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Wife and I having a kid and thinking of buying a place. I think our budget is $300k, maybe a little more - it depends on things like HOA payments, taxes, insurances, etc, etc, etc, that determine the final payment. I think we'd be approved for 3k-3.5k but would prefer to stay at 2.5k. We would like a 3br or 4br. Condos are out cause we won't have 25% down, so I guess we're looking at single family homes and townhomes.
We have only lived in Miami for 4 years, so, while we know a lot of different areas, we don't know all of them, and don't know most of them well.
So, what area of PBC (or MD or B county if you prefer) (with houses available at $300k) do you think will appreciate the most over the next 15 years - preferably an area that also has a good elementary, middle and high school? Don't worry about our commute in your answer.
I just don't know what other people want when they are looking for homes, or at least, what they will want in the next couple decades. Let me know what you think! All replies appreciated.
#1 condo and town homes will not appreciate as much as a single family home anyway. Not sure where you are coming up with 25% needed as down payment for a condo? Also 300K is an extremely low budget to buy into a nice area in a nice community with good schools, not impossible but it will be a needle in a haystack with a home needing lots of love.
Now your numbers seems way off as well , and you should do some more planning. this is evident from you saying " I think our budget is"
what type of down payment do you have?
example of numbers with a 4.25% mortgage and 10% down so PMI included, $400,000 home with $40,000 down
So I suggest you up your budget to well over $300,000 and minimum $350,000 to find something meeting your criteria. In PBC you can look at many communities with a minimum of $350,000. But with $300,000 your selection will be limited and unlikely to meet your criteria .
If you are looking to build equity typically finding a home in a neighborhood with good schools or close to areas with a lot of restaurants/shopping/employment, that you can put some work into is a good way to go. Trying to find the next hot spot could be a guessing game.
I was working with a client yesterday that was looking for a home around 300k and we actually found a few very good options. With that being said, they didn't have children so they didn't mind a smaller home, didn't' need to be in the best school zones, and weren't turned off by a house that needed a little updating. 300k might be a little tough to get everything you are looking for, but not impossible if you are open to putting in some work. You may want to take a look at homes in the 350k range to see if it's worth increasing your budget at all.
Some of the areas like Boynton, West Lake Worth, and Wellington that are known to have higher rated schools and are still considered affordable might be a good place to start.
Keep in mind there are a ton of buyers right now in your price point, many of them cash investors, so you may have to make multiple offers before finding the right house.
#1 condo and town homes will not appreciate as much as a single family home anyway. Not sure where you are coming up with 25% needed as down payment for a condo? Also 300K is an extremely low budget to buy into a nice area in a nice community with good schools, not impossible but it will be a needle in a haystack with a home needing lots of love.
Now your numbers seems way off as well , and you should do some more planning. this is evident from you saying " I think our budget is"
what type of down payment do you have?
example of numbers with a 4.25% mortgage and 10% down so PMI included, $400,000 home with $40,000 down
So I suggest you up your budget to well over $300,000 and minimum $350,000 to find something meeting your criteria. In PBC you can look at many communities with a minimum of $350,000. But with $300,000 your selection will be limited and unlikely to meet your criteria .
Here are the numbers I came up with for an actual house in delray for example:
$300k house
3.5% down FHA mortgage, 4.00%, no points, 289.5k loan amount
requires 19k "cash to close" (includes down payment and all taxes, fund escrow, etc - everything)
1382 mortgage
265 mip (pmi for fha)
425 taxes
262 hoa
200 insurance
Total = 2534/mo, plus 20k out of pocket
In your example, we'd need to come up with over 50k cash to close, more than 2.5 times as much. Which is something we don't want to do. We don't want to raid our retirement savings to buy a house. So, while both our numbers are correct (and I did do specific research to come up with a budget), the fact we don't want to put down 50k is why we are going to be stuck in the lower 300s or so, depending on the specific house, taxes, hoa, etc. (Although, in 400k houses I find, the taxes and insurance are both a little higher than you have pointed out.)
I have been unable to locate a mortgage for a condo in florida that doesn't require 20-25% down. The closest I've come is some mortgages for specific hud approved buildings, and that list of buildings is very, very short. Plus, I've not found any buildings on the list that comes anywhere near 3brs for 300k. We actually prefer condos (live in one now) but we don't see a way that we will be able to buy one. But if someone could point me towards a mortgage that is 5% down on condos, we would definitely take a look at it.
So, back to the bigger picture. It looks like we need the "least worst" area that has 3br+ homes with the "least worst" schools for around 300k. Obviously we could "stretch" into the 3's if the right place is presented to us.
We've owned a home before (up north) so we've been through this before, and this is what we're comfortable with this time around. We really don't want a 3k/mo house payment, or a 50k downpayment.
So, which areas are the closest fit for these limited criteria? What area with at least one 300k house do you think will appreciate the most in the next 15 years? One I was looking at was in Boca Raton, bounded by I95 in the west, "gulf stream" in the east, nw 7th st in the north, w palmetto park rd in the south. These houses seem to be districted into addison mizner elementary, and boca middle and high school, which, according to several ratings, seem to be pretty good in south florida.
I only need to find one house, and one needing TLC is fine by us! You shoulda seen the all original 60's dump we bought last time! Unfortunately, the area we picked didn't appreciate, so while we got our money back from the renovations we did, we didn't really make out on it, even though we sold it for 35% more than we paid for it 7 years ago - that was all due to renovations. We don't want to make this mistake again, and want to pick the "area" more wisely.
I am not all that familiar with the boca area. Keep in mind home prices here in PBC are up 60 to 100% in past 4 years so the easy money has been made.
I did not realize you are going with a 3.5% down FHA, but yes with an FHA you will get nailed with closing costs . As skylinet mentioned you will most likely not get a good deal anywhere because you have no bargaining power with 3.5% down FHA especially going against all cash investors. when buying a home cash in PBC it requires no closing costs except the $25or so it costs to record the deed . So in order to buy a home FHA against cash investors be prepared to bid list price or over.
With that said look into wellington or western lake worth areas. Communities like Sugar Pond in Wellington (non hoa) or Wellingtons edge, Grand Isles to name a few. In Lake Worth you have smith farms and Lake Charleston
Palm Beach real estate has really been sky rocketing since the bubble burst. I wouldn't buy down there expecting things to keep on going on the upward trajectory like it has been. In some places, homes are starting to nudge areas that are getting a bit expensive for the area. House hold income in Royal Palm as an example is 67k. 28% for mortgage only that leaves $1563 per month which at 30 years, 5% (interest is going up and future prices are based on future interest as it will affect affordability in a big way) is 291k present value. Add a bit for your down payment. Tell me how many homes are for sale in the nice communities for around there and you'd be hard pressed to find anything. Move outside that like in La Mancha and you might find something in the Upper 200's that was built in the 80's and hasn't had any work done to it. Assuming you want to live off of Ponce De Leon that is.
Further south its even more expensive for the nice areas. You're going to start to see the same thing you saw before the bust. People will start moving north to the relative bargain areas like Stuart, Jensen and Port St Lucie and deal with the 30-50 minute drive. Those areas, especially PSL have recovered some but not nearly as well as Palm Beach. If you want appreciation you should consider looking there.
As for condos, most lenders arent' touching attached units unless you put down 20%. Single family is around 3-5% down.
I am not all that familiar with the boca area. Keep in mind home prices here in PBC are up 60 to 100% in past 4 years so the easy money has been made.
I did not realize you are going with a 3.5% down FHA, but yes with an FHA you will get nailed with closing costs . As skylinet mentioned you will most likely not get a good deal anywhere because you have no bargaining power with 3.5% down FHA especially going against all cash investors. when buying a home cash in PBC it requires no closing costs except the $25or so it costs to record the deed . So in order to buy a home FHA against cash investors be prepared to bid list price or over.
With that said look into wellington or western lake worth areas. Communities like Sugar Pond in Wellington (non hoa) or Wellingtons edge, Grand Isles to name a few. In Lake Worth you have smith farms and Lake Charleston
In my research i've come up with this as the required closing costs in PBC when you are getting a mortgage:
appraisal, flood cert, tax cert, credit report: $500
survey: $300
lender title insurance: .2%
owner title insurance: .5%
recording charges: $200
mort state tax: .35%
mort intag tax: .2%
first year insurance: $2400 for $300k
downpayment: 3.5%
prefund escrow account: $2k and up
This all seems like what we paid before, when we bought our last home...the first time you assume you're paying just the downpayment, but you learn quick everyone wants a piece of you...
So it's looking like $10k each for "downpayment" and "costs." I don't want to add $20k or $30k to the downpayment on top of that.
I assume I'm going to have to pay the asking price, I assume the place we get will need work. Or we will have to get something that's sat on the market forever for one reason or another. I'm not expecting a castle or anything. I know 300k doesn't go far down here. I don't expect this to be easy, or that we'll get a house that doubles in value in a few years. Our last house was 1200 sqft and that was plenty big for us actually...so it doesn't have to be huge. We aren't the hoarding type. We just want something that will appreciate well over the next 15 years and has good schools (for south florida.)
I'll look at the schools in those areas and see if any look decent. Thanks.
As for condos, most lenders arent' touching attached units unless you put down 20%. Single family is around 3-5% down.
exactly, and why is that? banks are not stupid they know condos do not appreciate as much as single family homes. Condo have not rebounded anywhere near what single family homes have except oceanfront or specialty locations.
But you still can find homes for $300K or so in wellington and western lake worth, but as I already stated with 3.5% down going FHA you will not get a deal and have to pay asking price or above for offer to be considered on any decent property, it is a sellers market and low down payment FHA loans are on the bottom of the pecking order if seller receives multiple bids
Palm Beach real estate has really been sky rocketing since the bubble burst. I wouldn't buy down there expecting things to keep on going on the upward trajectory like it has been. In some places, homes are starting to nudge areas that are getting a bit expensive for the area. House hold income in Royal Palm as an example is 67k. 28% for mortgage only that leaves $1563 per month which at 30 years, 5% (interest is going up and future prices are based on future interest as it will affect affordability in a big way) is 291k present value. Add a bit for your down payment. Tell me how many homes are for sale in the nice communities for around there and you'd be hard pressed to find anything. Move outside that like in La Mancha and you might find something in the Upper 200's that was built in the 80's and hasn't had any work done to it. Assuming you want to live off of Ponce De Leon that is.
Further south its even more expensive for the nice areas. You're going to start to see the same thing you saw before the bust. People will start moving north to the relative bargain areas like Stuart, Jensen and Port St Lucie and deal with the 30-50 minute drive. Those areas, especially PSL have recovered some but not nearly as well as Palm Beach. If you want appreciation you should consider looking there.
As for condos, most lenders arent' touching attached units unless you put down 20%. Single family is around 3-5% down.
I don't expect 50% in a year or any of that. We just want normal, solid returns. We're looking over the next 15 years. We owned our last home for 7 years, and would have stayed forever if we didn't decide to move to FL. We want to get a house and settle now that we have a baby on the way. We just want to pick the area more wisely - last time we purchased where we wanted, which was not what others wanted, so we saw no price appreciation at all. And I don't know a ton about south florida, so I'm trying to get a feel for what people say is a good idea - but it has to be in our budget.
We are already those people looking at PBC cause we can't find anything in miami or broward. We don't want to be those people looking further north in a few years. We have to be able to stand a drive to miami when we need to, and i've driven to stuart, etc, and it ain't fun.
Do you have any other ideas in PBC (or south, lol) that might fit our criteria?
EDIT: I thought about this more, and if "everyone" is paying cash, then why does the median income of the area matter for prices? Why would that be a limiting factor? I understand why it normally would be. It seems prices in many areas are already more than you'd expect based on the demographics.
Last edited by pghsebring; 07-25-2015 at 07:43 PM..
Reason: forgot something
exactly, and why is that? banks are not stupid they know condos do not appreciate as much as single family homes. Condo have not rebounded anywhere near what single family homes have except oceanfront or specialty locations.
But you still can find homes for $300K or so in wellington and western lake worth, but as I already stated with 3.5% down going FHA you will not get a deal and have to pay asking price or above for offer to be considered on any decent property, it is a sellers market and low down payment FHA loans are on the bottom of the pecking order if seller receives multiple bids
I've found condos prices to be so far out of line with what they could rent for, its unbelievable. The rebound i've seen has been astronomical. I am in miami beach right now though. But looking even more north, i haven't found anything remotely reasonable. A 3br condo that's in a decent school district? The price of that would bear no relation to reality.
The last place we lived in now rents for $3.2k a month for a 2br, and sells for $600k. Our current place is a 1BR for $2k, and sells for $400k. It would cost more to buy any of these condos then it does to rent them. The owners are paying 900 and 600 in HOA a month. Add that to the mortgage, taxes, etc, its literally insane. You HAVE to be an all cash buyer for any of this to make any remote sense.
We wish we could afford a condo. I'm not too worried about them not appreciating around here, with all the cash buyers not needing to qualify for mortgages. What limits the price appreciation then?
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