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Been posting on here a bit since we are in the market in CT and have basically been dismayed with lost bids and the offerings in our price range. The story seems to be that you either buy a house for close to our price that is a complete heap that needs $100k in work to be updated and brought to our standards, or the homes are at the top of our range and still require $50k worth of work. Now once in a great while you will have a gem pop up that is priced right and it disappears in a week from listings, but it's not the norm.
I also realize that what we consider a home to be worth and what the seller values the home at are completely different. We are seeing homes listed for $370-400k that we would not pay more than 300-325 for because of the work we would need to do. I'm not just talking about basics like painting and cleaning, but replacing carpeting with wood floors, updating a bathroom that is pink or baby blue from the 70's, or a kitchen that was updated half-***. But again could someone move in to the home and live, I suppose but not us. I promise I'm getting to the savings part soon.
The homes we keep seeing online that we seem to love are just out of our reach because I do not want to be house poor and have an idea of what I want to pay for a mortgage. They sit in the $400-450 range, are newer builds, have open floor plans, nice kitchens, master suites, etc. In order to bring these into our range we would need probably about $30k more of a down payment which I can easily put away in the coming months (over the summer). My concern is the market and I get myself worked up because I know what these homes are priced at "today" but by the time I have enough saved I am worried I will be looking at the same homes we are now in the $370-400k range. Basically I am concerned that I will be saving up for the same house I could buy now.
So am I paranoid because prices most likely won't be jumping $50,000 in say 6 months, or interest rates will be jumping over 5% by then? I know we don't have a crystal ball, but from what I have seen is that prices seem to be dropping on a lot of these homes that were in the mid 400's and are now down to the 415-425 range.
Apologies for the drawn out post, we are just wearing ourselves out because even though we live in a small cape, it is updated and immaculate (again our standards), and we look at these other potential homes and just shake our heads at what we see. I'm taking my wife to a open house on a home listed for $430k this Sunday to see if this is truly what she is looking for, then we can move on from there. My anxiety just falls in the "will it be worth it come 6 months".
Must Haves:
-2,000+ sq ft.
-two car attached garage
-updated or large kitchen (could be updated later)
-open floor plan
-3/4 bedrooms
-2.5 baths
-master w/ bathroom (his/her sinks a plus)
-walk in closet(s)
-good size yard
-neighborhood (cul de sac, no main roads)
-city sewer
-city water
-natural gas (oil acceptable if it's the right home)
I know you're trying to avoid Buyer's remorse. It's natural. Once you buy, your energies and attention will be in settling in, not seeing if the market is taking a downturn. Interest rates, if you're financing, are still pretty low. Many people are refinancing over selling and buying another place. Your other option is to make an extension onto your existing home.
I felt the same way for the houses I saw. 20-30% priced over what I expected. It took a year. I rented for over a year so I didn't have something to tie me down. It doesn't hurt to make an offer, though. Most sellers were unrealistic. Many are biased by how they see their home as marketable.
Kitchens, room additions, and bathrooms are quite costly; as are replacing windows. Paint and carpet are less costly. I'm no do it yourselfer. I just look for reasonable contractors. I you can do things yourself, it won't cost you as much, but it better be done right (if there is any thought for resale).
The better deals are those that are vacant, where someone already owns multiple houses, or where someone needs to sell. Every market is different, though. Sounds like yours is a hotter market. In the end, you should focus upon what you want, what you can afford and where you'd like to live. If you're looking for something for the long term, then these small variances in price will not be a factor for you.
The story seems to be that you either buy a house for close to our price that is a complete heap that needs $100k in work to be updated and brought to our standards, or the homes are at the top of our range and still require $50k worth of work.
Lower your standards and buy a house you can afford.
My problem is not necessarily affordability, it's what I am getting for my money. We can afford to buy a home in our range and do the updates over time if necessary. The homes we see however don't have much potential to end up being what we want them to be. Once we start talking about what we would probably do to a home, we just don't see the benefit of the cost of doing all the work vs. just saving and buying one in the higher range noted in my OP and only having to worry about small things like paint.
When we walk into a home the first thing I think about is "can we fit 20 people here for a gathering inside without being cramped and shouldered?" It may sound ludicrous but we both have large families and entertain them and friends frequently. Currently in our home we can only really have one side over at a time without packing them in. Our benefit is that the home we are in is a family owned home that costs us nothing but utilities and taxes to live in. So the ability to save a lot more over a shorter period of time (i.e. a mortgage payment of $2,500) is much easier than for others. That ties into our buying position where we have no liabilities to hold us back from completing a deal based on the buyers timeline.
I don't think we would have buyers remorse because once we buy a home I would be down to business. I am a big DIY'er and my family is very handy as well with multiple trades. As mentioned, the issue is we are not finding and good base homes to start with and anything below our price range are literally heaps that are so outdated or dilapidated that they are not worth the effort. I guess we just go to see these homes, and see some updates the owners did and think wth?
The problem is that housing prices have risen, but your expectations are still in 2012. The market has changed. If your expectations are stuck in 2012, you will not be buying a house this year. Period.
In 6 months what will happen? I can't say for sure. But you're not buying to sell and make a profit in 6 months. Buy to have a house of your own that you plan on living in for years to come. Buy something you can afford so you don't have to count on the market going up to be able to stay in it.
What you're willing to pay based on the work you think needs to be done is part of the equation. But if other people are willing to pay more than you (which is what sounds like is happening) then you will continue to lose out on offers and chase the market up and your options will become even more limited.
Rates are creeping up. The expectation is that they will continue to creep up. We are at historical lows on interest rates and I wouldn't count on that lasting for much longer.
Since you are big on DYI, look at homes that fit your desires on the things you cannot change. Location, lot, and layout. The rest can be done as your schedule and budget allow.
Been posting on here a bit since we are in the market in CT and have basically been dismayed with lost bids and the offerings in our price range. The story seems to be that you either buy a house for close to our price that is a complete heap that needs $100k in work to be updated and brought to our standards, or the homes are at the top of our range and still require $50k worth of work. Now once in a great while you will have a gem pop up that is priced right and it disappears in a week from listings, but it's not the norm.
You're smack in the middle of one of the highest home price markets in the country...
at a time when the fewest (good) choices in twenty years are available.
Your personal finances (and sanity) will be best met by either withdrawing from the market and leaving it to the desperate and hungry (and more cash laden) or MOVING to a more affordable part of the country and starting over.
Quote:
Must Haves:
-2,000+ sq ft. -two car attached garage
-updated or large kitchen (could be updated later)
-open floor plan -3/4 bedrooms-2.5 baths
-master w/ bathroom (his/her sinks a plus) -walk in closet(s)
-good size yard
-neighborhood (cul de sac, no main roads)
-city sewer -city water
-natural gas (oil acceptable if it's the right home)
All of these things are available for well under $200,000.
Just not in Connecticut.
You're smack in the middle of one of the highest home price markets in the country...
at a time when the fewest (good) choices in twenty years are available.
Your personal finances (and sanity) will be best met by either withdrawing from the market and leaving it to the desperate and hungry (and more cash laden) or MOVING to a more affordable part of the country and starting over.
All of these things are available for well under $200,000.
Just not in Connecticut.
Basically that's our situation. However moving away is not an option. We are big family people and almost our entire families live here. There is a saying about this area; "you can leave very easily, but it's near impossible to come back." It's pretty funny to see the variation because in a place like Raleigh, NC you could get 3,000 sq ft and have a gorgeous open home but it's not just about the home.
The houses that are sitting just out of reach at the moment are doing just that, sitting. Small price changes, open houses, but they are holding steady and not selling. We shall see.
Is there room on your lot to add a gigantic family room? You like the house you are in, maybe you could figure out how to stay in that one.
You say that the sellers and you disagree on price, but if the houses are selling quickly, then it is the sellers who are right about the price and not you.
Is there room on your lot to add a gigantic family room? You like the house you are in, maybe you could figure out how to stay in that one.
You say that the sellers and you disagree on price, but if the houses are selling quickly, then it is the sellers who are right about the price and not you.
I wouldn't say we are disagreeing on price. I am just in the mind set that if this is the best you can get in the area we are looking in, then why not just spend the extra $ (saving up) and go 20-30k higher to get a house that has everything already without having to deal with major renovation/updating.
The house we live in now is not ours, it was an income property home that was originally the parents and has been used the last few years for another family member and now for us while we save. A rare situation that not many find themselves in.
If prices in your area are still dropping, wait. However, with the amount of $$$ the fed is pumping into the real estate market it may not be safe to bet on prices falling much further. It really depends on the market. Where I'm at, a 2000+ sq ft house with a 2 car garage for $400K is likely going to need well over $100K in updates to be anywhere close to modern standards. That's just what people are willing to pay right now. Whether that price point will go down, who knows - but with the government working hard to re-inflate the market to pre-crash prices it seems less likely than it did 1-2 years ago.
Quote:
Originally Posted by NinaN
In 6 months what will happen? I can't say for sure. But you're not buying to sell and make a profit in 6 months.
While that's certainly nothing to plan on, it looks like we could list now for $40K more than we paid last year and get multiple offers based on the junk that is selling at those prices...
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