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Old 05-31-2018, 02:54 PM
 
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You like living in Portland and make more than enough to be able to afford to live there in a decent neighborhood and house. So moving seems to be unnecessary and not a choice you want to make.


Mortgages are going up. Housing prices, especially in Portland, are going up. Don't count on Portland seeing a downward correction. The economy is doing well and the zoning restrictions are guaranteed to keep housing prices high. I would not wait to buy. A few years from now that $550K median price is going to see real cheap.
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Old 05-31-2018, 02:57 PM
 
Location: Saint John, IN
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I also suggest moving to a lower COL state!
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Old 05-31-2018, 03:21 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Vancouver, WA (7 minutes north of Downtown Portland) is also seeing housing cost pressures (200+ Oregonians move to Vancouver EVERY MONTH!).

Really depends on your LT plans and ST comfort.

1) Doubt if PNW prices will crash HARD (But I do feel they are currently over inflated)
2) Economy WILL crash hard (someday... not soon)
3) You may have a future opportunity to snag a bargain (keep LOTS of cash on hand)
4) Ideal properties seldom appear when you are looking for them (same with ideal spouses)

I would be hard pushed to buy a personal residence in Oregon (as noted above... taxes + politics + I am not really that keen on 280 days of drizzle / yr for LIFE) You can be stuck with 'houses' FOR LIFE! + strange / difficult ownership laws (since I have most my props in community prop states +/-)

Lots of options.

Don't get a big hurry
Consider how you can best optimize your cash flows / taxes / investments.

Having REAL PROPERTY can benefit your taxes / strategies a LOT (ask Donald).
Personal residences are not privy to that special tax treatment.
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Old 05-31-2018, 04:46 PM
 
Location: Cleveland, OH
452 posts, read 706,043 times
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Quote:
Originally Posted by wheelsup View Post
We've been looking in that area as well, tons of homes for sale in the $300's. You don't need to spend anywhere near half a mil on a house there.

Live in Vancouver, and avoid the $20,000 a year in OR income tax as well. Plus the schools are better.
I would be working in OR, so wouldn’t be able to avoid the OR taxes by doing that.


Also, I would prob make more in “flyover” country.
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Old 05-31-2018, 06:07 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,115 posts, read 3,411,881 times
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Quote:
Originally Posted by HappyinCali View Post
I think it will come down to personal priorities. Financially, you are a physician (??) so you will always have a job. So you are unlikely to ever have to sell your house at the bottom, because you lost your job, which is really the only way you can get hurt. In addition, with 5% down you will actually be risking very little and you will get a pretty decent interest rates, given how low rates are currently.

My parents bought at almost the peak last time. They had stable jobs and even though their value cratered they kept making payments and it eventually rebounded to where they were breakeven.

As far as the housing market, not that my opinion matters, but I think we are closer to the top than the bottom. But I don’t think it will be anything close to what we saw in 2007.

So if you wait 3 years for a 20% correction, you will have spent close to $100k in rent, to buy a house $100k lower. Seems like a toss up.

As far as personal preferences, only you can know that. My wife and I have had many discussion regarding that over the past years, but each time we decide that we love living in CA too much to move. If our circumstances change and we lose jobs, family issues arise etc., then things might change. But we would rather live in a small place in San Francisco than a big house in the Midwest/South.

Bottomline with housing: You only get hurt if you are forced to sell at the bottom due to job loss, transfer etc. Given your occupation you are unlikely to experience that. Based on the stats you posted, I think you can afford it and you will not struggle financially to do it. Beyond that, it is about personal preferences.
Not to mention waiting and paying higher interest rates on the mortgage and missing out on tax deductions which I would think someone making $200K a year would benefit from.
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Old 05-31-2018, 08:25 PM
 
10,723 posts, read 20,156,038 times
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Quote:
Originally Posted by aslowdodge View Post
Not to mention waiting and paying higher interest rates on the mortgage and missing out on tax deductions which I would think someone making $200K a year would benefit from.
We are quite a bit above that yet we will be taking the standard deduction by a long shot. Only pay about $3k in mortgage interest a year.

It's not about income it's about how you spend it.
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Old 05-31-2018, 11:57 PM
 
Location: Formerly Pleasanton Ca, now in Marietta Ga
4,115 posts, read 3,411,881 times
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Quote:
Originally Posted by wheelsup View Post
We are quite a bit above that yet we will be taking the standard deduction by a long shot. Only pay about $3k in mortgage interest a year.

It's not about income it's about how you spend it.
So how long have you had your loan and for how much?
OP is looking at getting a new mortgage, exactly how would they be paying that little in interest on a new loan? Do you think they will only have a payment of <300 a month? I guess if they buy a house for something like $75K and take out a mortgage on it. They have those cheap houses in Portland?
What about Property tax deduction?
What about waiting three years like people are talking and waiting for a drop in prices ( if it happens) and paying a higher interest rate on the mortgage?
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Old 06-01-2018, 08:40 AM
 
628 posts, read 445,835 times
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Nobody has mentioned your lack of downpayment. Rates have gone up and will be even higher for the 5% down loan you have to get. Keep in mind that you need to have cash for closing costs ($3500ish), first year homeowners insurance($1000 here), moving expenses and three months PITI reserves in the bank to buy a house.

So on a $550000 property you need $27500 down, $4500 misc and abt $9600 in reserves plus moving expenses. You will end up with a payment (of my back of the envelope multinoman cty calcs are correct) abt $3200 @ 4.625%. Will this payment allow you to save? You have not saved very much so far so I assume you are young and your income will be going up. If that is true I would say go for it.

If I were in you and my wages were fixed or stagnant at $200k I would personally only be willing to take on a mortgage payment of 25% of my take home, roughly $2650. But If I knew my wages were to increase and I were young I would go up to $3200, I would be comfortable in that payment at a salary of $240k so if you are going to hit that in the next couple years just dive in now. You are close enough and you are losing traction on a hotmarket.
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Old 06-01-2018, 09:08 AM
 
12,404 posts, read 9,215,201 times
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Quote:
Originally Posted by MDCB View Post
We live in the PNW (Portland) and median home prices = ~ 550K
We love living in the PNW and Portland in particular

We make ~ 200K/year
Current savings = ~ 50K
No education loans.
Car loan 20K @ 2.9% ($400/month)

Can get a loan with 5% down (physician loan)

Current Rent = $2900


What do you think would be the intelligent thing to do:
- Continue renting? and potential wait for a bit of a downturn in the housing market?
- Buy a house?
- Move to the midwest/cheaper area and buy a house for a median cost much lower?

Thanks in advance for all the thoughts.
This is going to depend on lifestyle preferences, not just raw financial numbers. Raw numbers suggest it is good to rent (unless house prices will appreciate considerably faster than inflation in your area). Or move (but this is also a lifestyle choice, since there may be intangible or less-tangible reasons for wanting to stay put or live in a city of a certain size).

Overall, the best plan may be to rent until you are within 2-3 years of having school-age kids (if applicable), then buy into a good district.
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Old 06-01-2018, 12:09 PM
 
10,723 posts, read 20,156,038 times
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Quote:
Originally Posted by aslowdodge View Post
So how long have you had your loan and for how much?
OP is looking at getting a new mortgage, exactly how would they be paying that little in interest on a new loan? Do you think they will only have a payment of <300 a month? I guess if they buy a house for something like $75K and take out a mortgage on it. They have those cheap houses in Portland?
What about Property tax deduction?
What about waiting three years like people are talking and waiting for a drop in prices ( if it happens) and paying a higher interest rate on the mortgage?
Your post referenced income only.

I didn't say my payment was $300/month.
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