$450K house is low income? (2024)

Ok, I realize in many parts of the US (and elsewhere) the real estate market is very expensive, as in $1 million dollar 1200sf homes, etc. and people will pay what the market bears. I also understand that in many parts of the country people make more at equivelent jobs because of a higher cost of living.

Here is my question. How does a "regular" Joe Schmoe make it in these markets? Just wanted an episode of Flip that house and the flipper said he was only interested in the flipping because he can sell to low income buyers who might not be able to buy a house otherwise.

Supposedly he takes a crap house that he buys for way under market value at like $300k which is absolute sh*t hole in a bad neighborhood. He puts $100k into it and sells it for $450k to a "low income family"..... how is a low income family supposed to afford that?

I make, what most people would say is good money at my currently job and together with my wife, we are what the government would call middle class (over 100k a year).

Since when did a $450k house become low income housing?

Originally posted by: SpanishFry
good question. i have a good income and even $350K looks steep. That's probably around $2500/month just for the mortgage payment.

Click to expand...

Yeah, I have decent income, and I'm pretty sure I'd cry a little every time I paid the mortgage at that amount...

Section 8 Housing? <shrug>

I can't imagine any low-income people qualifying for a house over 200k nowadays much less 400k.

Originally posted by: Anubis
both mom and dad working both making 6 figures, paying someone to raise their children is how it happens

Click to expand...

I don't think you understand what "low income" means.

@ OP: I'm guessing they are referring to lower end home buyers, not truly low-income people. In an area like that, truly low income people would probably never own a single family home.

Originally posted by: BarneyFife
I think to buy a 450k house you have to be making 150k with a 20% down payment at minimum.

Click to expand...

what are your estimates for $350K? I've always wondered how much house I can comfortably buy.

SF Bay, New York, LA...

But extrapolating what I'm paying for the place I'm working on getting. Two people making $80k can afford it if they managed money right and had 10% down.

Originally posted by: SpanishFry

Originally posted by: BarneyFife
I think to buy a 450k house you have to be making 150k with a 20% down payment at minimum.

Click to expand...

what are your estimates for $350K? I've always wondered how much house I can comfortably buy.

Click to expand...

There's mortgage calculators that give you an estimate based on how much you make, expenses, etc.

Originally posted by: SpanishFry

Originally posted by: BarneyFife
I think to buy a 450k house you have to be making 150k with a 20% down payment at minimum.

Click to expand...

what are your estimates for $350K? I've always wondered how much house I can comfortably buy.

Click to expand...

I would say 75k would the min you would have to make to even think about it.

100k-125k would be better.

Originally posted by: SpanishFry

Originally posted by: BarneyFife
I think to buy a 450k house you have to be making 150k with a 20% down payment at minimum.

Click to expand...

what are your estimates for $350K? I've always wondered how much house I can comfortably buy.

Click to expand...

Well I'm at about 115k and going to put 20% on a 350k next year and I still think I might be stretching it. I might wait and put more down.

Originally posted by: RightIsWrong
Thankfully, I live in/near Austin and just moved into a new build (3122 sq. ft) for under $216k in a master planned, golf community.

Click to expand...

I recently moved to Austin and the thing I don't get is that there seems to be huge neighborhoods with nothing but $500k+ houses, with many going into the $1-2 million range. Are there really THAT many millionaires here?

I read an article in the OCRegister. One immigrant family who purchased a house in Santa Ana (later foreclosed). It was 450k

They had 6 people (extended family I assume) chipping in for the 4k a month mortgage.

Originally posted by: Special K

Originally posted by: RightIsWrong
Thankfully, I live in/near Austin and just moved into a new build (3122 sq. ft) for under $216k in a master planned, golf community.

Click to expand...

I recently moved to Austin and the thing I don't get is that there seems to be huge neighborhoods with nothing but $500k+ houses, with many going into the $1-2 million range. Are there really THAT many millionaires here?

Click to expand...

I sure am not one of them if there are.

I'm guessing that it has more to do with a lot of Cali folks relocating here for tech gigs and having made a mint on their previous house before the market out there started tanking. I would like to think that it is more likely to be two working adults or one professional worker with a trophy w/h making 6 figures.

That's not true for everywhere obviously. Our home was a little over that amount, and we have a really nice home in a nice neighborhood in Atlanta. In smaller towns that should go even further.

Then again, there are a lot of ~$450k+ homes going in the Atlanta area. Given that our mortgage is ~$3k or so, I don't see how it would ever be possible for a "low income" person to afford it. It doesn't seem right or fair...

[edit]Just realized that I didn't really answer your post. I don't know how "Joe Shmoe" makes it. I suspect they don't, and that's why we're in the crisis we are. A household that makes $60k/yr can't afford a $450k home unless they put down an incredible amount or have help, and even $60k represents almost double the median household income I believe.[/edit]

Originally posted by: Capt Caveman
In some cities, $450k will only get you an one bedroom condo.

Click to expand...

That would pretty much be all of Silicon Valley. Crappy 600sq ft 1bdrms are $300K. Median home price is about $740K.