Wednesday, July 11, 2007

Ain't What It Used To Be

If you're a new college grad with dreams of home ownership, read no further to avoid being disillusioned.

For me, it started 6 years ago. I recall reading an article describing a young, professional couple making well over six figures and living in a homeless shelter in Silicon Valley. The piece didn't exactly rock my world, but it clearly made some kind of impression given that I typically can't remember what I had for lunch on any given day.

To the American psyche, six figures was supposed to be the gateway income to the good life. Once you earned six figures, all hope of sticking it to the man was gone because you were the man. It signified a life replete with 4 car garages, golf club memberships, and ski vacations.

A mere three years ago, two friends of ours took up good paying jobs in California. Their combined income was certainly greater than $100k. Imagine my dismay upon discovering they lived in grandma's basement.

By the Numbers

So what does a six figure salary mean? I'm going to make some gross simplifications, but with $100K in annual income, you could easily take out a mortgage for $350k. In lovely Houston, TX, you could buy this 4000 sq ft behemoth with a thousand bucks to spare.

Let's forget about NYC & LA for a moment and look at what we can get in the sleepy suburb which happens to be home to Microsoft:

I'm not exactly sure what this is, but 1000 sq ft of it will be yours for a mere $2400 a month + taxes for the next 30 years. Tempting, no?

Of course, the average salary for a newly minted software engineer in Redmond is $62,814. On this salary, you could afford a house on the order of $225k. Coldwell Banker reports no homes for sell in this price range. Forty-five minutes to the east in our lovely town of Duvall, still no listings. That's right, Duvall is suburb of a suburb and still offers no respite.

What's the problem here? Maybe it's the 6 figure median income in Remond ($101,247 by some estimates). Maybe it's our country's 5 year real estate binge. But whatever 6 figures means, it certainly ain't what it used to be.


SleeplessInSeattle said...

Wow...I can soo soo relate to this blog!!

SleeplessInSeattle said...

Wow...I can totally relate to this entry!! Nicely put.