Who's Going to Buy My House?
Not that I'm selling it yet, though. My kids ( one boy, one girl, beautiful ,smart, both in advanced placement classes,) have six more years of school before they are both off to college (I Hope). So I am expecting to be staying put for that long. The question is then what happens? My house is 5 bedrooms, 1/2 acre, 2700 square feet on Long Island in a good school district and right now it is worth
$550,000 (Hooray!) The identical house across the street just sold in July 2006 for $640,000 (I would never have paid that much!). O.K. so lets say my house is worth only $500,000 ('Only' I cannot believe I am saying 'only' about $500,000 dollars) If a potential buyer wants my house and puts 10% down their mortgage will be 2600/ month, plus taxes will make a monthly payment of $3000 ( My taxes are relatively low for Long Island). When i was 20 years old it was suggested that your monthly home expense should not exceed 1/4th of you monthly income (ha ha that was then) now lets use 1/3rd as a guideline. $3000 x 3 x12 = $108000 dollars annual income (gasp!). According to Wikepedia 75% of US households earn less than $80,000/year (households, not individuals). And that top group is mostly boomers of which I am almost the youngest, born in 1960.
Many times during my life my older boomer brothers and sisters have gotten there first. Leaving me crumbs to pick up. At 30yrs old My new wife and I went shopping for our first house only to find that housing had skyrocketed the previous 7 years, and it took our entire incomes to purchase a starter home. Then the housing market flattened for the next 5 years. So we put $30,000 of improvements into our first house and after 5 years were able to sell it for what we had paid for it. (Not even getting the $30,000 back). But we had gotten ahead of some of the Boomers and that $500,000 dollars our current home is worth is twice what we paid for it. But the housing market has begun to flatten again. And now 30 million of them (us) are going to retire, sell their houses, and not trade up. 6-10 years from now it will be my turn to retire.
On L.I we have lots of new jobs in service now. Wal Mart, Target, and the like. Lots of people who do not make enough to buy my house, or any of my retiring friends houses either. Nope, those 30yr old professionals are earning $60k combined. And there are less of them now. Lots more of them are earning even less.
I have to make my kids dinner now, but I am still wondering...
Who's going to buy my house?