It certainly would be ideal if one´s house payment could amount to 30% or less of their income but I doubt this is the case in most places. For example in US in San Diego, an average montly mortgage payment is $3500 these days! I am quite sure that average salary there is not $11K. Some people used to say that over there we got paid in sunshine dollars... similar can be said about Spain - your salary in ¨sunshine euros¨
In that sense the quality of life is declining in lots of places, not just Spain.

Also, please note that in the States many people pay over 1% yearly property tax, and in some newly developed areas that tax can be almost 2%. My friends on average pay over $10K (some about $15K) a year in property taxes. I think property tax in Spain is about 0.01% or am I wrong?

And for example, with Walmart being the largest employer in the US - do you think that people who work there get paid much more than $1300 a month? ($1300 being approximagely 1000EUR right now)

Life is getting more difficult almost everywhere.

Ola - But are the highly educated professional execs in America earning 18,000?

They are here.

That is the main difference. There will always be crappy, low paid jobs, but in Madrid it is VERY difficult to get anything other than a low paid job.

In America and the UK if you are in a good job you will be well paid.

quote:

ORIGINALLY POSTED BY NOMI

True, if you pay a 300€ rent and earn 1000€ a month, that is not a bad living, but I don't know anyone paying that low of a rent.

I know of quite a few people who pay this much in rent for a room in Madrid and they make it. This, of course, does not include expenses.

Dean,

Let's not be fooled by this great money making that people think happen in the US. It depends on what you study. Teachers are among the lowest paid in the US, but they expect them to have a lot of education and to be professional. Now, take your example of business execs. Yes, they earn a lot of money, but then we get to an important question, which was posed in a sociology book, whose job is more important?

I am not asking anyone to answer this question, but if teachers are as important as society says that they are, why aren't the salaries higher? This is even with teacher unions pushing for higher salaries and they are still relatively low.

I am in the US right now and look at the classifieds and with companies downsizing and outsourcing, even your entry level jobs have gotten much lower as far as salaries are concerned. With the economy not being so great here, peopel are hanging on to low paying jobs just to make ends meet because they don't know if they will go into work the next day and get a pink slip and see there job go overseas.

So, all in all, I think that it depends on what you study and who you know to earn the BIG BUCKS in the US. If anyone sees this differently, please chime in and let's create a healthy dialogue on this topic.

Thanks,

Shawn

Redwood - I can only speak for the UK, I took the American generalisation from previous posts in this thread.

With the current high cost of living and low salaries, do the members of multimadrid think that a house market crash is likely in the next few years?

deano6410,

Yes, I expected this response

I didn´t mean to disagree with you but what I meant to say was that even though in the States (I don´t know about UK) yes, people get paid a lot, their spendings are skyrocketting - they pay outrageous mortgages (like I said - on AVERAGE $3500 monthly), outrageous property taxes, outrageous medical insurance premiums (I knew a guy in SD that would pay $600 a month only to cover medical insurance for his family) and more. So those high wages don´t take people that far anymore.

BTW, I just got my first job in Spain, at the Spanish company, without the help of any enchufes and I get paid about twice as much as that. I´m not thrilled with my pay but I don´t think its that bad. But! I get more than twice the amount of vacation days I was getting in the States so that makes me happy

Ola,

Thanks for sharing the other side of the story with me.

The costs of living in the UK are about the same IMO as Madrid, and in the UK I am told they work less than in America.
Also, as far as I am aware there are no high property taxes in the UK, and you have the choice between free and private healthcare.

Regarding vacations... I work online, so I generally do 5 days a week 51 weeks per year. But I am flexible, and I can pretty much take time off whenever I need (although it would be mainly un-paid).

Thanks again for the update.

Dean

quote:

With the current high cost of living and low salaries, do the members of MultiMadrid think that a house market crash is likely in the next few years?

Dean,

Most people are saying this because of what they are reading in the newspaper, so to find that answer, we can only go by what we read. We must also think critically about the situation and draw our own conclusions until we see the proper outcome for ourselves.

I, personally, do not think that prices will go down anytime soon and until they do, i expect them to get even higher than we see now.

Shawn

Shawn, I was going off the low salaries and high cost of living, not the newspapers.

God knows how a young person can afford even a small place these days.

I can back up what Ola is saying. The cost of living in big US cities has spiraled out of control. If we were to rent a place like ours in DC, for example, it would cost about triple what we are paying here.

The cost of houses in our neighborhood in DC increased four or five times in the past six years (from around $150k in 1999 to $600-700K now). And this is a neighborhood with lots of major problems (think Lavapiés times 50).

Our health insurance in the US for two adults and a child was over $800 a month four years ago. Here it is around $150 a month (and we don't have to wait a month to get an appointment as we did in the US). Preschool cost--at the minimum--$1000 a month in DC. Here it is free from age 2 1/2-3 (and much better).

Our experience: we make a lot less here, but we need a lot less. Buying a place would be difficult here, but no more so than it would be now in DC. For the vast majority of people it is completely out of reach in a big US city. That's why there is a mass exodus of people moving from the big east coast cities to smaller, cheaper cities in the south.

Dean,

I mentioned the newspapers because that's where many articles are coming from that states that the housing bubble will burst. We already know about the low salaries and the high costy of living. You asked the question and I decided to answer based on what many newspapers are hoping will happen in the future. Notice the use of the word "hoping" because I don't forsee housing prices going down anytime soon.

In other words, we are in agreement, but what can be done about it is the next question. When I mentioned to a student that the government should step in and regulate or do something to help, she was against it and said that it's not the government's problem to deal with. then when I asked her what she be done, she looked dumbfounded and just got quiet.

quote:

ORIGINALLY POSTED BY MARIPOSITA

That's why there is a mass exodus of people moving from the big east coast cities to smaller, cheaper cities in the south.

Tell me about it. We now have homes in Richmond that start at 600,000 and that's because Phillip Morris have moved their headquarters from NY to VA, Richmond, in particular, and execs that were making 200,000+ in NY are making the same salary in VA. The Medical College of Virginia has also built a biotech park and that's attracting big named scientists to Richmond and they don't come cheap. Prices in Richmond have gone through the roof and 35,000 as a single person is nothing now. Years ago, it used to be a good salary.

My first apartment was a studio and rent was only 275 and that inculded utilities and that was back in 1992.

Back in the days
When I was young
I'm not a kid anymore
But some days
I sit and wish
I was a kid again.

Shawn

deano.

quote:

The costs of living in the UK are about the same IMO as Madrid,...

what are you basing that on?

as someone who spends time in both the south of england (where my brother lives) and madrid, i can tell you that (aside from real estate), the cost of living in the south of england is much higher than madrid.

also, you can's say uk and madrid, u.k is a country and madrid a city. you need to compare apples to apples and oranges to oranges, not mix them up.

you need to compare a major city to a major city and the cost of living in london is INSANELY above that of madrid.

take going out to a nice restaurant for example. dinner for 2 at a nice place in madrid, you can get away with it for 45 euros. that is 30 gb pounds, try to do that in london

saludos,
jer...

Sorry Jer, I meant to write "Ths cost of property in England is roughly the same as it is in Madrid, but the salaries are much less here"

I must stress that I am from Northern England, so it is cheaper than the South.

It seems that property prices in America have shot up in the past 5 years. Scary stuff indeed.

I am glad to be well up the property ladder, but it is a shame I couldn't have done it 6 years ago

quote:

It seems that property prices in America have shot up in the past 5 years. Scary stuff indeed.

What many people don't realize is that the NEW HOMES that are being put up in the USA will fall down when the first strong wind comes along. How can so many houses being put up at such a fast rate all be safe? Yes, they pass inspection, but the building material of today is a far cry from the material used years ago.

Brick is too expensive to use and to buy a good, solid brick home menas that you will pay through the nose. At least in the US, it's a buyer's market and not a seller's market. many people are taking advantage of the "low prices", if you can call them that, of homes now.

Shawn

The main point is it's not fun living here is each and every month is a struggle becuase your earing too little money. Speaking of London and the cost of living it has'nt keep hundreds of thousands of east europaians from flooding into the city for work. I know wages are low here but I couldn't imanage living in London on what most of them would be making.

I figured it out as 20.000 a year over 14 pays would be roughly 1200 a month take home which is too little to live on your own, it would mean a shared appartment. On the other hand 500 rent leaves 700 left over with lunches paid for it shouldn't be too tight. The only other negative I thought would have been is most shared places are in the city and Daimler is in the burbs so he'd be looking at about an hour each way to work.

He ended up turning down the job, it was a little bit on the low side.