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"This gap between buyers’ willingness and sellers’ expectations is also revealed in the latest data. The median list price in Philadelphia is currently $180,000, while the median transaction price is only $110,500. That represents a difference of nearly $70,000 between what sellers want and what buyers are actually willing to pay."
- Philadelphia home values down for the year
By Kevin Gillen & Ed Goppelt Tuesday, 02/05/08
I think just wait and keep your eyes and ears to the ground. Be ready to move when a great place that is priced right comes on the market.
I wouldn't say 'We Want it for nothing" ... but logic would say if House A- New Construction, 1800 sq ft, modern ammenities and appliances, buyer incentives lists at $399K and House B-35 years old, 1800 sq ft, marginal upgrades and includes original baths, furnance and septic also listing at $399k... which would you pick?
Honestly it depends upon the location of each home. That new construction could be so brand spanking new the floors aren't even in yet but if it's on a postage stamp sized lot surrounded by a hunderd other copy cat new construction homes and the older home is on a good sized lot (.3 or more) and in a good location I will almost certainly choose the older home. I can change a house I can't change a location.
We've been on the fence about whether to buy for probably a year now. We've been scanning and tracking MLS listings for probably 1.5 years now. We've probably seen less than a handful of actual places. Like other posters have expressed, we haven't been impressed with the inventory.
But also for us, here is a big thing we've come to realize:
We rent in a city where my husband can walk to work. When we moved here we downsized to one car. If we move to a nice home outside of the city, we would have to include the cost of purchasing another car, additional car insurance, the monthly cost of gas for commuting (Friends of ours estimate monthly gas as high as $300-$400! It's not uncommon to commute 40-60 minutes one way here), the cost of parking in the city, higher cost of utilities for a bigger living space (and we've recently had utility hikes in our area!), the cost of home maintenance, etc. Adding these expenses on top of a mortgage and property taxes really adds up!
For the time being at least, we are not convinced that we would be better off investing in a home. In fact, we think quite the opposite, especially with home prices sinking. At least with renting (and carrying no car payment or credit card debt) we can still save a good amount of money each month and as long as we move these savings into other decent investments opportunities we figure in the long run we will do well.
So to answer the OP's question - whether being on the fence is about price, economy, or bad inventory - in our case it's a little bit of all those factors!
We've been on the fence about whether to buy for probably a year now. We've been scanning and tracking MLS listings for probably 1.5 years now. We've probably seen less than a handful of actual places. Like other posters have expressed, we haven't been impressed with the inventory.
But also for us, here is a big thing we've come to realize:
We rent in a city where my husband can walk to work. When we moved here we downsized to one car. If we move to a nice home outside of the city, we would have to include the cost of purchasing another car, additional car insurance, the monthly cost of gas for commuting (Friends of ours estimate monthly gas as high as $300-$400! It's not uncommon to commute 40-60 minutes one way here), the cost of parking in the city, higher cost of utilities for a bigger living space (and we've recently had utility hikes in our area!), the cost of home maintenance, etc. Adding these expenses on top of a mortgage and property taxes really adds up!
$400/mo for gas what kind of cars are your friends driving? I travel 45 miles one way and I spend $200/mo on gas. Also you realize that while home prices may come down some more things like, utilities (which effect renters), property taxes, home maintenance will not, they'll most likely over time increase along with insurance so knowing this does it mean you'll never buy? I'm curious not trying to be rude.
$400/mo for gas what kind of cars are your friends driving? I travel 45 miles one way and I spend $200/mo on gas. Also you realize that while home prices may come down some more things like, utilities (which effect renters), property taxes, home maintenance will not, they'll most likely over time increase along with insurance so knowing this does it mean you'll never buy? I'm curious not trying to be rude.
I don't take your comments as rude. What I've laid out is how we've been thinking about our situation. If we'd benefit from adjusting the way we are thinking about something, I'd rather know that than not. So I appreciate your comments.
No, we not saying that we will never buy, but given our current situation, it doesn't seem to financially make sense for us right now.
Yes, utility hikes do affect us as renters as well. However, with a smaller living space we can still have relatively lower bills for the time being.
Unfortunately, I'm not sure how accurate the estimate on the gas cost are because I'm just going by what I've heard rather than first-hand experience. I'm actually quite happy to hear that you drive 45 miles one way on about $200/month.
$400/mo for gas what kind of cars are your friends driving? I travel 45 miles one way and I spend $200/mo on gas. Also you realize that while home prices may come down some more things like, utilities (which effect renters), property taxes, home maintenance will not, they'll most likely over time increase along with insurance so knowing this does it mean you'll never buy? I'm curious not trying to be rude.
$200 a month?
My wife drives a Honda Civic and gets 34 miles per gallon. She drives 107 miles to work each day round trip. That requires two full tanks of gas each week (including local driving). And she spends over $300 a month. Thankfully I work from home otherwise my gas and commuting expenses would be about the same. $400 a month for fuel and commuting expenses is not out of the realm.
In my area... an average PITI on a mid-priced home can range $2700-$3500 (that's on a $300-400K home). Apartments rent for $1000-$1700 for 2-3 bedroom and houses rent for $1000-2000 (excluding utilities). When you factor the overall cost of homeownership even with deductions it is definately a renters market. At current prices you wouldn't begin to break even on a home and start to accrue some value and investment until 8-9 years. And that's if taxes remain the same in NY which we all know they won't. In the last 3 years property taxes increased an average of 14% yearly in the town and school district we are looking in. Surrounding communities are no better. So I'm giving serious consideration to renting a home if I don't find what I'm looking for by this summer. Maybe even rent with an option to buy. Right now there are too many rising costs inaddition to monthly mortgage payments to consider. It may be a wiser investment over time to invest the difference in retirement and annuities save rather than spend $10-$14K per year in property tax alone.
I'm not saying that buying a home is bad. Certainly in 1998-1999 when the average house here listed for $170K owning a home was a wise financial investment. However in 2008 when the same home is listing at $375K (a 53% increase) and rent has increased over the same period only 20-25% in my local area the scales certainly tip toward renting. These are the things I have to consider short term.
Last edited by thunder88; 02-21-2008 at 12:25 PM..
My wife drives a Honda Civic and gets 34 miles per gallon. She drives 107 miles to work each day round trip. That requires two full tanks of gas each week (including local driving). And she spends over $300 a month. Thankfully I work from home otherwise my gas and commuting expenses would be about the same. $400 a month for fuel and commuting expenses is not out of the realm.
In my area... an average PITI on a mid-priced home can range $2700-$3500 (that's on a $300-400K home). Apartments rent for $1000-$1700 for 2-3 bedroom and houses rent for $1000-2000 (excluding utilities). When you factor the overall cost of homeownership even with deductions it is definately a renters market. At current prices you wouldn't begin to break even on a home and start to accrue some value and investment until 8-9 years. And that's if taxes remain the same in NY which we all know they won't. In the last 3 years property taxes increased an average of 14% yearly in the town and school district we are looking in. Surrounding communities are no better. So I'm giving serious consideration to renting a home if I don't find what I'm looking for by this summer. Maybe even rent with an option to buy. Right now there are too many rising costs inaddition to monthly mortgage payments to consider. It may be a wiser investment over time to invest the difference in retirement and annuities save rather than spend $10-$14K per year in property tax alone.
These are the things I have to consider.
Hey I drive a Honda Accord. I don't know what I get milewise but during the week I typically spend $50 on gas. If I factor in weekend driving then I spend $75/week.
$14K/yr property taxes! OMG! That's a lot. I spend $2800/yr. Heating oil kills us though ($1500/yr). My town doesn't have a whole lot of rentals. We don't have apartment buildings or anything like that. I'm sure some people rent houses but that's really it. The majority of my town is Single Family homes with a few condos and several 55+ communities.
I don't take your comments as rude. What I've laid out is how we've been thinking about our situation. If we'd benefit from adjusting the way we are thinking about something, I'd rather know that than not. So I appreciate your comments.
No, we not saying that we will never buy, but given our current situation, it doesn't seem to financially make sense for us right now.
Yes, utility hikes do affect us as renters as well. However, with a smaller living space we can still have relatively lower bills for the time being.
Unfortunately, I'm not sure how accurate the estimate on the gas cost are because I'm just going by what I've heard rather than first-hand experience. I'm actually quite happy to hear that you drive 45 miles one way on about $200/month.
Everyone should do whatever fits there financial needs. good for your for making a decision that fits your financial budget. Personally I don't like renting. I've done it before and it's not for me. Plus my town doesn't have a lot of rentals which would mean going to a bigger town that has more crime and I don't want that.
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