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Will you buy a house which is the biggest and most expensive one in the subdivision? I heard usually it is more deficult to sale or has less appreciation potential. Is this correct? What do you guys think?
For me personally, I would have to really look at the neighborhood. Is it my dream house, and do I believe I will be there for 20 years? Or, is it more of a transitional home where moving in 5 years is probably more reasonable?
If the house is one that I know I will be in for the long haul, I don't think I would worry as much. If I know I am going to try and sell in 5 years, I would think about it. If it is the most expensive home in the neighborhood, it probably will not appreciate as much simply because people moving into that neighborhood are looking for a certain price point, and homes that fit that median price will do better.
Everyone always wants the least expensive house in the most expensive neighborhood.............
I think it really depends on what you are looking for though.
I did that once, and I will never do it again. My current house is the most expensive house in the subdivision, and I cannot find a buyer. I was told by the appraiser that it worth much more, but it is very hard to sell.
For me personally, I would have to really look at the neighborhood. Is it my dream house, and do I believe I will be there for 20 years? Or, is it more of a transitional home where moving in 5 years is probably more reasonable?
If the house is one that I know I will be in for the long haul, I don't think I would worry as much. If I know I am going to try and sell in 5 years, I would think about it. If it is the most expensive home in the neighborhood, it probably will not appreciate as much simply because people moving into that neighborhood are looking for a certain price point, and homes that fit that median price will do better.
Everyone always wants the least expensive house in the most expensive neighborhood.............
I think it really depends on what you are looking for though.
Leigh
I would agree with Leigh. If I knew I was going to be there for 20+ years, then I would not mind. Depending on the subdivision and the house itself.
As for me, I bought the least expensive house on an expensive street and the house is still pretty close to our 'dream home'.
Price per square foot is always a good thing to look at. Is this house that much bigger than the other homes in the subdivision, or is it the same size home with a ton of upgrades?
Will you buy a house which is the biggest and most expensive one in the subdivision? I heard usually it is more deficult to sale or has less appreciation potential. Is this correct? What do you guys think?
There is a house for sale in our neighborhood that meets the biggest most expensive standard. The guy is a contractor and added EVERY possible upgrade, finished his walk out basement, the whole nine yards. He thought his family would be there 20 years. Well, they are getting divorced so they have to sell. Their house is listed for about 150K more than the other 4 resale homes that sold in our neighborhood in the last 6 months, including the one we bought. This 150K is like 45% to 50% more than what the other 4 homes were sold for. That is subtantial. There has not been very much interest in the home. I think buyers in that price range either want a lot bigger than 1/3 ac. or more neighborhood amenities.
If your house is most expensive by 10% you are probably safe. Or if you are paying cash for your house then I wouldn't care about the percentage. But 25-30% more expensive and carrying a loan would make me nervous. But I'm fiscally conservative w/ my money.
Will you buy a house which is the biggest and most expensive one in the subdivision? I heard usually it is more deficult to sale or has less appreciation potential. Is this correct? What do you guys think?
I would only do this if I planned to live there for a VERY long time - like 20+ years or maybe even until I died. If you think you may have to sell in a few years, this would be a risky investment.
In a subdivision of "like" homes I would look to be in the middle.
In a larger masterplanned community with a wider range of home sizes and prices (Think Bedford at Falls River, Cary Park, Amberly) I would not have a problem buying at the upper end but I'd try to stay away from the top of any segment within the neighborhood (for instance, you are safe buying in the more expensive sections of Amberly, but I wouldn't want to be the bigest house in Village Square OR The Peninsula).
If you are building and have a choice of lots I would make selecting a favorable lot my biggest priority. When it comes time to sell if there are 3 houses with the same basic floorplan on the market the one with the nicest lot will sell fastest and for more money as long as the upgrades are on a par with the neighborhood.
Funny....I've been thinking about this a lot today. I really like a house that is currently priced about 30K more than comparables in the neighborhood. It also has a really gorgeous renovated kitchen that the comparables don't have that probably cost the homeowners about 40-50K to put in. Is the higher price justified or have they priced themselves out of their own neighborhood? It would be the most expensive house on the block right now but would the others catch up as more people start renovating their kitchens?
1. There will always be a "most expensive house." Someone will own it and live in it. It will fit someone's needs. If that is me, then, Yes, I would buy it.
2. The "most expensive house" may be a good buy at $30,000 more than any other home in the neighborhood.
If the homes are all luxury homes and range in price from $1,700,000 to $2,500,000, I wouldn't consider it at all material.
If the homes are all custom built and range in price from $700,000 to $800,000, I wouldn't consider it very material.
If the homes are cookie cutter, running from $125,000-$150,000, I would definitely not want to be $30,000 higher.
You have to quantify what it means to be the "most expensive house."
3. If you pay the same $$$/square foot as other cookie cutter homes and pay $30,000 more because it is 1500 SF larger, I think that is a mistake. Smaller homes fetch a higher SF price, and larger homes a lower SF yield in the same subdivision. Usually.
So you pay less/SF, and sell for less/SF, and expect good appreciation. Now of course this is resale. Options are limited in new construction.
4. I would expect appreciation in line with the neighborhood. If the average home appreciates at 4%, I would expect 4% for a well-kept home.
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