this figure isn't as useful as median personal income.
If you can find the median personal income for King County, post a link in the comments. I couldn't easily find it this morning..
Nope, still bummed.
Again this is apples-to-apples. Bill Gates and the homeless guy around the corner have a per capita personal income in the billions.
Oops, I meant NOT apples-to-apples.
Why isn't yesterday's thread letting me comment/respond to Gomez's last salvo?
Unfortunately, it's impossible to find a median personal income, which in some ways would be the truest measure of middle-class economics. Median household income is collected using census techniques (which are generally household-specific). Personal income is damn near meaningless because of the Gates-homeless guy problem. To put a finer point on it: US personal income has been skyrocketing over the last 5-7 years as the wealthiest have gotten even wealthier, but every other measure of middle class prosperity--wages, median income, savings rate, tax data, etc--has been flat or actually declining.
Regardless, neither the household income nor the personal income stats listed are enough to live on in this city - things here are priced for amazon and microsoft folks and the like - everything from groceries to housing. What kind of mortgage can you expect to get for $60k? It's ridiculous.
Yeah, that's still pretty high. You're pretty much not only college educated, but firmly enslaved ERRRRRR entrenched with a company and well connected to have a salary that reaches, let alone passes, those marks.
And don't waste my time, exceptions. That's why you're exceptions: because you are not a relevant indicator of the norm.
Well, if you have savings, and no consumer debt, and live cheaply, you can easily afford a $200,000-$250,000 mortgage. that will get you into a condo, especially if you have a lot of savings.
But if you're an American, you probably don't have any savings. You probably have an ipod, and a cell phone with a 1000 minutes a month, and a computer, and broadband, and cable tv, and an newish car bought on payments, and two lattes a day, and twice-weekly trips out drinking in clubs, and restaurant trips more often than that, and so on and so forth. So you probably have a ton of consumer debt, and you probably have a large recurring monthly bill for services.
Which makes paying for any kind of mortgage on this $60K impossible. But the "30% rule" is a joke; you can easily afford to spend WAY more than 30% on housing if you adjust your lifestyle. But Americans don't like to adjust their lifestyle anymore.
There are immigrants all over this city who spend VIRTUALLY ALL of their income after tax on investment, including housing as soon as they have enough saved for a down payment. They have no "lifestyle" now, but in a few decades they will be far richer than you.
This is not a lecture, because I'm as bad a spender as any of you. But its a fallacy to say that it's impossible; it's just uncomfortable. And Americans need to be comfortable all the time, even if it hurts their future.
But think about it: if you are an aggressive about savings, you can easily live on a few dollars a day for food. I've lived on a lot less than that before. Cut back to basic utilities -- heat, water, light. Tear up your credit cards, pay off the balances, and stop spending money on anything at all. Ride the bus to work. You'll have enough for a down payment on a condo fairly quickly. You build equity, and you're on your way.
It's not easy, and it's not fun, but it IS doable. It's probably what your parents did, or your grandparents.
Careful, Fnarf, you're starting to sound a little chest-thumpy there . . .
FNARF Nails It!
Up until about seven years ago, the mortgage industry was as staid and fiscally conservative as it gets.
The rules of thumb were:
1) You can afford a home that costs three times your gross household income.
2) You shouldn't spend more than 36% of your income on all debts including the mortgage.
3) A down payment of 20% or more is required.
Now we live in the age of zero down, Never-Say-No lending, with housing prices that have far outstripped incomes. In Los Angeles, for example, the median household income is around $60,000, but the average cost of a home is like $500,000. This can't go on forever. And for frak's sake don't take out an Interest Only or Option Payment ARM.
I'm just sayin'.
I totally agree with Fnarf. I think the bigger problem is that wages increases in almost all companies do not compete with inflation. And since inflation is different for each state, I can understand why its hard for large corporations to handle. But even if you save and live frugally, if your wage does not go up to meet inflation, you will always be behind. I honestly think that if wages went up with inflation, it would help quite a bit.
But yes, Americans won't sacrifice anything, even their poor diet.
Fnarf makes wonderful points. A friend of mine who has worked for years on the UofW campus loves to regale us over dinner with tales of the high-priced items - and sense of entitlement - that students arrive on campus with, and the fancy treatment they receive, as the UW has increasingly become an expensive, elitist school.
Thursday the Seattle Times ran a long article titled "Fewer can afford to buy a house in King County, report says". It covers the "Affordable Housing 2006" report released by King County Wednesday, which concludes that housing became even more unaffordable in 2006. The low-priced semi-afforable areas are in South King County (think White Center).
Since the income of the average Slog reader is probably somewhere in the $20K range, no amount of tweaking the figures between household and personal is going to cheer them up.
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