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Old 06-18-2013, 04:03 PM
 
9,008 posts, read 13,962,159 times
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Quote:
So, yes, it's possible.
You're being too generous.

First of all, nobody could possibly consider 0.2 acres a good sized lot of land. I have about that much and in just a 2000 square foot house, the houses are pretty much right on top of each other. I'm not knocking it, i think it's fine, but it doesn't match the description that was set out. I would say a reasonably large lot STARTS at 0.5 acres.

Did you type in neighborhood name, or use zip codes? Because a lot of properties will use Buckhead as a marketing tool because there is no real way to disprove it as there are no actual borders. So many properties that no reasonable person would consider Buckhead market themselves that way.

You've also been quite generous on the definition of "great schools"

Anyway, I would imagine that it might be possible. But very, very, very, very difficult and not possible for just anybody who wants to do it.
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Old 06-18-2013, 04:35 PM
 
Location: Morningside, Atlanta, GA
280 posts, read 387,566 times
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Quote:
Originally Posted by red92s View Post
A "quick and dirty" estimate is that a home shouldn't exceed 3X household annual income. So, figure a $450k purchase price for this exercise.

I did a quick search for active 4BR listings under $450k, with a 8,000SF (.2 acre) lots. I had to pick something to qualify as a "large lot", and a fifth of an acre is being generous there. The results are below. I didn't take the time to investigate if they qualified as being "modernized" since that is more subjective. I've been very generous on the "great" public schools requirement, and the "kids playing in the street" criteria wasn't even considered. I stopped at about 10 neighborhoods.

Buckhead: 4
Underwood Hills: 3
Grant Park: 2
30317 (Kirkwood, East Lake): 3
Loring Heights: 1
Decatur: 1
Lake Claire: 1
Chastain Park: 0
Virginia Highland: 0
Midtown: 0
Candler Park: 0
Morningside-Lenox Park: 0

So, yes, it's possible. But it's extremely difficult and you are sort of fighting for scraps.
You are not going to find a house in good intown neighborhoods of that size in that price range that does not need some serious work. There are a large number of 3 bedroom below $450K around Morningside and more in the other neighborhoods, but the best properties will be over that price. I renovated my kitchen in my 3 bed room and my house is now above that value (at least on Zillow). It is also worth more than twice what I paid in 1995.

The real question is what size house do you want? I raised 3 kids in a 3 bedroom house with a 0.18 acre lot in Morningside. You can see my earlier post in this thread. It was tight when they were teenagers, but fine before and after that time. Being near 3 parks with playing fields and the school playground and basketball court certainly helped. It is definitely a lifestyle choice to have a smaller home when you have 3 kids. While it worked well for us, OTP in Atlanta is very nice too. As I said before, we have plans to enlarge some rooms, when the college tuition finally stops.

Finally, when that big house is empty of kids, some folks who moved out to the suburbs, move back intown! One of our favorite couples, empty nesters, just moved back from Roswell to a 2 bedroom in Cabbagetown that they are renovating. Another got a condo in Buckhead. While we like the stability of living in the same place for 18 years, other people like moving to a place that suits the time their life is in . If a large house in the suburbs is calling you, it may not be forever.
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Old 06-18-2013, 05:01 PM
 
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I know we've had this discussion in the past and I will have to admit I am just as baffled now as I was before.

What I'm hearing is, "What I want is A, B, C, D and E, and I want them in a certain location, and I want them for a certain price, even though that price is below what the market commands. Nonetheless none of my criteria are subject to compromise."

To me this is circular, as it is defining the goal in terms that are by definition impossible.

It seems to me that the choices are obvious. You could do what many others have done, and move to an area that may not be perfect just yet but is up and coming. You could compromise on other criteria (e.g., a smaller yard, or a house that needs remodeling), with the expectation that you'll be happier and come out better in the long run. You can save or seek ways to gather more money so that you can pay the market rate. You can look for a bargain below market price. You can wait and see if the market changes. You can prioritize your finances. You can bag it and move somewhere else.

Of course all of these options may involve an element of uncertainty or deferred gain. But that is just the way life works in a market economy. We can't demand our ideal scenario at below market rates and expect to get it.
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Old 06-18-2013, 06:20 PM
 
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Quote:
What I'm hearing is, "What I want is A, B, C, D and E, and I want them in a certain location, and I want them for a certain price, even though that price is below what the market commands. Nonetheless none of my criteria are subject to compromise."
That's not what was said at all.

What was said is that I want A, B, C, D, and E. I can't afford E (location), so I'm willing to give it up in order to have A, B, C, and D. I thought what you were saying is there's no need to give up E, because you can have A, B, C, D, and E.

Yes, you can....it exists. It's just out of the reach of most people. So what many of them decide to give up is E.

So there's no real disagreement. We all agree that you would have to give up one of those things unless you have plenty of money....which it sounds like the OP does, so maybe the advice would apply to him specifically, but the discussion veered a little away from that particular scenario and into generalities.

I think that prioritizing finances is a fairly unreasonable perspective. If you have an income of say $85k or $100k, there's really no such thing as prioritizing in a way that affords what we described. The only real way is to be irresponsible and do something like live above your means or not save for retirement. That's not a question of prioritizing, it's a matter of being responsible or not.
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Old 06-18-2013, 07:06 PM
 
2,167 posts, read 2,813,058 times
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Quote:
Originally Posted by arjay57 View Post
I know we've had this discussion in the past and I will have to admit I am just as baffled now as I was before.

What I'm hearing is, "What I want is A, B, C, D and E, and I want them in a certain location, and I want them for a certain price, even though that price is below what the market commands. Nonetheless none of my criteria are subject to compromise."
I agree with what you are saying above, I just don't think that is the conversation we are having.

You developed the list of features that were ("spacious", "great public schools", "large lot", etc) but never set a price range. Nobody would argue you can't find those things with an unlimited budget. I think we all agree that yes, you can get a large yard with good public schools and extra space and trees, you just have to pay pretty dearly for it. Saying there are "plenty" of these areas indicates they'd be just a bit more . . .accessible?
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Old 06-18-2013, 08:49 PM
 
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I think a lot of this comes down to perspective and where you come from. Property taxes in Atlanta are still much much cheaper than most cities. House prices even in places like Buckhead and Morningside etc are still extremely cheap compared to the NE or Europe. Try looking for a house in NJ, CT or Westchester for example. In fact at the global company I work for Atlanta is considered the cheapest place of all office locations to live. In the pool of high earners at large companies even if you add in private school and a Buckhead house Atlanta is still crazy crazy cheap. You live like a king here on 500k yet like dirt in NYC, London, Zurich or SF etc.

Some of you are also underestimating the number or rich and high earners in Atlanta. There a literally tens of thousands of couples making 250k joint incomes here and many, many making 500k plus too, on top of that lots of folks are beginning to get inheritances from parents. Many of these will desire to live in areas like Morningside/Buckhead and will pay.

In a nutshell Atlanta is beginning to grow into an older/establised city with the same living patterns. Longterm that means more and more of the rich living in three or four intown zip codes just like a small London or NYC. It also means less and less poor people in the city as costs rise This is why IMHO longterm the best investment is a house in the prime intown areas.

Having said all this I can see the appeal of a couple of the suburban areas if you need to stretch too far finanically to live intown. Problem is I often see friends in places like Alpharetta just spending the difference on fancy cars once they move and regretting selling their intown house a few years earlier. Given a notional 250k income personally I would rather an older 2000sq ft house and private school than an oversized mansion in Alpharetta associated maintenance/upkeep and a couple of new Lexus but each to his own.
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Old 06-18-2013, 08:59 PM
 
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Quote:
Originally Posted by arjay57 View Post
I tend to think of $150K as big bucks, but maybe I am behind the times. That's more than I ever made in a year and a lot more than the median family income in areas like Buckhead, Virginia-Highland or Candler Park.

How much can folks afford on that kind of salary? I honestly don't know.
I think this is a little outdated. I would put the true family income of people now (2012-2013) buying a house in Buckhead closer to 350k-500k. Ether that or massive equity from a previous house.
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Old 06-18-2013, 09:08 PM
 
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Quote:
This is why IMHO longterm the best investment is a hosue in these areas.
This may be true. It may also be true that shares of Berkshire Hathaway good longterm investments. You just have to be able to afford them first.

I was thinking about all this, and came up with some simple math. This is for the OP.

For the sake of simplicity, let's use simple, round numbers. Imagine the OP has $1 million in cash. Here are the choices:

1) $500k home in Alpharetta
2) $1 million home in Buckhead/VaHi/etc.

Okay. Let's imagine that in 15 years, the OP can sell the Buckhead home for $1.5 million and the Alpharetta home for $625k. That assumes double appreciation intown than the suburbs.

Okay, so the OP would net $500k on the intown sale, but only $125k on the Alpharetta sale.

Now let's assume in Buckhead, both kids have to attend private school, just for high school, at $20k per year. So now we are down to $340k profit in Buckhead. Now let's imagine the OP put the $500k he saved buying in Alpharetta in a conservative fund that yielded 5% per year. That account would now be worth $1.05 million, a net profit of $505k. So now in Alpharetta, he's up to $755k profit.

I left a bunch of stuff out, assuming things like extra gas used in Alpharetta would be offset by increased property taxes in Buckhead, etc. I'm assuming a wash on all other fronts.

This is just sort of a reasonable example that came to my mind. Naturally, you can manipulate the numbers to tell whatever story you want, I used some pretty broad assumptions.

The big point I'm trying to make is that from a pure investment standpoint, forget personal preference, you can't assume that buying intown is a better investment because you're failing to consider that buying a less expensive home frees up cash for other investments. 5% is a pretty conservative estimate of returns.

Naturally, if you spend the extra money on things like cars, this math doesn't apply. I'm also assuming fiscal intelligence.

Of course personal preference trumps all. I'm just challenging the traditional notion that buying intown if you can is always a smarter investment. Maybe it is, maybe it isn't, a lot depends on factors that can't easily be predicted. That makes it really difficult to say with any authority that any particular area of town is a better investment than another, unless it's reasonable to see the area not appreciating at all, going down, etc.
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Old 06-18-2013, 09:11 PM
 
31,993 posts, read 36,507,354 times
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Quote:
Originally Posted by jpatlanta View Post
I think this is a little outdated. I would put the true family income of people now (2012-2013) buying a house in Buckhead closer to 350k-500k. Ether that or massive equity from a previous house.
I wouldn't underestimate the latter as a factor. I know several people who've moved here from other cities and they are astonished at what you can get for $1-2 million. That will buy a super nice city home in neighborhoods like Morningside, Brookhaven, Ansley, Buckhead or Druid Hills.
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Old 06-18-2013, 09:16 PM
 
454 posts, read 817,190 times
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You guys should check this out. I think it may well apply to Atlanta aswell in the next five years. Another reason to not sell that intown house Maybe rent it out and keep if you move out

Priced out of Paris - FT.com
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