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Foreclosures or home prices problem, keep Americans in their homes, unethical means, starter homes, less desirable neighborhoods, newer developments, fancy amenities and upgrades
Understandable, but - I have a white collar job, have had one for my entire career (7 years now... only slightly scary). I'm definitely not overpaid, and consider myself just slightly underpaid, but I'm not far from where my work would get me at this level. I work in NYC. My job doesn't exist except in major metropolitan areas - DC, San Francisco, London, Dubai, so on. Its harder ever year to find competent people even at a lower level than mine. So, I'm making skilled NYC money. I don't say this to try and flaunt what I'm making (because it would be kind of silly), just to point out that I'm definitely not in the category of doing poorly.
I've already rented, and rent was actually more than my current mortgage - almost more than mortgage plus taxes, and I made far less money at the time. What I bought (as you know) was a small 1200sq ft home, which needs a good bit of work - and it was still a hell of a deal. As Bob knows (and mentioned when I posted some pics), I'll be putting a good bit of money and labor into bringing it up to par. Already have been, with some of the more significant expenses coming up in the spring. When I do all this work, and the home is in good shape, I will have brought it up to the value of a 1200sq ft home which doesn't need a new roof, siding, some electrical updates, bathroom venting, a new kitchen, carpeting/flooring upstairs, no cracks in the walls, a more polished looking basement, new trim throughout the house, so on and so forth. So in other words, a generic small home fit for a couple, maybe empty nesters. A starter home that doesn't need someone familiar with the construction business.
A starter home worth (by recent comps) about $250-$275k.
Considering my parents, with three kids, making not much less than they make now, purchased a roomy split level home in a nice area for $220k.... well, sorry, I don't consider $250k a "starter home" price. It just doesn't fit with the idea of "starter".
you know, we all come into this with different sets of eyes. my starter home, adjusted for inflation, is in line with our salaries adjusted for inflation today. the NJ/NYC area has always been expensive, this in not a new phenomenon. not many people can or could afford a starter home on a single salary (i noticed you kept referring to your salary, so I assume you purchased this alone, and not with your SO), so if you did, that's wonderful and quite an accomplishment - I couldn't do that when I was your age.
i think of my parents - my dad was 40 and my mom was 46 when they purchased their first house. they both worked and HAD to work in order to keep up with the mortgage payments. this was in the late 60's. and in a time when mom's "didn't" work, most of my friend's moms did, and I'm sure it was to make ends meet. i keep thinking of the billy joel song "we didn't start the fire" - as I see what's going on now is no different than what I've personally seen over the past 20 years. maybe houses today are a BIT more out of reach than 15 yrs ago, but prices are slowly coming down and, like I said, be a little more affordable to the average middle class family.
you know, we all come into this with different sets of eyes. my starter home, adjusted for inflation, is in line with our salaries adjusted for inflation today. the NJ/NYC area has always been expensive, this in not a new phenomenon. not many people can or could afford a starter home on a single salary (i noticed you kept referring to your salary, so I assume you purchased this alone, and not with your SO), so if you did, that's wonderful and quite an accomplishment - I couldn't do that when I was your age.
Yeah it was on mine alone - adding her part time salary wouldn't have made much of a difference, plus we're not married yet.
My point was mainly that in the past 10 years, home prices have risen so rapidly that a starter home has doubled in price - which is quite a scary thing for the young home buyer, and not what it was ten years ago.
Quote:
Originally Posted by tahiti
maybe houses today are a BIT more out of reach than 15 yrs ago, but prices are slowly coming down and, like I said, be a little more affordable to the average middle class family.
True, and I hope it continues to the point of just being affordable to the average middle class family - that will make home ownership within reach for the majority of people working hard to get somewhere.
I am sure most of the younger people will disagree with this but the older folks know what I am talking about.
Todays first time buyers don't want starter homes like most of the older folks started with 40 years ago. They want fancy kitchen and baths, best neighborhoods, best schools, two new cars in the drive and a great vacation every year and they are in their late 20's early 30's.
I'm a first time home buyer, and at this point, we would rather rent and put the money that would go into our mortgage into a savings account at 6%. I am not going to buy a "starter home" that will only depreciate over the next 5-10years. What we currently pay in rent is less than we would be paying in property taxes. The only thing we are losing is is a couple of years in a house.
True, it's a sacrifice to rent a place that is smaller than the house we would like to buy. On the other hand, we could not be more stress free at this point in our lives. On the joy of renting in NJ, my husband and I were sitting down to a candle lit dinner the other night, while there were two MDs in our bathroom fixing our toilet. LOL!
I'm a first time home buyer, and at this point, we would rather rent and put the money that would go into our mortgage into a savings account at 6%. I am not going to buy a "starter home" that will only depreciate over the next 5-10years. What we currently pay in rent is less than we would be paying in property taxes. The only thing we are losing is is a couple of years in a house.
True, it's a sacrifice to rent a place that is smaller than the house we would like to buy. On the other hand, we could not be more stress free at this point in our lives. On the joy of renting in NJ, my husband and I were sitting down to a candle lit dinner the other night, while there were two MDs in our bathroom fixing our toilet. LOL!
Dont forget though, one day those 2 MDs will own the house free and clear, that YOU paid for. All for the low, low price of fixing a toilet once in a while. lol.
I agree with emanon on this one. The younger generation are making more and don’t necessary have a good understanding of personal finance. This is a dangerous combination as it makes them more optimistic about their financial situation. They are doing things like spending beyond their means in the hopes that their income will increase. Or using credit cards to pay for their extravangances.
Being of the younger generation myself, I noticed friends who fall into this trap. They borrow 4x or more of their income for a first home to show off how affluent they are.
Case in point, a friend of mine recently bought a 5BR home in Princeton for nearly 900K. She and her husband make abit over 200K, just like my husband and I, and have no children. We got the 500K 2BR condo and they decide to buy one of the better homes in an already expensive neighborhood. Why do you need a 5BR home for 2 people?
It’s people like this who want to flaunt their so-called wealth that enable home devepers to price homes in NJ the way they do. The same 900K house in Princeton would probably be 300-400K in PA. Location does not justify a 2-3x increase of a house.
I would just love to know what occupation you have in your late 20s, early 30s, that nets you 200k/yr each. Even mid to high 100s each seem pretty wild for 20/30 somethings. Especially for someone who can write with such clear disregard for grammar and spelling.
I would just love to know what occupation you have in your late 20s, early 30s, that nets you 200k/yr each. Even mid to high 100s each seem pretty wild for 20/30 somethings. Especially for someone who can write with such clear disregard for grammar and spelling.
I think she meant 200k combined income, but I'm total agreement with the rest of your post.
I frequent an NJ real estate board and pondered the same question. One reply was "are you kidding me? All you have to be is a professional and you will make over 100k a year".
So, I think on one hand, you have people who think 70-90k is good money, and you have people that say 150k is barely cutting it. I think time will tell.
I frequent an NJ real estate board and pondered the same question. One reply was "are you kidding me? All you have to be is a professional and you will make over 100k a year".
I love this quote. I think someone owes me money for the last 10 years of my professional life.
I'll tell you....I'm not sure whether I should buy a home now or just sit on the sidelines and wait. The last thing I want to do is buy a home here in Wall and then see it's value drop like a stone in a year. I just got a divorce and I don't want to put what little I have down and watch it all vanish. I'm not sure if I should rent or take the plunge and buy something. I have children to consider and that's the only reason I would buy something as opposed to renting. Any ideas???
I'll tell you....I'm not sure whether I should buy a home now or just sit on the sidelines and wait. The last thing I want to do is buy a home here in Wall and then see it's value drop like a stone in a year. I just got a divorce and I don't want to put what little I have down and watch it all vanish. I'm not sure if I should rent or take the plunge and buy something. I have children to consider and that's the only reason I would buy something as opposed to renting. Any ideas???
Here is a great calculator - put in the rent you'd pay, and the equivalent home price, and see where it takes you
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Finding An Affordable Home In NJ
