Corbic

I own a home. I paid under 6 figures for it and it gets the job done. I've been working professionally for 8 years now and I make good money.

Now I'm in Detroit and I'm chilling at the hotel. I turn on HGTV (I don't have cable at home) and I was hoping to catch a cool DIY project. However the channel is a never ending loop of young couples crying about not getting granite countertops and picking between a house that is $670,000 which is $70k over budget or the "fixer upper" for $500k and putting another 120k into it.


WHAT THE FUCK DO THESE PEOPLE DO FOR A LIVING?!?!

Thats what the show should be on!

Who pays enough that you can hack $3-5k a month for JUST A MORTGAGE!

WanganRunner

IDK around here, and in my field (commercial real estate), it's not uncommon for people to get $65-75k fresh out of undergrad. Throw a few years of raises onto that, then multiply it by two for a couple, and you can buy a fair amount of house.

That said, in this market (DC), a $500k house isn't much of a house.

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Phlip

I bought my house in 2009 while making a considerable amount less than I make right now. I watch these shows and get a little depressed with how they treat shit like marble floors and granite countertops like people like I do with starting a garden or making a table from $50 of repurposed materials.
Yeah, I hate those bitches.

$500k in NC is a 5000+ ft² mini mansion on a golf course.

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redline racer510

$350k here in the bay area gets you a 3 bed 2 bath house approx. 1600sq/ft and a small backyard. Yea in SF you need to be making atleast $150k a year to buy a "nice" house.(I understand that is subjective). Rent in downtown SF averages between $2500 and $5k a month for something not roach infested and free of mold. You people on the east coast got it good in terms of housing.

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DreamN

Fucking hate California for how overpriced homes are. I have cousins near the east coast. Paid something like $350k for something that pretty much resembles homes than would sell for nearly a million out here. It's nuts.

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defcon86nwh

102k for mine @ 1700sq foot. 2 acres and a 2 car garage. It's a little older, but I've replaced most everything now.

Phlip

That first house you described is my house, but I might have a little more yard than you described.
$94k right as values were shitting the bed. I intend to be under 75k left within a year from now.

I was JUST about to say "that's NC/SC/TN prices right there" before I noticed your location.

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AFSil80

I'm sure part of it is b/c it's reality TV, but then I'm sure that most of it is b/c hardly anyone here in America seems to know how to live within their means. They'll take on a mortgage for a 4,000 sq foot house while eating on paper plates and sitting in folding chairs in the living room.

All some people care about is the image. And they don't care how far into debt they go, or how far behind they fall in payments, as long as they maintain that image of being successful with a big house and a BMW. Living the dream until the bank calls their number and the repo man shows up.

$500k in Savannah would be a piece of property on the river with a dock all to myself.

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soundboy

thats the truth,
I prefer to live in a small place and be happy i dont have a mortgage to pay, as how the economy is going.
Going to bed with the idea of how much bills and loans you need to pay isnt a nice feeling,

CrimsonRockett

It all comes down to location. My girlfriend and I were very fortunate to have found the property we bought. 1000 sq ft 2 bed/1 bath, 6000sq ft lot, huge front/back yard with a long driveway and a wide two car garage. $240k. Also very lucky to have ended up in the best area in the city. Super quiet, well kept/maintained homes, no fences around the front lawn. Drive through LA, nothing but chain link fences and door bars. Good indication of where not to live.

It did need work, but we've invested roughly $30k or so on our remodel so far. Interior/exterior completely redone, new stucco/window trim, interior completely refinished, new bathroom, new kitchen, furniture, plumbing, etc. Didn't exactly cheap out on the remodel either, just got really good deals from family friends on the labor.

Right now, the property value is back up to $315k based on the previous condition(which was horrible). Homes similar to ours with a fresh remodel are priced around $360k and at its peak was worth $450k.

Our mortgage is below $900/month (taking into account the down payment we had) and our monthly expenses are next to nothing. So, there's no need for us to earn loads of money to enjoy our lives. We have plenty left over at the end of the month that we apply toward the principal of the mortgage. Can't beat paying off a 30 year mortgage in 7.

But, yeah. Having worked in banking, I saw first hand how people buried themselves into these ridiculously large mortgages and high monthly payments. My thought process was pretty simple going into my home purchase. I'd better be damn sure I can afford this payment for the next 30 years.

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ZenkiKid

^ Man you totally lucked out.

I already know that I am going to take out a 30 year FHA loan. Its pretty damn hard to save up the 20% when simply being alive in CA is expensive as it is. I know Im gonna have to pay the PMI but it is what it is.

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!Zar!

Californians on average make more.

So California homes on average cost more.

That's pretty much what it all comes down to.

Nobody wants to live in the boonies somewhere on the east coast.

So in return, people will make less and pay less for their house.

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Gnnr

Nice theory, but its wrong.

http://en.wikipedia.org/wiki/New_Yor..._capita_income
http://en.wikipedia.org/wiki/Califor...ions_by_income

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Matej

Hope to never own a house in my life.
I would rather pay someone rent while they send people to fix the roof and pipes and mow the lawn and whatever other terrible work a house requires, and then when I decide to move somewhere else I can just go without being tied down by a house.
I understand that there are people who do not mind or even enjoy housework and being homeowner is their ultimate dream, but I am definitely not one of them.

An acquaintance of my parents' keeps trying to get me to buy 10K$ houses in the ghetto so I could fix them up and sell them for profit, but I would rather kill myself.

CrimsonRockett

Different preferences. I love having my own garage, my own driveway space, etc.

House maintenance isn't much when you stay on top of it.

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DreamN

That's what kills me. That's actually a small living space at that price.

Also, prices are higher in the 818

We can afford our home. Your home pretty much compares to mine. You have about 100 sq ft or so more living space, but my lot is 7k sq ft.

Just been looking around for larger homes and to live comfortably and not stretching out a budget it's just not doable right now, in CA anyway.

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lude4life13

I feel like in socal, it is nearly impossible for the younger generation without having a money gift from parents or family. My wife and I both went to college, both graduated with decent paying jobs in a professional services firm by the time we were 23, both went to a CSU (little to no school debt), and we can't even dream about home ownership for at least 5 years. We also don't spend a lot of money on anything besides bills. The reality for us is that we WILL NOT buy a house until we have a sub $1800 mortgage (including the FHA loan insurance stuff), so we would need close to a six figure down payment to get in that range with current prices.

The more I think about it, the more I think we will be renters until shit crashes again, which I believe will happen within the next 10 years. People these days are becoming more confident in intangible securities, companies with "innovative" ideas, commodity prices like gold are decreasing again, and once there is a "scare" again, I feel like houses etc will decrease in value again.

That being said, I don't know a single co-worker with a comparable age who has bought a house without their down payment being a wedding gift from their families. As time goes on it will continue to be harder and harder for the lower class to move up, and there will be a bigger gap between upper and middle/lower.

redline racer510

Average down payments in my area are 50-60k, who in there right mind expects people to have 60k in cash to blow on a down payment?

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tricky_ab

As for people getting in over their heads, I can see how it happens. When we were getting our pre approval from our bank, they gave us a rather high number based on our credit scores, equity, and down payment. We didn't spend nearly what the ceiling of the amount was while shopping for our second home.

Alright I guess I'll post up a little story or sorts.

Our first house was a townhouse that was 1500 Sq feet, single car garage that was a brand new build. Now it's in the suburbs of Toronto (30-45 minutes out), and it's a younger family area.

Anyways, it was $330K, with a down payment of $35K. It was custom in the sense that we were able to select whatever we wanted to place in it (and pay for it). My wife and I were saving while living with my parents for a few years while we graduated school. I'm thankful that my parents were super encouraging during the process, and did not take a dime from us (even though we would try for the longest time).

So it took around 2 years from signing the papers till we had the keys in hand. We LOVED it! It was our first place! I ended up finishing the basement and learned a lot along the way from my father in law, and from the trades people who I subbed out specific jobs.

Anyways, once we decided to have a child the place felt a bit too small, so we decided to move. We wanted to live in the same area, so we looked at new builds and 1 year old and less houses that were for sale in the area.

We ended up finding a place that we liked that was a about 12 months old, and ponced since my wife was VERY pregnant and we needed as much time to plan things out. The price? $480K. It's a 1900 sq foot 3 bedroom, 3 bath single car detached. Yeah, it was a bit much. But not out of the realm of what we could afford to pay for comfortably. Anyways fast forward a bit, and we sold our townhouse for $422K. Again, this was about a year old at this time. So if you're doing the rough math, we made $120K in equity in a year!

So there really was not much of an increase to our monthly mortgage rates, since we gained a bunch of equity in the process.

Some of you would be shocked to hear how much houses in my area cost. The house across the street from me is a 1650 Sq foot double car garage home that just sold for...
...

.... $560K!?! The record for that same model sold just down the street for $574K!!! The same model house we are currently living in is selling between $530-$550K. It's nuts! We have agents constantly asking us if we would like to sell.

The average cost of a detached home in my town is $520K. I don't get it, I'm just happy that we got in before the madness really kicked off.

We love the area a lot... but to get into a larger house with a double car garage with the amenities (upgrades) that we like, the house would be $600-700K Easy.

We plan to live here for the next 10 or so years, so we will see what happens... Though we regularly check listings in the area, so you never know HAHA!

I posted a bunch of pictures but then I took them down since no one else was posted examples of their homes in the areas with costs associated. I do find it interesting how the cost of homes varies from city to city in Canada, let alone the US. I would KILL for some of the costs that some of you guys pay for a house.

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BenRice

Wow, it's interesting to hear that you guys are experiencing the same thing on the otherside of the world as us.

The wife and I are 30yo and worked and rented in Auckland (largest city in New Zealand) until two years ago when we moved back to her home town and bought. Pay rates in Auckland were 30-40% higher though so the pay cut sucked.

We bought a 10yo 1700ft 3bd 2bth with double garage on a flat 6500ft at the end of a culdesac for a little under US$330k and have spent around US$7k of updating. We went in with over 30% deposit and after 2 years now have 50% equity, and repayments of NZ$300/week (or US$1150/mth). Because we bought well within our means we can live on one income if we need to and i get to keep the S13 and keep taking it to the track.

We had the wife's uncle who is an estate agent in Auckland come visit and valued our place, if in Auckland and in one of the outlying areas, at high NZ$600's. Despite having over $100k in deposit after saving for 8 years we couldnt get a reasonable house in a reasonable area of Auckland. Housing in desirable places worldwide is spiraling so high, yet small town stuff seems to be staying the same.

But it was a good move in the end: it takes me 15min to get to work (as opposed to 45min), we are 1km from the beach, I'm closer to our country's best racetrack and the climate is way better.

My advice: work wherever you get paid the most and rent there, then when you want to settle down, move somewhere quieter and buy there as your deposit will get you more house and less loan.

Phlip

Foreclosures within 2 miles of my house are damning anything that might RESEMBLE the building of equity.
My aunts live 3 blocks from me in the oldest house in the entire neighborhood and a realtor told them that my grandparents' house would be worth triple what it is in almost any other neighborhood in the city. I am riding this out and dumping all extra cash into principle payments. I will either wait on the market to sell and upgrade or stay my ass right here forever.

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Corbic

Well you have three possibilities.

A. You die. In which case nothing matters.

B. You sell the house.

C. You live there till it's paid off.

In B, if everyone goes "Ok", you either sell it for what you owe, sell it at a price that you "Break Even" from all the money you've spent or you turn a small profit.

In all three you come out ahead had you been renting for 3-10 years. Even if you just barely get out of your loan, you at least built credit and had more living space then renting at that monthly payment would have provided.

At least I keep telling myself that. At $750 a month I am not renting a house with 2 bath, 2 bedrooms, finished basement and detached 2+1 car garage.


In C, once the house is paid off that is $$$ in your pocket each month. I originally had a 30 year mortgage at $480 a month, once I got promoted I refinanced at 3% (from 5%) for 15 years and my mortgage bounced to $750. I have less then 9 years left. So, in the unfortunate event that I'm still fucking stuck here, I'll be 39 with a paid off house. If I move in a few years, I may just keep it and rent it to Norte Dame students as I'm within biking distance of campus.

enkei2k

come to NYC, you'll experience severe sticker shock.

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Corbic

Never. I don't even have any desire to visit anything Pennsylvania North.

Terrible weather, crowded, nazi Governments, over priced. Zero appeal. At least Cali has the landscape and weather.

TMW

this is why nc is so nice, cali prices are crazy

heres just some examples of what you can get for that kind of money here in raleigh

http://www.fmrealty.com/real-estate/...Photo=exterior

http://www.fmrealty.com/real-estate/...Photo=exterior

edit: house hunters is on right now haha its an episode in chicago. 1500 sq ft bungalow that pretty much needed an entire remodel for 355k...

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ZenkiKid

Yup. I am in the same boat as this guy. Every person who I know either bought a house or is living somewhere bad ass obviously got a financial boost from their families.

Me and my girlfriend dont have the same luxury when it comes to financial support and to be honest it kind of scares me as to what the future holds, but at the same time I know that this is how my parents started out when they first got here.

2 weeks ago I had a talk with a childhood friend of mine who works at an engineering firm. He too agrees with me with renting being dumb because of the fact that youre essentially throwing money away and making someone else rich off of your own money when you could be building equity.


Im not going to lie. Im not going to move out till my GF and I can afford our own mortgage. Like what I said earlier I truly believe that renting is stupid other than getting you used to the "shock" of making such a huge payment every month. So I will probably be at the earliest 28, but I will have a decent enough downpayment to bring my overall monthly to 2k including utilities + a little extra every month.

So until then ill be saving my money and waiting until

1. My gf finally finishes nursing school.
2. When the housing market is where I like it to be when I buy.

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ineedone

My neighbors just sold their condo (1bed 1 bath, 650 sq ft) for 445k. This is in D.C. though. Probably the craziest housing market second to NYC.

You have to pay to live in an awesome city. Personally, I like having shit to do and I am willing to pay the premium to live within walking/biking distance to all of it.

tricky_ab

I actually like seeing what your money gets in your area...

This is what $500K gets you in my area...

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Mr.Doback

It is all based on location, to you 600k may seem like a lot of money, which it is, but there is a vast amount of affluent individuals/families in this world. For example, the average income for my area is a little over $100k/yr.

If you don't have kids/major fiscal responsibilities, it isn't too hard to get approved for a loan that large. My buddy just bought a house for $450k and that is with a 65k/yr salary, no wife/kids and we are both 2 years out of school and make the same income.

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Corbic

See I have no wife or kids, no student loan debt and I make more than that. What did he do, take out a 5yr ARM?


I don't see the point on buying if you are NEVER going to pay it off, that's just a financial burden.

He is likely taking home $3-3,400 a month and at 30 years his mortgage has to be $2,800-3,000.

So best case he lives off $600 a month, worst case he is going into debt each month?