Reply #36: Partly true I think

[dmallind]

But the thing is even with the worst of the horror stories about foreclosures and bankruptcies etc most people who buy houses manage to afford to pay for them. How they do so in areas like yours and the SF Bay Area etc is to be honest beyond me, but they do. I'm in the mid 100's range in income myself, and don't live all that extravagantly for that income (Nissan Altima base model car, no hugely expensive vacations, buy clothes at JC Penneys. I do have a 10K motorcycle and about half that in a couple of collections, and I take a few short trips to the opera every year that are not cheap but that's about it. I certainly spend more than average in entertainment but even then it's sports bars not sushi houses so $30-40 a pop rather than hundreds), and yet I would be unable to swallow the house payments for anything over maybe $350K mortgage at a push. Right now I am moving so I will have one 200K mortgage and one 180K mortgage but that's for a couple months or so and I would be hesitant to do so for a long time. I could certainly qualify for more, but would not want to. This would proce me out of your market and those like it for anything worth buying.

How then do so many in the high buck areas manage to buy houses I could never dream of even with a comfortably top decile income? Dunno really but my guess is a lot of them simply leveraged the increase in their existing home. If I were to move into Arlington now I would be screwed. But had I lived there when I bought my first house 15 years ago, the increase in the value of that house would have meant I would have had a huge chuck of that $670K in equity, so would need only a comfortable mortgage to buy the house you describe.

Just to set up contrasts the $180K mortgage is for a 2700 sq ft 4 bed 3 bath 2.5 car garage 1/2 acre lot 1993 built nicely decorated home in a quiet suburb of Buffalo. The price was about 50K higher than that which I had in cash. Population decline is mostly an urban Buffalo phenomenon and there is plenty of money in the suburbs, so who knows what factors made it avoid the bubble you folks saw. It's certainly not that there aren't flippers and ARMs and greed here of course.