Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
It was a house that was vacant for several years. It was part of a probate fight and after probate was finally over the family was trying to get it sold before the city issued an order to demolish. I bought it for the land mostly. Using the house as a remodel also saved me on impact fees from building new. Yes, I have had it appraised. I'm in the construction business and have all the tools afforded to know the value of my house. There have been several homes in our immediate area sold in the last few months that support the appraised value.
Being in the construction biz is another atypical factor in what you did. Most people would not undertake that project - I have zero desire to do anything more than some real basics to any house I might buy.
Respectfully, your example is an outlier. The example I gave is much more typical for the last 10 years.
Exactly my thoughts Westbound and Down. My wife and I have been renting since the spring of 2010 and may never (I know...never is a long time) buy a house again. Ever.
We are very comfortable renting and share your sentiments. It affords us a lot of flexibility - if/when we want or need to move, we don't have to worry about selling a house. We got badly burned on that in the 1980s, and it is always part of our calculus in the "rent vs buy" decision.
We would consider buying another house if we felt we would be staying in the location for at least 7 to 10 years. If I felt that way about ABQ, I might do it here. However, our current horizon is about 4 years (we are here for a specific length of time for a purpose). And I would rather buy in a "healthy" market where there are lots of houses for sale with motivated sellers; what we found here is a low supply / low demand market - lots of the limited number of houses on the market where sellers are "fishing" and if they don't get their price, they yank it off the market. Their 'price' is almost always a function of what they paid for it - we looked at houses that were listed at $500k that had a market value of under $400k, and we have seen many of them get taken off the market. Lots of owners, although they may want to sell, don't really have to sell. We ran that gauntlet for about 2 months and decided to rent instead...
what we found here is a low supply / low demand market - lots of the limited number of houses on the market where sellers are "fishing" and if they don't get their price, they yank it off the market.
I agree and observed that.
We were fortunate that we were out here on business frequently for a period, then my wife was offered a transfer in 1998. We bought a smaller home in anticipation of retiring. Things got a bit confusing, but overall we came out ok.
what we found here is a low supply / low demand market - lots of the limited number of houses on the market where sellers are "fishing" and if they don't get their price, they yank it off the market. Their 'price' is almost always a function of what they paid for it - we looked at houses that were listed at $500k that had a market value of under $400k, and we have seen many of them get taken off the market. Lots of owners, although they may want to sell, don't really have to sell. We ran that gauntlet for about 2 months and decided to rent instead...
Great post. I ran into this as well earlier this year, and you helped put into words that which made no sense to me at the time. Thanks.
Let this thread be a lesson that when asking questions that are really about personal finance, it is better to go to the personal finance section than to ask whomever happens to be in the city. Buying a house has vastly more to do with proper financial planning than which city is being considered. Yes, a reference should be made to the city so it can be incorporated, but conflict opinions with very little math is par for the course.
As for buying a house in ABQ. Why not? Buying a house is a good plan if you are there for 3 years or more. If you are planning to only be there three years, but can put down 20%, it is a very reasonable plan. The PMI is removed and if you can swing the funds to make the payment on a 15 year mortgage the rates are lower. Use reverse points where the mortgage company is paying their own fees in exchange for getting you to pay a higher interest rate. That way you aren't throwing your money in the trash if you decide to move. Usually the payback period on those choices is 3 to 5 years. If you end up staying there 10 years, such that the reverse points were no longer a good deal, you won't carry because by that point owning will have been so much better than renting that the comparison is absurd. This is also known as hedging your bets. When you do it properly, you win under both scenarios.
The taxes, insurance, and interest (no PMI) should be substantially smaller than the rent. The challenge will be making the principal part of the payment on a 15 year note. The savings should easily be enough to afford the realtor fees on the transaction.
If you're looking at cheaper parts of town, the difference between rents charged and the costs of ownership (in percentage terms) increase even higher. The worse the slumlords operating in the area, the bigger the savings from avoiding them.
To say that, like a previous post, that the market in ABQ is unique is putting it mildly. Southwest housing values, but without the boom-and-bust of Phoenix, in a stagnant economy with many New Mexicans unemployed or underemployed. Even where I live (near Gallup) good house rents in a nice neighborhood or area are more expensive than a comparable home in the Midwest (and Gallup is quite depressed to put it mildly). We will probably be moving to ABQ in a year or so based on our jobs, but house rents are high in ABQ, compared to metro Chicago or Cleveland (though there are unique exceptions at both the high and low ends of the spectrum). But to buy a house? Not a terrible market here, and mortgage payments are probably cheaper than renting, but..............
New Mexico in general is kind of like that, compared to other places. Unique. (Maybe more like Colorado?).
Let's just say coming to New Mexico from metro Cleveland we got some sticker shock on house rentals. Apartment rentals are much more reasonable in NM than house rentals, yes? Particularly house rentals in "good" neighborhoods. A nice 1200 sq. ft. 3 BR ranch in Corrales, for example, ain't going to be $800 a month like in the Midwest for a comparable neighborhood. And the NM pay isn't better than in the Midwest, usually. Especially in so many Midwestern cities where school quality is a primary factor in dictating home value. So in NM....it's instead the price paid for natural beauty and climate, I guess. I'm still learning as I go here, though.
I have always thought that since 2000, a purchase of a home (to finance one with a low down payment, that is) is the most overrated oversold myth in the American economy. To rent and enjoy your life (and the freedoms renting permits) stressfree is truly much better than the overrated tax deduction (for many the main selling point). Compared to maintenance and upkeep, and homeowners insurance and property taxes, it's pretty much hassle free, with a good landlord, that is. It's not like full-timing it in an RV, but it ain't far off, either.
But for some folks, the house maintenance and gardening and weeding etc etc is their weekend in a nutshell, and enjoyed, and their love. For those folks, a house purchase usually makes good sense.
But despite all that, and hyprocritically, we're fifty now, and so a small bungalow in the city, close to shopping and amenities, is probably in our future. But we're going to hold out for a great situation, or we'll just keep rentin'.
If you are not going to be here for at least 5 years I would not buy.
You also have to take into consideration, property taxes, insurance, PMI and repairs. Things you usually do not have to worry about when renting.
Agree. Housing prices are quite high now, so don't count on much appreciation. Find a 3-BR apartment and stash the extra cash away. You'll save on repairs, realtor fees when you sell, and property tax.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
