(post by Dee) One part of the Lehman Brothers collapse, bankruptcy and sale that has been controversial is a stat published on the average income of Lehman Brothers’ employee salary: $332,000. How does a company going under pay so much to people that basically let it fail? Beats me!

So I decided to poke around a bit. According to Simply Hired, a job board, average job posted by Lehman paid “only” $98K. See the page here. PayScale shows a higher average salary for Lehman Brothers’ employees, but still a far cry from the claimed $332K. Even if true (surely, the C-suite salaries bump the average!), according to a 2006 article in The Boston Globe, Goldman Sacs paid an average salary of $622,000!!! Wow! And, Business Week’s annual survey of the best places to launch your career, Lehman Came in at #31, with a starting salary rather low, around $50K plus bonus.

Still, when the Census Bureau reports average American income at $50,233, $332K ain’t bad.

But how does this relate to us, real estate folk? Well, let’s look at what $332,000 can afford you in terms of a house (or, in NYC, an apartment).

According to a senior mortgage banker from Wachovia I know well: Assuming credit score of 700 or more, and about $800 in debt (credit cards, car payment, loans) payment per month, with a total housing expense not exceeding 28% (a standard measure required by lenders for best rates and terms – this will include mortgage payment, maintenance/common charges, and homeowners insurance), a person making gross income of $332,000 qualifies for $1.7 million in financing.

But in NYC, with average apartment price of at least $1,200 per sq foot (highly variable, depending on area, condition, building and other factors), a big shot from Lehman can buy at the most a 1,400 sq ft apartment. Not bad but no a mansion, either. My mom has a bigger house than that in Florida. With a pool, LOL.

So, while a salary of $332K may evoke envy and anger from many “average, hard working” people, considering average cost of living in NYC paints a different picture. We may have more opportunities to make bigger bucks here in New York, but we also need to make it just to live here. Gotham ain’t cheap. Just not sure what those people laid off by Lehman are to do now… their expensive apartments they no longer can afford (let’s face it, who is going to pay you this kind of money for no real skills in the real world, Mr. Trader, Investment Banker or Stock Broker) are worth same or less now, and after closing costs and extra time on market, money will be lost. Not good for them, not good for the City. Let’s hope this madness stops soon and we go back to overpaying people on Wall St… It’s good for real estate.