A few weeks ago, there was this exchange:
Five Reasons Houses Beat Stocks [Burbed.com]
February 20th, 2008 at 6:08 pm
I need your wisdom. I make a standard starter Valley salary (125k) ,I just bought a new Sienna for the children (800 a month) ,and I have some money from stock (150k).
The calculator at Move.com shows that I can afford a 577,767$ house. There are no houses in Palo Alto for that price.
RealEstater, what should I do? Where should I buy?
First of all, you should’ve paid cash for the Sienna, but let’s work with what you’ve got.
You make over 10 grand a month. That means very conservatively you can afford $3K a month of payment. Working backwards, you can borrow somewhere in the neighborhood of $500K, although up to $600K is doable.
With a down payment of $150K, you can afford a home in the $650K-$700K range. You can buy a house in any number of neighborhoods within Santa Clara, Sunnyvale, or San Jose.
You’re not going to make it to Palo Alto right away, unless you want to live in a Condo. Palo Alto is considered a “destination neighborhood”. You get there only after trading up a couple of times.
In other words, you’re in a good position to own a home. I don’t see you as being priced out.
Good advice? Bad advice? Do you agree with Real Estater?
What would you tell Crossroads to do?