Buying a house????

[MrsNick]

Val, I hear you. I married at 31, bought our 1BR / 1BA condo at 32, and nearly two years later, am really hoping that we'll be able to sell our home at enough of a profit to put a good downpayment on something with 2BR / 2BA (sheesh, I don't even dare to dream of 3BR's, lol).

But, I hear that clock ticking loud and clear. I want to at least be PG before I turn 35, and at this point it will be a race.

A good friend of ours is a real estate agent, and his advice was that you need to get in the game. Buy the best place that you can afford, and go from there. We followed his advice, and with any luck, we'll be house hunting this spring.

Anyway, you have my empathy (much more than you could know) so here's some PD for you, so that both your dreams are fulfilled

 

[DMickey28]

I do appreciate all the advice and ideas on here. Being from MA coming here, the housing is very different. My best friend bought a small two bedroom home in w. warwick about a year ago. It's on a nice lane with a large yard just off the river. They had a large down payment from her DH's parents. To find a cute house like that here is more difficult. There is not a lot of free space left in MA or central RI. In IL and IN there is a lot of flat farm land being developed, leading to subdivisions and tract housing.

Again, I guess I am young and I am learning. I do appreciate the different points of view as well. We aren't young and poor and starting out, we are just looking to get into the buying game late.

 

[dvcgirl]

I'm the same age as you. I also am planning on having children within a few years. I think the whole point of the starter home is being misunderstood.

Let me put it to you this way - instead of spending over $1000 a month on rent for the past 3 years while I struggle to save for a down payment on a 2500 sq ft or larger home to accomodate a growing family, I purchased a 1200 sq ft 2br/1 bath house with potential to build on to. I do not plan on raising a family in this house.

My Mortgage payment is comparable to what I would be paying in rent. The benefit is that I've gained equity so if I sold my house right now I would get about $100,000 profit. That's a pretty hefty sum to put towards the house I want to raise a family in. Not bad for 3 yrs in a small house the size of a very large apartment. It'll be even better when I finish the minor upgrades we are doing so that by the time we go to sell our house when our future child is a toddler I'll be reaping an even bigger profit. Plus, like TF mentioned, I'm also getting a bigger tax break every year as a homeowner than you are getting as non property owning DINK. All of the interest I pay towards my mortgage every year (and the first few years you own a house are mostly interest) are all tax deductible.

I don't understand how spending money on rent and saving up for a down payment on a larger house is better than compromising for a couple of years when you don't have children in order to reap some monetary reward to put towards your dream house.

Well, because right now, the market is cooling...and rather rapidly. It's cooling quickly here in Orlando, and it's cooling quickly where you live as well. I would not buy a house if it was my first home right now. I'd wait for the dust to settle. And I also wouldn't count on keeping all of that equity you have over the short term...you're likely to lose some over the next year if you live in an area that has seen off the scale appreciation.

I could have sold my house here for 25-35K than I could get for now had I sold it in the summer. Houses are beginning to pile up on the market...taking longer to sell. The kind of gains you have realized are wonderful...but they are not sustainable.

 

[icebrat001]

Just curious... How long does it take the "dust" to settle?

 

[dvcgirl]

Just curious... How long does it take the "dust" to settle?

You know, I'm no expert on real estate, but things really are slowing down very quickly here in Orlando. If you need to buy a house...well, you should buy a house. You'll be in a good position to negotiate. See if you can't find yourself a place that's been on the market for awhile. I see you'll be buying in Florida....*really* do your homework if you plan to buy a condo. That's one area where I'd be a little leary to buy near the top of this market because I think that's the most likely to drop a bit more.

Bottom line, in this market...buy a house because you need a house to live in. Don't expect the insane appreciation that we've seen in recent years, because you simply won't see it. If you're looking for a place to call your own where you can paint the walls whatever color you'd like and plant some flowers...buy a house...and live in it for a number of years. This isn't the market where you want to buy now and sell in a year or two.

I've read that Orlando will appreciate 3% this year and then head down 0.5% in 2007. I'm not seeing that. I think we're down already from the end of the summer. Perhaps there's a sweet spot in the 200-250 range that will appreciate, but above that I think we'll drop a bit from here. Hopefully no more than 5-10%. Still though, we've seen some incredible gains, and I'm not complaining.

 

[Aimeedyan]

I understand all sides. I'm in a different area - one that doesn't have much appreciation in the homes and one that is very low cost.

When DH and I were househunting, we had someone ask us why we weren't just purchasing a starter home. Well, they don't seem to exist. Let me rephrase that - small homes are harder to find in our area, in a safe area, and even the small homes were very close in price to a large "forever" home. The monthly payment differences were literally dollars. So why buy a 3 bedroom, 1400 sq ft home for $125k and have to move in 2-3 years (not making any on the house, mind you, and having to MOVE again) when you could buy a 4 bedroom, 2800 sq ft home for $150k and put down roots. DH and I ran the figures and decided that at our age (27-28), with the jobs we had, and our plans to have children in the near future, it would be dumb to get stuck in a small home that we couldn't unload due to the market when the time came. If those few dollars in mortgage payments were going to make a big difference then we shouldn't be buying a house now anyways! =)

We have been married 3.5 years, living in a rental house the entire time. I was in grad school in another city. We did lots of cheap meals, skimped by, etc. We've been there.

Our house is half empty. We have 2 practically empty bedrooms and an empty gameroom. I don't foresee furnishing that gameroom for another 3 years or more. I want to pay cash for the furnishings in it. That really doesn't bother me... we're happy here, we love our neighborhood, great schools, and we know that we can raise our children here. It wasn't so much of an investment for us (though we looked at everything and worked with a great realtor) but where we wanted to stay awhile. Esp since homes stay on the market a LONG time here and don't make much money. Homes we looked at when househunting were on the market 6 months or more. It's just not a hot market. We looked at every zip code in the this metroplex just to see what we could get. We are in a tract house, very very common here, but it doesn't bother me for some reason... it's a dream to build custom but unrealistic at this point so we don't dwell on it.

In another market, we would have had no choice but to house hop. Condos are a rarity here - I can't think of 1 condo in my area at all. Now, there are downtown lofts selling for 300k-up but TX has a lot of land and they just keep building. And since they are cheap, people buy bigger.

We looked at LOTS of existing homes. Older, ranches, newer, etc. They were all about the same price as a new build with no exra charms or features. If anything, we'd have to fix someone elses mistakes! There is a great neighborhood of old historic homes being renovated that I would have LOVED to move to but those prices are $300k and up. Perhaps we'll retire there!

I also agree that the age of marriage is getting older... average person is in their early 30s now, I believe. We married young IMO at 23 and 24 but I went onto graduate school and delayed things. Most of my peers bought homes after 25 and even more after 30 due to graduate school and doctorate work. I understand why a 32 year old who's worked their tail off, completed 2 degrees, works a great job, and has lived in rentals for 10 years wants a house they can live in awhile. Have a child in. Invite parents to stay the weekend in. It makes sense. It'd be different if that person was 22, straight from college, and expected a house large enough for those things. I don't think that's too much to ask. Unfortunately, you either play the real estate game or move to a more affordable place.

My parents had a true starter house- but they were 18 and 20! I think it's different when you're 10 years farther along in life then that...

 

[BuckNaked]

I've seen this comment a few times when people are talking about not being able to afford a house: About the commute.

Unfortunately, sometimes this is one of those sacrifices. It doesn't have to be forever, but sometimes you have to move out and commute just to get your foot in the door, so to speak. And, yes, it's painful.

When I bought my very first home, it was in a not-so-great area, but I was 14 miles from work (D.C.). For my second and current home, I was absolutely determined to be in a safer neighborhood with a better school system (I had kids at this point). So, I had to move 30 miles outside of D.C. I searched and searched for a home in the county that would put me closer to D.C. with a good school system, but, financially, it was really out of my reach. I have been in my current home for 11 years and have built up some sizeable equity. My goal is still to move one county north (Fairfax, VA) to make my commute a bit easier. It will have taken me 15 years to get exactly where I wanted to be, but sometimes you just gotta do it.

I think if I had not been willing to make the commute sacrifice, I don't think I would have ever been able to own a home. Even though I was trying to purchase when it was *supposedly* easier.

That's the position we're in now, i.e., looking to buying a home in Prince William County despite the commute. The school districts aren't an issue because we'll keep the kids in private school, but I want a nice, safe neighborhood, and we can't get that closer in for the price we're willing to pay.

 

[mickeyfan2]

Also part of the profit will be lost in your closing costs on the next house and realtor cost on selling this house.

 

[CheshireVal]

Val, I hear you. I married at 31, bought our 1BR / 1BA condo at 32, and nearly two years later, am really hoping that we'll be able to sell our home at enough of a profit to put a good downpayment on something with 2BR / 2BA (sheesh, I don't even dare to dream of 3BR's, lol).

But, I hear that clock ticking loud and clear. I want to at least be PG before I turn 35, and at this point it will be a race.

A good friend of ours is a real estate agent, and his advice was that you need to get in the game. Buy the best place that you can afford, and go from there. We followed his advice, and with any luck, we'll be house hunting this spring.

Anyway, you have my empathy (much more than you could know) so here's some PD for you, so that both your dreams are fulfilled

Thank you!

I wish I had bought something a few years ago, on my own, but I didn't, so I'm kind of starting from scratch at an age when I feel like I should be farther along down the road with this house thing!

Good luck to you in yoru quest for a house, and a baby!!

 

[Christine]

Maybe the town does not matter as much as I think it does. Someone pointed out, we don't have kids so we don't need the best school district at this time. So why not buy in the less desireable town and move up with the equity. How is that skipping step 1?

That is not skipping step 1. Moving "way" out, in a less desirable neighborhood, less desirable schools, further commute is, indeed, "akin" to getting a starter home in a more desirable area.

That is what I was pointing out earlier about page or two back when Val indicated that she could move farther away but her commute would be hell. That's one of those sacrifices you make at first. Then you move on.

But, to answer your question, this would be part of Step 1.

 

[CheshireVal]

That is not skipping step 1. Moving "way" out, in a less desirable neighborhood, less desirable schools, further commute is, indeed, "akin" to getting a starter home in a more desirable area.

That is what I was pointing out earlier about page or two back when Val indicated that she could move farther away but her commute would be hell. That's one of those sacrifices you make at first. Then you move on.

But, to answer your question, this would be part of Step 1.

Well, I did commute for 50 miles each way for two years back in my early 20s. I don't really mind commuting, but commuting in Atlanta traffic is what is really impossible.

We're still going to look farther out, but in my earlier post I was thinking of and kind of referencing McDonough and that $100,000 townhome that my best friend has. I'd take one of those in a heartbeat but that *particular* area is completely impractical based on where my husband and I work.

 

[mickman1962]

This might be over simplifying but you should buy the best house you can afford at the time. Not just your first house, but your second and third maybe, until you have enough money/equity to buy the house you really want. I think most of us will agree that even the dream house we eventually purchased we would make a lot of changes to if we had to do it over again.

 

[Christine]

That's the position we're in now, i.e., looking to buying a home in Prince William County despite the commute. The school districts aren't an issue because we'll keep the kids in private school, but I want a nice, safe neighborhood, and we can't get that closer in for the price we're willing to pay.

Well, come on down!! You can be my neighbor!!

Seriously, if you have any questions about neighborhoods, feel free to PM me. I live in Prince William (eastern) and because of all my kids friends, I'm pretty familiar with the neighborhoods. Also, we do a "mixture" of public and private school. Some of the public schools are excellent, some not.

 

[sm4987]

I think starter home is in the eye of the beholder. We lived in apts. for years and rented a couple of houses. Our first home, brought in 2000 was 1484 sq. feet for $89,000. That was a lot on a teacher's salary (I'm a SAHM) To us, that was a starter home in a decent neighborhood.

When I started feeling like that house was getting to small, dh started making more money. We could have gone for a builder without all the frills and extras and gotten a $4000 sq. foot home for $160,000. However, I like the extra's and he was/is working for a high end builder here in DFW. We moved in 2004. So I'm now in a 2800 sq. foot one story in a golf course neighborhood and paid $205,000. There are those I know who don't live in our neighborhood and as soon as the hear the name of the builder, even though their houses might be bigger than ours, are like, you are in those rich homes. That is my dream one day. I can never understand it, knowing that their house is not "less than ours on the inside", but something just projects better and better. We question over and over again about a dream home, and what that means. I'm not sure anymore. We are both 31, and I think that our generation just expect nicer bigger things. I know our home is nice and bigger than anyone in either of our families. My house is one of the smallest in the neighborhood, and thanks be to God for the great deal we got on it, have lots of equity considering they are still building homes and 2500 sq. feet is now building for $260,000. However, moving to a dream home now would be over $300,000 and of course that would mean a bigger house and higher payments and all that. I think that we are happy now where we are and I'm going to work on making this house my dream house. Gee I have formals that we don't even use!!!

I don't know about other areas, but house are really affordable here in Texas especially if you get with a certain builder. There are really nice older homes that you could still buy under the $120,000 mark in a good neighborhood with good schools. Keep looking around, deals are everywhere!