2022 Real Estate Observations (Boston: hair salon, private schools, income tax)

[msRB311]

This is also a strange one :

https://www.zillow.com/homedetails/1...57176113_zpid/

I guess the person made 19k at least ?

[newenglandgal123]

Originally Posted by msRB311

This is also a strange one :

https://www.zillow.com/homedetails/1...57176113_zpid/

I guess the person made 19k at least ?

Nope, no way they even made $19K. They hired realtors to sell so assume they had to pay around a 4% commission upon the sale, so more like they took an approximate $50K loss!

[msRB311]

Very strange !

[GeoffD]

Originally Posted by newenglandgal123

So a family with an approx $300K income is comfortably affording a ~$6000/month mortgage, taxes,insurance, interest payment assuming they put 20% down? This in addition to monthly car payments as well of lets say around $1200/month total for two cars, plus food, utilities, daycare, retirement, etc? I'd say barely scraping by is more like it.

A 2 1/2% 30 year fixed mortgage for $800k on that 20% down million dollar house is $3,160/month. There have been very few transactions in the United States since the whole country locked in to that 2 1/2% to 3 1/2% mortgage. Most towns aren’t assessing at market value. Depending on the town, that could be $4k/month, not $6k. My effective mill rate is ~ $6.50 per thousand. With Proposition 2 1/2, the town has no incentive to value at 100% and proportionally lower the rate. They’d be flooded with appeals.

[simplexsimon]

Originally Posted by newenglandgal123

So a family with an approx $300K income is comfortably affording a ~$6000/month mortgage, taxes,insurance, interest payment assuming they put 20% down? This in addition to monthly car payments as well of lets say around $1200/month total for two cars, plus food, utilities, daycare, retirement, etc? I'd say barely scraping by is more like it.

Yes if you're talking about a family that just purchased two brand new cars, just had a couple brand new babies, and are fully funding retirement then discretionary income is going to be a little low for the first few years. What is money for?

[newenglandgal123]

Originally Posted by GeoffD

A 2 1/2% 30 year fixed mortgage for $800k on that 20% down million dollar house is $3,160/month. There have been very few transactions in the United States since the whole country locked in to that 2 1/2% to 3 1/2% mortgage. Most towns aren’t assessing at market value. Depending on the town, that could be $4k/month, not $6k. My effective mill rate is ~ $6.50 per thousand. With Proposition 2 1/2, the town has no incentive to value at 100% and proportionally lower the rate. They’d be flooded with appeals.

I'm talking about what the scenario looks like at the current ~5.5-7% mortgage rates that we've seen the last few months. Million $ plus homes are flying off the shelves around here, so there are still plenty of transactions taking place.

[newenglandgal123]

Originally Posted by simplexsimon

Yes if you're talking about a family that just purchased two brand new cars, just had a couple brand new babies, and are fully funding retirement then discretionary income is going to be a little low for the first few years. What is money for?

I'm not talking about a family that just purchased two new cars. They could be in year 2 or 3 of car payments. The average car payment is more like $700+ right now so I was being conservative saying $600 ea. Why brand new babies? It's not like they get any cheaper when they're a couple years old. lol More like discretionary income is going to be tight for many years unless income continues to increase more than just by a cost of living 2-3% salary raise each year.

[matrix5k]

Originally Posted by newenglandgal123

Yes, I suppose that could happen. I have a family member who lives in a development where a neighbor a few houses down from them is getting divorced and selling because the wife was having an affair with the husband nextdoor. They've owned the home for 4 years though not 3 months. Wild stuff like that can happen I guess!

You know a lot about your family's neighbors.

[simplexsimon]

Originally Posted by newenglandgal123

I'm not talking about a family that just purchased two new cars. They could be in year 2 or 3 of car payments. The average car payment is more like $700+ right now so I was being conservative saying $600 ea. Why brand new babies? It's not like they get any cheaper when they're a couple years old. lol More like discretionary income is going to be tight for many years unless income continues to increase more than just by a cost of living 2-3% salary raise each year.

How many years is "many years" that you're talking about?

If the car loan is in year 2 or 3, it will be repaid even sooner than what I was assuming which frees the $1,200/month thereafter, less car maintenance costs.

I'm looking at my daycare's tuition schedule and the difference between infant care and pre-K is about $500/month per kid, and then of course it drops way off after they're in public school. Sure there's going to be costs for after school activities, but nowhere near the cost of daycare.

Then even 2-3% salary raises each year is $6k-9k/year on $300k of income, and your biggest expenditure is a fixed expense (property taxes and insurance will go up a little, but not by this much).

The main risk of buying a new home, which has never changed, is job loss.

[robr2]

Originally Posted by msRB311

This is also a strange one :

https://www.zillow.com/homedetails/1...57176113_zpid/

I guess the person made 19k at least ?

It's very strange as the house was taken by the US Marshall's from Richard Hajjar in 2021. He was the CFO of Alden Shoes who was financing Bianca Delargarza's lifestyle by embezzling from Alden.

It's possible the first sale was done as a courtesy for the second. We'll never know.