Home Prices

[PrincessFiona]

Holy COW....the price of homes in the area that we live in has gone up SO much over the past couple of years. You truly can not buy anything nice or even remotely nice for under 200k...even the starte homes in the area are at $120-150 and they are all 80 year old teeny box homes.



How do people afford to buy a home anymore???

I've been looking online and in order to compete with the tons of new homes being built, we'd have to add a lot of upgrades here to get a good enough price to move and be able to buy something the same size etc...

I'm just so surprised because in TX we could afford a mansion for what these homes here are going for.

kris

Kris, Compared to here, those prices aren't bad!

[PrincessFiona]

I don't know how normal people afford to live...truly.

How are people able to afford such expensive homes, too? Our friends here are a 1. nurse (the husband) 2. social worker (the mom) and they just bought a $250 house.

Where do people get the money?

kris

[Vanquisher]

Most people live house rich and cash poor. They live paycheck to paycheck. They don't save, and have no retirement or other funds. I've often been surprised at the amount of people who want to live in expensive cities. I just read that in California the median price of a home is now over $500,000. I am sure that my house in some areas in California would be a multi-million dollar home, and here it cost 165K.

When we are looking into where we want to be permanently, cost-of-living is going to be huge. I want nice things, and I deserve them!! I'm going on 10 years in my marriage being beyond broke. I want to be able to vacation, have a wardrobe that wasn't pieced together on ebay, and sales racks at discount stores. I'd like a new car. I'd like to have a savings and cushion and send my kids to college. I don't want to feel like I am drowning in debt anymore. I am sure that is what most american families feel like.

They lease cars, and put 50% or more of their income toward their house payment (yes that's right). That same California article specifically mentions one couple who spend 70% of their income on their home.

That's not a way to live, in my opinion, and the prices of houses are outrageous. I'm lucky they are still reasonable here.

[BonBon]

They lease cars, and put 50% or more of their income toward their house payment (yes that's right). That same California article specifically mentions one couple who spend 70% of their income on their home.

:thud: DH and I were looking at real estate in Las Vegas and Portland(some good jobs in both areas) and to get our current house and *no* land, we would have to spend waaaaay beyond what we could afford. There certainly are advantages to living in the sticks!

How can people not save for retirement? are they nuts??

[Amiens]

That actually sounds a lot better than here in Seattle. Good friends of ours sold their home- 95 yrs old (no that is not a typo), pretty nice neighborhood in Seattle, 1100 sq ft., 3 small bedrooms, 1 bathroom, unfinished basement, renovated the kitchen, paved a driveway, new backyard deck, finished carpentry, new windows, new front door, and painted it nice- bought it for $195K. They lived in the house for 4 years, and sold it for $350K. They turned around and bought a home in Snoqualmie Ridge (up and coming suburb of Seattle) for $425K. My friend jokes they are now house poor.

Fellow resident in Matt's program bought a big time fixer-upper- 800 sq ft, 2 bd, 1 bath- needs to have the oil tank removed. Anyway they bought it for $375K. The day they closed on the house there was a note on the door saying "If you want I will buy your house for $500K."

Our house we bought in Boise, if we tried to buy the exact same specs in Seattle it would be close to $1 million.

Housing costs are outrageously crazy now.

Crystal

Hey guys, don't knock the older houses -- they have a lot of charm and I'd take that over a new one any day!

Totally true about the house poor thing. My MIL, a public school teacher, said that many of the younger teachers had wanted to sah but simply couldn't and still pay the mortgage and car payments.

One way to do it is to start out in a crappy neighborhood that you can actually afford, on one income, build up some equity, sell that house, move to a nicer (less dangerous) neighborhood, repeat. But many people are unwilling to make that kind of trade off.

We, like most of our friends, bought our first house around age 26.. It was a 1934 Cape for $45 K and we had arrests on our lawn. We fixed it up and sold it after 6 years.Our current house, 1969 rancher was $145 three years ago and again, we fixed it up. We can expect anywhere from $270 + for it now.

I agree about older homes...You know pretty much what repairs to expect. Friends with newly built homes are having to replace the construction grade carpeting in their places after 5 years, while the solid oak floors in our home could be refinished and still look good in 20 years. A tree being blown into the house from a hurrican will cause roof damage on a new house just like on a 45 year old one. Plus, you are more likely to have a certain individuality in the exterior. You might even be allowed to have a clothesline even

[Flynn]

That actually sounds a lot better than here in Seattle.

You can't buy ANYTHING for less than 250$ in the majority of city suburbs here. If you want something livable with more than one bathroom, expect to pay 350$.

[DCJenn]

According to the Washington Post, what most of the newer home buyers are doing here is getting interest only mortgage loans. Basically, it's renting from the mortgage company. We have an interest only loan but we do pay on the premium every month as well. Our house? 1800 square feet- one bathroom, 2 1/2 bedrooms and an open LR DR kit on the first floor. We paid- more than 350k. We live in a less than desirable DC neighborhood- it's still evolving and there is some major infrastructure building going on. In 10 years, it'll be great.

We decided that we wanted to invest here because we want to end up here. We decided on this neighborhood, because we like being close to the river. It's a sacrifice- but worth it. We do invest in our retirement plans at the max every month- and now that I'm not working I'll go back to contributing to my Roth IRA. It's not an easy ride- but it can be done.

The best thing we ever did was hire a financial manager through our bank and we have a plan for investments, home ownership, life insurance, etc.
I encourage everyone to do that before you buy a house, so that you can figure out the best priorities for you family.

Jenn

[Sheherezade]

We looked in Boston before we decided to come to Ohio. In the Boston burbs within a 45 minute commute, the homes for between 300 and 500 K were basically Brady bunch split levels that hadn't been updated. We just couldn't see spending that much for a too-small, fixer-upper. Moving was a financial no-brainer. (It was hard to leave our established friendships, though.) We knew one family in Brookline (an inner circle suburb with good schools) that bought a condemned property for 800 K and then leveled it to build a new home. The people I know have the money because they bought homes in the area 10 years ago for 200 K that are now worth a million or more. The problem is that if you cash out, you have to move somewhere else because you can't find a comparable home for any less in the area. I think that is why so many take equity cash out for silly things like luxury cars. It must be frustrating to sit on 800 K of profit and know you can't really use it or have it. Of course, if the real estate bubble bursts, then the "profit" wasn't real in the first place.

[Cumberland]

One nice thing about our area is that housing prices are CHEAP. We live in a 3000sf home on 1/2 acre with a pool (its inground but not the prettiest thing to look at) that we paid under 150k for-it needs cosmetic updates that we are almost done with. It is a nice neighborhood but if we are still here with school age kids we would have to move or send them to private schools. My sister lives in San Fran, and they are looking in the 850K range and not finding much. She says that houses there are go for 200K more than their LISTED price!!! So you actually have no idea what the house will sell for bc the list price is meaningless. We see fixeruppers with potential all the time here for 60K- if only we had the money we could really do well.

My cousin just bought a 1200 square foot "fixer-upper" in Pasadena, CA for $500K. They put about $25K into before they even moved in, too. Plus, in addition to the no-house-for-the-money problem, the public schools in Pasadena are pretty rotten, so they'll have to spend $ on that, too!

That's one thing I'm really looking forward to in KC. We found a great 5 bedroom house for $249K in a fantastic school district. In Cleveland Heights the housing is v. reasonable (TOTAL buyers market right now, btw, and I'm trying to sell), but the schools leave something to be desired.

I just read that in California the median price of a home is now over $500,000.

Yep, this is exactly why we moved out of California last summer! We lived in an apartment in a not so great neighborhood and the houses across the street from us were selling for $675k for 3 bed/2 bath and basically no yard. I don't even know what those same houses are worth a year later but, with the appreciation rates in that area, I'm guessing they are around $800k. And my sister who lives in Orange County, CA just told me that they are building "low income" condos a few blocks away from her. Get this...the starting price for these 2 bed/2 bath "low income" apartments.....$380k! I wonder what they consider low income.....

The bidding wars on houses are just crazy in California. I couldn't imagine finding the right house only to be outbid by 20 other couples. A lot of houses sell before they are even put on the market and I know several people who placed bids on houses "sight unseen". I couldn't even imagine doing that! One of my friends did that on a house in San Luis Obispo. In order for their bid to be accepted over all the others, they also agreed to bypass the home inspection. They bought the 1200 sq ft fixer for $645k. They were in the middle of renovations when they discovered that it had a major mold problem that was going to cost $75k to fix. It is just a nightmare for them.

So many financial experts are saying that there is no housing bubble, but I just don't believe that. Eventually, something has got to give because housing prices are far outpacing incomes (of course, that's what I said 3 years ago and prices still continued to skyrocket).

Erica

What does eveyone consider to be a starter home?


For me, its something aboutn 10-50 years old fixer upper.

Decent construction, 3 beds (2 with only one or no kids), 1-2 baths, smallish kitchen. About 1200 sf. Cosmetic challenges like tacky wood paneling or interesting wall paper/color choices, ugly cabinets and countertops. Not pretty, but usable. Roof and furnace in good shape.