Nothing Inbetween (real estate, houses, income)

[hnsq]

Originally Posted by CaptainObvious

So, I've got my $1,000/month in hand, for better or worse, out there looking, and finding that I am priced right out of the market. "Starter homes" aren't so starter anymore. $1,000/month will get you a 700 square foot apartment in a nice neighborhood or killed in a bad one. Which lead me to the first post...nothing inbetween. I know my outlook is pessimistic, if not downright bleak, but I just feel like with as successful as I feel, I ought to be able to afford more. Such is life

I find it hard to believe you are willing to pay $1,000 a month for a 700 sq foot apartment. My place is around 700 sq feet, I pay half of that and live only a few blocks from Walnut St. You obviously shouldn't grab the first place you find. Shop around, make a budget, a GOOD budget. Don't eat out every night, be smart about your money. Most of the best houses and apartments require a lot of hunting to find (in my opinion). As far as the question of money for retirement goes, I have studied some finance, and if you are smart about it, over half of your retirement income can be gained by saving money in the first few years you are working. With a decent rate of return, and good savings plan during those years, you will live much more comfortably when you are older.

Of course, I am just 21 years old and am just going on suggestions I have been given with the retirement thing, but the numbers do add up.

[CaptainObvious]

Originally Posted by hnsq

I find it hard to believe you are willing to pay $1,000 a month for a 700 sq foot apartment.

I never said I was willing to do that.

Cap

[MLN2603]

Cap.... I know exactly what you are talking about!! We've been thinking of moving up and been looking at houses... we can't believe how people let a beautiful home go to crap! I just said the same thing you did the other day... 'it doesn't take any money to cut your grass and pull weeds!' (maybe $2 for gas) And come on.... you can't come up with $10-$20 for some flowers??? It's amazing how people don't respect and take care of what they have!

No, you most likely won't find anything new for under $150,000...

We bought our house 4 years ago... small ranch built in 1968... for $90,000. It was in move in condition but we still managed to put over $50,000 into it! Our mortgage is $900 a month including taxes & insurance... we make $75k and still struggle at times...

[CaptainObvious]

Originally Posted by MLN2603

Cap.... I know exactly what you are talking about!! We've been thinking of moving up and been looking at houses... we can't believe how people let a beautiful home go to crap! I just said the same thing you did the other day... 'it doesn't take any money to cut your grass and pull weeds!' (maybe $2 for gas) And come on.... you can't come up with $10-$20 for some flowers??? It's amazing how people don't respect and take care of what they have!

No, you most likely won't find anything new for under $150,000...

We bought our house 4 years ago... small ranch built in 1968... for $90,000. It was in move in condition but we still managed to put over $50,000 into it! Our mortgage is $900 a month including taxes & insurance... we make $75k and still struggle at times...

Shame...about the houses going to waste and about making a good wage and having to struggle to get something nice. I continue to feel like I am extraordinarily successful and can't afford to buy something nice. Shame that $150,000 doesn't get you anything any more...because that's alot of money to alot of people (including me). I see, too, a lot of people touting this as some kind of badge of courage or something. Posters from bigger cities saying "Ha! $100,000! That will get you a studio apartment in the bad part of town! I had to spend $700,000 just to get a house within 10 miles of City X". I feel like saying "Well, good for you!" My calculations say to actually afford a $700,000 you'd have to be pulling in $250,000/year. Big cities pay more, but not that much more...you mean to tell me secretaries in Pittsburgh make $12.00/hour, but in Chicago they make $40.00? Please. And the people that buy the $700,000 house because it was "such an amazing deal" because "all the other houses on the street go for $800,000". Yea, BUT YOU'VE STILL GOT TO BE ABLE TO AFFORD A $700,000 HOUSE IN THE FIRST PLACE- good deal or not. The past few years seems like you've got to be nuts (finance the living hell out of your lifestyle), settle for something you don't want, or be rich. Unfortunately I am none of the above. Oh! And poster #3 (I am on a roll now)..."You don't know how good you've got it in Pittsburgh. You can get a 100-year old historical mansion close to the city for $250,000. In CityX that would be two million bucks!" Fantastic. So, I should go buy $100,000 more than I can afford because that house sitting a thousand miles away would be worth 3 times what it is here? Again, YOU STILL HAVE TO BE ABLE TO AFFORD THE HOUSE! Regardless of "how cheap the Pittsburgh housing market is". Just urks me to no end that a good wage ain't enough to get you nice. I'd even take a Mcmansion at this point- WITH vinyl siding, but alas, they're all $225k +. Since housing prices are driven by demand, I still can't figure out who the people are buying these homes. A $1,800/month mortgage would wreck me, and my income is in the top 10% nationwide statistically (and I have ZIPPO debt- credit card or otherwise). Stands to reason my home should be "nicer" than 90% of the country than wouldn't it? Nope- you'd see my place and think "slum". I know a lot of this is personal preference. But, I think there is a certain point where reality comes into play and one JUST CAN'T AFFORD something no matter what lifestyle, creative financing, preference toward risk, etc one might have. One might argue that my idea of "nice" is too high. Here are some extraordinarily dreary average homes I cannot afford...


Coldwell Banker Real Estate Inc. Pittsburgh
Coldwell Banker Real Estate Inc. Pittsburgh

Yuk! Now I have to go take my blood-pressure medication

Cap

[Katiana]

OK, Captain O, you are going to hate me for this one. Housing prices in metro Denver are at least 50% higher than in Pittsburgh. During the height of the recession in Pgh, about the time DH and I were buying our first house, prices here were at least 100% higher. Yet DH and I and many other young (at the time) couples managed to buy a house. Wages here are not much higher than in Pittsburgh, especially for professionals. I think nursing wages are actually lower here, and engineering salaries roughly at par. I used to crack up when my mom talked about young moms she knew in Pittsburgh (usually classmates of mine) who had to work to make payments on a house 1/2 the price of ours. As a young mom, I mostly stayed home, worked some very part time (1/2 to 1 day a week) jobs. And we did it! I don't know how, exactly. We didn't buget, per se; we didn't deprive ourselves of much (at least we didn't think it was deprivation); we took vacations to Pittsburgh and other exotic places, etc. We did have a fair amt of money saved for a down payment, which helped. We try to stay out of debt.

I'm not sure what my point is. I understand what you're saying about not caring that prices in CA or CO or wherever are higher than Pittsburgh. I guess I would say save up some money for a down payment and take the plunge!

[CaptainObvious]

Originally Posted by pittnurse70

I guess I would say save up some money for a down payment and take the plunge!

Yea, I get all worked up when it comes to housing prices! Good grief! I think the down payment is probably my last ray of hope. I save money. That's one thing I do. I contribute the max to my 401(k) at work. I contribute the max to a Roth IRA every year privately. I suppose it is time I contribute some to the down-payment fund as that may be my only saving grace. I can afford a $150k house...I suppose I ought to save up $50k and put a down-payment on a $200k house and then I will be making my nice little tidy payments I've determined I can afford. I am so uber conservative when it comes to money, though I can see me having the argument with myself in a few years..."Ok, Cap, you've saved up a hundred grand...good job! Now, go spend half of it in one day. No. No. You can't spend HALF your money in one day!" I think I said this to myself when I first contemplated buying that lollipop at the corner store for $0.50 when I had $1.00 allowance to my name. Years later I had the same argument concerning a $500 TV when I had managed to save $1,000. Then came a $5,000 down-payment on a car when I had managed to save $10,000. I bet, when I'm 172 years old and have $32 million in the bank, I will be fretting over buying that private jet for $16 million...."But, Cap, you'll ONLY have $16 million left!" It is just my nature. Seriously, though, it REALLY REALLY gets to me.

CaptainO

[Tallysmom]

Originally Posted by CaptainObvious

Yea, I get all worked up when it comes to housing prices! Good grief! I think the down payment is probably my last ray of hope. I save money. That's one thing I do. I contribute the max to my 401(k) at work. I contribute the max to a Roth IRA every year privately. I suppose it is time I contribute some to the down-payment fund as that may be my only saving grace. I can afford a $150k house...I suppose I ought to save up $50k and put a down-payment on a $200k house and then I will be making my nice little tidy payments I've determined I can afford. I am so uber conservative when it comes to money, though I can see me having the argument with myself in a few years..."Ok, Cap, you've saved up a hundred grand...good job! Now, go spend half of it in one day. No. No. You can't spend HALF your money in one day!" I think I said this to myself when I first contemplated buying that lollipop at the corner store for $0.50 when I had $1.00 allowance to my name. Years later I had the same argument concerning a $500 TV when I had managed to save $1,000. Then came a $5,000 down-payment on a car when I had managed to save $10,000. I bet, when I'm 172 years old and have $32 million in the bank, I will be fretting over buying that private jet for $16 million...."But, Cap, you'll ONLY have $16 million left!" It is just my nature. Seriously, though, it REALLY REALLY gets to me.

CaptainO

Cap'n -- I don't know how old you are, but the older you get the more conservative you get with your cash. Don't grow old before your time.

Here's the thing -- a house is an investment. It's not the whiz bang investment of the stock market... but there is one thing the stock market isn't -- a bit of security.

Let's say you are renting for $1000. a month. Every year, you get a raise of 3% on your 35K salary. And every year, your landlord walks up to you with his hand out for it.

You buy a house -- and get a fixed mortgage and DON'T use your house like an ATM -- your payment isn't much more than that (I got around 1300.00 a month). Next year you get your raise... and you can slam that raise into your investments. In a few years, you'll start hearing about rents being 1800 -- 2000 for the place you lived in... and your mortgage is 1300. And you're earning almost 40K... and you're living a little easier.

Not to mention, you can paint your house sky blue pink if you want to! (Sky blue pink was my grandfather's answer when we asked him what his favorite color was...) You can make a Tiki refuge in your basement with a bar and pool table, all outfitted with masks and pink flamingos.

And that's a pretty cool thing to have.

[CaptainObvious]

Originally Posted by Tallysmom

Cap'n -- I don't know how old you are, but the older you get the more conservative you get with your cash. Don't grow old before your time.

Here's the thing -- a house is an investment. It's not the whiz bang investment of the stock market... but there is one thing the stock market isn't -- a bit of security.

Let's say you are renting for $1000. a month. Every year, you get a raise of 3% on your 35K salary. And every year, your landlord walks up to you with his hand out for it.

You buy a house -- and get a fixed mortgage and DON'T use your house like an ATM -- your payment isn't much more than that (I got around 1300.00 a month). Next year you get your raise... and you can slam that raise into your investments. In a few years, you'll start hearing about rents being 1800 -- 2000 for the place you lived in... and your mortgage is 1300. And you're earning almost 40K... and you're living a little easier.

Not to mention, you can paint your house sky blue pink if you want to! (Sky blue pink was my grandfather's answer when we asked him what his favorite color was...) You can make a Tiki refuge in your basement with a bar and pool table, all outfitted with masks and pink flamingos.

And that's a pretty cool thing to have.

Again, all great points for sure. Let's take your $1,000/month rent scenario. Here's the way I look at it. I'm renting for $1,000/month and just able to be comfortable...not rich, not living paycheck-to-paycheck. Nice and comfortable. Going to $1,300/month would just tick me off- I don't want to spend the extra $300- I am nice and comfortable now. I could go to $700/month, but I don't need to be stingy! Afterall, I am nice and comfortable at $1,000/month. SO, I start looking for homes where the mortgage with taxes and insurance would be about $1,000/month. At a 6.25% 30 year fixed rate, and no down-payment (that might be the kicker), that would get me about $140,000-ish home. Ok, let's take a look at $140,000 homes... MY $1,000/month apartment is a) almost as big, b) nicer, c) comes with no maintenance, and d) comes with a gym and pool! If I take the leap, I at least want it to be an upgrade. I'd better get a garage and more square footage. And $140,000 homes usually need thousands more to get the way you want...I've got all brand-new everything in my little apartment now (even if the cabinets are made of particle board ) I surely understand the investment side of it...the fact that my rent goes away into thin air while with a home I am at least working on equity. (although, people often forget they are exchanging their money for A PLACE TO LIVE when renting, so they aren't getting NOTHING), and home ownership brings alot of pride, not to mention no more footsteps from above or downstairs neighbors screaming at each other every night. I get it. I get the pros of home ownership. It just seems too darn expensive for what you get. Its location that kills me... In the Pittsburgh area, where do I want to live? Here's the short list... Sewickley, Moon, Robinson, Mt. Lebo, South Park, Upper St Clair, Fox Chapel, Hampton, Indiana, O'Hara, Mars, Cranberry. Those are the areas I like the most...AAAAAAAAAND, they just so happen to be so freakin' rediculously expensive that I'll never afford them! I don't like them because they are expensive. They are expensive because everyone likes them. So, my choices are live in an area I hate in a house I like OR live in a house I hate in an area I like. Yuk!

This is the stuff that keeps me awake at night. Why is this house, which I find quite beautiful and in a decent area, "only" $200,000 ? Coldwell Banker Real Estate Inc. Pittsburgh when this one Coldwell Banker Real Estate Inc. Pittsburgh is $250,000. The freakin' view? This is why I don't understand the market. You mean to tell me, in a city where houses for sale outnumber buyers 3-1, that there is such a premium on a view that someone would be willing to spend $50,000 more on the home knowing they'd have to sink $50,000 on it after that just to get it update it to THIS century. All that, and you've still got 500 less square feet than the first home with no yard. I can't begin to believe the market will bear it. It makes no sense! I'M GOING TO EXPLODE AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH

Cap

[CaptainObvious]

Originally Posted by Tallysmom

I don't know how old you are, but the older you get the more conservative you get with your cash. Don't grow old before your time.

.

I am hoping it is this premature oldness that will make me filthy stinkin' rich one day. Granted, I will have to wait until I am 64.5, but oh what a day it will be. Maybe I will buy my first house then You say "tightwad", I say filthy stinkin' rich when I'm an old old man baby! I'll buy a diamond-encrusted walker, maybe a platinum oxygen tank. And I will buy 2 weeks, not 1, but 2 weeks worth of Depends.

CaptainO

[Hopes]

Take Pittnurse's advice about taking the plunge.

Real estate prices only go up. It's only going to get more expensive.

What you think you can't afford today will be worth much more money in 5 or 10 years.

If you want a chance at owning property, you should do so as soon as possible.