How Can Anyone Afford to Buy?

[SHELLY]

The one thing that I like to spend money on is our vacations. I wouldn't consider us to be rich, but we are financially comfortable. Yes, it would be possible for us to buy a $1 million home at the beach, but we would feel that it was beyond our means. It's all about comfort level.

Too many people in our country are deep in debt and have bought homes they never could afford. We are now seeing the repercussions of this on our global economy. But that's an entirely different issue.

Well put. And being in the early-50s that $Million beach house/condo, including PITI, maintenance and other carrying costs can go a helluv a long way in paying for your vacations (here and other places around the world) for the rest of your lives.

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[Pirate]

Well put. And being in the early-50s that $Million beach house/condo, including PITI, maintenance and other carrying costs can go a helluv a long way in paying for your vacations (here and other places around the world) for the rest of your lives.

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Surely you don't think the majority of gulf front homeowners have multiple mortgages and carry balances on their credit cards? These homes aren't owned or bought by middle America. I know the flippers really muddied the waters up but they are falling by the wayside day by day. I have agreed for a long time about the prices but they are creeping down to a more realistic level as of late. Look at the sold prices from 20 years ago and extrapolate them at 6 or 7 percent annually until now and many asking prices are just off base. With solds going out the door at 70 -80 percent of asking prices things are getting close to realistic.

Also, owning a beach house and going on a vacation are 2 completely different experiences.

I checked some demographic information about the beaches of South Walton area. The average household income is $70,000. The average price of a home is about $700,000. How can people afford to live in SoWal? The average household income level where I live is $214,000. The average price of a home is about $850,000.

I would guess the income of the average homeowner in Watersound is way north of 214k, and I doubt the investulators currently have an income to report.

 

[luvthebeach57]

Also, owning a beach house and going on a vacation are 2 completely different experiences.

Tell me about it! Our family had a beach house from since I was 3 years old. I spent my childhood and teenage summers there. It was great fun and I have wonderful memories, but it was a lot of work for my parents. When my father passed away in 1992, the following year we decided to sell it. My mother didn't want it and my husband didn't want the responsibility of the upkeep. However, I still miss having our own little place at the beach.

 

[Miss Kitty]

I hope you enjoy your beach vacation, luvthebeach. For future reference, it is not mandatory to post your financial history to visit sowal!

 

[SHELLY]

Surely you don't think the majority of gulf front homeowners have multiple mortgages and carry balances on their credit cards? These homes aren't owned or bought by middle America. I know the flippers really muddied the waters up but they are falling by the wayside day by day. I have agreed for a long time about the prices but they are creeping down to a more realistic level as of late. Look at the sold prices from 20 years ago and extrapolate them at 6 or 7 percent annually until now and many asking prices are just off base. With solds going out the door at 70 -80 percent of asking prices things are getting close to realistic.

Some yes and some no. I know many, many people who looked upon real estate (during the boom) as another place to "park their money." The ones who put it into coastal property figured it would go up further and faster than, say, a duplex in Dallas. Some bought empty lots to use like CDs; others bought homes and condos so they could use them while their investment increased. Truth be told, lots of the "high net worth" people who bought their properties as investments (which is more than are letting on) are not at all happy to have to be feeding the beast.

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[SHELLY]

Tell me about it! Our family had a beach house from since I was 3 years old. I spent my childhood and teenage summers there. It was great fun and I have wonderful memories, but it was a lot of work for my parents. When my father passed away in 1992, the following year we decided to sell it. My mother didn't want it and my husband didn't want the responsibility of the upkeep. However, I still miss having our own little place at the beach.

It is by far much, much better to be the child of (or the friend of) the owner of a beach house .


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[Pirate]

Some yes and some no. I know many, many people who looked upon real estate (during the boom) as another place to "park their money." The ones who put it into coastal property figured it would go up further and faster than, say, a duplex in Dallas. Some bought empty lots to use like CDs; others bought homes and condos so they could use them while their investment increased. Truth be told, lots of the "high net worth" people who bought their properties as investments (which is more than are letting on) are not at all happy to have to be feeding the beast.

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Once again I have to agree, but frequently it sounds like you think all purchases made in the area are made by people that overpaid and now are on the brink of foreclosure. There are groups that have made wise purchases and groups that have not. The unfortunate group that bought the ever appreciating asset during the boom to make a quick buck are not very happy at this time. The group that used their property as an ATM are also not in the best of spirits I would assume. A little due dilligence goes a long way.

 

[spinDrAtl]

Some yes and some no. I know many, many people who looked upon real estate (during the boom) as another place to "park their money." The ones who put it into coastal property figured it would go up further and faster than, say, a duplex in Dallas. Some bought empty lots to use like CDs; others bought homes and condos so they could use them while their investment increased. Truth be told, lots of the "high net worth" people who bought their properties as investments (which is more than are letting on) are not at all happy to have to be feeding the beast.

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More blanket statements about groups of people while using nebulous words like 'lots', 'many', and 'some'. I'm sure there are 'lots', 'many', and 'some' who did the opposite and are as happy as they could be with their beach homes.

 

[spinDrAtl]

We fall into the hard working, sensible, and thrifty category. My husband and I are in our early 50's. We have $600,000 in equity in our home with a few years left on our 15-year fixed rate mortgage (4.25%). We pay cash for our cars. We have no credit card or other debt. We have already saved up enough money to send our teenage daughter to a quality 4-year college. We have hundreds of thousands invested for our retirement years. Plus, my husband will receive a pension from his job. I clip coupons and buy items on sale. The one thing that I like to spend money on is our vacations. I wouldn't consider us to be rich, but we are financially comfortable. Yes, it would be possible for us to buy a $1 million home at the beach, but we would feel that it was beyond our means. It's all about comfort level.

Too many people in our country are deep in debt and have bought homes they never could afford. We are now seeing the repercussions of this on our global economy. But that's an entirely different issue.

My point was more aimed at the other statement implying that the only way to own at the beach is:

"....2 jobs, credit cards, HELOCs, 401K loans, ramen--lots and lots of ramen (five different flavors)".

 

[scooterbug44]

The properties & prices that started this thread are not typical homes - they are the upper tier in a vacation/resort area. The many vacation homes have definitely driven up the overall prices in the area, but the average resident doesn't live in a beachfront condo.

IMO there are 2 groups of second homeowners - people who bought a home or property because they loved the area and wanted to spend more time at the beach and people who bought/built to try and make $$$ fast or as an "investment."

The first group are very happy with their purchase, though not so much with the taxes and insurance issues. They bought something because it added to their enjoyment of life.

The second group is rueing their timing and has many behind the fiscal 8 ball. The only thing the purchase was meant to bring to their life was $ and that has certainly not been the way it turned out.