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The dirty little secret seems to be inheritance/generational wealth, such as boomer parents gifting a sizeable sum. People don't talk about it openly, but I'm sure it happens quite a bit. The stories in the below article, which is about people in the UK, probably come up here, too.
https://www.theguardian.com/money/2022/dec/03/why-inheritance-is-the-dirty-secret-of-the-middle-classes-harder-to-talk-about-than-sex
Accenture 2 yup. You still see deed restrictions on the books, prohibiting transfers to people of color (though of course they use words like "negroes" and "coloreds"). Those restrictions are meaningless now, of course, but that stuff persisted until very recently relative to how long those communities have been around. It's crazy.
Think I disagree with the premise here.
1) Chicago area is a massive metro (3rd largest in the country) in the wealthiest country in the world. Wouldn’t you suspect there to be a lot of $1M+ homes?
2) Though there are many $1M+ homes, they make up a pretty small fraction of homes.
It’s said above, but I suspect you’re framing this a bit differently now than you will in 5-10 years. If you’re making $300k now and saving $100k+ (and growing) for the next 5-10 years, You’ll have a lot to invest (with a mortgage) in a nice home that provides a very comfortable life in an asset you expect to slightly increase in value over time.
You know there are many houses in pretty good areas in Chicago for 3-600k. If you want to live in a mansion or right next to the lake then expect to pay those prices, but jefferson park, sauganash, etc. you can find many reasonably priced places there
I have not someone in my circle who bought $1M house. Maximum they invested in a home was $750K
We did approx 530k in 2017, now at 380k HHI couldn't see myself putting that much into a primary residence in Illinois
SO and I are looking in that range, but only if we househack a 3 or 4 unit building. We’ll have a healthy down payment.
Income is 350 and I bought one when interest rates were under 3%. 36, so have had a little more time to save and build investment accounts which made me comfortable with it. I wouldn’t do that now though.
There are quite a few people in my industry alone in this city who could easily afford 1MM+ homes
I think at 300k it’s a bit of a stretch, you can do it but you’ll feel house poor for a while until income rises a bit (assuming that’s your trajectory). You’d feel much easier doing it at 400k.
As for people, 400k is about top 1% of earners, $1M homes are also near the top of band (I wouldn’t say entirely too 1% but likely top 2-3%) so top of the income pack trades up there and then as everyone else said top of the NW pack (incl NW gifted from parents) also trade up there - while those top of packs don’t always overlap.
I’ve often thought about the same question. I grew up on the north shore and I know from experience that sometimes the outside of the house is more impressive than the inside. People cut costs in other areas.
Apparently our housing is cheap compared to other cities and you get more for your money! Honestly regret not spending more for a better location and luxury.
I bought a 2bd 2 bath condo for $230k last year near the medical district (my roommate and i make around $200k combined). I wish i had spent $600-700k for a place in wicker park since i feel like the quality of life would have been so much better. Location makes all the difference. And not having an elevator or covered parking spot is proving to be a problem for me now after having surgery and struggling to go up stairs. An in building gym would have also been smart.
DM me if you need advice. I made some poor choices during my home buying process (like buying a condo) and love to spread the knowledge or advice. Multi unit all the way if you can! But if you get a condo, id suggest booking an air bnb in areas you’re considering and testing it out. I didnt think location would be such a big deal for me since i drive, but definitely see why theres so much emphasis on it.
Back issues are no joke so I hope you're ok. But generally I wouldn't recommend anyone buy into a building with an elevator or other super high maintenance cost items like that. You spend many hundreds a month on something providing you no real benefit (except in your case).
I don't necessarily feel like I'm "rich" b/c I think there are a lot of people in a similar situation to me - two relatively high income earners. My husband and I are both attys, and I know a lot of other atty couples, or doctor couples, doctor/lawyer, etc.
You really underestimate how many wealthy people there are out there.
And keep in mind that rich people from all over the world are also buying property here.
Yeah. The markets in many other countries just aren’t stable or you can’t actually own property at all or there are no property rights. So you take all that money and move it to places like the US or UK. I have plenty of family members from Venezuela that own multiple properties in the US.
Am I the only one who does NOT think this is an unrealistic goal for most college educated couples? I’m assuming a HHI of at least $400k to reasonably afford $1M house mortgage after 20% down. Most educated/ambitious people are attracted to other educated & ambitious people meaning if one of the partners is earning 250k+ there’s a solid chance the other is earning somewhere close to that. In careers like finance/tech/consulting/law these salaries are very achievable by 30. Factor in the fact that many of these people likely already owned a condo or starter home prior to buying a million dollar house and were thus able to sell that place and use the proceeds of the sale as the down payment for said million dollar home. To me the fact there’s couples earning HHI greater than $400k in their 30s seems much more achievable than saving the $200k+ required down payment in cash. I mean me and my SO are 27 & 24 and HHI around $350k but it would take us at least 3 more years to save a $200k cash down payment assuming we continue to max retirement accounts and don’t drastically cut back on spending. Lots of people here trying to say family money but I would say that’s not the case 90% of the time, not for a million dollar house at least.
The confirmation bias is strong with this one.
No one puts 20% down anymore. I have a $1.0m house in Chicago on HHI of over $400k but only put 10% down.
Yes it would SE1 but not by much. Every additional $10k you put down is like $300.
From my experience, you need to make 400-500k without a ton of money down or have some major equity built up from other real estate, or else just have not spent any money and saved (some even live at home).
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