Millennials Continue to Leave Big Cities

[Obadno]

I think you guys are a little myopic in what you consider expensive.

Sure the average dual income in Chicago my be 100k a year but that's significantly above the average family income of the United states. for MOST people in the USA raising a child in an urban city anywhere, let alone in the biggest cities is not a viable option.

Dont get me wrong, I am with you when a 400k+ house doesn't have me reeling in shock but we have a really stratified society and you probably don't realize how far above "normal" you actually are.

This is a forum discussing "urban living and development" by its nature this forum is filled with people that tend to be higher paid, higher educated and have the time to concern themselves with shit like the "built urban form" and "place making"

Median household income reached a record $61,372 in 2017, up 1.8 percent from $60,309 in 2016. This marks the third year in a row that median household income has gone up, according to the U.S. Census Bureau, which compiled the data.

HOUSEHOLD that's two income earners. Trust me, I dont live in an expensive city and I dont understand how a family could live of 60k but thats the median, thats "normal".

The average home is not 400k, the average person thinks you are rich.... (and you are compared to most)

[Crawford]

Originally Posted by Investing In Chicago

There are definitely cheaper options, the least expensive reasonable options are ~$1,500/mo. - but the Yuppie daycares are all in the $25-30k annually range.

Wow. Manhattan daycares are around 2k a month, and Brooklyn is a little cheaper.

Preschools are much more expensive. Can be 50k+ a year. But I'm not sure I've ever heard of a normal daycare program costing 30k a year.

[the urban politician]

Originally Posted by Steely Dan

our property taxes are $8,000/year.

do you honestly think that i would be paying significantly less than $8,000/year on property taxes for a 2,000+ SF home in urban NYC, LA, or SF?

I honestly can't tell you, but I do know that at least for CA the property tax rate based on assessed valuation is far lower than in Chicago, due to Prop 13. So regardless of what your home's value is, you are paying a far lower proportion of its value in property taxes than you are doing in Illinois.

JB is only raising income taxes on the wealthy, not us middle class schlubs.

Sounds good. I'm wagering that that will change, give it time. A quarter trillion pension obligation with no political will to change the current formula....I think the taxman will be back for more

that's fine, but i would much rather not be "house poor".

But that's just it, if you qualify for the loan, which scenario would you prefer? In two simplified, hypothetical scenarios:

A. $3000 monthly payment, of which $2000 goes to the mortgage and $1000 goes towards tax and insurance

B. $3000 monthly payment of which $1500 goes to mortgage and $1500 goes towards tax and insurance

Most people who understand math will prefer scenario A. Scenario A makes you a richer person at the end of the 30 year amortization period.

[Skintreesnail]

Originally Posted by pj3000

Millennials Continue to Leave Big Cities

Census figures show smaller drop in young urban residents than previous years, but many still leaving for cheaper housing, better schools

https://www.wsj.com/articles/millenn...es-11569470460

Curse those millennials! *conceals birthday

Isn't this expected as millennials start having families? I expect the next generation is taking their place in the cities.

[Investing In Chicago]

Originally Posted by Crawford

Wow. Manhattan daycares are around 2k a month, and Brooklyn is a little cheaper.

Preschools are much more expensive. Can be 50k+ a year. But I'm not sure I've ever heard of a normal daycare program costing 30k a year.

I'm from NYC, and have had this conversation with friends living in the city there - granted they all live in Manhattan (TriBeCa, West Village types) but they are all paying ~$25k/year/child in the city. I was shocked it wasn't more expensive.

[Steely Dan]

Originally Posted by the urban politician

I honestly can't tell you, but I do know that at least for CA the property tax rate based on assessed valuation is far lower than in Chicago, due to Prop 13. So regardless of what your home's value is, you are paying a far lower proportion of its value in property taxes than you are doing in Illinois.

for sure, i get all of that. illinois property taxes are quite high in terms of the rate on assessed value.

my point was that, comparing like for like properties (ie. 3 bed/3 bath 2,000+ SF family-sized home), i'm not going to be paying less, overall, in property taxes in urban SF or NYC than i do in chicago because that same property in those expensive coastal markets is going to have a much higher assessed value in the first place.

Originally Posted by the urban politician

Sounds good. I'm wagering that that will change, give it time. A quarter trillion pension obligation with no political will to change the current formula....I think the taxman will be back for more

probably. time will tell.

Originally Posted by the urban politician

But that's just it, if you qualify for the loan, which scenario would you prefer? In two simplified, hypothetical scenarios:

A. $3000 monthly payment, of which $2000 goes to the mortgage and $1000 goes towards tax and insurance

B. $3000 monthly payment of which $1500 goes to mortgage and $1500 goes towards tax and insurance

Most people who understand math will prefer scenario A. Scenario A makes you a richer person at the end of the 30 year amortization period.

for sure, but if that 3,000/month only gets me an 800 SF shoebox, then i'm out, at least for raising a family.

[Crawford]

Originally Posted by Steely Dan

our property taxes are $8,000/year.
do you honestly think that i would be paying significantly less than $8,000/year on property taxes for a 2,000+ SF home in urban NYC, LA, or SF?

It's quite possible. I pay less. Property taxes on residential real estate in NYC proper are rather low, especially for smaller buildings. CA has Prop 13. I know my parents pay more in property taxes in Michigan than my Aunt in Coastal CA, whose home is probably worth 6x as much.

This $6 million home in Park Slope has property taxes of $1,948 a month. Not too bad. You're paying like $3,900 a year in taxes for every one million of value:

https://ny.curbed.com/2019/9/27/2088...lope-townhouse

[the urban politician]

You whipper snappers with pre-K kids are so adorable!

Where did you get the idea that childcare expenses end when the kids go to school?

Come on, now!

If you're a family of 2 working parents, then you have to use after school (and sometimes before-school) programs, and they charge money as well.

A popular one that we use is Champions.

Sure, it's cheaper than all day daycare, but don't start celebrating yet. The expenses keep coming!

[Steely Dan]

Originally Posted by Crawford

It's quite possible. I pay less. Property taxes on residential real estate in NYC proper are rather low, especially for smaller buildings. CA has Prop 13. I know my parents pay more in property taxes in Michigan than my Aunt in Coastal CA, whose home is probably worth 6x as much.

This $6 million home in Park Slope has property taxes of $1,948 a month. Not too bad. You're paying like $3,900 a year in taxes for every one million of value:

https://ny.curbed.com/2019/9/27/2088...lope-townhouse

but in NYC you have a city income tax, chicago does not.

the tax man is gonna get you one way or another.

Originally Posted by the urban politician

If you're a family of 2 working parents, then you have to use after school (and sometimes before-school) programs, and they charge money as well.

A popular one that we use is Champions.

Sure, it's cheaper than all day daycare, but don't start celebrating yet. The expenses keep coming!

fortunately my wife has a work from home gig, so we won't have to fork over for after-school care.

[Steely Dan]

Originally Posted by Obadno

The average home is not 400k, the average person thinks you are rich.... (and you are compared to most)

oh, i don't doubt that we are wealthier than the average american family (on the simple basis of facts, we are), but i also wouldn't place myself in the "extremely wealthy" category either.

"extremely wealthy" people own homes with 7 figure price tags, own a vacation home at the beach or on a lake or at a ski resort, own a boat, drive $50,000+ cars, etc.

we're much closer to the middle class than we are to the top 10% or whatever.

[JManc]

I own property in CA and in TX, the property tax rate is waaaaaaay higher in TX.

[Investing In Chicago]

Originally Posted by Steely Dan

i am aware of that.

i even directly said as much in this thread yesterday.

I missed that on the previous page, but none the less, High School is a major issue in Chicago, and private school is yet another cost to factor.

Originally Posted by Steely Dan

no, i'm talking about a purchase price of $420K with 20% down, so a mortgage of $336K. a family with an AGI of $108K will qualify for that in most cases.

yes, daycare payments can complicate that financial picture, but daycare is also a short window of time that eventually goes away. we're living through it right now with two kids in full-time daycare to the tune of $26,000/year. but next fall our daughter goes to (FREE!!!!!!!!!) all day kindergarten and our son will follow in fall 2021. it'll be like a $26,000 raise after all the belt-tightening we've had to do make it through the "daycare years".

i'm thinking about buying a Ferrari!

Sure this hypothetical family would qualify for that mortgage, but factoring in all of the other expenses that life throws your way, this is still very tight. I would never recommend a family with an AGI of 108K take that on.

This doesn't even address the obvious that a family sized home at a purchase price of $420,000 is not easy to find in good neighborhoods. You're almost certainly looking at condos, which is fine, but a deal breaker for many, and a SFH in any decent Northside neighborhood is going to be non-existent at <$500K

[the urban politician]

^ That's why I would buy a 2 flat instead!

A 2 flat for $500k or a bit above can still be had. Collect that rent, and significantly cut down your monthly payments!

[Investing In Chicago]

Originally Posted by the urban politician

^ That's why I would buy a 2 flat instead!

A 2 flat for $500k or a bit above can still be had. Collect that rent, and significantly cut down your monthly payments!

100%. I did that in college - bought a 4 flat, and rented to all of my friends. Not only did I live for free, I made money every month. Still own the building in, one of the best decisions I ever made.

[Steely Dan]

Originally Posted by Investing In Chicago

This doesn't even address the obvious that a family sized home at a purchase price of $420,000 is not easy to find in good neighborhoods. You're almost certainly looking at condos, which is fine, but a deal breaker for many, and a SFH in any decent Northside neighborhood is going to be non-existent at <$500K

oh for sure, if you're talking desirable northside for under $500K, you're almost certainly talking about a condo/flat.

but there are still plenty of family-sized units at those lower price points, unlike desirable areas of the expensive coastal cites.

if you're willing to push a little further afield into a place like portage park, you can still pick up a decent bungalow out there for $350K.

that was the choice my wife and i were facing two years ago: multi-family unit in a flat building in a more urban area like lincoln square/edgewater, or a bungalow out in portage. we went with location over SFH becuase i'm just a location guy at heart.

Originally Posted by Investing In Chicago

100%. I did that in college - bought a 4 flat, and rented to all of my friends. Not only did I live for free, I made money every month. Still own the building in, one of the best decisions I ever made.

how does one get the down payment and mortgage approval for a 4-flat when they are in college?

when i was in college i was shaking out couch cushions looking for spare change for beer money.

[the urban politician]

Originally Posted by Steely Dan

how does one get the down payment and mortgage approval for a 4-flat when they are in college?

when i was in college i was shaking out couch cushions looking for spare change for beer money.

Parents

I don't know IIC, but I'm willing to wager that the parents bought it for him

[Investing In Chicago]

Originally Posted by the urban politician

Parents

I don't know IIC, but I'm willing to wager that the parents bought it for him

Ha. My parents are Italian immigrants who didn't have money to buy me text books.

I worked full time as a personal banker at Chase while attending the University of Michigan, did construction in the summers. Saved $20K and immediately put that as downpayment on a $200K 4-flat (13 total bedrooms) that generated nearly $4k per month.

The next $20K I saved I bought a second rental property....

[the urban politician]

Originally Posted by Investing In Chicago

Ha. My parents are Italian immigrants who didn't have money to buy me text books.

I worked full time as a personal banker at Chase while attending the University of Michigan, did construction in the summers. Saved $20K and immediately put that as downpayment on a $200K 4-flat (13 total bedrooms) that generated nearly $4k per month.

The next $20K I saved I bought a second rental property....

Wow, my bad. You're the man!

Unfortunately, it's practically impossible to buy a 4 flat for $200k these days....

[Investing In Chicago]

Originally Posted by the urban politician

Wow, my bad. You're the man!

Unfortunately, it's practically impossible to buy a 4 flat for $200k these days....

No worries. Yeah, this was 2004 when one could buy a property with no money down. There are still deals to be had, if I still lived in Ann Arbor I would have bought every multi unit property in town

[Steely Dan]

Originally Posted by Investing In Chicago

Ha. My parents are Italian immigrants who didn't have money to buy me text books.

I worked full time as a personal banker at Chase while attending the University of Michigan, did construction in the summers. Saved $20K and immediately put that as downpayment on a $200K 4-flat (13 total bedrooms) that generated nearly $4k per month.

The next $20K I saved I bought a second rental property....

wow, impressive. you can probably muster more ambition in a single day than i can in my entire lifetime.

as i said, i was poor as fuck during my college years, literally scraping together loose change at times.

but good on you for earning it all yourself.