Will the home prices ever go down? (Cambridge: rent, mortgages)

[GeePee]

Originally Posted by jks1985

Mortgage interest, homeowner's insurance, property tax, and HOA/condo fees... now THOSE are great investments!

All a hassle but arguably mostly paid for by the renters.

[Louisville Slugger]

Originally Posted by GeePee

All a hassle but arguably mostly paid for by the renters.

Yeah, mortgage interest can be deducted, but it's not much now considering the standard deduction has doubled. Insurance is insurance, renters pay for renter's insurance and they're paying the landlord's homeowner's insurance through their rent. Condo fees are just expenses you would have paid for by yourself if you owned a house. They're just split between however many units are in the complex. Again renter's are indirectly paying for property taxes through their rent. Owners pay these directly to their lender or town/city and can deduct them on taxes. Not having to pay maintenance is a big one. Appliances, water heater, exterior maintenance can add up over time. Stuff doesn't last long as it used to.

Renting does have its benefits though. It allows for mobility. Also if you're disciplined enough, saving and investing the difference could put a renter well ahead if done right.

The decision to rent vs. own should be a lifestyle choice. One is not necessarily better than the other.

I'd like to think there will be some sort of correction, but MA is a desirable location. Proximity to the water, good schools, hospitals, employment opportunities. Land is a finite resource. Zoning laws, regulations, and anything else that prevents building up areas will continue to limit supply.

[GeePee]

Originally Posted by Louisville Slugger

The decision to rent vs. own should be a lifestyle choice. One is not necessarily better than the other.

Bingo. Some people cringe at thinking they will be exactly where there are now in 5 years. Some find ultimate comfort in that.

[in_newengland]

Originally Posted by massnative71

That's why I said 5 years minimum, depending how the market goes it could be more. After that, I would much rather pay interest on my own asset than for somebody else's (even if it seems like you are pissing it away for the first few years of the mortgage).

I've always heard at least ten years if you want to make a profit. But probably it's less in today's market. It's never certain that you will make a profit as you could end up in the middle of a recession and actually lose money.

Has anyone mentioned upkeep on a house? Replacement of fridge, dishwasher, other appliances? Building a deck or repairing it? Tree removal or trimming? Lawn mowing/snow removal? Gutter cleaning. New roof. How about new heating system? And there are selling costs even if all you use is a lawyer.

The list goes on. Some say a house is a hole in the ground into which you pour money. Mostly it's a lifestyle choice and if you plan on staying 5, maybe 10 years, you can even make a profit by owning. There's a certain satisfaction in owning.

[timberline742]

Originally Posted by Louisville Slugger

Renting does have its benefits though. It allows for mobility. Also if you're disciplined enough, saving and investing the difference could put a renter well ahead if done right.

.

WHICH IS HUGE.


I moved, ugh, Vermont, Wisconsin, Indiana, California.... more. For education and career moves in my 20s and 30s. Most people I know moved around a bunch. Buying a house (even if fiscally possible) in my 20s / early 30s would have been horrible to my career.

[airunxc]

Buying a condo good investment (less to upkeep, as long as association has good finances)
Buying a house, a decent place to store equity for 10-30 years. Maybe you get lucky and town really improves if it has good schools and doesn't build a lot therefore increasing demand.

[MassVt]

Originally Posted by Louisville Slugger

Yeah, mortgage interest can be deducted, but it's not much now considering the standard deduction has doubled. Insurance is insurance, renters pay for renter's insurance and they're paying the landlord's homeowner's insurance through their rent. Condo fees are just expenses you would have paid for by yourself if you owned a house. They're just split between however many units are in the complex. Again renter's are indirectly paying for property taxes through their rent. Owners pay these directly to their lender or town/city and can deduct them on taxes. Not having to pay maintenance is a big one. Appliances, water heater, exterior maintenance can add up over time. Stuff doesn't last long as it used to.

Renting does have its benefits though. It allows for mobility. Also if you're disciplined enough, saving and investing the difference could put a renter well ahead if done right.

The decision to rent vs. own should be a lifestyle choice. One is not necessarily better than the other.

I'd like to think there will be some sort of correction, but MA is a desirable location. Proximity to the water, good schools, hospitals, employment opportunities. Land is a finite resource. Zoning laws, regulations, and anything else that prevents building up areas will continue to limit supply.

Excellent post, covers all the basics.

[Louisville Slugger]

Originally Posted by MassVt

Excellent post, covers all the basics.

Thanks, it was unconventional buying my first condo at 26. Most people my age moved around a bit or worked in the city. I was the type of person that liked visiting the city, but wanted my own place. It's been 5 years since I moved. I've gone through, sewer line clog due to roots, found out one of my kitchen cabinets was mounted through a drain pipe, gutters detached from the house, driveway dug up and re-paved, pipe leak because spigot wasn't completely drained before winter and the water froze inside pipe, expanded, and made a hole, window sill and casing rot, etc. Some of this stuff was planned, but there was unexpected stuff that came up. The majority of the time I was the one who got estimates and coordinated when things were going to get fixed. Someone had to do it.

Then there were improvement costs: Mini split installation, all new appliances, LEDs, new toilet upstairs, painted whole place, new light fixtures, carpet, washer/dryer/vent, water valve for washer, faucet for kitchen sink, shower valve replaced, etc.

And future improvements: sliding glass door will be replaced hopefully this month, and I want to get two faucets replaced in the second bathroom downstairs because they're falling apart.

Then there's the time. I had to take over managing the condo because my neighbor who managed the condo lost his partner due to Scleroderma. This happened in the middle of his chemo treatments for testicular cancer,

We closed the existing trust account and opened a business account since I was not on the trust and becoming a trustee required paperwork and lawyers. It was much more cost effective going to a business account. I scan all bills and invoices and upload them to Drop Box for everyone in the building to view. I make deposits and manage the money coming in and going out. I have a big spreadsheet detailing operating costs and income.

A lot of this has been a really good learning experience. I guess if I ever do meet someone and buy a house I'll be able to roll over some equity and have no problems managing issues that come up.

But at the end of the day considering these expenses and the opportunity cost of working outside the city vs. in the city the value of my place has gone up a good amount. My mortgage is fixed for the next 15 years and I could potentially be mortgage free by 45.

[BostonBornMassMade]

I was scrolling though recently sold homes on Boston.com last night..I saw a lot of homes in Avon, The Bridgewaters, Brockton, Randolph, Holbrook even Stoughton and Quincy selling for just over 200k some were selling SFH selling for under 190k. Condos in some of the less expensive town like Methuen and Taunton are going for as low as 107k-125k. I would say prices increase has slowed tremendously towards the bottom of the market.

[inquisitive2]

Originally Posted by miu

IMO the large number of condos in the metro Boston area keep the single family home prices permanently high for anything within 128. Plus Boston keeps attracting more and more businesses to the area, which translates to more workers wanting to live close to work.

What also keeps the market up is the influx of non-residential students that come here for school, rent and stay. If college students stayed at home, lived with parents, and went to school locally our costs of rent and real estate would not be what it is.

In addition the number of low income people who are given section 8 vouchers take up units in apartment complexes and private two and three family houses and contribute to keeping rents high with limited number of apartments that are available-supply and demand.

Finally, many foreign investors have real estate and business holdings purchased low and then priced for maximum profits with no concerns for locals affordability.