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Old 09-02-2011, 12:04 PM
 
57 posts, read 137,765 times
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I am wondering what is the best thing to do (as I'm sure others are) regarding housing. I live South of Boston and am renting. Rent in this area is pretty high and has gone up especially in the last year or two. My FI and I are paying $1025 a month for our 1 br/1ba 600sq ft. apt. It is not a nice apartment but is okay and we are now tenants at will and haven't had our rent raised in the past couple years. South of Boston, a nice 1 bedroom apartment goes for $1300+ right now for what I've seen. We also have two cats which limits our apartment options.

I would like to buy a house so we have more options, more space, etc, but the Boston housing market is still really overpriced. Decent houses in our general area are probably in the $200-$250k range. We have about $15k saved that we could use for a down payment, which isn't much. Our wedding money isn't coming out of that, that is a separate fund. Additionally, I have $600 a month in student loans that will go up if the government raises interest rates (before the recession they were $900 a month and no I cannot lock them in). I don't think housing is at the bottom but I'm also concerned that mortgages are going to be harder to get (although my credit is good).

I'm afraid we're never going to be able to afford a 20% down payment in this area, but moving to a nicer apartment (since I don't want to live in this apartment forever) would further hamper our ability to save. Do we just stay here and try to find better jobs (there are some jobs still in Boston) or do we try to find a job in another city with a lower COL so we can rent a nicer/cheaper apartment and save for a down payment on a significantly cheaper house?
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Old 09-02-2011, 12:23 PM
 
Location: The Triad (NC)
31,948 posts, read 73,530,679 times
Reputation: 38903
Quote:
Originally Posted by Carrie0930 View Post
...the Boston housing market is still really overpriced.
Decent houses in our general area are probably in the $200-$250k range.
$200-250,000 is not especially high... even today.
In fact that number is closer to par (subject to real specific detail).

Quote:
Rent in this area is pretty high...
...paying $1025 a month for our 1 br/1ba 600sq ft. apt.
South of Boston, a nice 1 bedroom apartment goes for $1300+
Again... that is not especially high... even today.

Quote:
Do we just stay here and try to find better jobs (there are some jobs still in Boston) or do we try to find a job in another city with a lower COL so we can rent a nicer/cheaper apartment and save for a down payment on a significantly cheaper house?
You say that as though there are real work options elsewhere. Are there?
Most people are sticking tight to the jobs they have.

Assuming you can actually pull it off...
(to somehow add another $500-$1000 to savings per month net of everything)
then that's absolutely worth investigating.

But is that real? ...or just hopeful conversation?

Quote:
We have about $15k saved that we could use for a down payment, which isn't much.
Our wedding money isn't coming out of that, that is a separate fund.
If the other numbers eventually crunch out...
have the reception in your Mom's backyard.

hth
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Old 09-02-2011, 01:47 PM
 
Location: Newton, MA
324 posts, read 1,013,034 times
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Quote:
Originally Posted by Carrie0930 View Post
I would like to buy a house so we have more options, more space, etc, but the Boston housing market is still really overpriced. Decent houses in our general area are probably in the $200-$250k range. We have about $15k saved that we could use for a down payment, which isn't much. Our wedding money isn't coming out of that, that is a separate fund. Additionally, I have $600 a month in student loans that will go up if the government raises interest rates (before the recession they were $900 a month and no I cannot lock them in). I don't think housing is at the bottom but I'm also concerned that mortgages are going to be harder to get (although my credit is good).
Have you run the numbers and figured out what a monthly payment would be on a 250K house? Have you spoken to a bank about what kind of a loan you might qualify for? Personally, I wouldn't make any decisions without having the facts.

If buying seems out of reach, I'd probably be tempted to find an apartment you like better. I definitely wouldn't consider moving out of the area unless you actually had jobs somewhere else.
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Old 09-02-2011, 04:12 PM
 
Location: Boise, ID
8,047 posts, read 26,586,356 times
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Quote:
Originally Posted by MrRational View Post
$200-250,000 is not especially high... even today.
In fact that number is closer to par (subject to real specific detail).



Again... that is not especially high... even today.


Are you saying those numbers aren't high for Boston? Or that they aren't high for the country in general? Because I'm looking at those numbers and just cringing. Those are 100% higher than what I would post in my area. A decent house these days is in the $125k-150k range, and a 1/1 rental would only rent for around $500-$600 per month.

To the OP, those numbers might be normal for the Boston area, but you can definitely find places in the US that are far far cheaper. Of course, wages are less here too, so it sort of averages out, and I wouldn't want to be in the market for a job right now anywhere in the US. The type of job a normal 9-5er has makes around $30k here. Compare that to whatever you are making and decide if it is worth it. But I say if you have a job, and can't transfer, stay where you are at.
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Old 09-02-2011, 04:35 PM
 
Location: The Triad (NC)
31,948 posts, read 73,530,679 times
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Quote:
Originally Posted by Lacerta View Post
Are you saying those numbers aren't high for Boston?
The term I used was par...
I was intending that most of the metropolitan areas from Boston south to DC would qualify under that.

I'm amending that now to say it's LOW (see below postcript)

Quote:
Those are 100% higher than what I would post in my area.
and about half of what the LA market is.
---------
Quote:
Originally Posted by deptofnumbers
As of August 29 2011 there were about 27,876 single family and condo homes listed for sale in Boston Massachusetts. The median asking price of these homes was approximately $329,400. Since this time last year, the inventory of homes for sale has decreased by 1.7% and the median price has decreased by 2.8%.
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Last edited by Yac; 01-24-2012 at 05:41 AM..
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Old 09-02-2011, 05:32 PM
 
57 posts, read 137,765 times
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Quote:
Originally Posted by Lacerta View Post
Are you saying those numbers aren't high for Boston? Or that they aren't high for the country in general? Because I'm looking at those numbers and just cringing. Those are 100% higher than what I would post in my area. A decent house these days is in the $125k-150k range, and a 1/1 rental would only rent for around $500-$600 per month.

To the OP, those numbers might be normal for the Boston area, but you can definitely find places in the US that are far far cheaper. Of course, wages are less here too, so it sort of averages out, and I wouldn't want to be in the market for a job right now anywhere in the US. The type of job a normal 9-5er has makes around $30k here. Compare that to whatever you are making and decide if it is worth it. But I say if you have a job, and can't transfer, stay where you are at.
In the OP I was referring to being high for the US in general. I'm not an idiot, I've lived in the Northeast my whole life so I know Boston is expensive and NY and SF more expensive than that. But when I look at other areas in the US and think we could afford a starter home with a 20% down payment now and we don't even have a 10% down payment here and that in other places you can rent a 3 bedroom apartment for what we pay for a tiny one bedroom, it kind of gets to you.

I've been trying to find a better paying job that would help. Salaries are supposed to be much better here than elsewhere but my salary is $42,500 which doesn't equal a lot with the costs. And my company doesn't have any promotions (it's a flat organization) so that's pretty tough. It wouldn't be so bad if I could find a better paying job and didn't feel like saving for anything was a complete uphill battle.

If we want to have kids in the future we'll have to figure out something. Because obviously it's impossible to have kids with our current living situation.
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Old 09-02-2011, 05:33 PM
 
416 posts, read 598,928 times
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Don't know the full situation but what about taking your $15k and paying down the student loans? Assuming no CC debt, would this eliminate your student loans or would you have more to pay?

My guess is your $15k is also sitting in a savings account? What is that earning? Far <1% interest and your student loans are probably 6-8%?

Pay off the debt, and then ask yourself if buying a house is everything you have always wanted.

A few other posters have noted that rents, housing prices, job pay vary widely across the US. There are a few exceptions where pay and real estate don't correlate (high/low or low/high).

If you really want solid answers re: rent, real estate, etc vs what your finances are then you might want to sit down with a fee for service financial planner (i.e. not one that takes a % cut), lay out a game plan and stick to it...

but it sounds like you have a pretty solid start in this arena if you have saved so much already. keep up the work and in 1-2 more years (banking on a stagnant real estate market) you will easily find a place.
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Old 09-02-2011, 05:57 PM
 
Location: The Triad (NC)
31,948 posts, read 73,530,679 times
Reputation: 38903
Quote:
Originally Posted by Carrie0930 View Post
In the OP I was referring to being high for the US in general. I'm not an idiot, I've lived in the Northeast my whole life so I know Boston is expensive and NY and SF more expensive than that. But when I look at other areas in the US...
When I read your Q about "other cities" I (perhaps wrongly) assumed you meant other cities in Mass
or at most the greater New England area.

But if you're willing to pull up stakes and move 1000's of miles to a new opportunity...
well, that opens you up to all sorts of possibilities. Risks too though.

Have you ever been to Iowa?
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http://www.youtube.com/watch?v=s60hOgqLFGg

Last edited by Yac; 01-24-2012 at 05:41 AM..
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Old 09-02-2011, 06:42 PM
 
676 posts, read 1,708,078 times
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Quote:
Originally Posted by davehalo View Post
....
but it sounds like you have a pretty solid start in this arena if you have saved so much already. keep up the work and in 1-2 more years (banking on a stagnant real estate market) you will easily find a place.
If the OP can save the money in 1-2 years, then the housing price goes up, how can he afford at that time?
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Old 09-02-2011, 07:30 PM
 
4,399 posts, read 9,957,521 times
Reputation: 2369
Quote:
Originally Posted by AngelBy View Post
If the OP can save the money in 1-2 years, then the housing price goes up, how can he afford at that time?
'
Doubt housing prices will be much higher in 2 years.
In 1 year he probably won't have to worry much about higher interest rates, in 2 years interest rates will probably be at least a little higher.
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