Did you buy/ have the most expensive house on the block?

[gwynne]

Is your realtor showing you actual comps? Zillow is not the most reliable source of information. Sales prices may be accurate as that is public record, but for values, I would not trust Zillow. Your realtor should be showing you actual sales of similar homes within a given radius.

This. Zillow was way off on the actual selling prices in my old neighborhood.

 

[Darcy03231]

We sold the most expensive house on the block. The realtors wanted us to list at $40,000 - $50,000 less than what we listed at. We sold in 48 hours for 98% of list price.

Having said that, the neighborhood was highly desirable due to the school systems with little to no inventory. When people move in they tend to stay for a long time (we were there for 17 years). Our home was move in ready, but the finishes weren't over the top. We'd put in a new kitchen, gutted and redid two bathrooms, updated the two other bathrooms, and within four years of selling did the siding, windows (new construction), roof and deck. It had mature landscaping and was on a good size lot.

 

[bethy]

Buy the cheapest/smallest house that meets your needs in the best neighborhood and location you possibly can. Not just for resale value but for LIFESTYLE. For quality of life, better quality schools, better commute, more neighbors who hare more likely to have their act together, so to speak. This is all true especially if you are young and planning on raising a family there. This will be your kids' environment and the kids who they grow up with and the neighbors' houses they visit . . .

This is what we did and the only downside is that we do feel the pinch now that our kids are older. In that a lot of their friends have more luxuries than they do, etc. They have fully funded college accounts, get cars when they are 16 etc. There are times when I wish we lived in a more modest area . . . but not really.

 

[Gorechick]

This is a small neighborhood, commute and close to shopping are good, this puts us in the district for the high school we want and taxes are considerably lower than more desirable areas. It's not an over the top house but it seems to have more to offer than others in the neighborhood. I'm comfortable paying about $10,000 or more less than listing. I think it will appraise less than what they're asking.

 

[EMAW_KSU]

Having the most expensive house does not mater if the prices are close. What you do not want is a 250,000 house in a 150,000 neighborhood.

 

[Bluestars]

For a difference of only $10,000, I would probably just get the house. Generally, I would prefer to buy a house in the best neighborhood I could afford. I just don't see a $10,000 price difference that big of a deal. The houses in my old neighborhood varied in the $50,000 range.

 

[mnrose]

Been there, done that, and NO, I won't do it again. It is a harder sell, and appreciates more slowly and declines more rapidly than others.
Now, it does depend on what you mean by "higher priced." If it is a *little* more because it has higher end finishes, that's one thing. If it is a larger home and fancier, I'd avoid it. The neighborhood is looking for the "standard" house at the "standard" price. Bigger and fancier homes are a looking for a different category of buyer, and often those buyers are not interested in the "standard" neighborhood.

 

[TLSnell1981]

I haven't and I wouldn't.

 

[Colleen27]

$10,000.00 is actually a very small difference in comps.

I don't know what price range this is. But, I might be more wary of a difference of like $25,000.00 or more?

I think that would depend on the price range. $10K difference in a neighborhood of 100K homes is a much more significant difference and likely to have more of an impact on showing/selling than $25K in a neighborhood of 500K homes. I think I'd be more inclined to look at it as a percentage - 5% above comps or 20% above comps or whatever. That would likely give a more accurate picture of how much the over-improvements are likely to effect the long term value of the house.

 

[cherylnj]

We bought the most expensive house in our neighborhood. We had very specific needs (mother/daughter with the mother part being a fully self contained apartment). There are 3 others in our town. There are no other comps within 5 miles. We've gotten unsolicited offers for way more than we paid for it 7 years ago at the top of the housing bubble. We'll be staying 2 more years until my youngest graduates HS. If we didn't have such specific needs when we bought, we never would have bought the most expensive house in the neighborhood. Fortunately, it worked out for us, most of the time it doesn't.

 

[Katy Belle]

Our house is probably 2nd most expensive on the block, but middle of the neighborhood.

How long do you plan to live there? If it meets your needs...commute and HS would be very important to us...then it is probably worth it.

 

[unhinged]

We're going to take a second look tonight. The only downfall on this house is a smallish kitchen (that could potentially get opened up in the future) and it being in an ok neighborhood. Most homes are selling at asking, some bidding wars, and selling in a day. Our initial offer got trumped by a full price cash offer by an older couple. The wife seems to be having buyer's remorse.

I would not buy a house that is above comps in just an ok neighborhood. I would consider it in an outstanding neighborhood though. Remember, it is location, location, location. You can change a house but not the location.

The other thing you have to check into, if the house is set way above comps for similar in the neighborhood and you think it may not appraise for asking price, you may have to bring more cash to closing to make up the difference.

 

[eliza61]

question: Are you buying your house to resell or are you buying your house to make a home in.

The house I have now I love, I'll be in it for at least 15 years. so any upgrades I do will be for comfort. If when I resell I get back what I put in cool, if I don't or the market crashes when I'm selling so be it.
depends on how you view your house.
my last house was one of the bigger in the development, but it was not out of line for the development itself. In these new developments though, that's not a big problem as the builders generally don't put million dollar houses in with 150K houses.

Where I live now it's all about location and neighborhoods change rapidly. for example Rittenhouse square in Philly the house go for anywhere from 500K to well over 2 million. You go 4 blocks away and the houses are a lot cheaper at 350K.

 

[tvguy]

I think that would depend on the price range. $10K difference in a neighborhood of 100K homes is a much more significant difference and likely to have more of an impact on showing/selling than $25K in a neighborhood of 500K homes. I think I'd be more inclined to look at it as a percentage - 5% above comps or 20% above comps or whatever. That would likely give a more accurate picture of how much the over-improvements are likely to effect the long term value of the house.

We have 3 different developments on my street within 11 houses of each other. First built in 1976, second in 1985, third in 2010. Prices range from $268,000 for an 1976 built 1,300 square foot house on a .2 acre lot, to $490,000 for a 2,200 square foot house built in 2010 on .15 acre. Go figure.

 

[NewRVLady]

The house next to us used to be the most expensive...we are all in the mid - high $200k
They had a hard time selling at $380,000 as a handful of the houses in our neighborhood are 15 or so years older

Now a house on opposite street sold for $425k and we are flabbergasted ...it has a pool and all the flat screen tv's stayed but doesn't seem tat great of a house!

 

[Gorechick]

We're looking to live there and not sell anytime in the near future. The neighborhood has been occupied by older residents, most of the original homeowners. Houses and land look well kept and we met some nice neighbors. Our town itself will stay desirable as we have a college incentive program. Lots of new, young families moving in to take advantage of that. We have an offer in, we'll see what happens.

 

[SC Minnie]

We bought at the upper end for our neighborhood but we liked the neighborhood and the house. We had planned to stay in that house for a very long time and have been there for 18 years now.

The general consensus is the buy the cheapest house in the best neighborhood but if the house is $10,000 over the others I don't think that's a big deal. If it was $50,000 or more it might make a difference. Also consider how long you expect to stay in this house. Is this a house you plan on staying in for the next 15-20 or more years? Do you love this house, neighborhood, are the schools great?

 

[barkley]

a house is only worth what someone will pay for it at a specific point in time. that price can vary wildly depending on the overall housing market (sellers vs buyers) as well as what may happen down the line in a specific neighborhood/city.

that said-our first home we probably paid the more for it than any of our other neighbors b/c it was an older established neighborhood w/mostly people who had lived in their homes for decades. when we sold we 'maybe' broke even given the improvements we had made-the market wasn't depressed it just wasn't on a huge upswing and the comps for sales were largely from the adult children who had inherited mom/dad's home or were selling it on their behalf when they moved to more senior style living (and since the owners were in the homes a long time they had lots of equity so even the more modest sales prices looked like a huge windfall to them).

our second home we paid what everyone else paid (new development) but sold for the second highest sales price on the couple of blocks around us. it wasn't by virtue of doing any massive improvements, it was just that the seller's market was at it's peak (we literally sold a couple of weeks before the housing bubble burst). we sold for over 3x what we paid 7 years earlier (and Zillow is off by over $200,000 on our sales price so I don't know what sources they rely on). because of the sellers market that drove up the comps that helped increase our value, the neighborhood was very overpriced-and it was telling when after the bubble burst that many people who had bought during the few years the prices were quickly climbing couldn't even sell their homes for reasonable short sale prices (our former home has gone through 3 owners since 2006, the most recent got it at a foreclosure auction for 15% of the sales price we received (and less than 45% lower than the homes sold for new in 1999). the market for that area like many in California is improving pretty quickly BUT homes are still valued at/selling for less than they did even before the market exploded (in '03 and '04).

where we live now everything is individually built (either by spec builders or individual home owners) so what someone pays to 'buy' (or build) can vary wildly-but we're all still slaves to the comp values for the market. we've had a couple of REALY nice homes (very high end builds and improvements) in our neighborhood that sat on the market for over a year each despite massive price reductions. it's not that they weren't 'worth' what was being asked-it was what the comps said. we've had several foreclosures and short sales in the area that have driven down prices, so despite how nice those homes were, how much they had been improved-they sold for about the same as much more modest homes. our neighborhood's values will take another hit I'm guessing within the next 6 months to a year as well-another home on the market, not the nicest but the owners put too much money into it (and took too much out via home equity loans) so it's now the most expensive home in the neighborhood-and has been sitting on the market for months and months. we all know it's destined for foreclosure which will lead to an auction and further drive down the comp values.

for us it's not an issue-this is our 'forever home', and to some extent the lower values help keep our property taxes down. our neighbors that bought with the eye of selling in the next 5-10 years.................well, they may find that their homes are not the investments they anticipated.

 

[Rhombus]

I always heard that the best thing to do was buy a smaller house in a better neighborhood, but I personally believe you should buy the house you love. So - do you love it?

If so, I wouldn't worry too much. As you said, it's a seller's market right now, so any house is likely to sell a little over it's actual value. And who knows what improvements might be made to the other houses in time.

I see a house as a home first, an investment second.

Yep, I view a house as a product to be used and enjoyed. Any appreciation in value is of little importance to me. I'm not relying on the house as an investment.

When I had the deck replaced a few years ago, friends, co-workers, etc. said it would improve the house's resale value. I told them I had it replaced to enjoy it, not for any increase in value. I think a few were actually offended by my response.

I live in a community of about 60 houses. All were built in the early to mid 1990s, and all were roughly the same price when new. I bought it in 2002, and I'm guessing I paid in the middle of the range for the neighborhood.

 

[HM]

We bought into a new nieghborhood. We were the second people there and the first to build (the other family bought a spec home). We knew we wouldn't end up in the most expensive house because the developer had a price hike every few months built into their sales and we bought a mid-size plan and lot.