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  1. #301
    Join Date
    Dec 2009
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    North of Durham
    Quote Originally Posted by Kdogg View Post
    Does anyone know what the worldwide market size is for properties like this? 10,000 people? 100,00 people? A million? Property taxes and upkeep combined has to run 1-2 million a year.
    Good question - I am not sure. I'm guessing that of those who own these types of places, there are quite a few people who own multiple of them.

    Out of curiosity I went to a web site called StreetEasy that has NYC apartment listings. I was able to sort by single family buildings at $30MM and up and there are currently 59 on the market publicly. I'm guessing some of these are fishing expeditions and won't get anywhere near that, but the flip side is that there are likely some that are not publicly listed.

  2. #302
    Join Date
    Jan 2010
    Location
    Outside Philly
    Supposedly there are 25,000 people worldwide worth $100M or more. Iíd start there.

  3. #303
    Join Date
    Feb 2007
    Location
    Durham, NC
    Maybe this is a stupid question, but does the wine come with the wine cellar? How would someone move so much wine. Lots and lots of crates??

  4. #304
    Join Date
    Sep 2007
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    Undisclosed
    Quote Originally Posted by aimo View Post
    Maybe this is a stupid question, but does the wine come with the wine cellar? How would someone move so much wine. Lots and lots of crates??
    I am prepared to be part of a solution.

  5. #305
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by aimo View Post
    Maybe this is a stupid question, but does the wine come with the wine cellar? How would someone move so much wine. Lots and lots of crates??
    I know a guy - a good friend of mine helps run a business that does wine storage and transportation, including for personal wine cellars. He was very busy during the pandemic.

  6. #306
    Join Date
    Feb 2018
    Location
    Durham, NC
    Quote Originally Posted by aimo View Post
    Maybe this is a stupid question, but does the wine come with the wine cellar? How would someone move so much wine. Lots and lots of crates??
    Quote Originally Posted by OldPhiKap View Post
    I am prepared to be part of a solution.
    ...and lots of record-keeping. I'm sure you were just being helpful, though.

  7. #307
    Quote Originally Posted by Kdogg View Post
    Does anyone know what the worldwide market size is for properties like this? 10,000 people? 100,00 people? A million? Property taxes and upkeep combined has to run 1-2 million a year.
    Iíve never comprehended the $1-10 million US house price segment. For example, how can millions of people in California, Hawaii, NYC, Boston, Miami, etc. afford a $1+ million house?

  8. #308
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by Jeffrey View Post
    Iíve never comprehended the $1-10 million US house price segment. For example, how can millions of people in California, Hawaii, NYC, Boston, Miami, etc. afford a $1+ million house?
    I live in Manhattan where a home for a family of four in a decent public school district (to avoid paying $50-60k a year per kid for private school) is often going to run you $1 million.

    Let's say you saved up $200k somehow to make the 20% down for a $1 million home, so you have an $800k mortgage. If you bought when rates were lower, you had a 3.5% mortgage, or potentially lower. So your monthly is about $3,600, annual is about $43k. There are lots of different guidelines of how much of your income your mortgage should be. I have heard no more than 28% of gross. Let's be a bit more conservative and say 25% of gross. So you need to be grossing $172k a year.

    That is a significant amount of money but for a family with two working adults it is not an exorbitant amount. Obviously that means you have more child care costs. In this range, the mortgage interest write-off also helps - older mortgages could write off interest on up to $1 million of mortgage, this was brought down to $750k of mortgage a few years ago, so at least for the first few years of ownership, you are maxing this out, which is particularly meaningful given that you are probably in a pretty high tax bracket to be affording this.

  9. #309
    Quote Originally Posted by CrazyNotCrazie View Post
    I live in Manhattan where a home for a family of four in a decent public school district (to avoid paying $50-60k a year per kid for private school) is often going to run you $1 million.
    How many $1+ million homes, would you estimate, are in Manhattan?

  10. #310
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by Jeffrey View Post
    How many $1+ million homes, would you estimate, are in Manhattan?
    I don't know this source so take it with a grain of salt but I found this article showing that 248k of the 1.02 million homes in NYC are worth a million dollars or more. Manhattan's population is about 1.6 million of the 8.5 million people in NYC total. I would guess a disproportionate share of the million dollar homes are in Manhattan, though there is definitely a non-trivial amount in other boroughs. According to this source, 68% of the homes in San Francisco are worth $1 million or more. I think all of these numbers seem a bit inflated, but it is an interesting conversation starter.

    https://smartasset.com/data-studies/...lar-homes-2021

    Using Streeteasy, there are currently 4,390 homes for sale in Manhattan for $1 million or up.

    As an interesting data point, a starting public school teacher in NYC with a masters degree and 8 years experience makes $84k. So two teachers in their early-mid 30s would theoretically be near the $172k income threshold to buy a $1 million home (assuming they had saved the down payment).

    https://teachnyc.net/about-our-schoo...y-and-benefits

  11. #311
    Quote Originally Posted by CrazyNotCrazie View Post
    I live in Manhattan where a home for a family of four in a decent public school district (to avoid paying $50-60k a year per kid for private school) is often going to run you $1 million.

    Let's say you saved up $200k somehow to make the 20% down for a $1 million home, so you have an $800k mortgage. If you bought when rates were lower, you had a 3.5% mortgage, or potentially lower. So your monthly is about $3,600, annual is about $43k. There are lots of different guidelines of how much of your income your mortgage should be. I have heard no more than 28% of gross. Let's be a bit more conservative and say 25% of gross. So you need to be grossing $172k a year.

    As an interesting data point, a starting public school teacher in NYC with a masters degree and 8 years experience makes $84k. So two teachers in their early-mid 30s would theoretically be near the $172k income threshold to buy a $1 million home (assuming they had saved the down payment).

    https://teachnyc.net/about-our-schoo...y-and-benefits.
    Thanks for the conversation. As usual, youíre introducing great information. Hope you donít mindÖ I combined pieces from your last two posts because I think theyíre excellent data points.

    Two starting public school teachers in NYC, with masters degrees, and 8 years experience should certainly be able to afford a nice home. Especially, when theyíre making $170k per year (almost 2.5x the median US family).

    I donít think itís possible for most early-mid 30ís couples, starting to gross $170k year, to have a $200k down payment. So, letís consider a more realistic $50k down payment. Current 30 year fixed mortgages, with 5% down, are about 7%. The mortgage payment (before property taxes, HOA fees, and PMI) is about $6,300 a month or $75,800 a year. I like your 25% of gross (before property taxes, HOA fees, and PMI) which means you need to make $300k to afford a nice home. The two teachers will need another two teachers compensations to afford the mortgage.

  12. #312
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by Jeffrey View Post
    Thanks for the conversation. As usual, youíre introducing great information. Hope you donít mindÖ I combined pieces from your last two posts because I think theyíre excellent data points.

    Two starting public school teachers in NYC, with masters degrees, and 8 years experience should certainly be able to afford a nice home. Especially, when theyíre making $170k per year (almost 2.5x the median US family).

    I donít think itís possible for most early-mid 30ís couples, starting to gross $170k year, to have a $200k down payment. So, letís consider a more realistic $50k down payment. Current 30 year fixed mortgages, with 5% down, are about 7%. The mortgage payment (before property taxes, HOA fees, and PMI) is about $6,300 a month or $75,800 a year. I like your 25% of gross (before property taxes, HOA fees, and PMI) which means you need to make $300k to afford a nice home. The two teachers will need another two teachers compensations to afford the mortgage.
    Fair analysis. Agreed that the stars kind of have to align to make the $1 million work, but I used the teacher example to show that it was not dramatically out of reach. I agree that two teachers should be able to afford something like this. As you noted, they are a bit short. But a teacher plus a second parent making 25% more than a teacher (which is not a ridiculous salary in NY) can get there.

    And remember that that is a base salary for a teacher. I have a huge amount of respect for teachers and recognize that good teachers put in a lot of hours beyond the school day - their day rarely ends when the kids leave. But I also know that plenty of teachers, especially when they are young and don't have families, have supplemental incomes, either after school or in the summer. At my kids public schools, a number of teachers, especially younger ones, help with after school activities a few days a week, tutor, work at summer camps, etc. This extra money goes a long way towards a down payment and/or carrying a mortgage.

    The hardest part is the down payment. Someone can correct me if I am wrong, but at least in Manhattan, most of these apartments would require 20% down. So getting to the $200k down payment is the hard part. The good news is that once you are there, it brings down the mortgage amount a lot.

    Obviously, as you noted, the recent bump in interest rates also makes the math a lot harder. The difference in annual payments for $800k on a 7% mortgage vs. 3% is over $20k a year, which dramatically changes the math.

  13. #313
    Join Date
    Jan 2010
    Location
    Outside Philly
    Quote Originally Posted by CrazyNotCrazie View Post
    Fair analysis. Agreed that the stars kind of have to align to make the $1 million work, but I used the teacher example to show that it was not dramatically out of reach. I agree that two teachers should be able to afford something like this. As you noted, they are a bit short. But a teacher plus a second parent making 25% more than a teacher (which is not a ridiculous salary in NY) can get there.

    And remember that that is a base salary for a teacher. I have a huge amount of respect for teachers and recognize that good teachers put in a lot of hours beyond the school day - their day rarely ends when the kids leave. But I also know that plenty of teachers, especially when they are young and don't have families, have supplemental incomes, either after school or in the summer. At my kids public schools, a number of teachers, especially younger ones, help with after school activities a few days a week, tutor, work at summer camps, etc. This extra money goes a long way towards a down payment and/or carrying a mortgage.

    The hardest part is the down payment. Someone can correct me if I am wrong, but at least in Manhattan, most of these apartments would require 20% down. So getting to the $200k down payment is the hard part. The good news is that once you are there, it brings down the mortgage amount a lot.

    Obviously, as you noted, the recent bump in interest rates also makes the math a lot harder. The difference in annual payments for $800k on a 7% mortgage vs. 3% is over $20k a year, which dramatically changes the math.

    This financial blogger I check in on every once in a while estimates a family of four needs a $300K HHI to be middle class in the HCOL cities.

    Pretty close to your and Jeffreyís analysis.

    https://www.financialsamurai.com/living-a-middle-class-lifestyle-on-300000-year-expensive-city/

  14. #314
    Join Date
    Feb 2018
    Location
    Durham, NC
    Quote Originally Posted by CrazyNotCrazie View Post
    According to this source, 68% of the homes in San Francisco are worth $1 million or more. I think all of these numbers seem a bit inflated, but it is an interesting conversation starter.
    When my wife was in grad school we were in the Bay Area. We took a look at renting in the Albany Valley just north of Berkeley. We choked at the rent, then asked what it would cost to buy if we could swing 20% down. We shouldn't have been, but we were both stunned that the answer for a 1200 square foot house was half a million. That was several decades ago. The tech boom, which was just barely getting started back then, really sent housing prices through the roof.

    I have little doubt that the majority of houses in San Fransisco itself are $1+ million. Is that "inflated"? Not if people are willing to pay it.

  15. #315
    Join Date
    Dec 2009
    Location
    North of Durham
    Quote Originally Posted by Phredd3 View Post
    When my wife was in grad school we were in the Bay Area. We took a look at renting in the Albany Valley just north of Berkeley. We choked at the rent, then asked what it would cost to buy if we could swing 20% down. We shouldn't have been, but we were both stunned that the answer for a 1200 square foot house was half a million. That was several decades ago. The tech boom, which was just barely getting started back then, really sent housing prices through the roof.

    I have little doubt that the majority of houses in San Fransisco itself are $1+ million. Is that "inflated"? Not if people are willing to pay it.
    The one that jumped out at me was Atlanta. I lived there many years ago, visit often and have many friends there. I think it said 10% of the homes there are over a million. That seemed very high. There are definitely plenty of million dollar homes there. But there are lots that are well below that and a large cluster that are probably in the $750k range, not $1 million.

    As far as NYC goes, the $300k to be middle class depends on where you live. You can probably be comfortable middle class for less than that in the boroughs. In Manhattan that is probably right. The trick is that if you make $250k so are below middle class in Manhattan, when you apply for college financial aid they donít really recognize that.

  16. #316
    Join Date
    Feb 2007
    Location
    Steamboat Springs, CO
    Quote Originally Posted by aimo View Post
    Maybe this is a stupid question, but does the wine come with the wine cellar? How would someone move so much wine. Lots and lots of crates??
    If it's in the contract, but probably not. There are so many kinds of wine, and tastes differ.

    First of all, that seems like a few hundred bottles. Just moved that much a year ago. I purchased boxes from two suppliers of wine cartons. As I was having to build a cellar (my third) at my new house, I found temperature-controlled storage at a reasonable price. I did the packing and moving myself, with some help from friends, to better keep track of inventory.

    Second, it was a strain on the my old bod, so I had some medical treatment. All is fine now.

    My apology for posting this statement of ostentation, but it is my major vice.

  17. #317
    Quote Originally Posted by Jeffrey View Post
    Iíve never comprehended the $1-10 million US house price segment. For example, how can millions of people in California, Hawaii, NYC, Boston, Miami, etc. afford a $1+ million house?
    Yea, living in the Northeast myself (although not in one of the major urban areas), I sometimes wonder how people are paying for these very expensive homes and properties. I've never seen a study on it but I think that, in many cases, people buying these $1 million plus homes probably own an existing house that has substantially appreciated (like, they bought a house or condo or apartment 10 or 15 or 20 years ago for $400,000 and now the house is worth $1.2 million; they sell it and buy a new house for $1.5 million, without a huge outlay of new money or a large mortgage). In other cases, there are a lot of people in the major cities of the Northeast - NYC, Boston, etc. - who are making a LOT of money in various jobs and occupations or have started (and maybe sold) successful companies and can afford to buy, either for cash or with a large mortgage, an expensive home. There may be others who have inherited a lot of money. We live in a rural vacation area of western MA and the local real estate market is driven heavily by affluent and rich people mostly from NYC and some from the Boston area buying homes and large properties. The house and property next to us went on the market a couple of years ago for $6.8 million. Everyone in the neighborhood was laughing about the asking price and it eventually sold for, I believe, $4.2 million to a relatively young couple from the Boston area. Not to be creepy but I did google them (and it's scary how much you can find out about people on the internet) and the wife's father (yea, I read his obituary) had started and then sold what was described as the largest medical supply company in the world. I assume the young couple used her inherited money to buy the property. So, people are finding the money somewhere to buy these expensive properties but it makes it hard for those young people who don't have high paying jobs or inherited money to get a foothold in the real estate market.

  18. #318
    Quote Originally Posted by CrazyNotCrazie View Post
    The one that jumped out at me was Atlanta. I lived there many years ago, visit often and have many friends there. I think it said 10% of the homes there are over a million. That seemed very high. There are definitely plenty of million dollar homes there. But there are lots that are well below that and a large cluster that are probably in the $750k range, not $1 million.

    As far as NYC goes, the $300k to be middle class depends on where you live. You can probably be comfortable middle class for less than that in the boroughs. In Manhattan that is probably right. The trick is that if you make $250k so are below middle class in Manhattan, when you apply for college financial aid they donít really recognize that.
    It used to be (and I don't know if it is still true?) that real estate prices around Atlanta were quite reasonable compared to the Northeast, for example. I have a close friend of mine who went to Duke and he used to own a fairly nice two bedroom condo outside Boston and in the early 90's he got transferred down to Atlanta, so he sold his condo outside Boston and for approximately the same amount of money that he got from the condo sale, he bought a very nice brick "mansion" in one of those suburban towns north of Atlanta that was probably triple the square footage of his Boston condo.

  19. #319
    Quote Originally Posted by duke79 View Post
    It used to be (and I don't know if it is still true?) that real estate prices around Atlanta were quite reasonable compared to the Northeast, for example. I have a close friend of mine who went to Duke and he used to own a fairly nice two bedroom condo outside Boston and in the early 90's he got transferred down to Atlanta, so he sold his condo outside Boston and for approximately the same amount of money that he got from the condo sale, he bought a very nice brick "mansion" in one of those suburban towns north of Atlanta that was probably triple the square footage of his Boston condo.
    Looking back to 2000, Atlanta still is more affordable/trails appreciation of the 20-largest cities:
    Atlanta Case Shiller.jpg

    But, you'll see that it has increased in price index ABOUT the same as the 20 city index since 2012. So Atlanta has gotten hot to an extent, but is much more reasonable compared to places like Boston, NY, Seattle, San Fran, LA, etc. still given the lower starting value in 2000 (when the 20-city index was first calculated) and also the lack of bubblicious appreciation that those cities have seen more frequently.

    You can create your own comparisons here:
    https://fred.stlouisfed.org/series/ATXRNSA#0

  20. #320
    Case Shiller is also an excellent resource on the housing cost data.

    https://realestatedecoded.com/case-shiller/

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