Relative Wealth - In some places an income of $250k per year really is middle class

I do not think 500K property 25 years ago will be around 800K today. In my neighborhood 150K houses 25 years ago are a little over 600K now.

I’ve said it before, and I will say it again … UM has a huge variety of in-state students from all socioeconomic backgrounds. When I think of my D’s friends who went to UM, the author’s comments make me laugh out loud. They were down-to-earth kids who dressed in jeans and UM sweatshirts … hung out together in the dorms on Friday nights because, regardless of how much money their mommies and daddies did or did not have, THEY didn’t have money to go out … wouldn’t have been able to name any designer. Yes, there are a lot of privileged students at UM, both in state and out of state. But there are MANY in state students who are not, not, not as the author portrays them.

How many homes sold in Palo Alto in 2014?

http://www.paloaltocompplan.org/ExistingConditions/10/mobile/index.html#p=10

Figure 10-3…

https://www.sccassessor.org/DocLib/Annual%20Report14.pdf

Reportedly, some of the new property owners are Chinese: http://www.theatlantic.com/china/archive/2013/11/why-chinese-people-buy-so-many-homes-in-palo-alto/281234/

Periwinkle, I am going to check your link…

While I do that…

I have this…

http://www.kavanaughrealestate.com/July-2014-Real-Estate-Update

Not quite true, Cobrat. I live in one of the most expensive towns in MA and there are plenty of nice homes for under a million. They’re not fancy, and won’t have a pool or extensive acreage, but they’re good solid 3-4 bedroom family homes in nice neighborhoods with excellent schools. The difference is that once you go below $500-600,000 in these towns all you’ll find is condos or tear downs.

Only one town in Massachusetts, Weston, has a median family income of over $250,000. Even #2 Dover, with its horse farms, has a median household income of under $200,000.

I think sometimes kids (and occasionally adults) mistake what’s average in their community for what’s average across the nation. It’s true that what a 4 BR, 2 1/2 Bath home with a 2 car garage in my town costs could buy a 5 BR, 6 bath home with a pool, 3 car garage and a guest house in another part of the country, but that’s the way things go. Most people, and certainly most middle class people, are in something a whole lot closer to the former than the latter.

Would someone please explain to me why someone from California would choose another OOS public university?

^ (adding) But then perhaps it also depends on what you consider a tiny house and a postage stamp yard. If you’re used to homes with 2 acres of land a 1/2 acre lot, considered generous for an in-town lot here, would seem tiny. By any standard my family is wealthy, yet when we built our house it was with one bath for the 3 kids to share. Having more just wasn’t important to us.

HarvestMoon1, Because they lived in California all their lives and want to live somewhere else…

Both my kids left Calif to go to college…
One went to Michigan. :slight_smile:

Periwinkle… I don’t see the 5,099 number for Palo Alto…

Page 17…that is Santa Clara County

I don’t understand the 18 percent turnover number…
I don’t buy it.

I think my analysis is correct.

I lived in a place similar to Palo Alto and many people could not afford to buy their homes at today’s prices.

This is your link…

I think this is going to have a huge long term impact…

http://www.theatlantic.com/china/archive/2013/11/why-chinese-people-buy-so-many-homes-in-palo-alto/281234/

Harvest, Michigan has been a stomping ground destination for out of state students since post World War II. My 93 year old father lived in the Union while he was in engineering school and his roommate was from NY. There are over 500,000 living alumni, many of whom have or want to have or had their kids attend regardless of where they live in the world. It’s a world-class university that just happens to be a state public university.

My question specifically related to those who reside in CA. I think Californians have equally if not better choices right in their own backyards for much less cost. Just my opinion. I think what @dstark posted makes sense - for those who can afford it perhaps they just want a change of pace.

@HarvestMoon1‌
There’s a lot of reasons. One reason that I can think of is kids that were rejected from Berkeley and UCLA tend to go to OOS public like Michigan/UVA/UNC. Kids that attend Gunn HS or Palo Alto HS, those are competitive schools that even the top 75 percentile has a 32 ACT . Berkeley or UCLA will not accept 1/4 of their graduating class.

Makes sense @2018dad - they are among the schools I was thinking of.

I have my doubts about income statistics from the census. Lots of foreign buyers in Palo Alto, Los Altos Hills and they are not going to list their incomes accurately. I am sure there are a lot of CCers here who low-ball their incomes on surveys just because it’s an invasion of privacy.

The 500k to 800k quote was a reference to its value under tax purposes, rather than actual value. California has a system where property taxes are based on a ~1% of purchase price + various increases that are usually not proportional to actual value, so persons who purchased their home decades ago have a very low property tax rate. For example, the real estate listing at https://www.redfin.com/CA/Palo-Alto/672-Melville-Ave-94301/home/1626625 mentions a home 1300 sqft home being priced at $2.2 million that paid $1,000 in taxes in 2012. If the home sold at the listing price, property taxes would jump from ~$1,000 per year to ~$22,000 per year.

Data10,

So in your example, the owner of that house paid well under $100,000 for that house. May have owned that house for 50 to 60 years…

http://quickfacts.census.gov/qfd/states/06/0603092.html says $239,886.

In HI, there are a lot of homes that were $500K in the late 1980s that are now about $800K. If one is only supposed to pay up to 2x total income for a house. The median income in 2013 for Hawaii was $68,020. I am unaware of anything for sale on Oahu for 2x that–condo, duplex, townhouse, or home, no matter where it is located, even teardowns.

Housing prices are often 5-10x that for a modest, older place. Condos, duplexes, townhouses also have association dues that adds to housing costs.

I don’t know how young people afford housing, unless they get significant help from relatives. A nice two bedroom place can rent for over $2500 around here. HI & many parts of CA are indeed high COL areas.

There are many possible explanations including:

-They may have bought the house long ago when less expensive.

-They may have paid for most or all of the purchase price in cash and have a more reasonably sized mortgage, perhaps using equity from their previous home sales. The article at http://www.paloaltoonline.com/news/2014/07/02/real-estate-matters mentions 42% of Palo Alto real estate transactions are in cash. I live in a 7-figure home in an expensive part of CA, yet I don’t have a mortgage. A good portion of my neighbors do not as well, including some retired couples with relatively small incomes.

-They may be renting. Nearly half in Palo Alto rent. Among younger, single persons it’s not uncommon to rent a room instead of a full home.