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What is everyone's thoughts on people that move from higher cost of living area, to lower cost area? For example, lets say someone sells there home for 600k and moves to neighboring state and buys a home, that is twice the size and costs 300K?
The reason I ask this is because, my wife and I are in are late 20's, we currently live with my parents, and are trying to save money for a down payment. Our county hasn't had any price corrections yet. Prices continue to rise for the area, mostly due to out of stater's coming in and buying up all the good properties, in turn making it very difficult for 1st time home buyers to get a home that is in great shape and not in need of major repairs. I know it's a free country and people can move to wherever they want to but something has to be done to correct this mess. Should we just go ahead and buy now? or wait on the hopes that prices in our area will go down eventually?
What is everyone's thoughts on people that move from higher cost of living area, to lower cost area? For example, lets say someone sells there home for 600k and moves to neighboring state and buys a home, that is twice the size and costs 300K?
The reason I ask this is because, my wife and I are in are late 20's, we currently live with my parents, and are trying to save money for a down payment. Our county hasn't had any price corrections yet. Prices continue to rise for the area, mostly due to out of stater's coming in and buying up all the good properties, in turn making it very difficult for 1st time home buyers to get a home that is in great shape and not in need of major repairs. I know it's a free country and people can move to wherever they want to but something has to be done to correct this mess. Should we just go ahead and buy now? or wait on the hopes that prices in our area will go down eventually?
Overappreciation has happened to an overwhelming majority of markets over the past 6-7 years. First time home buyers were the ones left holding the bag. No one cared about them....
Just curious, what market are you in? That would help determine a better answer....
Of course your income will have a lot to do with your decision. But the point of the other thread is that there are often many other factors that should be considered before jumping ship and moving to what seems like a cheaper state. The other thread will highlight what some of those things are. There are financial considerations like salary changes, state tax, tax on food, health insurance premiums and out-of-pocket medical expenses, extra taxes on particular items like prescription drugs, motor vehicle fees, property taxes, etc. that will vary by state and that go beyond just what houses cost in the state. Then there are non-financial considerations like education for children, quality medical care, access to public and social services, etc.
For instance, you can move to Arizona which many people consider to be a cheaper state and yes you can pay way less for housing. BUT in national comparisons Arizona schools ranked #50 (last) for 2006-2007 by one source. If you are a parent, do you really want to put your kids in those schools for the sake of having a better and cheaper house? That will be a personal decision. The concern is people who see cheaper housing options and jump without realizing the ramifications because they did not do their homework. Also, my intention is not to knock Arizona in this case. Arizona is very nice state for the right people. But it has a very high number of retired folks who don't want to put tax dollars into the schools since they have no children in schools and so in turn families with children take a hit on education.
What is everyone's thoughts on people that move from higher cost of living area, to lower cost area? For example, lets say someone sells there home for 600k and moves to neighboring state and buys a home, that is twice the size and costs 300K?
The reason I ask this is because, my wife and I are in are late 20's, we currently live with my parents, and are trying to save money for a down payment. Our county hasn't had any price corrections yet. Prices continue to rise for the area, mostly due to out of stater's coming in and buying up all the good properties, in turn making it very difficult for 1st time home buyers to get a home that is in great shape and not in need of major repairs. I know it's a free country and people can move to wherever they want to but something has to be done to correct this mess. Should we just go ahead and buy now? or wait on the hopes that prices in our area will go down eventually?
What you describe is growth and development. That area is going from its historical rural character to more of a suburban one. Yes the most desirable porperties are going to go for more. Not all housing increase is over appreciation. You have seen a rapid increase in materials cost and after Katrina that exacerbated. You have increasing global competition for construction materials. New housing can only go so much lower and the most desirable resale properties will hold their appreciation the most. Selling a 600K house and relocating ( especially for retirement) and buying the same size house new for much less is good finance.
What you describe is growth and development. That area is going from its historical rural character to more of a suburban one. Yes the most desirable porperties are going to go for more. Not all housing increase is over appreciation. You have seen a rapid increase in materials cost and after Katrina that exacerbated. You have increasing global competition for construction materials. New housing can only go so much lower and the most desirable resale properties will hold their appreciation the most. Selling a 600K house and relocating ( especially for retirement) and buying the same size house new for much less is good finance.
Yes, I agree with the growth and development. Whats happening in my area is it's creating the haves and have nots. It just doesn't seem fair that someone can sell a house for 600K and buy a house that is better for 300k and put that extra cash in the bank or buy new cars with the extra money. Us young people that never had the opportunity to buy a house 10-15 years ago are stuck trying to figure out how to afford a descent home, and not some shack in the ghetto. Someone told me that prices will come down 50k in our area, but I don't see that happening in my area anytime soon, as long as the folks from outta state keep coming in the prices will stay up. So thats why I was stuck trying to make a decision on if we should buy now? or wait and hope the area cools off.
Well I am doing the very thing this whole thread is about. We just sold our 13 year old twin in Quakertown Pa (bucks county) for 210k. The house was 3 beds and 2.5 baths on .15 of an acre (1500 square feet)
We are buying a house with cash (no mortgage) on friday in Bradford county for 70k. 4 bed 2 baths on 4+ acres of land. There is no comparision between the houses. Not to mention we will have no mortgage and can actually start saving.
I would say go for something more affordable that may be a bit further than where you live now.
Yes, I agree with the growth and development. Whats happening in my area is it's creating the haves and have nots. It just doesn't seem fair that someone can sell a house for 600K and buy a house that is better for 300k and put that extra cash in the bank or buy new cars with the extra money. Us young people that never had the opportunity to buy a house 10-15 years ago are stuck trying to figure out how to afford a descent home, and not some shack in the ghetto. Someone told me that prices will come down 50k in our area, but I don't see that happening in my area anytime soon, as long as the folks from outta state keep coming in the prices will stay up. So thats why I was stuck trying to make a decision on if we should buy now? or wait and hope the area cools off.
I know it's no consolation, but the same thing has been happening in the pricier areas. Lot of young couples can't afford to live in their childhood towns or even nearby. It's knocking on to the cheaper areas. It'll end eventually, the money is running out.
Movin2Maine - My husband and I did the "move to a cheaper area" when we were in our late 20's and had a 4-yr old and a baby. We moved to a more rural area with great schools. It was a great place to raise kids. However, we did pay a very high financial price. We bought a house for 1/2 the price of the house we sold in a metro area. We remodelled much of the home and sold it 13 years later for $500 LESS than we paid for it. Plus we ended up moving into an area where home prices had appreciated substantially in that same 13-year period. So it was really tough to "bite the bullet" and get back into a more lucrative housing market. In our current market the home we purchased 4 years ago has almost doubled in value.
So . . . as with anything, there are definitely trade-offs. At some point in time, I might consider selling here and moving back into a cheaper market. But once we do, we'll have to be prepared to stay there, because it's too hard moving back into a more expensive market.
Yes, I agree with the growth and development. Whats happening in my area is it's creating the haves and have nots. It just doesn't seem fair that someone can sell a house for 600K and buy a house that is better for 300k and put that extra cash in the bank or buy new cars with the extra money. Us young people that never had the opportunity to buy a house 10-15 years ago are stuck trying to figure out how to afford a descent home, and not some shack in the ghetto. Someone told me that prices will come down 50k in our area, but I don't see that happening in my area anytime soon, as long as the folks from outta state keep coming in the prices will stay up. So thats why I was stuck trying to make a decision on if we should buy now? or wait and hope the area cools off.
Yes I am one of those folks who sold and moved and paid cash etc etc etc. Notice I said move, likewise you may have to move to take advantage of the market. I have a son who bought a townhouse sold moved out of state and has bought two houses since. I have another one in a very high priced market who has no intentions buying until he relocates. The world if full of financial realities and you may need to find the next Berks county which is relatively inexpensive now with great future upside. This is a very mobile world with daily changing financial realities.
Adaptiveness is the building block of development and improvement.
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Yes I did that
