First-time home buyer - areas I can afford? (Boston, Plymouth: real estate, rent)

[FashionD]

Is there any area (within a 30 mile radius of Boston) where a young couple can afford a decent house in a nice area with a combined salary of $100k?

I've heard Arlington is nice, but appears to be out of our range. I think we'd be looking into houses for $300k and under. Not really interested in condos, but if we couldn't afford anything else, we'd have to reconsider.

Thanks for your help, in advance.

[holden125]

I imagine there are houses within 30 miles of Boston under $300K, though not that many.

Keep in mind that 30 miles from Boston can mean many different things due to the roads and transit system. I had a friend who lived 30 miles south of Dallas, which basically meant that 35 minutes later he pulled into his driveway. Here, being 30 miles out could mean a 90 minute commute each way. For example, it's under 30 miles to Holliston but you'd have to either drive through back roads to the highway, or drive through back roads to the train in Ashland, which is about an hour to South Station.

You might want to look south of Boston. Maybe Walpole, Mansfield, Bridgewater areas, all about 45 mins on the train. To the north perhaps Woburn or Wilmington? It's about half an hour from Anderson/Woburn to North Station and there is ample parking there. Also take a look at Stoneham, Melrose, possibly Wakefield though that is often a bit more expensive.

[maggiekate]

Originally Posted by FashionD

Is there any area (within a 30 mile radius of Boston) where a young couple can afford a decent house in a nice area with a combined salary of $100k?

I've heard Arlington is nice, but appears to be out of our range. I think we'd be looking into houses for $300k and under. Not really interested in condos, but if we couldn't afford anything else, we'd have to reconsider.

Thanks for your help, in advance.

what about middleboro or lakeville-it is more than 30 miles but may be more affordable. Bedford near Alington also.

[smarty]

Here's an interesting article regarding rent vs buy.
http://www.cepr.net/documents/public...ty_2008_05.pdf

As a young couple, you may want to stay closer to Boston.

Seriously think about the reasons why you want to buy versus rent. How long you want to stay? Most people here will tell you to do certain things because that is how they do it (like have 3 kids, live in the boonies, ...). You have to ask yourself if that is what you want instead of what other people think you should do.

Good luck..

[FashionD]

Well, I'll most likely rent for the first year close to Boston, but once I've decided where I can afford to permanently move and buy a house, I will plan on moving further from the city. Real estate is a great investment (in the long run).

Thanks for the input, MaggieKate. I will check into Bedford.

[smarty]

Did you read the article? I strongly suggest you look at all investment options. If you buy high, it may take 10+ years for you to break even. I recall many who bought in 1988 could not sell for the same price they bought until 1999. Many did not make a dime.

[FashionD]

Ha! I haven't even moved to Boston yet. Still could be years before I buy!
My parents purchased their first house in 1974 and the value of that house as of today has gone up $1.1 million...over time, it's a pretty good investment, I think.

Thanks for the advice though.

[xS☺B☺s]

Originally Posted by FashionD

Is there any area (within a 30 mile radius of Boston) where a young couple can afford a decent house in a nice area with a combined salary of $100k?

The City of Boston and probably a few other cities nearby has a strong affordable housing program. I bought my first home brand new in Boston on Tremont St for a midwestern price. Check it out, learn the rules, work the system, and you could do what I did.

Affordable Housing Opportunities - City of Boston (http://www.cityofboston.gov/dnd/Affordable_Housing.asp - broken link)

[holden125]

Originally Posted by FashionD

My parents purchased their first house in 1974 and the value of that house as of today has gone up $1.1 million...over time, it's a pretty good investment, I think.

Thanks for the advice though.

Almost anyone who bought in 1974 will have seen great appreciation, even in inflation-adjusted dollars. But Smarty is absolutely right that buying at the height of a bubble can be a very bad financial move. Not only would you be overpaying for a roof over your head, but losing money if you have to sell and move. The RE has gone up so dramatically in many coastal cities since 1974 that 1974 to today is hardly a good comparison for predicting the next 30 years. There was a story about a house near NYC that went from $10,000 to about $67,000 between 1924 and 1974, and then sold for $890,000 in 2002 and was estimated at $1.2 million in January 2006.

http://www.nytimes.com/2006/01/02/business/02house.html


In constant (2006) dollars, the value was:
1925-$111,000
1951-$190,000
1964-$265,000
1974-$270,000
2001-$900,000
2006-$1,200,000

Compare these figures to the area's median income for those years, and you see that it took a lot more years of an average salary to come up with $1.2 M in 2006 than, say, the equivalent of $190,000 in 1951. Nationwide, I believe the cost of a house averaged 3x average income in the 70's, and in the Boston area was getting over 7x until the recent slowdown.

To use your parents as an analogy, the concern would not be for them but for the next buyer, which is more akin to the position you're in. In many areas in the US, including Boston suburbs right not, it would not have been a good move to have bought a house at $1.1 M in 2006, just to find it 20% lower in a couple of years.

In any event, in many popular US metropolitan areas, the monthly cost of buying has been so much higher than the cost of renting a comparable place, even after tax breaks for buyers, that you need continued tremendous appreciation (of the kind that would not be sustainable given that the market had already reached a point beyond reach for many people), just to make the costs break even over ten years. This is especially true if you had to resort to tricky mortgages with little or nothing down (the kind that are drying up today) in a struggle to put yourself in a house you could not afford under traditional fundamental principles.

Here's a recent article talking about why buying might not make sense for everyone.

http://www.nytimes.com/2008/06/23/opinion/23krugman.html

[maggiekate]

Originally Posted by FashionD

Well, I'll most likely rent for the first year close to Boston, but once I've decided where I can afford to permanently move and buy a house, I will plan on moving further from the city. Real estate is a great investment (in the long run).

Thanks for the input, MaggieKate. I will check into Bedford.

I think middleboro and lakeville area yet has not gone crazy like Plymouth
and has a train into Boston, you also are near Cape Cod and the beaches. Bedford I think the bad was plane noise, when I did live in the city I just
blocked it out, and Bedford is nice. The housing market you never can time.
now it is low, and if you have a good job, coming into your own place is nice.
To be near transportation into Boston is a big plus.