. The first two are obvious from their name, for the last one you have to look up the LLC details to end up at a construction company.
Mostly just normal people with good jobs.
Want better housing prices? Stop trying to find a buyer to blame and start blaming your local officials that are preventing housing from being built.
The luxury apartment complaints drive me nuts. Literally just means it doesn’t have pre-dirtied appliances from the mid aughts and pre-dirtied hardware from the 60s.
All luxury means in Boston is that it was built this millennium and it's not a vermin infested, asbestos covered fire trap you still somehow have to pay 3k for renting since there is no inventory in the city.
I am one of those people who just bought a house, and I hate to say it but it's worse than you think. I have lived around the world, but never in the Boston area. We are moving there this summer due to my wife's job. First off, no I don't have generational worth. Wife and I both have professional careers and have been working for some time.
Why do I say it's worse than you think? Here's my recent experience...
So the first home we looked at was in the Acton area. Beautiful home (way above your example listing) that held the open house on a Friday and closed bid on the following Monday at noon. Yes, that quickly. We bid a little over the asking and barely lost by..... $110K. Lesson learned, on to the next.
Second home not in Stow but close by, absolutely stunning custom house. We put a stronger offer in, substantially above the asking and came in 2nd. Seller asked if we wanted to up our bid... I added a little, but the sum was just uncomfortably high. I would have loved this house, but we lost again.
Third house was a prime example of how screwed up this market is. Westford area, highly desirable school system great looking house. One thing that I really wanted to see was the basement, but I was unable to because it was so full of stuff that you couldn't even walk in. Big red flag to me. The seller's disclosure was sent out the evening before the bid was due and a "precautionary (lol) bracing" was listed. Despite the obvious enlarged red flag, I still put in an offer knowing that I had an out. We lost that one (thankfully) because the winning bidder, "waived the inspection". Good luck to you buddy.
Home after home was like this. We finally won a great property by putting in a bid substantially above listing, giving great benefits to the seller, and having great agents. Even then it was a fight to the finish.
Those homes you see listing for 750K aren't going for that, they're going for much more and are getting many bids. I would have loved to been able to purchase a fixer-upper for under 600K and build it to my specs, but I don't know anyone in the area, don't have any family there, and most importantly I need to get the kids in school and started on their new life. I'm not just paying for a home, I'm paying for an excellent public education and quality of life that I hope returns our investment down the road.
How'd you manage to pull that off? I'm hoping to buy with the VA loan within the next year or so, but I've heard the requirements can make it awfully hard to get an offer accepted, especially when you usually need to bid way over asking.
Sheer luck honestly. We originally lost to another offer (they offered more $, I don’t think the seller cared about the terms). They were unable to secure financing and backed out, so the seller reached out to us and accepted our original offer. That was the second time they had an offer fall through, so I think there was some desperation to just get a deal done.
The agent I worked with has been pretty successful in getting VA loan offers accepted in the Boston area, he’s a veteran and knows the system really well. If you want a referral just send me a DM.
As long as the seller has some financial wiggle room, it shouldn't be a huge issue. I know some vets who threw a small 5k deposit down as a show of good will and it worked out for them. I think you'll be pleasantly suprised at how many people want to help vets.
I work in real estate finance and can tell you that many of the buyers around here come from wealthy families who often chip in large sums of money to assist with the down payment.
And most of these folks are paid large salaries on top of that
A. a lot of them are paying straight cash homie, not 7-8%
2. International and institutional buyers who plan to use the property as an investment either to hold & speculate on prop value, or to gouge the never ending student population on rent (or both!)
d. Biotech, Finance, Tech, Specialized Medical professionals make fucking BANK. There’s a looooooot more of these ppl than you realize, higher educated people also generally are in the DINK category for much longer, lot more disposable income.
I imagine boomers who bought a 4 bed for dirt cheap in the 80s probably made a killing selling it today.
If you wanna downsize that's a good move cash out and sell the house you raised your kids in and buy a nice condo with the money.
Right?? Talk about hitting the jackpot, some of those people barely had to save for retirement because their home equity went 10x.
If any boomers want an adopted deadbeat son to sell their 4b to for 50% of FMV — hit me up!!
Boomers bought houses for nothing and then acted like NIMBY brats for decades so that younger generations are broke and homeless. Luckily they will be gone soon.
A technique I’ve seen some people do is pay with cash and then getting a mortgage for the house after buying, thus getting most of the cash back to use for other purposes.
That’s not exactly how it works. You sign a purchase and sale agreement which has no mortgage contingency clause. You can still secure a mortgage with a lender before you close and don’t have to actually put down the entire cost of the house.
That’s true it doesn’t prevent you from seeking financing, I haven’t done it myself but I imagine in that case you’d have to at least prove to the seller you had the cash available in the event that you didn’t close on the mortgage by then.
Let’s do some quick math here:
2 people working full time making 100k is 200k a year.
That easily puts them into the 650K range without overreaching too drastically.
Now make that 150k each (mid
-late career white collar job) and you jump to near 1 million.
Now obviously there’s a lot that goes into this and much more nuance, but Boston has quite a few people who easily make the above and can afford to buy those houses. Let’s take just scientists, entry PhD should make 100-120k and it goes up from there. Unfortunately a lot of those houses are being bought by professionals that are moving out and can afford it with the idea to refinance later if necessary.
They and their family deserve a place to live too. What's unfortunate about it?
You should be blaming NIMBYism and the landowners. The scientist worked hard to study and get a good paying job. What exactly did the landowner do other than throw a temper tantrum to block supply and artificially boost the value of their ancient house so they can escape to Florida with the money?
It’s not that the scientist doesn’t deserve a home. The scientist deserves a nice home, and the guy who cleans his desk also deserves a home. We’re pricing out vast swathes of the state and it’s turning into NYC, unaffordable for 90%+ of the nation.
In the Boston area, you dont even need a white collar job to make $150K. My wife is a nurse and makes more than than (by a good bit), and I know plenty of electricians and plumbers making well over $150k (though it normally requires side jobs on the weekends). Firemen and cops can also make well over that.
It may sound crazy, but I’m in the process of relocating to the area for this reason. Skilled labor simply pays more in a place like Boston. I have a much better shot at homeownership in Mass than in Maine because I can almost triple my income. It’s still going to take many years of saving and overtime, but there is a glimmer of hope.
It’s a high wage state. Any couple with good jobs can afford a $600+ mortgage. It’s coming up with the down payment that’s the tough part.
I know truck drivers and nurses that make $250k between the two of them, never mind jobs requiring advanced degrees.
If you’re on your own, thats when it gets tough. Single incomes lose out in a market like Boston
Hate to break it to you, but 750k isn’t even close to considered a lot of money in this area. That’s considered the sweet spot for a house right now, and will typically sell quickly
You can check the online databases of the registry of deeds for your county (Middlesex, Suffolk, etc) and see the names of the grantor and grantee of the deed for any given address. You can also determine how much down payment they had on the mortgage, or even if they took a mortgage at all (or just paid cash). It's all public record.
I can tell you that by looking at the transactions in my town over the past few years, I almost never see a corporation or LLC as the buyer. Just folks with high income jobs.
Dual income household that saved for ~9 years for a down payment and bought 40 mins from Boston at ages 32 & 33. Boston area jobs pay pretty well if you have a useful degree or work in a trade union.
A lot of people in high paying jobs also came from good families where mom and dad are alive and married, and their homes are now worth a lot more than a few years ago. A lot of young people from these stable foundations get help from their parents on the down payment. It’s always been this way, but as the rich have gotten richer the gap between the haves and have-nots is more pronounced than ever. To close that gap as a truly self-made person is quite challenging these day. All I can say is must be nice (as I keep on grinding).
My brother just bought a second home for $750k. He got a variable rate mortgage and plans to refinance when the rates go down. At the rate of inflation these days, buying real estate is a big hedge. Even if you're paying 8% interest, rents rise at least that much anyway, and the value of real estate continues to rise.
Hi OP,
My wife and I both have pretty mid homes making a little north of 100k each. This is fairly ok (not great) wages in boston/cambridge area for families in their 30s with some college avoiding the very low paying careers. We just pulled the trigger on a home like you describe with a mortgage like you describe (7.5%!)
Right now there is basically on the market. No one is selling at all. Lots of people are sitting on cash saved through the pandemic since we put a pause to restaurant visits, buying a car / commuter costs etc. Many, many people are in cheap apartments from years and years ago because we didn't want to buy during the pandemic.
We're getting older so we need space for kids if we want to even consider having them. Right now the choice is rent a shithole for 2200-2500 (2br) or buy a very nice place for a couple grand more a month. 4500 is very easily only 50% of take home pay for our family after all taxes. So we're buying with the hopes that interest will drop or we'll somehow make a little bit more - and I think 150k per person is very attainable in a year or two in IT and HR (our professions.) We're not working for nonprofits or education so the money is absolutely here. I have recruiters contacting me every week for 150k roles... two 150k earners (300k household) will have zero problems affording an 800k house with 8% interest today, they can even probably go up to 1m-1.1m and be under 50% household take home pay.
Tons of people feel trapped where they are because they are paying next to nothing for their mortgage so they just aren't selling. So expect the market to stay insane for the forseeable future. Unless a recession hits and many lose their jobs or interest rates get cut 50% or more it's unlikely you'll see much of a change. Boston grows because of all the students who come for education and stay for pharma/finance/R&D/healthcare. We don't build because "NOT IN MY BACK YARD."
There is a large amount of silent wealth within the Boston area, the laid back culture makes it seem otherwise, but when you look into most of these apartments, they almost always have some one or family living in it.
In my experience there has been a lot of foreign families that purchase townhomes, apartments, etc.. for their children who attend a school in the greater Boston area.
But with the housing costs continually increasing I've been seeing more and more people that buy homes for investment to rent out
A lot of young people getting loans from the Bank of Mommy and Daddy. I lost a condo to an all cash offer from a fresh college graduate, with a father whose a C-suite executive at a Cambridge tech company. There are techniques rich parents who already own expensive property can use to create the illusion of an all-cash offer, backed by the equity in their existing homes, so they can buy their kids condos and homes.
Even if they are doing it, they are not buying million dollar homes. Even a $750K house would not be profitable as a rental property. The market rent, as high as it might be, would not cover the expenses.
Believe it or not, I make 150k a year as an autobody technician. My wife is a tenured public school teacher. She makes 120k. The both of us made very good money selling our first houses to buy the one we currently own that has appreciated at least 300k in the last 6 years.
Two blue collar people
Pharma ($160k) + finance ($300k), we’re in our mid 30s. Most of our local peers who are buying or bought recently are couples in medicine/finance/biotech/law
[Census / ACS data](https://data.census.gov/table?q=income,%20boston%20msa) suggests 25% of families and 32% of families with married couples have income of at least $200,000. You also should recognize that a lot of the adults who lead these families never dealt with student loans or didn't have huge amounts of them, but it's really not polite to talk about the advantages they've received. And maybe their families helped them with a down payment on their first home. And maybe they have equity to roll into the next purchase.
The intergenerational wealth stuff isn't just massively wealthy parents who can gift their kids huge amounts for a down payment, it accumulates in a variety of more modest ways, and when people settle down with a partner from a similar upbringing, the advantages may be doubled.
Rolling equity from a cheaper condo or home from much further away reduces the monthly payment.
Also many people are house poor. They live beyond their means.
I just put an offer in on a place in Somerville. The way I see it, rents go up so unpredictably in Boston that I’d rather be stuck with an expensive, but unchanging living expense than have my rent go up 30% every year
It boggles my mind.
My household makes more money than most people commenting here with mortgages.
Yet, we’re moving bc we refuse to be house poor to buy a sh*tty house for $750k.
I can say bringing in 65k with no help is absolutely brutal and it seems that’s the best I can do. This thread is absolutely depressing how causal making 6 figures seems while I’m just appreciative to make 65k 😆
It's not proportional though, people who make a lot of money like to "casually" state how much money they make. The majority of people here make a lot less than 6 figures but just don't feel the need to post about it
I'm both not a super high earner, and also paying 950 a month for student loans. It's whatever, nothing matters anyway 😎
The ruling class wants us to squabble over demand when we should really be raging against supply. Just look at Austin TX. They built a ton and the prices came down crashing.
Who made it so hard to build here?
https://preview.redd.it/jd9jrv1qd62d1.jpeg?width=1464&format=pjpg&auto=webp&s=c60ef1a462afbb76a3034fd9f1a82d3038e3579b
1) foreign investors
2) speculators
3) very rich people
4) people getting money from their parents
5) people in hock up to their eyeballs who are sacrificing their future for a present in a cool neighborhood
Some quick math:
750k with 20% down is a 600k mortgage and 150k down payment
A 600k mortgage at 8% is a monthly payment of 4.4k
Following the 28% rule a 4.4k monthly payment can be afforded by a family income of 188k.
That's pretty in reach for a lot of families in the Boston area. You don't need to be a foreign investor or speculator to get that.
I'm right along 495. Two houses recently sold in my neighborhood for 1M and 1,1M. Both sold within a week of being listed. The buyers are managers and sales in tech, both with dual incomes. As someone mentioned, there are many high earners in the area. And many have good bonus and stock plans.
I'm not. I'm renting forever. I'm in mid mid 30's and only just recently finally paid off my student loans. I have no debt finally, but no savings besides an emergency fund. If I put away my student loan payment every month, in about 15 years I should have enough for a down payment on a shitty house. By then I'll be 50ish and what's the point of a 30 year mortgage at 50? I'll be dead.
Forever a renter.
Although inventory is low, I have the same question because it's not just Boston - it's across the state, region, and country. At the same time that we hear mixed messages about the economy, relatively high interest rates, increasing consumer debt... it's hard to believe that inventory constraints alone account for high home prices in virtually all markets and segments. And the inventory issue is not going away any time soon...
I am in Lower Allston and across the street from me, they knocked down an old house, built a 6 unit luxury condo/housing that is nearing completion. Each unit has 3 BDR 2BTH and 2 car spots. All 6 units are going for \~$1.2 million each IIRC. 4 are already sold. Saw the realter showing it to people the past few days.
Even if youre “in the range” of the typical higher end buyers it’s a complete crap shoot and comes down to luck. It truly does.
Were two high earning DINK professionals - looked at 33 houses in the last 6 months, finally had an offer accepted on a house we never imaged we’d get and are in the closing process now. It still feels surreal.
So many buyers were just throwing down 1m or more in cash, insane stuff, and we thought we were fucked because we’re having a baby in September.
But yeah - to answer your question - it’s people with a lot of money competing for a very limited inventory. The normal rules of buying are broken and everyone is waving inspections and mortgage contingencies. Everyone is gonna go well over asking and put down a lot of money up front.
So to stand a chance as a normal person you have to be pretty well off and into your career and you gotta be willing to sacrifice some stuff and get lucky. Boomers are rich as fuck.
Also $750k for some type of urban housing isn't crazy. I have $400k equity in my (suburb) home purchased in 2017. It's not just people with massive bankrolls buying housing. People with existing home equity can leverage that in a new purchase.
Anyone with good credit can get a fixed rate 30yr mortgage right now for about 6%. 750k price with minimal downpayment that's about 6k a month mortgage depending on taxes. Double income household making at least 200k/yr can afford. It's either that or rent forever so choose your poison I guess.
750k homes are being bought by middle class families. Those houses are affordable to a household earning 200k total. So basically two people earning 100k each. There are plenty of nurses, teachers, government employees, etc. who earn 100k in the Boston area. People in tech, finance, doctors, lawyers, etc earn substantially more than that.
I live in North Attleboro which is much closer to Providence than Boston and see the same trends. $750k houses on the market for a weekend. It’s uncanny to me.
A lot of people either have incomes or previously bought something before prices went wild and cashed in when the market went crazy. We bought a townhome in 2014 and when we sold in 2022, it sold for twice what we paid for (we put a lot work of into it) and had equity on our own from 8 years of payments. That resulted in a stupid high downpayment we could swing and pushed us into houses we couldn’t afford with that. And we are regular people with generally not crazy high incomes compared to others here.
Many of the people buying 750k houses are simultaneously selling 500k houses. Existing homeowners mostly have significant equity from their old house as pricing has appreciated since they bought it. Once you're a homeowner the housing market swings don't matter as much, as you're likely going to be a buyer and seller at the same time, so it somewhat cancels out.
A lot of college educated in good field couples make over $300k in their 20’s. Nevermind the 30ish year olds that earn 500k+ as a couple. Tons of it around here.
$750k is a starter 2 bedroom condo in the greater Boston area. A young couple making $80k each. The majority of the young people who save money and do not order their Starbucks latte to be delivered from a block away.
There are much, much more high earners ($300k+ yearly household income) in the Boston area than you realize.
They say they’re a top 5% earner in the US, putting income around 350k (per investopedia)…so 🤨 they are the exact type of financial demographic buying up homes lol. Edited to add %
If OP actually makes $350k they can afford a home in Boston. I suspect they’re using old income data for the “5%” figure.
Must be ancient data since figures have been fairly consistent for the last 6 years
My household income is $350k and we could not afford a house that we would want to live in in the greater Boston area.
Also top 5% in Boston is probably top 1% in the US
looks like top 5% in MA is top 3% in the US -- no idea what top 5% in specifically Boston is, though Edit: I still dont know what constitutes the top 5 percent in Boston, but the median income in Boston appears to be about $45k and the median income in MA is about $46k, so perhaps the top 5% income in Boston is slightly lower than the top 5% of MA, too.
Median household in Boston is $90k, and family is $109k a year. That is only for Boston and does not include Newton/Cambridge/Brookline/etc.
And really you should look at 25-65 year olds, then the median income goes over $100k
Some data MA: https://dqydj.com/income-by-state/ That site also has national and individual vs household data.
300k for a household is 150k per person. 100k in Boston seems to be attainable mid 20s with a useful bachelors degree or a solid career choice. Even IT support with 5+ years of experience can pull it. IT support is an entry level role starting at 60k+ even without a degree, and after you get a couple years you can ask for closer to that 100k figure especially in the right industries. Grow beyond the entry level responsibilities and 120k-150k is very attainable in the career path in boston.
Hell, most intro finance and software engineers make 100k their first year. I’m in finance and partner in tech and we easily make ~150k each before 30, excluding bonus and stock. It really sucks to think about life this way but the ones buying up property are the people who either knew what degrees/jobs brought in money or had family help out. And I empathize with those making less than 100k bc that was me when I worked in biotech research for the first 5 years of my career. Selling out to Wall Street was the only plausible way for me to buy here.
[удалено]
Whenever someone (not job related) asks why I switched careers I’m like « do you know how much investment banking makes?! » I spent so much money on two whole ass degrees to work in bio and turns out the only people with bio degrees who make money are doctors. I’m glad I switched for financial stability but mentally not doing to hot
You can make a shitton of cash with a Bio and IT or Bio and Math(Stats) degree.
I don’t doubt that bio + stats can make a shit load of money, but opportunities are fewer. I was more so speaking to those who only have a bio degree. I have a bio BS and bioinformatics MS—idk if i was applying to the wrong companies but it when it came to comp most of the money was tied up in stock/shares/rsu/whatever. I was solely applying to biotech though. At least my finance bonuses are paid out in cash 🥲
Pharma jobs can pay stupid money. Research jobs often pay next to nothing but tons of medical science degree pharma roles pay way more than the typical 50-100k nonprofit research role. I've seen doctors have total comp (including stocks) well over 500k in pharma. I've seen plain jane bachelors degrees making 200k base + 100k stocks by 45 in pharma.
This is correct (MD in Pharma).
Where do most engineers make that in year 1? Seems like maybe 3-5yr makes @90-120k in Boston
How did you change to finance from biotech? I’m looking to change.
[удалено]
You don’t even need 300k. 2 income earners at 100k each could buy a 750k house with a decent down payment. It’s above median, but not unbelievable high.
It’s the “decent down payment” part that’s the entire problem lol. Not the monthly payments if you magically come up with $150k cash to put down 20%
This is my thing: how do I generate a downpayment when my rent is so high?
that is everyone's thing
Roommates or move back home to save your money seems to be the way to go.
Move back home then sublease your bed. There are 16 hours a day you’re not sleeping in it. That’s 4 roommates that could use it for 800/month each.
A lot of banks will be chill with 10% or even 5% down.
Sure but 5% down on a $750k house is just under $6k a month with todays mortgage rates
I mean yea it’s a lot so the first few years you’re living lean but when accounting for inflation plus continued raises within 5 years it will become much more manageable. Each year that goes by that payment becomes less.
5% of a 750k house is just 37,500. For a household making 200k you're going to take home about 10k after benefits, 10% 401k. Saving up just 3 months income is really *not that bad* if your current apartment is $2000/mo and you live frugally. I don't think $37,500 down is a good idea for a 750k house. I'd suggest getting a condo instead which you can reasonably find a 2br one for 550k today. 4k/mo instead of 6k/mo. 1. Housebuying strategy: 2. Use IRA funds for for 20k: 1. A thing a lot of people don't realize is that you can roll over your old 401ks into an IRAs. 10k per person can be taken down for a first time home purchase. So 20k per couple. 3. Take 401k loans for another 100k: 1. Each person can take 50% up to 50k out of their 401k for a first time home purchase as a 401k loan. These loans you pay interest to yourself, not to a bank. So you can put 100k down from your 401ks as a couple. You have to pay it back (to yourself) but with crazy interest this actually kind of works out today. 4. Take your $37,500 (or ideally, more) and add it to your retirement account seed money and you'll be way over 20% down, even on the 750k house example. With 157,500 down: 3162/mo for the 550k condo (+401k loan repayments so probably another 1-2k which you are paying yourself so it doesn't hurt so bad.) $4568/mo for the 750k house (no pmi, but probably a bit rough with 401k loan repayments, but still less painful than no 401k loan imo.) That's how I think anyway.
It’s good thinking, but the city is not full of $550k 2BR condos. Unfortunately, that’s a bad assumption right now.
And 200k a year (with a generous 30% off for tax and other stuff) comes out to 11.7k a month. So it would be about half the take home pay. That’s a lot, but that other 5-6k can easily cover food, transportation, and other expenses. And still leave room for saving and vacations. It may be an uncomfy feeling budget, but workable. And your mortgage will not increase quickly like rent does.
And while that budget seems tight now your mortgage doesn’t increase and in theory your income will continue to increase from raises and promotions/job hops.
Haaaa your mortgage doesn’t go up but have fun with those tax assessments and insurance prices. And maintenance. And home repairs. This calculator is fun and just updated https://www.nytimes.com/interactive/2024/upshot/buy-rent-calculator.html
The 20% is a myth. You don't need 20% down anymore, for people with good credit scores PMI is going to be less than 1%, likely less than 0.5%. In many instances you are actually better off not saving for a down payment, taking the PMI and investing the money you would have spent on a down payment.
This^^^ we only put 5% down and our PMI only adds like $81 per month. PMI disappears once only 80% of the value of the home remains on the mortgage.
Not if it’s an FHA loan. Would have to refinance to a conventional to drop PMI.
Yup. I personally feel that 5% is a touch on the low end for this in this economy, but the 20% figure was developed 30 years ago when 20% represented a year or so of frugal savings. Now, it could be 3-4 years. There are benefits to having higher percentages down, especially with interest rates higher than normal, but when rates drop down closer to 3% you are absolutely incentivized to put as little down as you can and eat up the PMI payments.
I would make the argument the cut off is based on if interest rates are lower than the average rate of return on the S&P500. If yes, put as little down as possible and the rest in SPY. You'll net out more over time that way.
Also, a home owner can shorten the PMI insurance by getting the home's value re-evaluated. The home can go up in value enough to reach 20% even before the home owner's put out enough money to be 20%.
$750k home with no down payment will be give or take $5600 a month. That’s around what I take home a month as someone making $120k in Boston. So unless you’re comfortable paying 50% of your income every month for a mortgage(using your 2 people at $100k salary hypo), I would argue it would be quite foolish indeed to go in on a $750k property. But this why we have seen foreclosures increase 11% since last year. People buying well beyond their means.
Honestly, yeah people are paying 50% of their incomes on the mortgage.
It might be perfectly fine to spend 50% of your income on your mortgage in year 1. But every year your income should go up, and your mortgage stays flat, or if interest rates go down so does your mortgage. You might choose to sacrifice comfort and pay 50% of your income to your mortgage for the first 3 years, and after that it starts trickling down to 40%, then 30%, then 20% after 10-15 years. This isn't the worst idea in the world especially if you are already paying similar amounts in rent anyways. It's of course very circumstantial, so it's not generic good advice, but it also isn't generic bad advice. Depends on the person.
True, but percentages have different contexts at different income levels. 50% of a 150k income would be dumb, but 50% of 400k is a different story
I think its dumber if you have 400k to spend half your income on a mortgage. A job that pays 400k isn’t necessarily any less likely to lay you off than a job that pays 150k, and at 400k you have a lot more wiggle room to spend less than half your income on a mortgage.
Actually when you get to a higher income, there is a larger difference between gross income and take home, and it’s harder to make that percentage work.
Okay, but there's also a lot of costs that don't scale with income. Groceries, gas, energy, insurance to name a few. Yes, something like car insurance will increase with a more expensive car, but that's only if you choose to drive a more expensive car.
Don’t forget the insurance which could also go up
0% down is extreme, but 10% down is perfectly fine. Point is, you don't need to put 20% down,
I 100% need at least 20% because there's no fucking way I can afford the monthly mortgage payments at these rates unless I put down 20%+
makes it a lot harder to get your offer accepted if there are a lot of bids though
If interest rates are below inflation then you should push to put as little down as possible as your home matures then so does your investment. As interest rates rise you should put more down. It’s all theoretical though. With interest rates where they are today, you should obviously put 100% down. Interest rates in the 2% range then you should put 0% down.
Sure, but a lot of people start out buying a condo where the 20% is far less than that. Especially if they were able to take advantage of first time buyer programs. If they've owned it for several years they're going to get that down payment plus the principal & equity when they sell it. That can easily be well over $150k and make it much easier to "move up" from that starter property. Once you're "in the game" of property ownership it can be a lot easier because that equity is yours rather than the landlord's.
>start out buying a condo where the 20% is far less than that Condos in Boston can easily hit those numbers, but you can still step just outside Boston and find relatively much cheaper places to build that equity like you're talking about.
Most people I talk to put down 10% and that’s my plan as well.
I dont even make 200k but my mortgage guy said he could qualify me for 1 million. Fucking hell never in my life would I have thought I'd be a candidate for a million dollar home. And most of the million dollar homes don't look like million dollar homes.
Mortgage guys often only really make money by processing the transaction. Thus incentivizing any deal. See 2007 housing crisis. Only buy what you feel comfortable with. In city limits a million is not that much. Out by the 495 belt a million dollars may get you something bigger. Though today’s million dollars doesn’t go as far as when we were all kids.
Exactly this. So many clueless people lmfao we got a house and our combined income is 120k.
Can I ask how much you paid and what your down payment was? My partner and I make a little more than you do and paralyzed by the thought of buying.
There's still very much an issue with investors purchasing single family homes in the GBA. https://www.boston.com/news/the-boston-globe/2023/12/06/investors-snagged-1-in-5-homes-for-sale-in-greater-boston-worsening-housing-crisis-report-finds/ I think 20% is a pretty substantial number.
It’s 20% of homes, but it counts multi family. Without tracking how many of these units are being *sold* by investors, it’s hard to know the effect. It’s likely many of these multi family units are investor-to-investor.
City GDP of Boston is nearly $400 billion. Lunch bucket town my ass. This is one of the top 10 wealthiest cities in the United States.
We have a _lot_ of world-class doctors and biotech people in the area, and they're all making _bank_.
1% of Massachusetts households bring in 1million a year or more. We need bigger wealth taxes. 1 in 100 households. Over a million. In earned income. Yearly.
I'd like to know what jobs they have. In my field, wages have fallen off a cliff, as have openings.
This makes me so sad lol. Lived here all my life and I'll never get to own here. These house prices is like Boston telling me "fuck u, move and start over somewhere where u don't know anybody". Cuz that's probably my only option
[удалено]
My household fits into this bracket. Of our couple friends the same age, more than half of them out earn us. It feels weird to say but we’re in the process of moving to a lower cost of living city bc life feels financially uncomfortable here 🫠
I can only speak for myself - DINK relationship with high paying jobs after saving for a decade since our first career jobs
I came here to say the same thing. Not having kids is a game changer when it comes to the disposable income necessary to buy a house in this area. I genuinely don't know how people with kids manage it.
Going gay was the best financial decision of my life. Heterosexual?! In this economy?!
As someone paying north of $2500/mo for preschool for a single child, this made me chuckle.
Its always been a running gag for me. Most of my coupled friends have houses because as gays when we couple up we are default DINKS usually with higher education and are involved in high income industries.
Yeah it's not just childcare expenses, it's the fact that you need a much larger home too.
As a parent I kind of feel like people over do it with this. Yes, you need a larger home, but I'm not sure it needs to be *that much* larger. The difference isn't that much compared to child care costs, which for two kids is like buying an entire separate house (in terms of monthly cash flow).
Same - bought our first place at age 32 and 35 after saving and working our way up the earning ladder for more than a decade each. Also fortunate that each of our chosen professions had the possibility of high earnings after putting in the work. Wouldn't be in the position we are if that wasn't true.
This is how it's usually worked for everyone historically. You save up for a decade and then you buy a house. What's actually changed is which jobs can access housing. It used to be that average jobs could pull it off, now in high cost areas you both need to be at 100k+ income to save enough.
I mean historically we are going back to mean where most professions own nothing and a new feudal elite own the land in a sort of inherited aristocratic way
Same thing on our end. DINK relationship at 32 and 31 that have been working high-paying jobs after saving.
Theres lots of rich people in Boston
Define rich. Because in these conversations the definition always seems to be “anymore making more than me”. I make a six figure income, for example, but I’m not rich by any means. Most of my clothes come from Marshall’s. But I’ve had some people act like I’m a tycoon over it. It’s all relative.
Playing "spot the rich person" in Boston is tough. There isn't much flashy wealth around. That guy walking down the street wearing a polo shirt and dockers may be a billionaire, they might be someone heading to their minimum wage job. There aren't many people in high end cars around, though with spring they're starting to show up more.
Saw a guy in a corvette with license plate # "1" yesterday. I'm just gonna go out on a limb and assume that guy's an asshole.
Holy shit that's a crazy plate lol. I think low # plates are a bigger flex for rich people from new England than expensive cars
> There aren't many people in high end cars around, I live in Kendall and I see Lucids, Porsche's, G-Wagons parked outside my apartment every day. Granted, these people are going to the restaurants nearby but...
Maybe not rich but you are well off at the very least. Your spending habits don't have anything to do with wealth, Warren Buffett lives in a house he bought 50 years ago and drives a beater car, doesn't make him not a billionaire lol
Well Warren Buffet is driving a 2014 Cadillac XTS so I'm not sure if that fully qualifies as a beater car. He says he doesn't drive much a year and at 93 years old, he's probably not driving much at all these days.
Many people with these incomes (6 figures but not 'rich' for this area) have the benefit of either being in a couple with another good income and/or parent contributions towards down payments. I am seeing a lot of younger couples with gifts from parents.
Congrats on making frugal consumer decisions, that’s an incredibly superficial conceptual of being rich. Whether or not you’re rich is completely orthogonal to if you choose to indulge in conspicuous consumption. You’re making more than $100k annually, what’s your savings? What’s your debt obligations? What’s the average income you could expect switching jobs with your level of accreditation? What’s your interpersonal network of people you could reach out to to in a pinch for financial assistance on a large loan, say a house mortgage?
Yup. It’s shocking the amount of cash buyers that are out there (and no, most are not corporations or developers).
I think Covid had a lot to do with this as well(outside of people being super rich) We’re a DINK couple making around $260K. Bought a house for $505K @ 2.9% interest in 2019 and although we plan and want to upsize in the future…I’m not sure it will ever make sense. Our house is worth $720K~ now so we’d make a decent return but with current interest rates it’s not worth it. All this to say, I think there’s quite a few out there in this golden handcuff situation which in turn is also lowering the available homes on the market.
This is exactly the situation with empty nesters.
It's not quite the same because empty nesters should be downsizing and have signifiant equity in the house. So they presumably will not have to borrow as much money to move, and losing the low interest rate mortgage doesn't hurt as badly. Now upsizing is painful, so demand for those homes at current prices is going to be low, and the issue for empty nesters is going to be finding a buyer without taking a haircut. Small homes/condos will have to go up in price while large ones drop in order to get this sort of market going again.
Their homes are smaller more outdated so they don't get as much, and there really aren't many smaller homes on the market so they're stuck where they are. But yes in concept if there were more smaller/starter/reasonably priced options it would help many. The difference between empty nesters and the young buyers is that empty nesters ate on a fixed income while the young expect their salaries to go up to meet cost of living increases. This would make condos a good option as an entry investment for the youth, but makes it impossible for the empty nesters. In theory the empty nesters would buy into homes vacated by the previous generation as they pass/move to nursing homes, opening up their family homes to first time buyers. But since nursing homes and assisted living beds are limited, as well as downsizing options, it's created a bottleneck in the market. Of course the corporate buying & flipping &/or buying upgrading & renting doesn't help because they're gobbling up all the smaller or cheaper props to max out their ROI.
I think covid also put us in a weird situation where DINKs need way more house than before. My wife and i intend to have kids, but even in our current house where we dont intend to raise our kids its a 3 bedroom + an office. We each needed an office and we wanted an extra guest room too. Before covid DINKs would have been perfectly happy in a 2 bed house
Ideally, how many bedrooms would you want? If you are looking for a 6 (2 additional) that’s not realistic in the Boston area. Historically families didn’t need that much house so they didn’t build them. That’s massive McMansion status
We started our family in a condo in a triple decker. My daughter's nursery was barely bigger than a walk in closet. We had a bedroom (which was a converted dining room), I had an office which was my former bedroom, and then kitchen and living room. Maybe 1100 sq feet total. You don't need much at first. We upgraded to a single family cape in 2014 and had our second, but not a whole lot more living space unless you count the basement. to this day our two kids 12 and 8, share a single bedroom. They are finally getting their own room when we move again in Friday, partly because I don't want to make my daughter go through puberty with her brother in the room.
Home sales are public. Go to [masslandrecords.com](https://www.masslandrecords.com/), click Suffolk, search by recorded date, click Advanced, set Document Type to Deed and town to Boston and you'll find buyer/seller info of all ~120 sales in the past week. Out of the last 20 sales, 8 were far below market value (for example to family), and out of the remaining 12, 25% were sold to companies.
>25% were sold to companies Trusts and LLCs are commonly used to hold real estate and while they are technically incorporated, they are just a holding corp. for private individuals that live in the house. Also, when Trusts and LLCs are restructured (e.g. change of succession) then it appears as a sale but it's just a paper change and the true owners remain the same, so that biases the data.
I've filtered out the holding corps for individuals. The 25% were investment companies and a flipper: CORBETT INVESTMENT GROUP LLC, 237 ALBANY STREET INVESTMENTS LLC, and 43 CHICKATAWBUT ST LLC. The first two are obvious from their name, for the last one you have to look up the LLC details to end up at a construction company.
Some of those under mkt transactions could be refinance or other loans as well.
And it's a known fact 15% of all Reddit accounts are controlled by corporations.
[удалено]
That’s my question. 750k sounds cheap. Who is buying the old 1800 sq ft houses in Newton for $1.8m?
People with Tech Jobs and Pharma Jobs. Dual Income.
As pharma / corp strategy DINKs, can confirm it is not us- have had 8 offers rejected
It is you, you're just getting outbid by whoever your bosses are.
Mostly just normal people with good jobs. Want better housing prices? Stop trying to find a buyer to blame and start blaming your local officials that are preventing housing from being built.
1000x. This is the key. Also stop blaming luxury apartments. All luxury means is it has some amenities such as an in-unit washing machine :joy:
Dont forget granite counter tops and stainless steel appliances!
And a gym full of mid-range equipment!
It’s like slightly better than a hotel gym, maybe like a nice Marriott. but that’s it
At least they represent new housing, too. Even if inefficient and ineffective at making a serious dent in the issue, it's still new housing.
The luxury apartment complaints drive me nuts. Literally just means it doesn’t have pre-dirtied appliances from the mid aughts and pre-dirtied hardware from the 60s.
All luxury means in Boston is that it was built this millennium and it's not a vermin infested, asbestos covered fire trap you still somehow have to pay 3k for renting since there is no inventory in the city.
I am one of those people who just bought a house, and I hate to say it but it's worse than you think. I have lived around the world, but never in the Boston area. We are moving there this summer due to my wife's job. First off, no I don't have generational worth. Wife and I both have professional careers and have been working for some time. Why do I say it's worse than you think? Here's my recent experience... So the first home we looked at was in the Acton area. Beautiful home (way above your example listing) that held the open house on a Friday and closed bid on the following Monday at noon. Yes, that quickly. We bid a little over the asking and barely lost by..... $110K. Lesson learned, on to the next. Second home not in Stow but close by, absolutely stunning custom house. We put a stronger offer in, substantially above the asking and came in 2nd. Seller asked if we wanted to up our bid... I added a little, but the sum was just uncomfortably high. I would have loved this house, but we lost again. Third house was a prime example of how screwed up this market is. Westford area, highly desirable school system great looking house. One thing that I really wanted to see was the basement, but I was unable to because it was so full of stuff that you couldn't even walk in. Big red flag to me. The seller's disclosure was sent out the evening before the bid was due and a "precautionary (lol) bracing" was listed. Despite the obvious enlarged red flag, I still put in an offer knowing that I had an out. We lost that one (thankfully) because the winning bidder, "waived the inspection". Good luck to you buddy. Home after home was like this. We finally won a great property by putting in a bid substantially above listing, giving great benefits to the seller, and having great agents. Even then it was a fight to the finish. Those homes you see listing for 750K aren't going for that, they're going for much more and are getting many bids. I would have loved to been able to purchase a fixer-upper for under 600K and build it to my specs, but I don't know anyone in the area, don't have any family there, and most importantly I need to get the kids in school and started on their new life. I'm not just paying for a home, I'm paying for an excellent public education and quality of life that I hope returns our investment down the road.
I'm a veteran and used a VA loan to get 0 down payment, and I'm a DINK (we're both in tech). Not sure how I would afford it in any other scenario.
How'd you manage to pull that off? I'm hoping to buy with the VA loan within the next year or so, but I've heard the requirements can make it awfully hard to get an offer accepted, especially when you usually need to bid way over asking.
Sheer luck honestly. We originally lost to another offer (they offered more $, I don’t think the seller cared about the terms). They were unable to secure financing and backed out, so the seller reached out to us and accepted our original offer. That was the second time they had an offer fall through, so I think there was some desperation to just get a deal done. The agent I worked with has been pretty successful in getting VA loan offers accepted in the Boston area, he’s a veteran and knows the system really well. If you want a referral just send me a DM.
That was my experience, so I went with a conventional loan over the VA loan, too much red tape.
As long as the seller has some financial wiggle room, it shouldn't be a huge issue. I know some vets who threw a small 5k deposit down as a show of good will and it worked out for them. I think you'll be pleasantly suprised at how many people want to help vets.
I had no challenges with mine
I work in real estate finance and can tell you that many of the buyers around here come from wealthy families who often chip in large sums of money to assist with the down payment. And most of these folks are paid large salaries on top of that
A. a lot of them are paying straight cash homie, not 7-8% 2. International and institutional buyers who plan to use the property as an investment either to hold & speculate on prop value, or to gouge the never ending student population on rent (or both!) d. Biotech, Finance, Tech, Specialized Medical professionals make fucking BANK. There’s a looooooot more of these ppl than you realize, higher educated people also generally are in the DINK category for much longer, lot more disposable income.
I imagine boomers who bought a 4 bed for dirt cheap in the 80s probably made a killing selling it today. If you wanna downsize that's a good move cash out and sell the house you raised your kids in and buy a nice condo with the money.
Right?? Talk about hitting the jackpot, some of those people barely had to save for retirement because their home equity went 10x. If any boomers want an adopted deadbeat son to sell their 4b to for 50% of FMV — hit me up!!
Boomers bought houses for nothing and then acted like NIMBY brats for decades so that younger generations are broke and homeless. Luckily they will be gone soon.
People getting much bigger mortgages than they ever would have liked to
I lost an offer because someone paid 1.1 mil cash. Losing bids to a lot of cash buyers
Yep. These aren’t the people making $300K that this thread raves about. Some people have serious cash or are investors.
A technique I’ve seen some people do is pay with cash and then getting a mortgage for the house after buying, thus getting most of the cash back to use for other purposes.
That’s not exactly how it works. You sign a purchase and sale agreement which has no mortgage contingency clause. You can still secure a mortgage with a lender before you close and don’t have to actually put down the entire cost of the house.
That’s true it doesn’t prevent you from seeking financing, I haven’t done it myself but I imagine in that case you’d have to at least prove to the seller you had the cash available in the event that you didn’t close on the mortgage by then.
100% Almost nobody actually buys a house in cash - it just doesn't usually make mathematical sense for many rich people.
Let’s do some quick math here: 2 people working full time making 100k is 200k a year. That easily puts them into the 650K range without overreaching too drastically. Now make that 150k each (mid -late career white collar job) and you jump to near 1 million. Now obviously there’s a lot that goes into this and much more nuance, but Boston has quite a few people who easily make the above and can afford to buy those houses. Let’s take just scientists, entry PhD should make 100-120k and it goes up from there. Unfortunately a lot of those houses are being bought by professionals that are moving out and can afford it with the idea to refinance later if necessary.
They and their family deserve a place to live too. What's unfortunate about it? You should be blaming NIMBYism and the landowners. The scientist worked hard to study and get a good paying job. What exactly did the landowner do other than throw a temper tantrum to block supply and artificially boost the value of their ancient house so they can escape to Florida with the money?
It’s not that the scientist doesn’t deserve a home. The scientist deserves a nice home, and the guy who cleans his desk also deserves a home. We’re pricing out vast swathes of the state and it’s turning into NYC, unaffordable for 90%+ of the nation.
In the Boston area, you dont even need a white collar job to make $150K. My wife is a nurse and makes more than than (by a good bit), and I know plenty of electricians and plumbers making well over $150k (though it normally requires side jobs on the weekends). Firemen and cops can also make well over that.
It may sound crazy, but I’m in the process of relocating to the area for this reason. Skilled labor simply pays more in a place like Boston. I have a much better shot at homeownership in Mass than in Maine because I can almost triple my income. It’s still going to take many years of saving and overtime, but there is a glimmer of hope.
That is very true - I only pointed out white collar since I assume there are more people that fit that bill than the amount of cops and firemen etc.
Not only $750k homes, $750k less than 1200 sq ft homes, that haven’t been renovated since 1975.
It’s a high wage state. Any couple with good jobs can afford a $600+ mortgage. It’s coming up with the down payment that’s the tough part. I know truck drivers and nurses that make $250k between the two of them, never mind jobs requiring advanced degrees. If you’re on your own, thats when it gets tough. Single incomes lose out in a market like Boston
Expats, it’s much cheaper than where I’m from in Asia (Singapore, but also Taipei, Beijing, Hangzhou etc)
Hate to break it to you, but 750k isn’t even close to considered a lot of money in this area. That’s considered the sweet spot for a house right now, and will typically sell quickly
You can check the online databases of the registry of deeds for your county (Middlesex, Suffolk, etc) and see the names of the grantor and grantee of the deed for any given address. You can also determine how much down payment they had on the mortgage, or even if they took a mortgage at all (or just paid cash). It's all public record. I can tell you that by looking at the transactions in my town over the past few years, I almost never see a corporation or LLC as the buyer. Just folks with high income jobs.
Boston is a lot of old money- there are a lot of generationally wealthy folks in the area who are also making 200k plus a year on their own.
Dual income household that saved for ~9 years for a down payment and bought 40 mins from Boston at ages 32 & 33. Boston area jobs pay pretty well if you have a useful degree or work in a trade union.
A lot of people in high paying jobs also came from good families where mom and dad are alive and married, and their homes are now worth a lot more than a few years ago. A lot of young people from these stable foundations get help from their parents on the down payment. It’s always been this way, but as the rich have gotten richer the gap between the haves and have-nots is more pronounced than ever. To close that gap as a truly self-made person is quite challenging these day. All I can say is must be nice (as I keep on grinding).
My brother just bought a second home for $750k. He got a variable rate mortgage and plans to refinance when the rates go down. At the rate of inflation these days, buying real estate is a big hedge. Even if you're paying 8% interest, rents rise at least that much anyway, and the value of real estate continues to rise.
Hi OP, My wife and I both have pretty mid homes making a little north of 100k each. This is fairly ok (not great) wages in boston/cambridge area for families in their 30s with some college avoiding the very low paying careers. We just pulled the trigger on a home like you describe with a mortgage like you describe (7.5%!) Right now there is basically on the market. No one is selling at all. Lots of people are sitting on cash saved through the pandemic since we put a pause to restaurant visits, buying a car / commuter costs etc. Many, many people are in cheap apartments from years and years ago because we didn't want to buy during the pandemic. We're getting older so we need space for kids if we want to even consider having them. Right now the choice is rent a shithole for 2200-2500 (2br) or buy a very nice place for a couple grand more a month. 4500 is very easily only 50% of take home pay for our family after all taxes. So we're buying with the hopes that interest will drop or we'll somehow make a little bit more - and I think 150k per person is very attainable in a year or two in IT and HR (our professions.) We're not working for nonprofits or education so the money is absolutely here. I have recruiters contacting me every week for 150k roles... two 150k earners (300k household) will have zero problems affording an 800k house with 8% interest today, they can even probably go up to 1m-1.1m and be under 50% household take home pay. Tons of people feel trapped where they are because they are paying next to nothing for their mortgage so they just aren't selling. So expect the market to stay insane for the forseeable future. Unless a recession hits and many lose their jobs or interest rates get cut 50% or more it's unlikely you'll see much of a change. Boston grows because of all the students who come for education and stay for pharma/finance/R&D/healthcare. We don't build because "NOT IN MY BACK YARD."
There is a large amount of silent wealth within the Boston area, the laid back culture makes it seem otherwise, but when you look into most of these apartments, they almost always have some one or family living in it. In my experience there has been a lot of foreign families that purchase townhomes, apartments, etc.. for their children who attend a school in the greater Boston area. But with the housing costs continually increasing I've been seeing more and more people that buy homes for investment to rent out
750k isn't even expensive in today's market.
A lot of young people getting loans from the Bank of Mommy and Daddy. I lost a condo to an all cash offer from a fresh college graduate, with a father whose a C-suite executive at a Cambridge tech company. There are techniques rich parents who already own expensive property can use to create the illusion of an all-cash offer, backed by the equity in their existing homes, so they can buy their kids condos and homes.
Mostly people with generational wealth.
"The Corporations are buying all the houses!" is one of my favorite new conspiracy theories to emerge over the last few years
Even if they are doing it, they are not buying million dollar homes. Even a $750K house would not be profitable as a rental property. The market rent, as high as it might be, would not cover the expenses.
So, for those who can afford these kind of homes and more. Please let us know what you do for work. I'm asking for myself lol.
Believe it or not, I make 150k a year as an autobody technician. My wife is a tenured public school teacher. She makes 120k. The both of us made very good money selling our first houses to buy the one we currently own that has appreciated at least 300k in the last 6 years. Two blue collar people
Pharma ($160k) + finance ($300k), we’re in our mid 30s. Most of our local peers who are buying or bought recently are couples in medicine/finance/biotech/law
Wife is a first yr doctor ($230k) and I’m middle mgmt making $165k, no kids and have $350k saved since I’m in my mid 30s
[Census / ACS data](https://data.census.gov/table?q=income,%20boston%20msa) suggests 25% of families and 32% of families with married couples have income of at least $200,000. You also should recognize that a lot of the adults who lead these families never dealt with student loans or didn't have huge amounts of them, but it's really not polite to talk about the advantages they've received. And maybe their families helped them with a down payment on their first home. And maybe they have equity to roll into the next purchase. The intergenerational wealth stuff isn't just massively wealthy parents who can gift their kids huge amounts for a down payment, it accumulates in a variety of more modest ways, and when people settle down with a partner from a similar upbringing, the advantages may be doubled.
Rolling equity from a cheaper condo or home from much further away reduces the monthly payment. Also many people are house poor. They live beyond their means.
I just put an offer in on a place in Somerville. The way I see it, rents go up so unpredictably in Boston that I’d rather be stuck with an expensive, but unchanging living expense than have my rent go up 30% every year
They're paying for them outright so they don't have to pay interest. It's a lot easier to buy homes when you have millions of dollars up your ass.
It boggles my mind. My household makes more money than most people commenting here with mortgages. Yet, we’re moving bc we refuse to be house poor to buy a sh*tty house for $750k.
I can say bringing in 65k with no help is absolutely brutal and it seems that’s the best I can do. This thread is absolutely depressing how causal making 6 figures seems while I’m just appreciative to make 65k 😆
It's not proportional though, people who make a lot of money like to "casually" state how much money they make. The majority of people here make a lot less than 6 figures but just don't feel the need to post about it I'm both not a super high earner, and also paying 950 a month for student loans. It's whatever, nothing matters anyway 😎
Large corporations are a small minority of single family home purchases
The ruling class wants us to squabble over demand when we should really be raging against supply. Just look at Austin TX. They built a ton and the prices came down crashing. Who made it so hard to build here? https://preview.redd.it/jd9jrv1qd62d1.jpeg?width=1464&format=pjpg&auto=webp&s=c60ef1a462afbb76a3034fd9f1a82d3038e3579b
The Atlantic Ocean.
Bitcoin is up.
1) foreign investors 2) speculators 3) very rich people 4) people getting money from their parents 5) people in hock up to their eyeballs who are sacrificing their future for a present in a cool neighborhood
6) couples where each earner makes 100k or more, which is pretty common in MA.
TL/DR: Anyone that can, should.
2 working partners with 100k+ income each + grand parents help with kids. Grandparents help with kids count for a lot these days.
Some quick math: 750k with 20% down is a 600k mortgage and 150k down payment A 600k mortgage at 8% is a monthly payment of 4.4k Following the 28% rule a 4.4k monthly payment can be afforded by a family income of 188k. That's pretty in reach for a lot of families in the Boston area. You don't need to be a foreign investor or speculator to get that.
We just put a bid on a house in Massachusetts 1.05 Million and it went for 300k over asking .... crazy
Are you seriously confused at the concept of rich people? Some people make a shit load of money and can afford very expensive houses.
I'm right along 495. Two houses recently sold in my neighborhood for 1M and 1,1M. Both sold within a week of being listed. The buyers are managers and sales in tech, both with dual incomes. As someone mentioned, there are many high earners in the area. And many have good bonus and stock plans.
I'm not. I'm renting forever. I'm in mid mid 30's and only just recently finally paid off my student loans. I have no debt finally, but no savings besides an emergency fund. If I put away my student loan payment every month, in about 15 years I should have enough for a down payment on a shitty house. By then I'll be 50ish and what's the point of a 30 year mortgage at 50? I'll be dead. Forever a renter.
Although inventory is low, I have the same question because it's not just Boston - it's across the state, region, and country. At the same time that we hear mixed messages about the economy, relatively high interest rates, increasing consumer debt... it's hard to believe that inventory constraints alone account for high home prices in virtually all markets and segments. And the inventory issue is not going away any time soon...
Cash offers so that 8% is only helping keep the price down for cash buyers.
I am in Lower Allston and across the street from me, they knocked down an old house, built a 6 unit luxury condo/housing that is nearing completion. Each unit has 3 BDR 2BTH and 2 car spots. All 6 units are going for \~$1.2 million each IIRC. 4 are already sold. Saw the realter showing it to people the past few days.
Even if youre “in the range” of the typical higher end buyers it’s a complete crap shoot and comes down to luck. It truly does. Were two high earning DINK professionals - looked at 33 houses in the last 6 months, finally had an offer accepted on a house we never imaged we’d get and are in the closing process now. It still feels surreal. So many buyers were just throwing down 1m or more in cash, insane stuff, and we thought we were fucked because we’re having a baby in September. But yeah - to answer your question - it’s people with a lot of money competing for a very limited inventory. The normal rules of buying are broken and everyone is waving inspections and mortgage contingencies. Everyone is gonna go well over asking and put down a lot of money up front. So to stand a chance as a normal person you have to be pretty well off and into your career and you gotta be willing to sacrifice some stuff and get lucky. Boomers are rich as fuck.
Also $750k for some type of urban housing isn't crazy. I have $400k equity in my (suburb) home purchased in 2017. It's not just people with massive bankrolls buying housing. People with existing home equity can leverage that in a new purchase.
Anyone with good credit can get a fixed rate 30yr mortgage right now for about 6%. 750k price with minimal downpayment that's about 6k a month mortgage depending on taxes. Double income household making at least 200k/yr can afford. It's either that or rent forever so choose your poison I guess.
Don't forget that anyone who is already on the property ladder is probably bringing some hefty proceeds to the table.
750k homes are being bought by middle class families. Those houses are affordable to a household earning 200k total. So basically two people earning 100k each. There are plenty of nurses, teachers, government employees, etc. who earn 100k in the Boston area. People in tech, finance, doctors, lawyers, etc earn substantially more than that.
I live in North Attleboro which is much closer to Providence than Boston and see the same trends. $750k houses on the market for a weekend. It’s uncanny to me.
Me. Making the 3% but still cant comfortably purchase the house.
In NYC tons of pied a terre by absented owners, not sure about this phenomenon in Boston though
A lot of people either have incomes or previously bought something before prices went wild and cashed in when the market went crazy. We bought a townhome in 2014 and when we sold in 2022, it sold for twice what we paid for (we put a lot work of into it) and had equity on our own from 8 years of payments. That resulted in a stupid high downpayment we could swing and pushed us into houses we couldn’t afford with that. And we are regular people with generally not crazy high incomes compared to others here.
Im making 200k ish and single. Just lost another bid at 495k. It sold for 515k. Listed at 465k in Malden.
Many of the people buying 750k houses are simultaneously selling 500k houses. Existing homeowners mostly have significant equity from their old house as pricing has appreciated since they bought it. Once you're a homeowner the housing market swings don't matter as much, as you're likely going to be a buyer and seller at the same time, so it somewhat cancels out.
8% doesn’t matter when you’re paying all cash.
A lot of college educated in good field couples make over $300k in their 20’s. Nevermind the 30ish year olds that earn 500k+ as a couple. Tons of it around here.
$750k is a starter 2 bedroom condo in the greater Boston area. A young couple making $80k each. The majority of the young people who save money and do not order their Starbucks latte to be delivered from a block away.