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Not 1%-er. Not by a long shot. We’ve spent the past 15 years riding out one hardship after the next, scrimping and saving (while paying NY rents) enough to put down to make a 400k-range home affordable. Really, we have no desire to spend that much, but that is what it costs to get into the size home for our long term needs. After changing apartments 3 times in 5 years, we have zero desire to buy a “start home” and trade up later; the house we buy is the one we intend to die in.
Something of a similar story here. My wife and I paid rent in NYC for a decade and then moved to a place where we could afford a 400K home - we worked on our careers in an expensive place and then moved to somewhere that we could command high salaries, relative to the cost of living.
Last edited by RJA29; 06-27-2018 at 01:41 PM..
Reason: spelling
My fiance grew up in Santa Rosa..... can't even afford an apartment there now. Only way to stay in that area is to have a relative die and leave you their house. Sounds to me like that the 900sf ranch that we live in in CT and if it were renovated, would be worth about $120k. In Santa Rosa probably $500k for the same house....
Probably can't even afford that scenario in Santa Rosa because when the relative dies the property taxes finally adjust to market value. That could easily be a 5x increase if they've been in the house for 30-40 years.
She knows that she can never go back.... But I don't know, with the fire's last year maybe people cashed out on their insurance and moved to Seattle because it would take over a year to rebuild.... Might be good prices on "Lot, with foundation"
And yeah, today is her birthday, and her dad, who still lives there, is not even going to call her. She reached out to him a couple of years ago, and was 10 or 15 minutes into the conversation before she realized he thought he was talking to her sister.... In 5 years I've seen her sister twice and never spoken a word to her.
A lot of people in this country, have over time built a lot of equity, so they sell a home and use the money from that home to buy another better one in another place.
Our first 4 homes, where all bought with V.A. nothing down loans. If the home is paid off on sale, you can use the V.A. loan again, and again. All in higher priced parts of the Silicon Valley. First home cost $13,750 in 1956. Today that 60 plus year old home, is selling for $1,250,000. So people in high priced parts of the country, can move to a cheaper area of the country, and pay cash for homes due to their equity in high priced parts of the country.
We now have a 3,700 sq. ft. 4 level (not 4 story) home on 5 acres across the street from one of the highest quality home areas in the city. We own it free and clear.
I was just running some numbers on the 2,400ft house that my stepson and his wife just bought a few months ago....If you take the house he grew up in, and the house she grew up in, probably doesn't equal 2,400 square feet.....
At best, if the house appreciates at all (they bought out in the woods not near anything), and this is CT, where housing is really only appreciating about an hour and a half from them, near NYC, it might be a percent or two if anything....Gonna cost them $70,000 over 8 years, to take $35,000 off of their principle..... that's some good financial planning "I will pay you $2 for every $1 that you lend me for the first 10 years" When the relationship goes south, (it was his first sex as teenagers and made a baby) and they have to sell the place, they (HE) will need to bring a checkbook.....
And they can only afford ONE car.... HAD to have this house.... Buying a small house, while building equity and making bank in savings wasn't an option for them. The baby made him cancel any plans for engineering college, is working as a pipefitter (good job, but he is not and will never achieve his dream of being an engineer). She started a pre-nursing college program, then the baby came, she set aside a nursing career to get a certificate to be a phlebotomist, so they could buy THIS house.... She goes to work for 4am, gets home by noon, he leaves for his second shift job by 3pm. Out in the woods. No street lights, no convenient neighbors to visit. And she is stranded....can't even go to the grocery store.
Now, his employer may, with 2-3 days notice, any day now, send him to a project in VA, from CT....for six months....in the meantime, the kids (I mentioned 22&21 right) are trying for a kid on purpose this time. Reason? Only reason? So that they are close in age.... The accidental beautiful granddaughter, turns 3 in August....Daddy will most likely be in VA and miss the party. If his wife gets a positive before he leaves, she spends 6 months or so by herself, pregnant, with a 3 year old..... and needs to quit her job because her baby daddy isn't there for his shift of parenting.
Sorry for my venting....kinda went off topic.... I never understood, why after my divorce, living with someone in a 2br ranch, in my forties, would exit my neighborhood into the next town over with houses twice the size, twice the mortgage, 2 late model cars, and swingsets and big yard toys.... could never figure how they could afford it.
My dad, bought ONE house. In 1959...Still lives there to this day....950 square feet. 3br, 1 bath.... I got stuck here taking care of him......
$400K is a cheap house. That’s below the median here. Minumum then would be what $80K down? I don’t know what you’re asking. How is that a big deal? Anyone can save $80K. If you’re asking how people pay in cash that’s a different story.
We are looking at houses $1.75M or so and the builder says half of their clients are cash buyers. There is a lot of money in the world my friend. Go to places like Newport Beach and Beverly Hills just to name two CA examples and every house the eye can see, which at times is many hundreds, is a multimillion dollar house.
Many people don't spend $400K on their first home, but, have owned multiple homes and move-up the housing 'food chain' through equity appreciation. Sometimes, that is accelerated by changing markets.
We paid cash for our last/current condo (5th home), which has since appreciated about 60-percent over what we paid for it 6-years ago, but, then, so has everything else in the area. Thus, if we are to take advantage of that appreciation, we would probably need to move to a different market - in order to move-up.
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That could easily be a 5x increase if they've been in the house for 30-40 years.
that's some good financial planning "I will pay you $2 for every $1 that you lend me for the first 10 years"
