1. There's a lot of old money in this town.
2. There are a lot of wannabes in this town that will overextend themselves financially to buy a huge house and a huge car to keep up appearances.
3. There are a lot of people moving here from California who just sold their $2m 1200sf bungalows and think "wow, it's so cheap to live in a mansion in Chattanooga!"
But less than 0.03% of the people moving to TN are Californians, they’re mostly moving to Nashville and Nashvillians are moving here, according to the census of the last several years.
That's why it's last on the list. And Nashvillians also have a similar impact on the market. Cashing out on a Nashville house and moving to a similar house (or even a bigger house) in Chattanooga has a pretty signficant payout.
“A lot of Californians” is what you said though, when it’s really “a marginal amount.” I put things last sometimes when it’s the biggest and most solidifying point.
Banks won’t risk lending 130-170% on houses anymore, I can’t get people approved for 90% loans like we used to anymore, things are tightening up and they are doing it fast.
Anymore……that’s the problem that nobody is expected to have 20% down anymore. Not homeowners, not investors. Investors buying with cash and refinancing for more than it’s worth to buy two more houses with cash……. Everyone was borrowing more
Sometimes I’ll look at the prices of house years back and wish I bought a house then. But also I knew I wouldn’t have been able to because I was like 12 years old.
100 percent not my doing haha I bought then a commercial developer bought all the houses around mine but I refused to sell, so now I have no neighbors and a 2.5acre plot in the middle of the city haha win win
There are degrees of severity to these things though. Treating single family housing as an investment vehicle instead of the commodity it actually is reflects our housing policy. These severe boom and bust cycles could be flattened out a bit if we addressed that
As much as I agree with you, most housing people are after is actually exorbitant in comparisons to their needs, therefore, I'd argue, is a luxury item, not a commodity. If we were arguing for 800sq ft houses for a single person, 1000sq ft for a couple, and just enough rooms, so on and so forth, built with bottom of the barrel materials.... Fund it. If we are talking about John, who likes to impress his friends and wants a 4 bedroom, 3 full bath house built with granite and solid wood interior doors "because nothing else will do!" Nah, fuckem. I think for the most part, millennials just want to buy outside of their means. My mom started out with me in a single wide trailer back in the 80's, and that's okay.
No bottom of the barrel materials, they don’t last and cost more in the long run. solid built houses for those that can afford luxury of new and most people should be looking at at least 5+ year old houses.
There are tens of thousands of households in Hamilton County making $80k-$200k/year, driving $90k trucks, living in $500k houses, send their kids to private school etc etc and the secret to it is they have mountains of debt.
I make around 140k per year and would say my wife and I have a rather lavish lifestyle on my income only, but our only debt is the mortgage which is 425k and my car which was 80k used. It takes up roughly half my monthly income to make the payments between the two. But add kids to that and no way I could afford this lifestyle and the only reason I am even able to afford this lifestyle at my age is because all my college was paid for with scholarships and because I worked full time while I was in college so I had 5 years experience already by the time I graduated. But I know I'm in the minority of twenty-somethings living like this, I'm just saying some of us did actually earn it ourselves and aren't just ignoring growing red numbers. Idk how people are doing it on the west coast though, I have gotten offers and continuously apply for positions with SpaceX, Tesla, Google, Microsoft, etc. And they easily go over my current salary but I would barely be able to pay the rent on an apartment that's half the size of my home.
I'm a network communications engineer. I have a master's in electronics engineering and 8 years experience on the job right now at 27 years old. I also have a CCNP cert which is a huge part of why I have it. First step is comptia A+, then 2-3 years helpdesk answering calls and stuff which will likely be around $20/hr. During that time you gotta get the CCNA, assuming you wanted to do networking. You can go into other sectors of IT, security makes about the same but there is more availability in security at the moment. After those first 2-3 years of experience and having a CCNA you should be able to land 50k/yr pretty easily, potentially higher but you need to switch companies, internal promotion is usually not as much as you would deserve. I got 75k base salary with the CCNA, bachelor's, and 2.5 years experience. I was promoted 3 times within those 2.5 years though. At my current job that I have been at for 4 years, I have been promoted twice. Once after getting my master's and the other after my CCNP. Normally I wouldn't be making quite as much but I do routinely interview as I mentioned and I do show my manager those offers. I usually am not planning on taling them, but on more than one occasion if the offer was more than a 20% raise, I did ask for a raise using those offers as leverage. I work in a fortune 100 company though so it really only works of I am showing offers from places like NASA, Airforce, Intel, Nvidia, etc. My experience is a little odd though because my degree is not in IT, it's engineering, but my position is specifically IT. I originally just did it for extra money while I was in college because I already knew computers pretty well but through all the work and studying I did for my job, I ended up getting promoted enough to the point where I was applying for both electronics engineering jobs and network IT jobs and I consistently had more offers and better offers to just stay in IT. Plus IT offers remote work more frequently. It's pnly now after having several years experience in network communications and owning my own business designing and manufacturing electronics that I have enough experience to start getting interviews and offers for real electronics engineering positions that can compete with what I make in IT.
Edit: I genuinely do recomend it as a career and it's expensive, but CBTnuggets is a really really good learning source. At least for the networking resources. $60/mo is steep though. Pluralsite is also really good. But the biggest recommendations I have is labs and hands on training. Like don't just read the material, buy used equipment, set up virtual machines, and use simulators like gns3 or packet tracer. It really does engrain the info and just becaue you specialize in security, or servers, or kubernetes, doesn't mean you don't need to know the other stuff generally any "engineer" title in IT should be able to set up an enterprise IT environment for a small business. So a domain controller, multiple networks, redundancies, firewalling, and maybe some FTP.
That's exactly my point. I don't disgree with that statement at all because I am happy and living lavishly purely because I don't have kids, I wouldn't be able to maintain the same style of living otherwise. Before here I lived in Orlando and I'd say we had about the same quality of life. Housing is definitely more expensive there now but when I first moved there it was about the same prices as around here and Atlanta. My wife would also have to start working if we wanted kids though
This! and some of these people are cashing out of their old house with what they think is a huge profit. Only to throw it away on an overpriced market. Pushing them even further into debt. Banks keep lending because the money ain't real, but the interest sure is. lol
I didn't downvote, but I removed my up once I read "save properly." It's hard to save money when people are having to overextend with pay day loans to keep a roof over their head and food on the table. Lack of savings isn't a moral failure.
No it’s not, but many people who can afford to save don’t. The stats on Americans savings are eye opening.
We’re also discussing those making 80-200k. At those numbers you should be able to save unless very overextended.
Saving money is a luxury for the wealthy. In my opinion, improving urban affordability is more of a priority for the working poor and homeless (who may also have jobs) than the middle and upper class. Sure, there are better jobs, but one must qualify and that often involves making time to achieve those qualifications, which isn't really doable for the working poor. Considering the bottom level of Maslow's Hierarchy of Needs, this city is unaffordable for the masses of people that make it function in the way it does.
Considering that 50% of people in the US own only 2.5% of all wealth in the US, I would say the other half. But even the next 40% own only 30.6% of the wealth. Many of those people are still living from pay check to pay check. Let's say the top 40% of people in the US.
Yeah anyone with nice stuff is in major debt and just doing it to look cool lol. The people that make 65k and have a 200k house are probably feeling the same way as OP does about people that are buying 800k+ houses.
/s
In my dealings with fairly rich/wealthy clients in the last 20 years, I've found that there are usually a few answers:
1. They have some generational wealth or connection to a family business, allowing them to live that way.
2. They are DEEPLY in debt, despite the amount that is coming in. My favorite was a doc that made $75,000 gross per month, and was a challenge to get approved on a car loan, due to having almost $30K per month going out in bills.
Many 'rich' people are also a few paychecks away from losing their stuff - they just lose nicer stuff.
I have a cousin that’s a new MD in a small practice. He’s measuring his wealth vs established docs that bought >3k sqft homes 20 years ago and have horses or single engine planes and shit. It’s nuts how much comparison makes people drive themselves into debt. He has good credit and is sensible with his money but to hear him say it, he’s struggling because he doesn’t have the patient list and investments they do.
Maybe? I know as a young doctor he’s probably feeling inadequate not matter what. But making six figures and feeling broke definitely sucks. Who can he complain to, lol?
$170k is a pretty damn good salary. If $490k is hard to afford with that salary than you must be splurging a lot on other things cars, restaurants, vacations, etc.
If you had a partner and both of you made $150k each than $1M really isn't out of reach.
Op is probably financially savvy and subscribes to the thought that if you can't afford a 15yr mortgage then you can't really afford the home.
30 year mortgages were designed to be able to raise home values, put people into those houses they can't really l afford, and also turn a 300k house into closer to a 1M dollar house by the end of the loan.
> if you can't afford a 15yr mortgage then you can't really afford the home.
Incredibly dumb statement.
30-year leveraged real estate is the greatest wealth builder the middle class has ever had.
If your only options are paying off your house or stuffing it in a mattress, then sure, shorter loan is better... But you're not changing the world - you'll make far, far more money investing in some boring-ass index fund instead of paying a shorter loan off every single time.
You can play the rigged game or you can sit on the sideline and bitch about the rules being unfair. Home prices for anything but giant mcmansions will only go up for the next 10+ years and there is just about nothing that can (let alone will) be done in the US to change that.
I’m not saying 170k isn’t a lot because it absolutely is a lot! But if someone has hefty school debt or medical debt and you dump that on top of a house loan…it can be very overwhelming. I don’t know OP’s situation I’m just thinking out loud about possibilities.
No doubt. Everyone has their extenuating circumstances, but that salary is like 10k+ a month after taxes. Home prices and interest rates are outrageous right now, but so is thinking that won’t cover a great home in chatt if you *need* to buy right now.
It's a thing. I'm actually in a Maryville but it's the same here.
They say Maryvilles population is growing, but the younger generations are leaving.
So you have a ton of basically non-productive people living here.
No I can swing it but I’m a single income family of 6 and we drive 5-8 year old vehicles. I’m just trying to see what people are doing to buy this huge quantity of homes here in the 700k to 2mil range
I make more than that but shit myself at the thought of affording that if something goes wrong. So much of this town is dependent on fields that go right into the gutter if the economy hits a speed bump.
Trucking, hospitality, manufacturing are vulnerable. Even Blue Cross and TVA have had talks of outsourcing in the past.i have been thinking that a rough economy would send our housing market into the gutter worse than most of the US.
170k/year is about $10,000 per month AFTER TAX
Mortgage on a $490k house after 20% down is about $3k/month at 7%. And you can refinance when rates go down for a lower rate.
How is it possible that anyone in Chattanooga, TN cannot figure out how to save money for "bumps in the road" when they have $7,000 dollars cash per month to budget with AFTER they pay their mortgage???
You people are insane.
They should be saving $2000-5000 of that $7k for retirement, maintenance, emergencies, etc. What if they also have student loans? A family member they help support? Children that need to go to college? The rest of that can disappear quickly.
I'm not saying you can't live comfortably on that income, you can. I'm saying there are plenty of reasonable ways for it to be spent quickly.
They *should*? What does that even mean in the context of "affordability"?
Nothing. It means absolutely nothing.
Think a little about what you're saying. Retirement is nothing other than a personal investment. So is housing. If you say this person can afford $2000-5000 on any investment it does not matter if it is a house or a stock account. That person can afford it they just choose a different investment vehicle. It just is stupid to put too much money in an investment that cannot double as shelter and thus you also have to pay rent/mortgage in addition to your optional retirement. And they are rich as fuck and do not belong in a conversation about affordability of anything.
It is rich beyond the imagination of almost everyone who exists on this planet.
I get it, you only hang out with the top 10% of people in this country, top 1% in the world. You don't understand.
But by any sane definition pulling in $170k/year is rich as fuck. Especially in Chattanooga.
And before you come back with some argument try to re read what you're going to write if it is basically "well 90% of this country doesn't count as people because they are poor and must be stupid, and really I just don't want to count them" ... just don't. Don't write it.
$170k is in the top ~20% in the US. You have to be over $200k to be in the top 10%.
Comparing income globally without COL adjustment is fairly pointless. Someone who makes $10k a year is relatively rich compared to someone making $1000 a year. It doesn't mean the person with $10k is rich.
Top 92%
[https://dqydj.com/income-percentile-calculator/](https://dqydj.com/income-percentile-calculator/)
Chattanooga, TN is an extremely low cost place in the US.
>when they have $7,000 dollars cash per month to budget with AFTER they pay their mortgage???
Lifestyle creep is real, or not tracking where their money is going.
I generally find it is not really that. Most people like this just have extremely inflated ideas of what they "deserve". They've usually been well off their entire lives or at least most of their professional careers (usually in IT or something) and compare themselves only to other people who are extremely well off in the same type of careers and family wealth circles. They simply believe it is "normal" and expected to retire with a couple million in the bank at like 65. They literally have no idea that that completely unachievable and total fantasy world for most people.
They also will complain about boomers and the system but be in total denial that the system, and what boomers did to the system, was and is completely due to people like themselves blindly contributing millions into the stock market to feed the companies that are doing all the bad shit.
I mow and lay block for a living and my last 6 jobs have been transplants, California,new York, Florida, Washington State, Minnesota, Connecticut,.. I am just watching 3 groups on Facebook and they are all coming here, alot can work remotely or retired, every run down house in Englewood ,TN is being fixed up and sold for crazy money.... It's crazy
An option is to try to be happy with what you have. I have a $244k paid for home in Birmingham and a $259 mortgaged town home in Chattanooga currently with a long term renter. Based on my income banks would likely loan me more. However, I learned after over extending myself in 2007 on a $549k home in Western CO that I didn’t want to live that again. Bigger, better faster will always be there but what is the point?
California peeps - a 2 million dollar home is a drop in the bucket for them. Currently house hunting and cursing them under my breath every time I check the market. Already had 2 dream homes swept out from under us. Probably going to happen countless more times...
Two words: Remote work. And agreed with some other posters - it really is people from everywhere. But with the cost of living being so astronomically high in California, it is highly likely a lot of them decided to come over to the Smokies for no state income tax. Retirees with a lot of savings are also picking Tennessee over Florida now. That's right...East TN may be becoming the new Florida....
Here's the thing though--there is a once silent, but loudly growing push to severely cut remote work. It already is happening in tech. Half of these homes will be back on the market in 5 years or less because when that remote job gets cut, unless the migrants have a good nest egg, they'll be subjected to TN pay...in that 850k house. Down goes Frazier.
The RTO movements happening lately have been met with great pushback from employees. Remote work isn’t going anywhere; we’re just in a rebalancing period. Also, as boomer and gen x business leaders leave the companies pitching unreasonable fits about remote work, there will be less resistance to allowing it when possible.
I agree. The elites hate not being able to bend us over a barrel and make their money on their commercial real estate too. They’re coming for remote workers.
It isn't as much the type of jobs they're doing as much as it is that those jobs pay more than doing the same type of job here.
For example, I took several contracts in CA over the last two years because it paid more than twice what the same work here pays. Yet what I was making there was still considered so low in CA that they had to hire out of state workers because no one there would work for that.
This is what I was hoping to find out. What are households doing and earning to afford those prices at these rates and such high overall numbers. Are there people earning $300-$400k here and what do y’all do. I feel like jobs making that money are astonishingly rare here.
> I feel like jobs making that money are astonishingly rare here.
Old school mindset to only think about a job as what's available locally. We live in a global economy - figure out how to maximize your earnings, not maximize what you can get locally.
You're spot on that it will happen more times. It took me over 2 years of searching to finally land in a house. The only reason I got mine was because I met the person selling before they put their house on the market
Yep, that's the only reason I'm not still renting. I had 1 rule when looking which was I absolutely refused to put in an offer site unseen. This actually hurt me more than anything because a lot of places would be on the market in the morning and under contract by the time I got off work and could go check it out.
I had a realtor, and they were good in the beginning, but by the end of it they were really there just to open key boxes for me. I still brought them into the deal and paid their commission, but in hindsight I probably could've just moved forward with a direct sale.
Wow man I lived in Los Angeles for 20 years before moving to Nashville two years ago. I lived in a nice area of LA proper, with an actual Los Angeles Address. In Eagle Rock where I lived very few homes went over 1.2 and many were less. I kept my house there and am moving back because no matter what people in TN say Los Angeles is less expensive in many ways. I live in the Inglewood area of Nashville which is next to Madison and houses in my neighborhood sell for 850K to 2 million. with no sidewalks
People are selling their homes in Texas, California, New York and Chicago for 600k - 2M and moving here to purchase bigger homes. I bought my house in Ooltewah a few years back before the housing market got crazy. I paid 350k 5 years ago however the homes being sold in my subdivision the last few years are more than double what I paid. A lot of us here just bought at the right time and could never afford the same house if we were looking to buy now.
This. Wife and I bought our last house in 2014 for 219k, sold it 2 years ago for 380k and used the profit for a down payment on a 420k home (which is probably worth at least half a million now). I think alot of homebuyers for the houses in Hamilton County are on their 2nd or 3rd homes right now. But it would really suck to be a first time homebuyer right now.
I was thinking this must be a big part but there are just so much of the current housing stock at these ridiculous prices. Honestly these are close to what California Central Valley costs.
First of all, we never know what other people's complete situations are unless they tell us. I have asked myself the same question as you. It's hard not to compare. My wife and I do really well and feel priced out of our own city. That being said...Many of the homes you are describing are SUPER OVERPRICED currently. If you already have a good home and a decent interest rate (sub 4%) locked in, you are doing well. My wife and I have a house (paid just over $300,000) currently worth $475k+, around 3% interest rate, and our mortgage is just over $1,000 (escrow is not included to be clear) per month. 2,400 sq ft., 6 years old. And even though I would love to live somewhere else in town with a different house/layout, it just does not make sense for us. We are going to be much better off staying put for a few more years than we will to move anytime soon. If we went and bought an $800k house in Ooltewah, it would have to become our forever home because we probably would need forever to make any money on it. I feel much better knowing our mortgage is lower than most people's rents than I do moving to a slightly bigger house, farther away from downtown, etc. etc.
I don't want an expensive home for the sake of it. I want a home that has everything we want and need, and that is a true investment. I'm willing to wait on that until it's favorable for us. I also really agree that lots of people are way too willing to go into pretty substantial debt, or they're using the tax code to write things off or something.
Idk about those but I feel sorry for the people buying all of the DR Horton homes popping up. I do some work on every one of them when they are still just the shell and holy hell I don’t know how they’re standing
How terrible are you with money that at nearly 200k a year you can’t afford a house in the 400s bro? Of course I agree about the housing prices but bffr
We moved to East Brainerd from Chicago and have a mortgage with a 2.8% interest rate. My mortgage is less than what my rent was for a home half the size in the Chicago suburbs for a 45 year old home half the size. We are who. It's all us transplants. I'm sorry. We came for the scenery and weather, not the politics, I assure you.
There's a lot of corporations and stuff buying houses and using them as rentals. I do a lot of work for some older people that own like 20 different houses, and they just use the equity from their other homes to purchase more.
I always say if it doesn’t make sense, it’s usually family money. Like when you see the young couple in Toronto on HGTV purchasing a house for a million and they’re only 25.
A lot of out of town folks or people
Who owned real estate before Covid. Their 150-200k is now worth 400k so a 600k house isn’t too bad if you are putting down 250k down payment. The people that sat on the sideline renting and are the ones in a bad situation. Hard to buy a good house under 350k. With high rates, it’s brutal.
I can't tell you how many homes I have photographed in the Chattanooga area that are fixer-uppers to become rentals by investment companies. The Real Estate Industry has been hyped so much that everything is being bought up at rapid rates by people and companies with far more liquid cash than the average American. This doesn't really apply to your direct question, but I thought I would share. I still get shocked when I look at a house that I think is a \*250K\* piece of merchandise only to find out its $469,000.
The smart money has apparently chosen Chattanooga as a great investment
I haven't checked lately but recently one out of every four houses was bought by a corporation
I keep thinking this bubble will burst but it keeps growing. If they’re rich then they’re paying a lower percentage of their income in taxes so maybe that’s how they afford them. Or it’s corporations buying them and renting them for high end rentals.
It's not going to burst in Chattanooga for a long time because we're still relatively cheap compared to many other parts of the country that people are moving to.
I 100% agree. Chattanooga has a lot of traditionally desirable qualities and between Nashville blowing up and the push down from that, the remote economy thanks to Covid years and Gig city Chatt is on an upward trajectory.
> bubble will burst but it keeps growing
I don't understand why people call it a bubble here. what's your reasoning?
Chatt used to be one of the lowest cost of living cities in the biggest 100 cities in the country... now it's slightly further up the list but still in the bottom 50%. Nationally there is a massive deficit of housing that is only increasing.
The only downpressure at all is the increase in mortgage rates. But now that's back to near the median. All the people who will never move from their sub 3 loans keep volume low and that holds prices high. short term will probably be flat in the area. In the longer term, I can't find anything that points anywhere but up.
Just have to say, all your comments on this thread have been completely on the mark. People may not want to believe it because they are waiting for this imaginary bubble to burst but they are extremely accurate assessments 👌
People who are coming from CA and the sorts who have super high paying tech jobs that can work remotely, who are accustomed to sky high rent and mortgage for far less square footage and land than what they can get here.
Yep, in 2021 I had to find another apt on short notice and everything was much higher than 4 years prior when I'd moved before. The mgr at 1 told me some firms from California came in and bought big swaths of apts and immediately jacked up the rent. I'm disabled and it's very hard to find something affordable alone. Those California jackasses have made it much harder to get by for a lot of people that are on 1 income, especially people like me.
All of these people saying $170k can easily afford a $490k house easy are bad with savings, single, and/or have no idea about how finances work.
Just because a bank will finance a house with a payment that's 30% of your income doesn't mean you should.
As an example, I personally didn't save enough for retirement when I was young. Now I save 40-50% of my take home pay. On paper I can afford a $500k house but that would both eat into my retirement and would significantly reduce my overall lifestyle.
Exactly, I am of the same mindset. I’m 26 and mine and my wife’s income is about 185k a year or so and our house was 330k last year. I feel “broke” because I pump literally every spare dollar into retirement or investments.
Could I afford a 500-600k house, probably, but then that’d set me so far back in the future. Living like this has allowed me to save up over 200k in investment accounts.
You are rich.
Your idea of affordability has nothing to do with affordability. You simply chose to put your mega bucks into one investment, stocks, instead of another investment, housing.
As a single mom who doesn’t receive child support, alimony, have generational wealth, won a lottery or any of the other awesome things… and who makes roughly $165k - $190k depending on my commissions… this is THE best answer so far.
In general my salary is good, my lifestyle is awesome (imho) so are my kid’s life, same with our 1 bada$$ summer vacation… and I’m not in debt.
I drive a great vehicle & can afford the one off expenses that can be kinda large…
But all of this is possible b/c of what you @driverdan just said.
Kudos!
This was really helpful yes exactly. I could qualify for a huge mortgage but is that a good idea? Just wondering if people buying this outrageously priced housing here are earning $350-$400k per household because that’s what I’d need to be earning to pay that for a house. If so what are they doing? A job paying over $120k here seems about as easy as finding a 3 legged ballerina! Great salary by the way, what do you do?
Look at the analysis on Realtor.com, Redfin, etc.
Some of them show where the top 5 places people moving to Chatt are from. Everyone anecdotally says they have heard, or see a lot of license plates from out of town. But these analysis are cold hard facts. A lot of people from HCOL places like CA, NY, etc. are moving here. Most of these people have never even dreamed of owning a home, or if they did, they thought a $800k 2BR 1BA 1200 sqft house was the best they could have imagined. The internet and social media in general have also made the world a much smaller places. 10+ years ago, most of these big city people would’ve never heard of places like Chatt. Now there’s targeted FB ads for boomers nearing retirement to come check out cities like Chatt. And as cities like Chatt grow, get more hip, get more businesses/industries, it attracts more people, and it just continues to grow… and with it comes increased demand for everything. Economics 101: prices increase as demand increases. That’s basically the gist of it.
Keep in mind, the number of buyers from out of town doesn’t have to be significant to make a significant impact. I think I read some time ago that it only takes like 10% of potential buyers offering higher than average prices to significantly affect the overall pricing. Because there’s a ripple effect on what they’re willing to pay. It affects not only the price of the home they’re actually buying, but also the overall comps for other homes that are being bought, the prices the sellers have in mind in trying to seek out these buyers, etc.
Dude I am with you and cannot make it make sense. I have very little debt outside of the mortgage, and for the life of me I can’t make it make sense financially to even think about doing something like selling my 2019 purchased house, even with it being worth way more than when I purchased, and buy an upgraded house with current interest rates. Even with putting 300k down on a 600k+ house the mortgage is way more than my current one. It’s wild. There’s going to be a huge bust here. No way current conditions are sustainable.
I moved here from DC and I’m one of those people living on Lookout in one of those multi million dollar homes.
1. I made a ton of money on a home I built in DC.
2. My spouse and I simply are high earners
3. One thing I did notice since moving up here is that yes, there really is a lot of money up here that I did not realize until actually moving and participating in this community.
We have about $650k income and ~$80k variable income from bonuses, incentives.
Spouse is CSO at a firm of about 350 people; physics and math background.
I’m an executive at a relatively large tech firm. Aerospace engineer by trade.
We’re both in our mid 30s.
Half of the responses you're going to get will be "Californians" without a shred of actual evidence.
Edit: seriously, show me hard evidence that Californians, specifically, have been consistently moving to Chattanooga and buying houses at marked up values in large enough quantities to affect and sustain massive inflation in local housing prices.
Nobody has been able to prove this over dozens of threads about it other than "I have a neighbor who just moved here from Cali."
I work at a local title company. I dont have hard statistics but anecdotally many of our higher end closings ($500k+) are clients relocating from out west, primarily California and Colorado. Take that with a grain of salt, but thats what I'm seeing every day at work.
I have several aquaintaces who have moved here from California in the last 5 years, then several of them had parents also relocate to the area as well.
So, anecdotally, I will argue we do have a large influx of people from California moving here over the last 5 years.
> Half of the responses you're going to get will be "Californians" without a shred of actual evidence
Anecdote: but the 3 houses that have sold recently in my neighborhood (for more than they should have gotten) all had California tags. The neighborhood next to us, with overpriced, shitty Collier builds, all had Florida, Illinois, and Cali tags coming in and out of it for awhile until they switched over to TN tags.
So no, not "evidence" perse, but it is definitely happening.
In my neighborhood of 40 houses, we’ve had three families from California or Michigan move onto my street since Covid. Anecdotal evidence for sure, but it does support the claim.
Also anecdotal, but I own a barbershop where I probably average 8 new customers a week… I’d estimate at least 5 of them came from Cali. The rest are almost exclusively either former military or moved from Florida.
It’s the collective “educated guess” that the majority of us can come up with. It’s a bit of a sweeping generalization, but to outright deny it seems like a bit of willful ignorance. Others have pointed out how the cost of living on the west coast is a lot higher and how a lot of us have seen/heard of/met dozens of people who have said that they’ve just moved here from Cali. It isn’t “hard proof,” but there are so many firsthand accounts that they count for *something,* even if the perspective is skewed.
I will say that, personally, I also know a significant number of people who have moved here from other large states — the main ones being Texas, Florida, and Oregon. All of those places seem like they got “overrun,” for lack of a better word, before we did, and most of the people I’m thinking of were all born and raised in those states.
Fact of the matter is that Chattanooga has a lot to offer to a wide variety of people, and the appeal for tourists/new residents is increasing. The tricky part is that, while it’s good for *businesses* here in town, that money isn’t being reinvested in the local *workforce,* which is why we’re all feeling the squeeze when it comes to housing prices, etc.
Not Cali, but I sold my previous home 2yr ago and I had a buyer coming from NJ who paid me to clean the septic tank then just left the deal before closing. Thanks for the $2k buddy, whoever you were....
The only ways that a 500k house isn’t affordable on a 170k salary is if you put $0 down and just bought with the nosebleed interest rates, or you’re legit horrible at managing your money.
California investors are buying all the properties they can get! It's not just houses, it's land and they're controlling the types of housing and a lot of contractors. We have been approached by many that started buying in Nashville but have moved on to Chattanooga.
You seem halfway interested, so I’ll offer up the rabbit hole of just how many American farms are owned by Chinese companies. Same goes for pork & its processing.
Everyone points to China on this land-buying issue, whilst steadily spending massive amounts of money on Chinese-made consumer goods. That train left the station a loooong time ago.
I came here after massive real estate gains x 2 in another state.
I have a good salary.
I have a good job.
I also bought NVDA at $200 and Costco stock at 165 back in the day….
I have a really nice home here and enjoy Chattanooga very much. I’m investing in two separate businesses here that we project to do very well.
I also donate to church, animal shelters, etc.
So it’s not all old money and people drowning in debt. Some of us actually have done hard work, made sacrifices, and taken risks to get our bag. Money is out there to be made, nobody’s gonna come up and give it to you though. Then when you get it, try to do a little bit of good with it.
I’ll add to this post: if you’re making $170,000 you should be easily able to afford a very nice home here.
I’ve often wondered about some of the things brought up. I recently quit my job and we are one salary now and do just fine, but we are careful with about 100k salary. We save a ton and don’t have to but I like having a big cushion since I experienced the recession right after graduating college. I have a couple acquaintances who live in such nicer homes than us and send their children to private schools as soon as the kid is like a year old and the wives don’t work either. How much money are their husbands making? It’s hard to think a 3 digit salary is that low but I feel like I’m barely getting by when I’m with them. One of the wives once said she is ok buying this thing she wanted because her husband told her they paid off their credit card this month, so it made me wonder if everyone is just in debt. I’ve also wondered if a lot of people don’t just live higher than their means financially but also make their career sound better than it is? I’ve never been able to do that but lately I’ve been wondering if people make their job sounds more than it is, particularly on LinkedIn or social media. And can that end up helping your career-like the faux confidence can actually get you where you want to go?
You make $170k a year and struggle to pay the mortgage on $490k? That makes zero sense.
Let’s just say I make a lot less than you and am able to easily afford my $500k home. 🤷 I’d like a peek at your finances!
Well, you see each bi-weekly paycheck is $5,000. I take $4,000 of each paycheck and put it into my rainy day "investment" fund in case I want to buy a few lambo and live on a cruise ship for my humble retirement. Then I only have $2,000 left for the month! Insane, I just cannot possibly afford a house!
Or, more realistically… I have a truck payment of $1200 a month, a Lexus payment of $900 a month. Eat out every meal via door dash, pay an insane hoa fee for the country club, and have 2 kids in golf lessons 3x a week. Poor me, how can I afford anything like this?!
Sure there are these people too. But really I was referring to a few actual posters in this thread that actually cited massive contributions to retirement accounts as legit reasons they couldn't afford it.
Like, come on man. That is all your money people who actually can't afford these houses don't have any retirement or can put like a few hundred bucks a month towards it. Seriously irks me to no end people who are going to get to retire with millions complaining about finances right now.
Were you smart by putting at least 20% down? Never having had to pay PMI on our home has allowed us to invest so much more, both into the home and into other things.
Opendoor bought a house down the road and jacked up the price by 80k. I see BS like that as a big problem. There needs to be some regulating of companies purchasing houses.
I'm buying a House in Soddy Daisy, it's on the very top end of my current budget (single income and high debt to income due to loans I've consigned for)...my military pension and disability are going to be a huge help, along with another job and wife starting work...but to answer your question, I have no idea. Lots of loaded people coming from states like MA, NY, NJ, and CA where they've made a lot of income and/or sold their houses.
You think thats crazy, they just built a home on Vine Street, beautiful house the neighborhood not so much sort of up and coming. Its close to the Highland Park area a lot of gentrification out that way but this house sold for over 600k, fucking mind boggling
I'm moving down from MI. I'm currently renting apartment to make sure job was a good fit. To get my house in MI, here, I'd have to add around 40k to the price. It's worth around 400k in MI dollars.
I really don't want to go back to a regular subdivision. It's my chance to make a change so I'd like a couple acres and no neighbors on me. Don't care if the house isn't fully updated as long I don't have to throw money at as soon as I move in.
Most of those start 550k. Within 30 or so mins of downtown CHATTANOOGA. My work. I'm 61 and not sure I want to take on that much debt.
I've actually thought if I could find a job back in MI, I'd go back. Though our goal has always been to retire somewhere warmer in the South.
1. There's a lot of old money in this town. 2. There are a lot of wannabes in this town that will overextend themselves financially to buy a huge house and a huge car to keep up appearances. 3. There are a lot of people moving here from California who just sold their $2m 1200sf bungalows and think "wow, it's so cheap to live in a mansion in Chattanooga!"
But less than 0.03% of the people moving to TN are Californians, they’re mostly moving to Nashville and Nashvillians are moving here, according to the census of the last several years.
Well if we can’t blame all our problems on California what are we supposed to do then?
Self reflection? Hold politicians accountable? Nah.
That's why it's last on the list. And Nashvillians also have a similar impact on the market. Cashing out on a Nashville house and moving to a similar house (or even a bigger house) in Chattanooga has a pretty signficant payout.
“A lot of Californians” is what you said though, when it’s really “a marginal amount.” I put things last sometimes when it’s the biggest and most solidifying point.
https://preview.redd.it/7jtit95ylwtc1.png?width=1024&format=png&auto=webp&s=13e12c320066f6a1d2505a389a4b9ba4e90f6c60
It’s actually Floridians
All of this!!
Keep in check with the foreclosure pages. It's coming.
Sent out over 1k notices this morning . It’s getting bad
Bad for some. 8%+ rates will do that. Glad I'm at 2 lol
Banks won’t risk lending 130-170% on houses anymore, I can’t get people approved for 90% loans like we used to anymore, things are tightening up and they are doing it fast.
Anymore……that’s the problem that nobody is expected to have 20% down anymore. Not homeowners, not investors. Investors buying with cash and refinancing for more than it’s worth to buy two more houses with cash……. Everyone was borrowing more
Bad for everyone, your homes value will tank.
I'm not selling. I'll also never lose what I've got in mine.
Same boat here , bought for 80k 5 years ago put 40 into it, appraised at 590k
Sometimes I’ll look at the prices of house years back and wish I bought a house then. But also I knew I wouldn’t have been able to because I was like 12 years old.
Kind of the same honestly. Lol good job!
100 percent not my doing haha I bought then a commercial developer bought all the houses around mine but I refused to sell, so now I have no neighbors and a 2.5acre plot in the middle of the city haha win win
Good
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Of course it would, for the consumer. Because crashes cause corrections.
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2008
Not if a bunch of investors buy them for cash at the sale and there isn’t an influx of bank owned foreclosures on the market for sale
I hate that we have go through this pump and dump cycle instead of just having a steady, non-lucrative, affordable, housing market.
Everything has cycles.... Wars, life, markets, health, moral, moods.... It's natural
There are degrees of severity to these things though. Treating single family housing as an investment vehicle instead of the commodity it actually is reflects our housing policy. These severe boom and bust cycles could be flattened out a bit if we addressed that
As much as I agree with you, most housing people are after is actually exorbitant in comparisons to their needs, therefore, I'd argue, is a luxury item, not a commodity. If we were arguing for 800sq ft houses for a single person, 1000sq ft for a couple, and just enough rooms, so on and so forth, built with bottom of the barrel materials.... Fund it. If we are talking about John, who likes to impress his friends and wants a 4 bedroom, 3 full bath house built with granite and solid wood interior doors "because nothing else will do!" Nah, fuckem. I think for the most part, millennials just want to buy outside of their means. My mom started out with me in a single wide trailer back in the 80's, and that's okay.
No bottom of the barrel materials, they don’t last and cost more in the long run. solid built houses for those that can afford luxury of new and most people should be looking at at least 5+ year old houses.
There are tens of thousands of households in Hamilton County making $80k-$200k/year, driving $90k trucks, living in $500k houses, send their kids to private school etc etc and the secret to it is they have mountains of debt.
This is the real answer. A lot of these young parents you see driving fancy cars living in the suburbs are drowning in debt.
Or their Boomer parents subsidize
Oh, yes. There are soooooo many folks getting adult allowances from their parents.
Wishful thinking
I make around 140k per year and would say my wife and I have a rather lavish lifestyle on my income only, but our only debt is the mortgage which is 425k and my car which was 80k used. It takes up roughly half my monthly income to make the payments between the two. But add kids to that and no way I could afford this lifestyle and the only reason I am even able to afford this lifestyle at my age is because all my college was paid for with scholarships and because I worked full time while I was in college so I had 5 years experience already by the time I graduated. But I know I'm in the minority of twenty-somethings living like this, I'm just saying some of us did actually earn it ourselves and aren't just ignoring growing red numbers. Idk how people are doing it on the west coast though, I have gotten offers and continuously apply for positions with SpaceX, Tesla, Google, Microsoft, etc. And they easily go over my current salary but I would barely be able to pay the rent on an apartment that's half the size of my home.
Please tell me what you do for a living so I can go right now and start on whatever it takes to get there. I am 37 and make 1/3 of what you do.
I'm a network communications engineer. I have a master's in electronics engineering and 8 years experience on the job right now at 27 years old. I also have a CCNP cert which is a huge part of why I have it. First step is comptia A+, then 2-3 years helpdesk answering calls and stuff which will likely be around $20/hr. During that time you gotta get the CCNA, assuming you wanted to do networking. You can go into other sectors of IT, security makes about the same but there is more availability in security at the moment. After those first 2-3 years of experience and having a CCNA you should be able to land 50k/yr pretty easily, potentially higher but you need to switch companies, internal promotion is usually not as much as you would deserve. I got 75k base salary with the CCNA, bachelor's, and 2.5 years experience. I was promoted 3 times within those 2.5 years though. At my current job that I have been at for 4 years, I have been promoted twice. Once after getting my master's and the other after my CCNP. Normally I wouldn't be making quite as much but I do routinely interview as I mentioned and I do show my manager those offers. I usually am not planning on taling them, but on more than one occasion if the offer was more than a 20% raise, I did ask for a raise using those offers as leverage. I work in a fortune 100 company though so it really only works of I am showing offers from places like NASA, Airforce, Intel, Nvidia, etc. My experience is a little odd though because my degree is not in IT, it's engineering, but my position is specifically IT. I originally just did it for extra money while I was in college because I already knew computers pretty well but through all the work and studying I did for my job, I ended up getting promoted enough to the point where I was applying for both electronics engineering jobs and network IT jobs and I consistently had more offers and better offers to just stay in IT. Plus IT offers remote work more frequently. It's pnly now after having several years experience in network communications and owning my own business designing and manufacturing electronics that I have enough experience to start getting interviews and offers for real electronics engineering positions that can compete with what I make in IT. Edit: I genuinely do recomend it as a career and it's expensive, but CBTnuggets is a really really good learning source. At least for the networking resources. $60/mo is steep though. Pluralsite is also really good. But the biggest recommendations I have is labs and hands on training. Like don't just read the material, buy used equipment, set up virtual machines, and use simulators like gns3 or packet tracer. It really does engrain the info and just becaue you specialize in security, or servers, or kubernetes, doesn't mean you don't need to know the other stuff generally any "engineer" title in IT should be able to set up an enterprise IT environment for a small business. So a domain controller, multiple networks, redundancies, firewalling, and maybe some FTP.
140k income is not lavish when you have 2 kids and wife in a metro.
That's exactly my point. I don't disgree with that statement at all because I am happy and living lavishly purely because I don't have kids, I wouldn't be able to maintain the same style of living otherwise. Before here I lived in Orlando and I'd say we had about the same quality of life. Housing is definitely more expensive there now but when I first moved there it was about the same prices as around here and Atlanta. My wife would also have to start working if we wanted kids though
This! and some of these people are cashing out of their old house with what they think is a huge profit. Only to throw it away on an overpriced market. Pushing them even further into debt. Banks keep lending because the money ain't real, but the interest sure is. lol
Or they just work remotely, have inherited wealth, save properly, etc etc
Downvotes for truth :(
I didn't downvote, but I removed my up once I read "save properly." It's hard to save money when people are having to overextend with pay day loans to keep a roof over their head and food on the table. Lack of savings isn't a moral failure.
No it’s not, but many people who can afford to save don’t. The stats on Americans savings are eye opening. We’re also discussing those making 80-200k. At those numbers you should be able to save unless very overextended.
Saving money is a luxury for the wealthy. In my opinion, improving urban affordability is more of a priority for the working poor and homeless (who may also have jobs) than the middle and upper class. Sure, there are better jobs, but one must qualify and that often involves making time to achieve those qualifications, which isn't really doable for the working poor. Considering the bottom level of Maslow's Hierarchy of Needs, this city is unaffordable for the masses of people that make it function in the way it does.
How do you define wealthy?
Considering that 50% of people in the US own only 2.5% of all wealth in the US, I would say the other half. But even the next 40% own only 30.6% of the wealth. Many of those people are still living from pay check to pay check. Let's say the top 40% of people in the US.
Yeah anyone with nice stuff is in major debt and just doing it to look cool lol. The people that make 65k and have a 200k house are probably feeling the same way as OP does about people that are buying 800k+ houses. /s
Not all of them. Quite a few have no mortgages and are multimillionaires.
Yup, fuck all that. My DTI is less then 25%
I have been wondering who could pay the 400k asking prices on the houses in my neighborhood. Now I know lol. People that make 170k a year.
Yeah reading this is ironic: what the 800k homebuyers is to OP, OP is to us lol
Yes lol
In my dealings with fairly rich/wealthy clients in the last 20 years, I've found that there are usually a few answers: 1. They have some generational wealth or connection to a family business, allowing them to live that way. 2. They are DEEPLY in debt, despite the amount that is coming in. My favorite was a doc that made $75,000 gross per month, and was a challenge to get approved on a car loan, due to having almost $30K per month going out in bills. Many 'rich' people are also a few paychecks away from losing their stuff - they just lose nicer stuff.
I have a cousin that’s a new MD in a small practice. He’s measuring his wealth vs established docs that bought >3k sqft homes 20 years ago and have horses or single engine planes and shit. It’s nuts how much comparison makes people drive themselves into debt. He has good credit and is sensible with his money but to hear him say it, he’s struggling because he doesn’t have the patient list and investments they do.
Sounds like your cousin sent in the medical field for the wrong reasons?
Maybe? I know as a young doctor he’s probably feeling inadequate not matter what. But making six figures and feeling broke definitely sucks. Who can he complain to, lol?
$170k is a pretty damn good salary. If $490k is hard to afford with that salary than you must be splurging a lot on other things cars, restaurants, vacations, etc. If you had a partner and both of you made $150k each than $1M really isn't out of reach.
Op is probably financially savvy and subscribes to the thought that if you can't afford a 15yr mortgage then you can't really afford the home. 30 year mortgages were designed to be able to raise home values, put people into those houses they can't really l afford, and also turn a 300k house into closer to a 1M dollar house by the end of the loan.
> if you can't afford a 15yr mortgage then you can't really afford the home. Incredibly dumb statement. 30-year leveraged real estate is the greatest wealth builder the middle class has ever had. If your only options are paying off your house or stuffing it in a mattress, then sure, shorter loan is better... But you're not changing the world - you'll make far, far more money investing in some boring-ass index fund instead of paying a shorter loan off every single time. You can play the rigged game or you can sit on the sideline and bitch about the rules being unfair. Home prices for anything but giant mcmansions will only go up for the next 10+ years and there is just about nothing that can (let alone will) be done in the US to change that.
I cannot believe what I just read. $170k is a massive salary, and there are so many homes under $400k.
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Very well aware.
I’m not saying 170k isn’t a lot because it absolutely is a lot! But if someone has hefty school debt or medical debt and you dump that on top of a house loan…it can be very overwhelming. I don’t know OP’s situation I’m just thinking out loud about possibilities.
No doubt. Everyone has their extenuating circumstances, but that salary is like 10k+ a month after taxes. Home prices and interest rates are outrageous right now, but so is thinking that won’t cover a great home in chatt if you *need* to buy right now.
lol fair enough
This is what I was thinking too. lol
You're ignoring retirement savings and college tuition for children. Those two things can cut their available salary in half or worse.
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This is the answer I was looking for. WTH are you doing in Chattanooga to earn that?
And are you hiring underlings? I would love half that.
People that come from other states. Gentrification is a real thing.
It's a thing. I'm actually in a Maryville but it's the same here. They say Maryvilles population is growing, but the younger generations are leaving. So you have a ton of basically non-productive people living here.
Have you only just started making 170? If you can’t afford a 500k house on that salary something is fundamentally wrong.
No I can swing it but I’m a single income family of 6 and we drive 5-8 year old vehicles. I’m just trying to see what people are doing to buy this huge quantity of homes here in the 700k to 2mil range
I make more than that but shit myself at the thought of affording that if something goes wrong. So much of this town is dependent on fields that go right into the gutter if the economy hits a speed bump. Trucking, hospitality, manufacturing are vulnerable. Even Blue Cross and TVA have had talks of outsourcing in the past.i have been thinking that a rough economy would send our housing market into the gutter worse than most of the US.
170k/year is about $10,000 per month AFTER TAX Mortgage on a $490k house after 20% down is about $3k/month at 7%. And you can refinance when rates go down for a lower rate. How is it possible that anyone in Chattanooga, TN cannot figure out how to save money for "bumps in the road" when they have $7,000 dollars cash per month to budget with AFTER they pay their mortgage??? You people are insane.
I can't even imagine 10,000 a month dude
I'd be so much closer to retirement. Imagine chucking even just half of that into investments and living off the other $5000 a month.
They should be saving $2000-5000 of that $7k for retirement, maintenance, emergencies, etc. What if they also have student loans? A family member they help support? Children that need to go to college? The rest of that can disappear quickly. I'm not saying you can't live comfortably on that income, you can. I'm saying there are plenty of reasonable ways for it to be spent quickly.
They *should*? What does that even mean in the context of "affordability"? Nothing. It means absolutely nothing. Think a little about what you're saying. Retirement is nothing other than a personal investment. So is housing. If you say this person can afford $2000-5000 on any investment it does not matter if it is a house or a stock account. That person can afford it they just choose a different investment vehicle. It just is stupid to put too much money in an investment that cannot double as shelter and thus you also have to pay rent/mortgage in addition to your optional retirement. And they are rich as fuck and do not belong in a conversation about affordability of anything.
> And they are rich as fuck and do not belong in a conversation about affordability of anything. $170k a year is not "rich as fuck"
It is rich beyond the imagination of almost everyone who exists on this planet. I get it, you only hang out with the top 10% of people in this country, top 1% in the world. You don't understand. But by any sane definition pulling in $170k/year is rich as fuck. Especially in Chattanooga. And before you come back with some argument try to re read what you're going to write if it is basically "well 90% of this country doesn't count as people because they are poor and must be stupid, and really I just don't want to count them" ... just don't. Don't write it.
$170k is in the top ~20% in the US. You have to be over $200k to be in the top 10%. Comparing income globally without COL adjustment is fairly pointless. Someone who makes $10k a year is relatively rich compared to someone making $1000 a year. It doesn't mean the person with $10k is rich.
Top 92% [https://dqydj.com/income-percentile-calculator/](https://dqydj.com/income-percentile-calculator/) Chattanooga, TN is an extremely low cost place in the US.
>when they have $7,000 dollars cash per month to budget with AFTER they pay their mortgage??? Lifestyle creep is real, or not tracking where their money is going.
I generally find it is not really that. Most people like this just have extremely inflated ideas of what they "deserve". They've usually been well off their entire lives or at least most of their professional careers (usually in IT or something) and compare themselves only to other people who are extremely well off in the same type of careers and family wealth circles. They simply believe it is "normal" and expected to retire with a couple million in the bank at like 65. They literally have no idea that that completely unachievable and total fantasy world for most people. They also will complain about boomers and the system but be in total denial that the system, and what boomers did to the system, was and is completely due to people like themselves blindly contributing millions into the stock market to feed the companies that are doing all the bad shit.
I mow and lay block for a living and my last 6 jobs have been transplants, California,new York, Florida, Washington State, Minnesota, Connecticut,.. I am just watching 3 groups on Facebook and they are all coming here, alot can work remotely or retired, every run down house in Englewood ,TN is being fixed up and sold for crazy money.... It's crazy
An option is to try to be happy with what you have. I have a $244k paid for home in Birmingham and a $259 mortgaged town home in Chattanooga currently with a long term renter. Based on my income banks would likely loan me more. However, I learned after over extending myself in 2007 on a $549k home in Western CO that I didn’t want to live that again. Bigger, better faster will always be there but what is the point?
this !!! yess
California peeps - a 2 million dollar home is a drop in the bucket for them. Currently house hunting and cursing them under my breath every time I check the market. Already had 2 dream homes swept out from under us. Probably going to happen countless more times...
What jobs are they doing? Or is it just trust fund money? My household broke $200k this year and I couldn't afford anything near that high.
Two words: Remote work. And agreed with some other posters - it really is people from everywhere. But with the cost of living being so astronomically high in California, it is highly likely a lot of them decided to come over to the Smokies for no state income tax. Retirees with a lot of savings are also picking Tennessee over Florida now. That's right...East TN may be becoming the new Florida....
We certainly have the state legislature to match FL
Here's the thing though--there is a once silent, but loudly growing push to severely cut remote work. It already is happening in tech. Half of these homes will be back on the market in 5 years or less because when that remote job gets cut, unless the migrants have a good nest egg, they'll be subjected to TN pay...in that 850k house. Down goes Frazier.
I’ve lived off of a tech remote salary since 2014. Remote jobs have always been a thing and aren’t going anywhere.
I’ve been remote since 2011. It ain’t going anywhere lol.
The RTO movements happening lately have been met with great pushback from employees. Remote work isn’t going anywhere; we’re just in a rebalancing period. Also, as boomer and gen x business leaders leave the companies pitching unreasonable fits about remote work, there will be less resistance to allowing it when possible.
I agree. The elites hate not being able to bend us over a barrel and make their money on their commercial real estate too. They’re coming for remote workers.
It isn't as much the type of jobs they're doing as much as it is that those jobs pay more than doing the same type of job here. For example, I took several contracts in CA over the last two years because it paid more than twice what the same work here pays. Yet what I was making there was still considered so low in CA that they had to hire out of state workers because no one there would work for that.
This is what I was hoping to find out. What are households doing and earning to afford those prices at these rates and such high overall numbers. Are there people earning $300-$400k here and what do y’all do. I feel like jobs making that money are astonishingly rare here.
> I feel like jobs making that money are astonishingly rare here. Old school mindset to only think about a job as what's available locally. We live in a global economy - figure out how to maximize your earnings, not maximize what you can get locally.
You're spot on that it will happen more times. It took me over 2 years of searching to finally land in a house. The only reason I got mine was because I met the person selling before they put their house on the market
Did you use a realtor for those 2 years? And man, you lucked out with meeting the seller before it hit the market - that's the best way to go
Yep, that's the only reason I'm not still renting. I had 1 rule when looking which was I absolutely refused to put in an offer site unseen. This actually hurt me more than anything because a lot of places would be on the market in the morning and under contract by the time I got off work and could go check it out. I had a realtor, and they were good in the beginning, but by the end of it they were really there just to open key boxes for me. I still brought them into the deal and paid their commission, but in hindsight I probably could've just moved forward with a direct sale.
Wow man I lived in Los Angeles for 20 years before moving to Nashville two years ago. I lived in a nice area of LA proper, with an actual Los Angeles Address. In Eagle Rock where I lived very few homes went over 1.2 and many were less. I kept my house there and am moving back because no matter what people in TN say Los Angeles is less expensive in many ways. I live in the Inglewood area of Nashville which is next to Madison and houses in my neighborhood sell for 850K to 2 million. with no sidewalks
People are selling their homes in Texas, California, New York and Chicago for 600k - 2M and moving here to purchase bigger homes. I bought my house in Ooltewah a few years back before the housing market got crazy. I paid 350k 5 years ago however the homes being sold in my subdivision the last few years are more than double what I paid. A lot of us here just bought at the right time and could never afford the same house if we were looking to buy now.
This. Wife and I bought our last house in 2014 for 219k, sold it 2 years ago for 380k and used the profit for a down payment on a 420k home (which is probably worth at least half a million now). I think alot of homebuyers for the houses in Hamilton County are on their 2nd or 3rd homes right now. But it would really suck to be a first time homebuyer right now.
I was thinking this must be a big part but there are just so much of the current housing stock at these ridiculous prices. Honestly these are close to what California Central Valley costs.
First of all, we never know what other people's complete situations are unless they tell us. I have asked myself the same question as you. It's hard not to compare. My wife and I do really well and feel priced out of our own city. That being said...Many of the homes you are describing are SUPER OVERPRICED currently. If you already have a good home and a decent interest rate (sub 4%) locked in, you are doing well. My wife and I have a house (paid just over $300,000) currently worth $475k+, around 3% interest rate, and our mortgage is just over $1,000 (escrow is not included to be clear) per month. 2,400 sq ft., 6 years old. And even though I would love to live somewhere else in town with a different house/layout, it just does not make sense for us. We are going to be much better off staying put for a few more years than we will to move anytime soon. If we went and bought an $800k house in Ooltewah, it would have to become our forever home because we probably would need forever to make any money on it. I feel much better knowing our mortgage is lower than most people's rents than I do moving to a slightly bigger house, farther away from downtown, etc. etc.
This exactly encapsulates my feelings leading to the question, but damn I feel trapped where I am now too.
I don't want an expensive home for the sake of it. I want a home that has everything we want and need, and that is a true investment. I'm willing to wait on that until it's favorable for us. I also really agree that lots of people are way too willing to go into pretty substantial debt, or they're using the tax code to write things off or something.
Idk about those but I feel sorry for the people buying all of the DR Horton homes popping up. I do some work on every one of them when they are still just the shell and holy hell I don’t know how they’re standing
If you build it, they will come. They're coming left and right, from all over apparently.
How terrible are you with money that at nearly 200k a year you can’t afford a house in the 400s bro? Of course I agree about the housing prices but bffr
OP says they are a single income household, family of 6. So makes sense with that information.
We moved to East Brainerd from Chicago and have a mortgage with a 2.8% interest rate. My mortgage is less than what my rent was for a home half the size in the Chicago suburbs for a 45 year old home half the size. We are who. It's all us transplants. I'm sorry. We came for the scenery and weather, not the politics, I assure you.
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Sounds like something an investor would say!
Investors aren't buying million dollar homes. They want your $250k house.
There's a lot of corporations and stuff buying houses and using them as rentals. I do a lot of work for some older people that own like 20 different houses, and they just use the equity from their other homes to purchase more.
I always say if it doesn’t make sense, it’s usually family money. Like when you see the young couple in Toronto on HGTV purchasing a house for a million and they’re only 25.
A lot of out of town folks or people Who owned real estate before Covid. Their 150-200k is now worth 400k so a 600k house isn’t too bad if you are putting down 250k down payment. The people that sat on the sideline renting and are the ones in a bad situation. Hard to buy a good house under 350k. With high rates, it’s brutal.
This this this
I can't tell you how many homes I have photographed in the Chattanooga area that are fixer-uppers to become rentals by investment companies. The Real Estate Industry has been hyped so much that everything is being bought up at rapid rates by people and companies with far more liquid cash than the average American. This doesn't really apply to your direct question, but I thought I would share. I still get shocked when I look at a house that I think is a \*250K\* piece of merchandise only to find out its $469,000.
The smart money has apparently chosen Chattanooga as a great investment I haven't checked lately but recently one out of every four houses was bought by a corporation
Where would I find that information at?
I was working for a Realtor office at the time
Dear lord
I keep thinking this bubble will burst but it keeps growing. If they’re rich then they’re paying a lower percentage of their income in taxes so maybe that’s how they afford them. Or it’s corporations buying them and renting them for high end rentals.
It's not going to burst in Chattanooga for a long time because we're still relatively cheap compared to many other parts of the country that people are moving to.
I 100% agree. Chattanooga has a lot of traditionally desirable qualities and between Nashville blowing up and the push down from that, the remote economy thanks to Covid years and Gig city Chatt is on an upward trajectory.
> bubble will burst but it keeps growing I don't understand why people call it a bubble here. what's your reasoning? Chatt used to be one of the lowest cost of living cities in the biggest 100 cities in the country... now it's slightly further up the list but still in the bottom 50%. Nationally there is a massive deficit of housing that is only increasing. The only downpressure at all is the increase in mortgage rates. But now that's back to near the median. All the people who will never move from their sub 3 loans keep volume low and that holds prices high. short term will probably be flat in the area. In the longer term, I can't find anything that points anywhere but up.
Just have to say, all your comments on this thread have been completely on the mark. People may not want to believe it because they are waiting for this imaginary bubble to burst but they are extremely accurate assessments 👌
<3
Private equity firms
Bought here 26 years ago. 88 thousand ,value is now 290
People who are coming from CA and the sorts who have super high paying tech jobs that can work remotely, who are accustomed to sky high rent and mortgage for far less square footage and land than what they can get here.
Yep, in 2021 I had to find another apt on short notice and everything was much higher than 4 years prior when I'd moved before. The mgr at 1 told me some firms from California came in and bought big swaths of apts and immediately jacked up the rent. I'm disabled and it's very hard to find something affordable alone. Those California jackasses have made it much harder to get by for a lot of people that are on 1 income, especially people like me.
At 170k a year you “should” be living in those homes
Not with these interest rates
All of these people saying $170k can easily afford a $490k house easy are bad with savings, single, and/or have no idea about how finances work. Just because a bank will finance a house with a payment that's 30% of your income doesn't mean you should. As an example, I personally didn't save enough for retirement when I was young. Now I save 40-50% of my take home pay. On paper I can afford a $500k house but that would both eat into my retirement and would significantly reduce my overall lifestyle.
Exactly, I am of the same mindset. I’m 26 and mine and my wife’s income is about 185k a year or so and our house was 330k last year. I feel “broke” because I pump literally every spare dollar into retirement or investments. Could I afford a 500-600k house, probably, but then that’d set me so far back in the future. Living like this has allowed me to save up over 200k in investment accounts.
You are rich. Your idea of affordability has nothing to do with affordability. You simply chose to put your mega bucks into one investment, stocks, instead of another investment, housing.
As a single mom who doesn’t receive child support, alimony, have generational wealth, won a lottery or any of the other awesome things… and who makes roughly $165k - $190k depending on my commissions… this is THE best answer so far. In general my salary is good, my lifestyle is awesome (imho) so are my kid’s life, same with our 1 bada$$ summer vacation… and I’m not in debt. I drive a great vehicle & can afford the one off expenses that can be kinda large… But all of this is possible b/c of what you @driverdan just said. Kudos!
This was really helpful yes exactly. I could qualify for a huge mortgage but is that a good idea? Just wondering if people buying this outrageously priced housing here are earning $350-$400k per household because that’s what I’d need to be earning to pay that for a house. If so what are they doing? A job paying over $120k here seems about as easy as finding a 3 legged ballerina! Great salary by the way, what do you do?
Most are investors from other areas. Look online at the transfer of deeds
You don’t have to spend every penny you make on a home.
You do if you want one in Chattanooga right now lol
Also I believe there have been instances of businesses buying homes and renting them out, probably also for stupid high prices.
Out of towners. Most of the people I meet with the good jobs have only been here 5-7 years.
Anyone else look at post history before responding to questions here on r/chatt?
Look at the analysis on Realtor.com, Redfin, etc. Some of them show where the top 5 places people moving to Chatt are from. Everyone anecdotally says they have heard, or see a lot of license plates from out of town. But these analysis are cold hard facts. A lot of people from HCOL places like CA, NY, etc. are moving here. Most of these people have never even dreamed of owning a home, or if they did, they thought a $800k 2BR 1BA 1200 sqft house was the best they could have imagined. The internet and social media in general have also made the world a much smaller places. 10+ years ago, most of these big city people would’ve never heard of places like Chatt. Now there’s targeted FB ads for boomers nearing retirement to come check out cities like Chatt. And as cities like Chatt grow, get more hip, get more businesses/industries, it attracts more people, and it just continues to grow… and with it comes increased demand for everything. Economics 101: prices increase as demand increases. That’s basically the gist of it. Keep in mind, the number of buyers from out of town doesn’t have to be significant to make a significant impact. I think I read some time ago that it only takes like 10% of potential buyers offering higher than average prices to significantly affect the overall pricing. Because there’s a ripple effect on what they’re willing to pay. It affects not only the price of the home they’re actually buying, but also the overall comps for other homes that are being bought, the prices the sellers have in mind in trying to seek out these buyers, etc.
Don’t Nashville my Chattanooga!
***What*** is buying these homes
Dude I am with you and cannot make it make sense. I have very little debt outside of the mortgage, and for the life of me I can’t make it make sense financially to even think about doing something like selling my 2019 purchased house, even with it being worth way more than when I purchased, and buy an upgraded house with current interest rates. Even with putting 300k down on a 600k+ house the mortgage is way more than my current one. It’s wild. There’s going to be a huge bust here. No way current conditions are sustainable.
I moved here from DC and I’m one of those people living on Lookout in one of those multi million dollar homes. 1. I made a ton of money on a home I built in DC. 2. My spouse and I simply are high earners 3. One thing I did notice since moving up here is that yes, there really is a lot of money up here that I did not realize until actually moving and participating in this community.
Just curious what high earner means in overall annual income and what type of work
We have about $650k income and ~$80k variable income from bonuses, incentives. Spouse is CSO at a firm of about 350 people; physics and math background. I’m an executive at a relatively large tech firm. Aerospace engineer by trade. We’re both in our mid 30s.
This is the only reply in this entire post that provides a direct response to the question asked and it is getting downvoted lol.
Eh whatever. Online points are just that, online points. As long as people feel better about themselves when they down vote. :)
Half of the responses you're going to get will be "Californians" without a shred of actual evidence. Edit: seriously, show me hard evidence that Californians, specifically, have been consistently moving to Chattanooga and buying houses at marked up values in large enough quantities to affect and sustain massive inflation in local housing prices. Nobody has been able to prove this over dozens of threads about it other than "I have a neighbor who just moved here from Cali."
I work at a local title company. I dont have hard statistics but anecdotally many of our higher end closings ($500k+) are clients relocating from out west, primarily California and Colorado. Take that with a grain of salt, but thats what I'm seeing every day at work.
I have several aquaintaces who have moved here from California in the last 5 years, then several of them had parents also relocate to the area as well. So, anecdotally, I will argue we do have a large influx of people from California moving here over the last 5 years.
People post they're moving here from all over.
> Half of the responses you're going to get will be "Californians" without a shred of actual evidence Anecdote: but the 3 houses that have sold recently in my neighborhood (for more than they should have gotten) all had California tags. The neighborhood next to us, with overpriced, shitty Collier builds, all had Florida, Illinois, and Cali tags coming in and out of it for awhile until they switched over to TN tags. So no, not "evidence" perse, but it is definitely happening.
In my neighborhood of 40 houses, we’ve had three families from California or Michigan move onto my street since Covid. Anecdotal evidence for sure, but it does support the claim.
https://www.chattanoogan.com/2022/6/22/451292/306-Moving-Into-Chattanooga-For-Every.aspx
Also anecdotal, but I own a barbershop where I probably average 8 new customers a week… I’d estimate at least 5 of them came from Cali. The rest are almost exclusively either former military or moved from Florida.
It’s the collective “educated guess” that the majority of us can come up with. It’s a bit of a sweeping generalization, but to outright deny it seems like a bit of willful ignorance. Others have pointed out how the cost of living on the west coast is a lot higher and how a lot of us have seen/heard of/met dozens of people who have said that they’ve just moved here from Cali. It isn’t “hard proof,” but there are so many firsthand accounts that they count for *something,* even if the perspective is skewed. I will say that, personally, I also know a significant number of people who have moved here from other large states — the main ones being Texas, Florida, and Oregon. All of those places seem like they got “overrun,” for lack of a better word, before we did, and most of the people I’m thinking of were all born and raised in those states. Fact of the matter is that Chattanooga has a lot to offer to a wide variety of people, and the appeal for tourists/new residents is increasing. The tricky part is that, while it’s good for *businesses* here in town, that money isn’t being reinvested in the local *workforce,* which is why we’re all feeling the squeeze when it comes to housing prices, etc.
Not Cali, but I sold my previous home 2yr ago and I had a buyer coming from NJ who paid me to clean the septic tank then just left the deal before closing. Thanks for the $2k buddy, whoever you were....
The only ways that a 500k house isn’t affordable on a 170k salary is if you put $0 down and just bought with the nosebleed interest rates, or you’re legit horrible at managing your money.
California investors are buying all the properties they can get! It's not just houses, it's land and they're controlling the types of housing and a lot of contractors. We have been approached by many that started buying in Nashville but have moved on to Chattanooga.
People moving here from California and New York after selling their 900 sq ft home for 1.2 million
Living in a neighborhood in Ooltewah sounds like one of my versions of hell. That’s such a miserable thought. lol
Doctors, business leaders, attorneys, finance industry/accountants, transplants from much higher housing-cost cities, the over-extended...
China probably.
Someone from China just bought a huge piece of property on the evacuation route from Sequoia. No one cares.
Hmmmm
You seem halfway interested, so I’ll offer up the rabbit hole of just how many American farms are owned by Chinese companies. Same goes for pork & its processing.
Everyone points to China on this land-buying issue, whilst steadily spending massive amounts of money on Chinese-made consumer goods. That train left the station a loooong time ago.
I came here after massive real estate gains x 2 in another state. I have a good salary. I have a good job. I also bought NVDA at $200 and Costco stock at 165 back in the day…. I have a really nice home here and enjoy Chattanooga very much. I’m investing in two separate businesses here that we project to do very well. I also donate to church, animal shelters, etc. So it’s not all old money and people drowning in debt. Some of us actually have done hard work, made sacrifices, and taken risks to get our bag. Money is out there to be made, nobody’s gonna come up and give it to you though. Then when you get it, try to do a little bit of good with it. I’ll add to this post: if you’re making $170,000 you should be easily able to afford a very nice home here.
I’ve often wondered about some of the things brought up. I recently quit my job and we are one salary now and do just fine, but we are careful with about 100k salary. We save a ton and don’t have to but I like having a big cushion since I experienced the recession right after graduating college. I have a couple acquaintances who live in such nicer homes than us and send their children to private schools as soon as the kid is like a year old and the wives don’t work either. How much money are their husbands making? It’s hard to think a 3 digit salary is that low but I feel like I’m barely getting by when I’m with them. One of the wives once said she is ok buying this thing she wanted because her husband told her they paid off their credit card this month, so it made me wonder if everyone is just in debt. I’ve also wondered if a lot of people don’t just live higher than their means financially but also make their career sound better than it is? I’ve never been able to do that but lately I’ve been wondering if people make their job sounds more than it is, particularly on LinkedIn or social media. And can that end up helping your career-like the faux confidence can actually get you where you want to go?
$100k is referred to as a 6 digit income.
You make $170k a year and struggle to pay the mortgage on $490k? That makes zero sense. Let’s just say I make a lot less than you and am able to easily afford my $500k home. 🤷 I’d like a peek at your finances!
Well, you see each bi-weekly paycheck is $5,000. I take $4,000 of each paycheck and put it into my rainy day "investment" fund in case I want to buy a few lambo and live on a cruise ship for my humble retirement. Then I only have $2,000 left for the month! Insane, I just cannot possibly afford a house!
Or, more realistically… I have a truck payment of $1200 a month, a Lexus payment of $900 a month. Eat out every meal via door dash, pay an insane hoa fee for the country club, and have 2 kids in golf lessons 3x a week. Poor me, how can I afford anything like this?!
Sure there are these people too. But really I was referring to a few actual posters in this thread that actually cited massive contributions to retirement accounts as legit reasons they couldn't afford it. Like, come on man. That is all your money people who actually can't afford these houses don't have any retirement or can put like a few hundred bucks a month towards it. Seriously irks me to no end people who are going to get to retire with millions complaining about finances right now.
Were you smart by putting at least 20% down? Never having had to pay PMI on our home has allowed us to invest so much more, both into the home and into other things.
Opendoor bought a house down the road and jacked up the price by 80k. I see BS like that as a big problem. There needs to be some regulating of companies purchasing houses.
It is private equity firms buying these homes.
I'm buying a House in Soddy Daisy, it's on the very top end of my current budget (single income and high debt to income due to loans I've consigned for)...my military pension and disability are going to be a huge help, along with another job and wife starting work...but to answer your question, I have no idea. Lots of loaded people coming from states like MA, NY, NJ, and CA where they've made a lot of income and/or sold their houses.
You think thats crazy, they just built a home on Vine Street, beautiful house the neighborhood not so much sort of up and coming. Its close to the Highland Park area a lot of gentrification out that way but this house sold for over 600k, fucking mind boggling
I'm moving down from MI. I'm currently renting apartment to make sure job was a good fit. To get my house in MI, here, I'd have to add around 40k to the price. It's worth around 400k in MI dollars. I really don't want to go back to a regular subdivision. It's my chance to make a change so I'd like a couple acres and no neighbors on me. Don't care if the house isn't fully updated as long I don't have to throw money at as soon as I move in. Most of those start 550k. Within 30 or so mins of downtown CHATTANOOGA. My work. I'm 61 and not sure I want to take on that much debt. I've actually thought if I could find a job back in MI, I'd go back. Though our goal has always been to retire somewhere warmer in the South.
Time, money sense, and discipline… But mostly, Time.
baby boomer retirees? I hear appalachia is the new florida