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I never quite understood this place. It's right on Davis which is going to be a busy four lane all the way, it has no amenities, is an area surrounded by much cheaper houses/townhomes, and yet the builders are asking more here than they do in communities like Bedford or Chestnut Oaks for the same houses!? I would say there is a LOT of cushion in their prices. But I still don't think I'd ever buy. They should have just built cheaper homes at this site. You'd be better off hunting for a bargain/custom build in somewhere like Amberley or Copperleaf nearby with same builder group
I used to live in that area and I agree, I never understood the placement of that subdivision. Perhaps further down Davis Drive (closer to Preston) would make more sense. It's surrounded by Twin Lakes with no amenities and no common areas. I'm not even sure where there is a community pool in the area since Twin Lakes and Breckenridge have their own pools.
I never quite understood this place. It's right on Davis which is going to be a busy four lane all the way, it has no amenities, is an area surrounded by much cheaper houses/townhomes, and yet the builders are asking more here than they do in communities like Bedford or Chestnut Oaks for the same houses!? I would say there is a LOT of cushion in their prices. But I still don't think I'd ever buy. They should have just built cheaper homes at this site. You'd be better off hunting for a bargain/custom build in somewhere like Amberley or Copperleaf nearby with same builder group
Yep, add in the lot sizes which let you see into your closest 5 neighbors' houses and I just don't see how this was driven by any sort of reality outside the mania of the real estate bubble. I know I'm a curmudgeon but in this case I'm not alone - how many years and price drops has it taken them to get a sale at all (and when will those sales turn up on the Wake County site)?
It's a slow market, but places like Weycroft and Kitt's Creek (to add a few more neighborhoods into the mix) haven't had that horrible a time of it. And for the price, I'd be very interested in resales in Preston or Carpenter Village. At least there you won't be waiting years and years for the neighborhood to build out, and you'll know that you won't be the most expensive house in a half finished and abandoned subdivision.
Can someone explain how being in the most expensive, top 20% houses in a subdivision is a negative thing? I thought, it was a good thing.
Also, if it wouldn't have been the 0 PMI, 3.95% interest rate & deep discount, I wouldn't have considered a house in this price range. So, Weycroft, custom homes at Kitts Creek, Copperleaf, Southbridge, etc. is beyond my reach.
With monthly P&I contribution being equal, I can either go for: Option I.) $350k house @5.5% - Some amenities, better schools, avg. upgrades, avg. builder, few yrs old house, established community, lower monthly contribution towards Principal Option II.) $600k house in Chessington @3.9% - No amenities, average school, excellent upgrades, excellent builder, new house, To-be-established community, higher monthly contribution towards principal
It's really a tough decision. I love the homes but equally hate the limited choices for kids.
Please help me!!!
Last edited by HitsOfMisses; 08-19-2009 at 01:02 PM..
er i'm not sure I get your math. 30 year mortgage of 350k @ 5.5% is around 2k a month. 600k @ 5.5% is closer to 3k. Not to mention significantly higher property taxes, insurance, maintenance, up-keep etc. By my math you need a discount of 175k to get down to same payment and while these boys are hurting not sure it's that bad.
If the only thing that makes you think you can afford this place is a 3.95% mortgage rate, then you really can't afford this place
Can someone explain how being in the most expensive, top 20% houses in a subdivision is a negative thing? I thought, it was a good thing.
Also, if it wouldn't have been the 0 PMI, 3.95% interest rate & deep discount, I wouldn't have considered a house in this price range. So, Weycroft, custom homes at Kitts Creek, Copperleaf, Southbridge, etc. is beyond my reach.
With monthly P&I contribution being equal, I can either go for: Option I.) $350k house @5.5% - Some amenities, better schools, avg. upgrades, avg. builder, few yrs old house, established community, lower monthly contribution towards Principal Option II.) $600k house in Chessington @3.9% - No amenities, average school, excellent upgrades, excellent builder, new house, To-be-established community, higher monthly contribution towards principal
It's really a tough decision. I love the homes but equally hate the limited choices for kids.
Please help me!!!
I'm also confused as to why you think you'll be able to afford a house that is worth almost twice as much with the only difference being 1.6%. The property taxes alone will make up the difference. I would think any house that is going for 600k+ should have some perks other than the new house.
Cityslick: "I'm also confused as to why you think you'll be able to afford a house that is worth almost twice as much with the only difference being 1.6%. The property taxes alone will make up the difference. I would think any house that is going for 600k+ should have some perks other than the new house."
More accurately, with the same amount of money ($2593) that includes Property Tax and P&I Mortgage, I can either go for $386k worth of property @ 5.5% or 600k @ 3.9%.
Isn't it smart to buy an expensive property with all the upgrades that gives better ROI? Besides, very less amount of money goes in the interest. Am I missing something here? Once again, I'm a first time buyer & I may not have done all the math.
Is insurance different than PMI? How much does it cost?
How come being among the expensive, top 20% houses in a subdivision is a negative thing? I thought, it was a good thing.
HoM - let me try to address both your questions separately.
In terms of the payment something is not adding up. I don't know quite what as I don't know what discount you have on 600k (that would help). But if you look at interest only, then on 386,000 5.5% interest is 21,320 per year; for 600,000 @ 3.9% it's 23,400. If I work backward, that would mean if you paid 546,667 for the house @ 3.9% the interest would be equal. BUT of course you have an additional 160,667 of principal to pay so over $500 per month over 30 years. Maybe you're 5.5% quote has outrageous PMI built in (again I would recommend if you're being hit for PMI you're not really in a position to buy...).
To address the point about being in the top 20% of homes. As a general rule having the most expensive house in a block/street/n'hood is bad financially as your house value is always dragged down by those around you. People use comps and wonder why they should pay more for yours than the other houses. It's not always purely financial though. I've had the most expensive house on a street because it had specifics additions that were attractive, and frankly my personality suits being the biggest fish in my little pond. But I go in open with the knowledge that it's not the most sound financial decision. Also it depends, if every house on the street is worth say 350-400k and you buy the one for 390k well that is one thing. But if you buy into a n'hood at say 550k, and then they build dozens of 350k homes, well know you are in trouble. People who want to live in 550k homes want to be surrounded by other people in 550k homes, or at least they want them to be close.
I can see why you might be torn as the homes are really well appointed.
My wife and I have been looking for homes as well and have worked the numbers quite a bit. Here are the numbers that I come up with using your values:
Mortgage:
$350K @ 5.5% = $1,980/month
$600K @ 3.95% = $2,850/month
So, the $600K home will cost $870 more in mortgage per month
Taxes in Morrisville:
$350K ~ $3,000/year ~ $250/month
$600K ~ $5,150/year ~ $430/month
So, the $600K home will cost $180 more in taxes per month
Insurance:
Depends on your credit/insurance ratings, so I can't gauge an exact number, but simply based on the value of the properties, you are going to easily pay $200-$300 more per year (~$25/month) in insurance for the $600K home.
PMI:
Again, depends on credit ratings and down payment, but PMI could range from $60-$150/month for the $350K house. So, the $600K home will save you, lets say $150/month.
Summary:
The $600K home will cost $870 (mortgage) + $180 (taxes) + $25 (insurance) - $150 (PMI) = $925 per month more than the $350K home. This is a rough estimate, but will get you in the right ballpark.
The only addition "savings" in purchasing the $600K home will be your tax deductions. You can apply the $2,150 difference in taxes and then the difference in interest paid. You will probably average 18.5K in interest per year the first 5 years in the $350K house, but $22K in interest per year the first 5 years in the $600K house. Let's say a difference of $3.5K in interest + $2K in tax difference = $5.5K in additional deductions, which works out to roughly $1,650 back in your pocket or ~$135/month back in your pocket.
So, even with the tax break on the additional taxes/interest, you will still owe around $800 more per month if you buy the $600K home instead of the $350K home.
This doesn't take into account the money down, which reduces your various payments/interest, but I still think you will end up owing more than $800 per month on the $600K home.
I would encourage you to work the math out in detail for yourself. This is where the professional Realtors can really help out as they can provide the tax rates, etc.
Hope the numbers help and good luck.
Last edited by NCInMyMind; 08-19-2009 at 06:51 PM..
Thanks ma91pmh & NCInMyMind for your reply. I should have been more specific. The $600k home is available for $500k.
Now here's the revised values in your format: Mortgage:
For $386K ($367k @ 5.5% & 0.78 PMI = $2,323/month)
For 600K-100k=$500k ($475k @ 3.95% & 0 PMI = $2,254/month)
So, the $600K home will cost $69 less in mortgage per month.
Taxes in Morrisville:
$386K ~ $3,435/year ~ $286/month
$600K ~ $5,340/year ~ $445/month
So, the $600K home will cost $180 more in taxes per month
Insurance:
Depends on your credit/insurance ratings, so I can't gauge an exact number, but simply based on the value of the properties, you are going to easily pay $200-$300 more per year (~$25/month) in insurance for the $600K home.
PMI:
Already calculated above at .78% for 5% down payment.
Summary:
The $600K home will cost - $69 (mortgage) + $159 (taxes) + $25 (insurance) = $115 per month or $1380 per year more than the $386K home, which is not much.
For 386k: $20k Interest + $5k Principal per year (Balance $339k after 5 yrs OR total $383k paid in 30 yrs interest)
For 600k: $18.5k Interest + $8.5k Principal per year (Balance $429k after 5 yrs OR $336,450 in 30 yrs interest)
Last edited by HitsOfMisses; 08-19-2009 at 08:48 PM..
I never quite understood this place. It's right on Davis which is going to be a busy four lane all the way, it has no amenities, is an area surrounded by much cheaper houses/townhomes, and yet the builders are asking more here than they do in communities like Bedford or Chestnut Oaks for the same houses!? I would say there is a LOT of cushion in their prices. But I still don't think I'd ever buy. They should have just built cheaper homes at this site. You'd be better off hunting for a bargain/custom build in somewhere like Amberley or Copperleaf nearby with same builder group
I completely agree. It's such an odd place for that price level. I'd hate to have to turn left out onto Davis in rush hour (either morning or afternoon), you're surrounded by much less expensive single builder housing (Twin Lakes, Downing Glen, Breckinridge, Wexford), you have no amenities at all and the planes are practically landing on your roof.
For that price range, I'd much rather look in The Reserve, Highcroft, Amberly, Cary Park, Weycroft or Copperleaf.
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Once again, I'm a first time buyer & I may not have done all the math.
