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To each his own, but OP, i think its naive to make a manifesto on your economic choices at 29. I dont know where you live, so maybe 250k works, but you mention that you would stick to it regardless of location?
I think you are making the mistake of choosing some arbitrary way to value the price of an asset. There is only one way, and thats market with all its greed and inefficiencies.
Making it in the world is hard , it is painful, even brutal. Running after money is not some vain pursuit , it is a validated means to provide for not just yourself, but family and leave somethin for your kids.
But if you are convinced that stock markets are the way to go, best of luck.
a house ? i can't get a decent two bedroom apartment co-op in our area for that amount .
LOL!
Yes, a house.
I would be thrilled if my house sold for that amount.
4 BR, 3.5 bath, 2400 sq ft on 1/3 landscaped acre.
Granite and quartz updates, hardwood floors, decks and patio, etc.
I'm just guessing you'll feel differently about this in 10 years. And 10 years after that, you'll feel differently, and 10 years after that.... And I'm not just talking about dollar amounts.
I would be thrilled if my house sold for that amount.
4 BR, 3.5 bath, 2400 sq ft on 1/3 landscaped acre.
Granite and quartz updates, hardwood floors, decks and patio, etc.
Probably will go for $200-210 when we sell.
Just to offer perspective on how housing prices can differ so much between areas...
Three months ago, I sold a 1 BR condo, 750 sq feet and a deeded parking space in a lot. For $230K. Had multiple offers too.
Yeah... I know someone who sold his Boston condo (smallish 2 BR on the 3rd floor, with rooftop deck, no parking, no elevator) for $600,000 about a decade ago.
He paid $200,000 for it less than a decade prior.
1. It's too much. No arguments about location and cost of living will ever convince me that the amount of labor that sum represents is a fair amount of work for shelter. It just isn't, no amount of spin changes that. A fair price is one that is comparable to what it should actually take to build a house. If the price is inflated by zoning, permit costs, bureaucracy nonsense, or profiteering-level utility hookup costs, it's too much.
2. It's too much. In HCOL areas, it usually comes out better to rent and invest in the stock market. While some trade-off can be made for quality of life, there must be a reasonable line drawn. There is no reason that "enough is enough" should apply less to housing than to everything else in life we make decisions on.
3. I refuse to put myself in a situation where I have a debt I cannot pay if circumstances change. With high prices, unless I make a boatload of $$$, I would be very vulnerable to changes in the job market and housing markets. At reasonable price levels, I could pay it off or pay it down enough and refi to be able to move elsewhere and still pay my bills, even before/without selling it. Not so with super-expensive prices.
4. I expect that at some point our education system will be reformed for the better, so that all families have access to a decent education regardless of where they live. As a consequence, I expect that people won't be willing to pay such insane premiums just for a good school district. I refuse to bet 10 years of hard life's work on the singular proposition that such changes will not occur and I'd be able to easy sell for more than it was bought for.
5. I am only 29 and I'm already sick and tired of chasing money. An expensive house will force me to chase money even more.
6. I believe short sales and strategic default are immoral and don't want to risk having to go through it. In my family you always keep your word. You don't borrow money and then not pay it back - that is like shoplifting. Most loan contracts specify foreclosure as a remedy a lender has to deal with a breach of contract, not as an option within the contract. Think about it - if it were an option that still satisfies the contract, why would it ding your credit? If you break a cell phone contract, it doesn't ding your credit. Why? Because you didn't actually breach it, you exercised an option within it. This distinction, while very subtle, is nonetheless real. In fact, the word "credit" comes from the Latin "crēdere", meaning "trust". A ding of credit is not simply a customary practice - but has a deeper meaning behind it - it means you cannot be trusted.
If you still don't agree, I would point you to the following legal analysis which explores the legal and philosophical arguments in more detail:
Wake Forest Law Review "The Morality of Jingle Mail"
I completely agree with point #3, and good for you for being prudent. My husband was laid off just after we moved and bought a house. If we had bought for the amount we were pre-approved for, we would have been in big trouble. As it was, we purchased a smallish but pretty nice house for a third of the pre-approval amount and were able to afford the mortgage after the layoff with much lower income. Several of husband's co-workers who were also laid off, but were mortgaged to the max, really struggled. Some of them worked 2 and 3 jobs just to be able to avoid foreclosure.
OP is also thinking only as a single person, not as a parent. I couldn't buy a home in my area for $250,000 with a reasonable commute to work where I could send my child to the public schools.
Not that you can tell everything for the various ratings and rankings out there, but my son will be going to one of the top rated high schools in my state in the US News rankings. For anything in the OP's arbitrary price point, the schools don't even make it into their rankings.
250k around here gets you a rundown dump in a bad neighborhood.
On the other hand, it is apparently possible to buy quite nice homes in certain parts of Detroit for 100k or so. And I expect the OP could find a mansion in Flint for a pittance these days.
A meal at a restaurant should never cost more than $20/person.
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