Here we can discuss how difficult or not it is for our kids to rent or buy a house in whatever area and give the downsizing thread back to that discussion
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One of my sons took 7 years to graduate from college. He got his degree two years ago and just bought a home in University Heights, OH, a very affordable suburb of Cleveland. I think his house payment is less than he was paying in rent.
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The median home price in DFW is now up to $400k, which will be unaffordable for many recent grads and this used to be a low COL area. I certainly would not have been able to afford a $400k home when I started my career and I was making over six figures. Rents are up even more than home prices.
As someone mentioned on the previous thread, folks on CC tend to forget that “CC kids” are not representative of the average college grad/young person, many of whom graduate with no debt, $100k+ or close starting salaries, and financial support from the bank of mom and dad. I’m not worried about my kid, I’m worried about the average young person.
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Inflation and a probable recession is going to be tough on many recent grads and certainly on those expected to graduate in the next few years. Our S16 has an apartment in SV/Bay-area that fits well into his budget (even though his rent is higher than our mortgage!) but he’ll be re-signing his lease in a few months and he’s bracing for the certain rent increase.
I wonder if there are rent increase caps in effect in CA?
Seems complicated and exacerbated by pandemic.
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I just checked, the median home in my town is $499,000, my 24 year old lived off campus fir 2 years in college and then another year, moved back home since his job is remote, has a house rented this summer with 9 other guys at the Jersey shore, $800 a month each, 3 bedrooms 1 bathroom. He’s been trying to find a house in northeast NJ with a bunch of friends but they can’t find anything. One bedroom apartments are $1400 a month (and those aren’t nice).
My daughter, who graduated from college in 2021, shares a 3 bedroom apartment with 2 other young women in North Beach in San Francisco. They each pay $900 a month for a total of $2700 a month plus utilities. It is a nice though not fancy apartment in an older house in a good neighborhood. The downside is that the only heat is electric baseboard heat, very expensive in the winter months. Still, they are happy to have found it. No way any of them could afford to buy a house or even a condo there.
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I mentioned on the other thread that both of my Ds grew up and live in San Diego. D1 is a teacher and D2 works in website implementation for a large company that builds apartment websites. Neither of my Ds has a six figure income and they can’t afford a house here with the median home price over $900K. D1 and her bf are looking at areas near the mountains in other western states to possibly move to over the next couple of years. If they can’t live near the ocean then they would like to live close to skiing and snowboarding.
D2 currently pays $1K a month rent for a great townhome that she shares with her friends who are a couple. She has a large master bedroom with a lovely balcony and her own bathroom as well as a home office/guest room. There is also a two car garage and a washer/dryer in the house.
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The median home prices in the markets where our kids live, both in the south, are $375K - $400K. When you look at their specific neighborhoods, the prices are higher. Rent is much higher than mortgage payments on an equivalent house.
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S had been looking to buy something somewhere in DC, TX or SF in 2019 and before. Covid stopped his housing hunt and now he’s planning to marry in 2023, so not sure what city or state they are looking at or where they are in their thoughts and plans.
Most of the areas S likes are very expensive and just going up.
My D is going to be doing a rotational program for the first couple of years after graduation so she’s going to be renting for a while. Her preferred preference for her first permanent position is in the Denver area where prices are higher than she’d like. We’ll see how she feels in a few years. I expect if she goes to CO, she will need to live quite a distance from work or will need to buy a small condo.
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DS & SO have a tiny apartment in SOHO area. It’s 2500/month - 3 times what an apartment was in the midwest! But they are sure enjoying the experience!
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Two of our small cities made the Zillow’s “most wanted” list. 
It used to be that a family of two teachers or even a single research scientist could afford a single family house in both of them. Not anymore…
Our son graduated and commissioned in 2019. He bought a beautiful, three-year-old, 2500 sq ft four-bedroom house with a chef’s kitchen and a large professionally landscaped yard in a lovely suburb of Augusta, GA in June of 2020. But here’s the thing. He receives a Basic Allowance for Housing (BAH) that is separate from his salary and was eligible for a no-money-down VA loan. He chose a property where the mortgage amount was barely above his BAH, so the house only costs $300/month out of his paycheck. Basically, the government gave him the money to buy the house and is paying it off for him. Nice racket. And he, like every other homeowner, is benefitting from the general rise in housing prices. Zillow currently lists his house $130K above what he paid for it. He has no school debt and a guaranteed good-paying job.
I have many issues with the Army but housing isn’t one of them.
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My kid graduated last year and is living with 2 roommates in Greenwich Village. Their 1 year lease is up and their landlord is raising their rent by MORE than 35%! They’ve been advised by everyone to renew because the rental market there is so hot now that it would be super hard for them to find a place at a much better price. I guess there is no such thing as rent control in Manhattan.
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My daughter and her BF bought a house last year. They looked for about a year and prices just kept going up and up. They finally bought and paid about $100k more than if they’d bought a year earlier, but they did get a good interest rate. Now, about 6 months later, the prices are still going up and so are the interest rates.
How do they afford it? They both have good jobs. Student loans are ‘on pause.’ She accepted his parents’ offer of an old car rather than buying a new one (that would have cost $35k). They are putting a lot of sweat equity into the house (right now she’s painting. Again).
They do travel more than average people, mostly to weddings but also had two family emergencies where they had to drop everything and travel. It is very expensive for young recent grads (she’s 25, he’s 28).
My other daughter, who is a grad student, pays $400/mo for rent and utilities (lives with 4 other students), drives her grandmother’s 2001 Honda Accord, works as a grad student and at Starbucks, has no new clothes, uses an old phone that I pay for, is as poor as she ever was as an undergrad - and happy as a lark. Right now she’s in Europe studying for 6 weeks, but still living as a student on the cheap. Her big splurge was paying for the ‘fast pass’ (don’t know if they use the same terms as Disney) to skip the waiting line at the Vatican.
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DD20 and roommate rented two bedroom apartment in SOMA San Francisco for $4,000 + utilities last year. It was very nice modern apartment with floor to ceiling windows. Now when her lease ended she moved to Marina and for this older apartment but in very nice neighborhood they will be paying $3,200.
My married son is looking to buy a house in Los Angeles. He is looking at houses under 1.5 mil for 3 bedroom and doesn’t want to live in the valley. He decided to wait few months since it seems that market is cooling down now.
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D was living in an older home in Alta Dena. She rents a room in a house with about 6 other people. One of the guys has a good job and income and decided to buy a new place in Fontana. They all moved with him and now are renting rooms in a much nicer brand new home in a new subdivision (tho further away from where they had been living). They are happier in the new house and all take good care of it.
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Anything related to affordability of housing varies tremendously by region, which is certainly something new grads should consider when comparing job offers. The report at https://cdn.nar.realtor/sites/default/files/documents/metro-home-prices-q1-2022-ranked-median-single-family-2022-05-03.pdflists the median sales price by region for different areas of the US and trend from previous years.
The highest price regions are below. 4/5 are in CA.
- San Jose-Sunnyvale – $1.9M (+25%)
- San Francisco-Oakland – $1.4M (+15%)
- Anaheim-Irvine – $1.3M (+26%)
- Honolulu – $1.1M (+20%)
- San Diego-Carlsbad – $1.0M (+19%)
The regions with highest increase over last year are below. 4/5 are in FL.
- Punta Gordo, FL – $376k (+34%)
- Ocala, FL – $267k (+34%)
- Ogden-Clearfield, UT – $474k (+31%)
- Tampa, FL – $380k (+29%)
- North Port-Sarasota, FL – $480k (+28%)
The lowest median price regions seem in more varied locations.
- Decaur, IL – $107k (+5%)
- Peoria, IL – $127k (+5%)
- Cumberland, MD – $129k (+6%)
- Youngstown, OH – $132k (+11%)
- Binghamton, NY – $137k (+6%)
I live in the SD area, which was among the 5 highest price regions. New grads I am familiar with in the area almost never buy soon after graduating. Instead they rent. In more urban or commercial areas, this is typically rending an apartment. In more residential housing areas, renting a room is often common, sometimes as a condo or sometimes a room in a larger home. Some save housing costs by moving inland or north of job location. Housing costs per sqft typically drop substantially when moving further inland from the coast, or further north from the La Jolla / Qualcomm / UCSD area.
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@Data10 - your info made me think of an interview i saw with Airbnb CEO recently. Something like they’ve changed their rules on pay/location differentiation; you can live anywhere and not get docked for location like some other tech firms - and their careers section on their website saw like 800,000 hits after they announced that!
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