Help! I've priced myself out of the Western Suburbs (Boston: real estate, apartment)

[Bonger]

Hi,

I was hoping for a little advice as I am running out of time and this situation is starting to drive me nuts.

A little about me:
I attended college in Waltham, and have lived in Waltham, Newton, Brookline and Watertown for the last decade. I am 27, work in the Financial Distict and attend Grad School in Wellesley. I love living in the area in every way.

The situation:
Being 27, I figure that "wasting" 1300 a month in rent is silly when I could be building some equity. With the housing market being down, all the more reason to buy a place now. So I figured I would look for a place similar to the apartment I have now, a good sized 3 bedroom. A house would be even better as they appreciate more, especially with a little work put in.

The problem:
I set my budget at 1500 a month, and apparantly, that only gets me a 200k place. I can afford more, but I believe I should be conservative with my first foray into buying. Unfortunately, I canot find a place with my space requirments in the western suburbs.

I've been looking a little further out like Framingham, Marlborough, Ashland, etc, but an not ecstatic about living there for a few different reasons.

So, what I would love is some ecommendations. I would like to find an affordable place, with atleast 3 beds, preferably a house, in a town that has a similar culture to the areas I am used to living in. That is, great diversity of food, a little racial diversity, etc. while still being within a reasonable drive to school and work. I drive, do not take the train as I get free parking.

Any ideas?

[NY'er lost in MA]

Well- $1500 for a mortgage would mean you have a fairly large down payment for a 3 bed condo or home. Unless you have roommates that plan to move with you to help offset some of your expenses...

Buying a 3 bedroom, single-family home is probably not realistic. Even finding a large condo in Metrowest will be a chore unless you do consider other areas. Studio condos are going for $225K+ in Brookline, Wellesley has no listings in that general price range and Newton isn't much better.

Give some more details on other areas you are open to and if you have a down payment.

[professorsenator]

I agree wholeheartedly with your desire to not "max out" on house payment.

I would encourage you to accept a smaller place in a better quality community. It's a cliche and everybody claims that they know it, but don't lose sight of thie fundamental real estate truth: location is everything. Yes, a little bigger and/or nicer place further out or in a less desirable location will look appealing, but you can't move it to a better location. That place in the primo location can always be spruced up later on (especially if you are wise and don't max out on your house payment).

[Bonger]

Hi,

Thanks for the initial feedback.

I agree that location is everything. I've found large places out in Marlborough, Ashland, etc, but the areas seem a little seedy and very boring.

As for the down payment info. I am planing on putting down 10% on a 200k ish place.

I actually took a ook around salem today as I saw some condos there that looked nice. The area seemed to be pretty active and interesting. Getting to school would be a little bit of a chore, but to work seems like a snap.

Once again though, a 3 bdrm condo offers less space than a house. And location? Is Salem considered desirable? Is 225 too much for a condo there. Should I just throw this idea down the toilet and keep renting?

I could not live in a studio. I've though about it a lot and I need to have a 3 bdm at the least to maintain my sanity.

[MAtoNC!]

Is Salem considered desirable?

No

Is 225 too much for a condo there.

Yes

Salem is flooded in the condo market. I would not consider this a good investment. Almost every multi family has been converted into a condo. Salem had the tourist thing going on and downtown. But I really don't find it that desirable.

If you are used to Metro West you may not care for the commute. I put up with it because I love the coast.

[NY'er lost in MA]

We have a condo in Salem and moved to Ashland- into a single family home. I agree with MAtoNC- Salem is inundated with condos- 197 on the market to be exact. Last year when we were trying to sell there was around 240. So essentially the best ones sell and there are still about 200 left!

Also- going to the city on the train is not exactly a breeze. Since your work in the Financial District, you will have a quaint little FREEZING walk from N. Station to your job. And driving into the city is ludicrous. I did that for 3 years- 2+ hours each way unless you get on the road before 6am. Being that Salem is jutted out on a peninsula, you have no easy access to the city- 114- 128 -93. That is the devil's cocktail of commutes! Take it from experience. And as far as developing equity- not a great area. Schools have issues and seems that many homeowners have been there for years with alot of equity. When you neighbor sells their condo for $100K less than yours- good luck!

I would search in some areas of Metrowest- the commute is much better to where you are headed. Perhaps sacrifice a little size, or have roommates as I mentioned before. $200K is a very minimal budget, so also keep in mind you may have to consider raising your ceiling slightly...

best of luck.

[Valerie C]

I just wanted to add a little note to you since you're a first time buyer. Hopefully your real estate professional will have pointed you in the direction of one or more lenders who work with the various 1st time buyer programs offered at the state and federal level. Down payment assistance, closing costs, grants, there are programs to fit many budgets, and anyone considering making the jump from renter to owner should look into what's available.

Originally Posted by Bonger

I set my budget at 1500 a month, and apparantly, that only gets me a 200k place. I can afford more, but I believe I should be conservative with my first foray into buying. Unfortunately, I canot find a place with my space requirments in the western suburbs.

[holden125]

Originally Posted by Bonger

Being 27, I figure that "wasting" 1300 a month in rent is silly when I could be building some equity. With the housing market being down, all the more reason to buy a place now.

Although there are tax deductions and building of equity, housing prices are still high enough that you may be better off renting. The New York Times and Wall St. Journal have had articles along those lines in the last couple of years, saying that in places like NY, Boston, California, Miami, that the prices got so high to buy that people did better by renting.

Renting vs. Buying: The Realities of Home-Ownership ∞ Get Rich Slowly

Most predictions are that the housing market will continue to drop for another year or two, and if that is the case, now would not be the very best time to buy (although it's already better than a year or two ago).