Home Prices

[Vanquisher]

I don't know what I consider to be a starter home. I thought our house was kind of a starter home, but it isn't what you described. I guess I would say 3 bdrm. 2 bath, 1500 - 1800 s.f. Not necessarily a fixer upper.

Our house is 2300 s.f., 10 years old, 4 beds, 2 1/2 baths. Has new carpet, new roof, landscaped, no repairs needed. It has a brick and vinyl exterior. We paid $165.

Here are some pics of our house:

http://home.nycap.rr.com/heidil/house/

Our first house was a "starter house". It was built 1956, we put in new windows, painted interior & exterior, did some landscape work and put in some new carpet in the basement. We bought it in Kansas City for $111K, we sold three and half years later for $146K.

Fast forward to current home and area.... we were trying to buy here when the real estate market was moving upward. We had to buy our current home at a price that we considered our top end, $250K, with no dickering. We had already lost out on four other bidding wars.
Just last week a neighbor two doors down sold their home(older by seven years, smaller sq footage, one less bathroom, for $280K). That puts our home near the $300K range- and I have already made upgrades to improve what it was when we moved in. The market here is totally crazy!

The biggest issue in our area is affordable housing for enlisted military members. They can't afford 90% of the homes in a 50-mile radius, especially when there is only one income. Apartments here have a waiting period that is terribly long.

[houseelf]

Wow....MSP is somewhere in the middle. It certainly is high compared to most midwest cities, but reasonable compared to the coasts.

We bought a 1981, 1350 sq. foot quad style town home for 137,000 four years ago this month. Because of the housing shortage, we literally had to decide whether we wanted it when we walked in the door and we were the first people to view it. We had been bid out on two other places already and we refused to get into a bidding war. Four years later, our adjacent neighbor just hung a sign in her window during her garage sale and she had two offers in one day for $190,000. This house has appreciated by a third in three years and it really ain't that special. It is VERY tight fit for a family of four and has no real yard.

I really don't know how residents coming in now can afford it. It makes me sad for people who haven't bought already.

Kelly

[Rapunzel]

Wow - we still rent and would like to buy in a year or so after residency. This is actually all quite scary to me! I'm starting to wonder if we will be able to afford anything like what we'll need (ie four to five bedrooms and at least 2200 sq ft) or want (a BIG yard for starters). And, this will all have to be on a military doc salary....

Oh boy, I am suddenly not looking forward to this.

Jennifer

[DCJenn]

Jennifer- Don't forget that we have some financing options not available to the general public!

Jenn

[Rapunzel]

We do? Oh, Jenn, I'm going to have a million+ questions for you in about six months!!

Jennifer

[SuzySunshine]

The CA housing costs are exactly why we left. We bought a house here and our mortgage payments are less than we were paying in rent in CA. You can't even touch a really tiny shack for less than $400,000 in the Palo Alto area. I agree with meeting with a planner and getting some plans even through residency. It is possible to be comfortable and build equity on a tiny budget. The good think about our house is that the previous owners bought it for $118K, six years later we bought it for $163K. Hopefully it appreciates that much in six more years and with the way houses are going around here I have no doubt that it will.

[PrincessFiona]

I'm just going to ask it. How the heck do you guys Qualify for loans like that as resident spouses? We qualified for 300k when his starting sallary was 125k. Sure, we had a high debt load (that we have greatly reduced now) but besides qualifying for the loan...how on God's earth do you pay the mortgage (250k or 165k) as a resident's spouse? We never could have done it.


:!
kris

[Vanquisher]

Well, as I am one of the ones paying the 165K, I will answer.

Our property tax is low. Our interest rate is low. Our home owners insurance is low. We got an ARM. We pay about $1100 a month for mortgage, taxes, and insurance. We got a no points, no money down, no PMI loan. We don't have to start paying back student loans until residency is finished. We consolidated those at a really, really low interest rate. Inflation is higher than our interest rate, and we will pay that back very slowly!

Also, dh's residency program is one of the most highly compensated. Interns start out at over 40K. Each year residents receive a level of training raise, and a cost of living raise (between 3-5%). By the time he is a 5th year resident he should be making close to 60K. We also get free health insurance among other benefits.

Cost of living in South Carolina is really low. The only thing that seems more expensive here than other places we have lived is milk. Our gas prices are around $1.90 a gallon right now. Overall, it is an inexpensive place to live. I could buy a 5000 sq. ft house on the lake for 500K here. Quite the difference.

It is tight right now, but it works.

Our starter home was a 980 sq ft brick bungalow, 1920s, 2 bed, 2 bath, full basement, on the edge of a desirable neighborhood. No one got arrested on our lawn -- but they did at the end of the street. Funny thing is that in the 8 years we lived there, we never had anything broken into or stolen. We live in inner suburban "bliss" for 6 months and the car is broken into on the driveway. Anyway, that first house was $130K and we sold it for $276K thanks to appreciation and some elbow grease.

We now have a 1300 sq ft 1950s ranch, 3 bed, 1.1 bath on a 1/3 acre for $270K. We would not have been able to buy or remodel this if we hadn't done so well on the last house (plus the equity of being there 8 years). Plus, rates on ARMs were so stinkin low last year. So, that's how we did it!

We have equity from our current home. If we get what we are asking for our place, we might be able to get by with a credit based loan, not taking income into account. Right now our credit rating is really good, so that is a real possibility. Put as much as we can down, pay off the car, and save a tiny bit as a cushion.

There are special loans for physicians, sort of like first time homebuyers loans. We had an FHA loan with our first house.


And I am jelouse of your bungalow...hard to find those here.

[SuzySunshine]

I agree with everything Heidi says, those numbers are about the same as ours. I also work, we don't have children but we are getting close to making that step. I will continue to work with the first and then stay home with the second. When we applied for the loans, on my DH's salary alone, we qualified for almost $20K more than we spent. I can't imagine what we would have qualified for if we both had jobs when we applied. They also wanted to qualify us based on what we had been paying in rent and we told them no way, because the whole point of moving out of CA was to pay a lot less and own.

[Sheherezade]

With DH's starting salary (around 200K) we were qualified for 450-500K on a traditional fixed rate loan at 6%. We would have qualified higher on an adjustable. We bought MUCH lower than that. We have the full load of med school loans to pay as well . Banks will qualify people for much higher loans now than when we bought our first house 11 years ago. Then, there was a strict rule that only 28-33% of your income could go towards housing and interest rates were good at 8%. We've always done fixed rates though; we're scared of the adjustables .

[SuzySunshine]

Our adjustable is a 7-year, the exact length of DH's residency. They don't have fellowships here for his specialty and he will do one so there is almost no chance we'll stay here past that. We might come back, but we will be selling in 7 years so our ARM was perfect for our situation.

[DCJenn]

We're in the same situation as Cheri- our ARM goes up in five years, which should coincide with a return to DC. Our plan is to either refi, (if interest rates are low) see what the ARM payment will be, or sell. In any case, thinking more than 5 years out while married to a fellow (and let's not forget the military aspect) seemed kind of silly. We know that in 5 years we'll be in a better place to know where and when we'll end up permanently- and hopefully can plan accordingly. In the meantime, we have the extremely nice tax deduction.

Jenn