What is the "rule of thumb" for how much house you can afford?

[disneygals]

Soccerchick...I think robsmom meant to type 5%, not 50%. If we all had $150K sitting around, this thread wouldn't exist.

Lisa F...I live near you. We put 5% down on a starter home in 1987, then 10% down on our current house 1992 and have pre-paid and refinanced along the way. We were lucky we bought back then, because this area is going crazy!! My dh works at MCI (originally MCI, then WCOM, then crash! then back to MCI) so I feel your pain with Enron. BTW I LOVE your cats!

 

[gometros]

Another rule of thumb is that if saving up for a house is really important to you, you may want to reconsider how you sepnd your vacation money:

http://www.disboards.com/showthread.php?s=&threadid=629668&perpage=15&pagenumber=1

 

[Jynohn]

Count us in as another MA family completely priced out of the market

My in-laws are older, and have been talking for years about selling us their home and moving into a condo. We waited all this time because it's a nice home in the town where we grew up in a great neighborhood, and they're willing to sell it to us way under market value.

But they have been dragging their feet for so long and we've been renting a home for years while we waited for them. Big mistake. Now it would be nearly impossible for us to afford a nice home in a decent town. My children are already school age so I have to take the school system into consideration. My husband is military and I make a decent, but not great salary. We could come up with a down payment, but I don't want to end up being house poor and spending every last dime each month on a mortgage.

Now that DH is deployed buying a home has been put on the back burner again, but we've already decided that when he gets home next year if his parents aren't ready to sell right away, we'll be moving out of state. It's sad because all of our family is here and my son will be devastated if he has to move away from his friends, but we don't think we have much choice.

My sister is in the same position. She and her family are moving to NC this spring.

 

[aprincessmom]

Someone told me that we are truly the first generation of MA homeowners to do less well than our parents.

I grew up on Cape Cod. It was a given when I was growing up over 25 years ago that none of us would be able to afford to live in the towns we grew up in if we wanted to live in the manner that our parents did. But if we wanted to live as they did when they started out, we could afford it.

I currently live in a "starter home" neighborhood...defined as 3-4 bedrooms, at least two bathrooms, large eat in kitchens with formal dining rooms, big decks and two car garages. I'm sorry but when my parents were starting out, starter homes didn't have 2 bathrooms or garages or hardwoods throughout the bottom or dishwashers or any of those other things. These were not the starter homes that our parents began with. We are using this term but the reality is that we are starting at the very high end of the spectrum because of what we feel is acceptable. We are looking at what took our parents years to accomplish and saying we want it now.

Most of my neighbors in this "starter home" neighborhood were buying into it after owning property in other areas. Small condos, small houses with 1 bathroom or no garage or less than a 1/2 acre of land. None of us were starting out...we had been around and were moving up. My house is small by most of my neighbors standards but I don't really need a living room AND den AND great room AND playroom in my house. I don't need 2000 sq. ft. for a starter home. Most of our parents didn't either when they were starting out.

It is what it is in MA because of the zoning laws and the restrictive land uses that towns place. Two and three acre zoning is becoming the norm so when the land costs over $250K with nothing on it, your houses will obviously cost more. It is truly a supply and demand thing. If you don't have enough land to build housing stocks than the stock that you have will skyrocket in price. That is the reality.

 

[chrissyk]

Some towns in MA do have large zoning requirements, but many don't. Our starter home (and it IS a true starter home, LOL!) is on less than 1/4 of an acre. It had 1 bathroom when we bought it. We added a second so we could sell it. It has no garage, the original flooring was disgusting, and the sq. footage is closer to 1000 than 2000. It sold for close to 1/2 a million dollars. We're closing next week We sold it ourselves in about a week, and we had TONS of people looking at it. Isoldmyhouse.com is really a great resource if you want to do FSBO. That and our road signs brought in all the lookers.

Things are definitely different on the Cape, where it's always been pretty pricey. Where I grew up (Methuen), we honestly expected that we'd be able to buy up to a better town than our parents lived in. My expectations weren't high...I would have taken a tiny starter house in a really nice town if I could have afforded it. Instead, I got a tiny starter house in an average town. I can't imagine what this house would go for in a really nice town

 

[aprincessmom]

chrissy...
Come to my town. My neighbor is selling her starter for $469.9K. It has 4 bedrooms, 2.5 bathrooms, living room, dining room, big 2 car garage and a full basement that can be built out. It's on a beautiful lot, nicely landscaped that's .3 acres in a town right off 495 and 95 with a train that takes you into Boston in 30 minutes during rush hour and about 25 minutes from Providence by car. Schools are good, lots of families and kids. Heck, I'm the only mom in my neighborhood who works.

You got enough for your house to easily afford this one and stay in MA.

 

[chrissyk]

Originally posted by aprincessmom
chrissy...
Come to my town. My neighbor is selling her starter for $469.9K. It has 4 bedrooms, 2.5 bathrooms, living room, dining room, big 2 car garage and a full basement that can be built out. It's on a beautiful lot, nicely landscaped that's .3 acres in a town right off 495 and 95 with a train that takes you into Boston in 30 minutes during rush hour and about 25 minutes from Providence by car. Schools are good, lots of families and kids. Heck, I'm the only mom in my neighborhood who works.

You got enough for your house to easily afford this one and stay in MA.

That's a really reasonable price for a house with so many amenities Are they selling it themselves? We sold ours FSBO, and it was really easy We actually had a realtor tell us that we should come down to 419K because we'd never get what we were asking. The next day, our house was under agreement for pretty close to our asking price

We had actually considered moving to the South Shore at one point, but we have a family-related reason for avoiding that area I'd heard that Plymouth and other south-shore/Cape towns were very good values for people who commute to Boston now that the North Shore and MetroWest are unaffordable. Unfortunately, my DH works in MetroWest, so the south shore/Cape would be a heck of a commute. We are really psyched to move to an area with warmer weather (FL), but if we'd been set on staying in MA I'm pretty sure that we would have ended up at least considering the south shore/cape

 

[Tink&SquirtsMom]

I currently live in a "starter home" neighborhood...defined as 3-4 bedrooms, at least two bathrooms, large eat in kitchens with formal dining rooms, big decks and two car garages. I'm sorry but when my parents were starting out, starter homes didn't have 2 bathrooms or garages or hardwoods throughout the bottom or dishwashers or any of those other things. These were not the starter homes that our parents began with. We are using this term but the reality is that we are starting at the very high end of the spectrum because of what we feel is acceptable. We are looking at what took our parents years to accomplish and saying we want it now.

You are very lucky thats considered a starter neighborhood. Where I live a starter is 1 bath, no garage 1000 sqft, usually needs major updating, remodling, structural repairs and can be anywhere from 70-100 years old. Where we used to live you'd consider yourself lucky if you got it for $500,000. Here you'd be lucky at $250,000-$300,000.

I moved to the more expensive area for college, and happened to stay there when I got married, so having spent 6 years in that housing market I was lucky to be choosy when we moved here. Ours is 1 yearold, 4 bed, 2 bath, 2 car garage, great room, and living/dining room. It's about 1750 sq ft and only has a 4650 sq ft lot. We are considered an upscale neighborhood. We looked at and could have afforded alot bigger but since we were moving from an area were this house would have cost $1,000,000 easily (taking into account great schools like we have now) we were more then thrilled to get this and put the rest of the money towards fixing the house up exactly as we want (having a custom home office installed tomorrow) and other things (like our two upcoming trips to WDW). My friends who stayed around here for college are having to move 2 and 3 hours out (where there is literally no jobs or infrastructure, was all farmland till 2 years ago) just to afford ANYTHING, or like my sister choose to live in an 800 sq ft townhome in an area where she doesn't feel safe getting home after dark.