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I am probably going to purchase my first home within the next year. I live in northeast TN, where wages are low and property is moving slowly in most of the region's towns. It is far from a hot market. Median household income is generally between $30,000 - $40,000 depending on the town. I make about $60,000 and am single.
You can find many reasonably priced older homes for $100,000 or less, many are in need of significant updating, some are updated tastefully. However, I grew up in an older split foyer (built in 1973, parents purchased it in 1998) that was in need of significant updating even then, and do not want to get back on this treadmill. They immediately had to replace a roof and a heat pump. It's since required yet another roof and heat pump. Original, avocado green, shaggy carpet was removed, replaced with more carpet, then that was replaced with expensive Bruce hardwoods about ten years down the line. Kitchen was remodeled in the early 2000s. It's required tens of thousands of work and still needs more.
We've had issues with moisture in the laundry room and the previous washing machine flooded several times. The bottom of the sheet rock around probably half the room is covered in black mold. The wall closest to the toilet is paneling and most of that is rotted out and going to have to be replaced. The previous toilet and sink in this room were original to the house, and were letting a septic odor in. Combine the moisture, septic odor, along with a litter box in a five cat household, the smell is absolutely noxious and I've nearly vomited cleaning out the box several times.
There are some other issues (minor electrical problems) - wooden deck that was never used needs to be rebuilt, wood from outside shed is rotting and everything but brick base needs to be rebuilt, etc.
I've watched them struggle trying to maintain a poorly built, poorly cared for older home. Previous owners cobbled things together - they nailed wall paneling to the floor joists in the basement den to make a "ceiling," then put drop tiles below the paneling, making the ceilings seven feet, things like that. None of the remaining maintenance is extremely expensive, but there are so many little things and they do not have the money to hire anyone, so things get done piecemeal. By the time one project gets done, something else is failing, there isn't the money to cover it, it gets deferred until it becomes a crisis, which costs more, and so goes the carousel.
The housing stock around here is generally dated and not in great shape. I can see buying an older home and getting into the same predicament they're in. I'm not handy at all and it would take me forever to learn how to do this stuff, I'd screw it up, or would have to hire it out.
I've been looking at newer construction and there is very little selection under $250,000 in the main cities (some smaller outlying towns or rural areas have some selection, but still generally above $200k). I won't be able to afford that expensive of a home on my single income (DP will probably 5%-10%), and I make considerably more than average for the area. I'd say probably 75% of newer construction is $279,000+.
I did see this and may drive by it after work this evening. Really nice home, but a bit far out. This is honestly about all the space I need.
Most of our new construction in this area isn't even that large, but is just way beyond what most area families can afford. It's rare to find a well updated home in the $150,000 range or so. Many of the homes in this range will require thousands of dollars in updating to get them up to a modern look. It seems like new construction is a luxury only the affluent can afford.
I do not want a large lot, a quarter acre or less will do. Many of the homes outside the city limits of my city were built in the 60s/70s on large lots. There are newer, more affluent subdivisions, but these are way out of my price range. I do not need a large house - 1200-1500 sq. ft is plenty.
What I've noticed in my town is a trend of original homeowners from the 60s/70s dying off. Their homes were often not updated at all, and the sellers (presumably kids) are trying to sell these homes in the $150k-$250k range, when they could easily require $25,000 - $50,000 in updating. At that point, you're starting to approach the price of new construction.
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Originally Posted by bbronston
We have lots of new construction here in west central Florida but typically not that small and nowhere near that price (i.e. Much higher).
I know property is much higher in central FL than here and that it's cheaper for builders to build larger homes $/sq. ft. I think part of the problem is our area just isn't growing, so home starts are very low. What few new homes we do have are selling for a premium as there isn't much selection.
We recently purchased a house (2015) in an established neighborhood in the suburbs of NYC. We were shopping in the $450,000 range and there was only 1 new construction home available in that price range in the areas we wanted. New construction started at $699,000.
Builders just love to build as big as possible. For instance, there was one lot in our new neighborhood that has been vacant since around 1950. The lot recently was placed for sale, and was purchased by a builder who is building a 2700 square foot house for $778,000. This neighborhood consists of homes build in the 1950s and I would guess the average square footage is 1500. So even in a neighborhood where a builder can place a more modest home they go big. It's disappointing for those looking to buy new and not outrageously expensive.
With all of that said we ended up buying a 1949 side hall colonial for $449,000 and have spent $15,000 on a bathroom renovation, but could have easily spent less on that. We also spent $1700 on a new roof over the addition. If you pick a home with good "bones" you should do okay buying used. We love the house, despite the money spent. Every house is a gamble, even new.
SC, this may be a dead end but you might try contacting your local builder's association and asking if they can give you names of independent and reputable builders in your area who can build a small home on a lot that you purchase, assuming that there are lots available for a reasonable price where you are located. Similarly, some might be experienced at renovating old places or even tearing down and rebuilding and they can guide you as you look for a property that will lead to what you want in the end within your budget.
I'll admit that I can think of several reasons why that might be a bad idea but, on the other hand, you never know until you explore the possibility. If there's not much building going on up there, there might be honest contractors who are hungry for work.
Not every older home is poorly built and poorly maintained. I would suggest looking at the ones that fit your parameters and making sure to get a very thorough inspection - bring in different people for different elements of it if you need to. Not sure of you exact budget but it's likely to be much less expensive to buy a decent condition existing home and put in some upgrades than it would be to build new construction, esp. from a custom builder rather than a tract home.
.......... It seems like new construction is a luxury only the affluent can afford..........
It costs money to build. Materials cost, labor costs, land costs, utility hook-ups cost, lot preparation costs, fees and permits cost. Interest and taxes have to be paid during the construction period.
New construction is expensive to buy because it is expensive to build.
Affluent here is $1000 a square foot in new construction.
For a reasonably priced 3/2 you are in the $300,000-$400,000 range.
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