how can a young couple afford to buy a home these days....

[Logan Sapphire]

I don''t know much about how the housing market works, but I really wish I had been the position of buying a house in Charleston, SC. My parents had their house built on a small upcoming island there; they moved in December 1996 after paying about $150,000. Today, the island is booming and real estate has sky rocketed. Their house, which is not large, now sells for around $450,000! That''s an amazing $300,000 profit! Lucky!

 

[fire&ice]

Date: 1/26/2005 10:54:22 AM
Author: Diamonds4Me

Here in NC, under current tax law, capital gains..up to $500,000 for a married couple filing jointly and up to $250,000 for a single person or a married person filing singly from the sale of a principal residence are excluded from taxation. The seller must have occupied the residence for two out of five years of ownership and it''s available only once every two years. Anything above and beyond the $500K or $250K would be taxed at the 20% capital gains rate.

I don''t know about other states though.

I''m pretty sure it''s a nationwide thing.

 

[fire&ice]

Edited: Cool beans F&I. I just noticed you''re in NC too

Grew up in the Triangle. Move to VA. Loved NC so much - we bought a house there to! I love the Great State of North Carolina.

 

[Diamonds4Me]

Date: 1/26/2005 11

0:39 AM
Author: fire&ice

Edited: Cool beans F&I. I just noticed you''re in NC too

Grew up in the Triangle. Move to VA. Loved NC so much - we bought a house there to! I love the Great State of North Carolina.

I was engaged to a guy that had grandparents in the triad area. I loved going there to go to the Crabtree Valley Mall...but that''s another store for a different thread

But I DO love that area. Everytime I drive through there I always wish it were closer to me.

 

[Logan Sapphire]

Fire and Ice- I grew up in North Carolina and now live in NoVa too!

 

[fire&ice]

Date: 1/26/2005 11:11

4 AM
Author: mmeowcollins
Fire and Ice- I grew up in North Carolina and now live in NoVa too!

Hey, we all know Northern Virginia isn't the South.

We live south down 95.

Crabtree - there isn't a store like Belks anywhere in the south.

Of course I'm so old, I remember when they weren't open on Sundays.

Edited to add: made my spending money working there in high school!

 

[strmrdr]

hmmmm looks like my tax info may be a bit out of date.
I still wouldnt want to be tied down by a house at this point of my life.
Sometimes the freedom to pick up and move is priceless.

 

[Diamonds4Me]

Date: 1/26/2005 11:23:32 AM
Author: strmrdr
hmmmm looks like my tax info may be a bit out of date.
I still wouldnt want to be tied down by a house at this point of my life.
Sometimes the freedom to pick up and move is priceless.

That is true.

If I weren't such a homebody and did a lot of traveling to the point that I didn't stay in one place very long it would be better to rent instead of buy for the simple fact that I could just pack up and go. Depending on your rental agreement (periodic tenancy: week to week, month to month, year to year, at will or EEK! At sufferance ((no landlord wants to hear that one)) ) you may only have to give a few days notice to one months notice or just immediate notice whereas if you were selling it may take several months to a year (or more depending on the market). So yes..IMO..the freedom to leave and be free when you want is priceless.

 

[eks6426]

Thanks everyone for making me love my small midwest town. I have a small (1400 sq feet) but cute house (3 bedrooms, 1 1/2 baths, hardwood floors, screened porch, garage, cottage garden yard) 5 minutes from my job and paid just over $100K for it 3 years ago. I live in northern Indiana....closer to Chicago than many of the western ''burbs with a much lower cost of living. This time of year, it is super easy to fantasize about moving to California (I would love to move to LaJolla) but your stories make realize just how good I have it here. Meanwhile, I guess I''ll just have to keep looking at all the tropical place websites and dream of my upcoming honeymoon in the Grenadines.

 

[ForteKitty]

Date: 1/26/2005 1:43:52 PM
Author: IslandDreams
This time of year, it is super easy to fantasize about moving to California (I would love to move to LaJolla) but your stories make realize just how good I have it here. Meanwhile, I guess I''ll just have to keep looking at all the tropical place websites and dream of my upcoming honeymoon in the Grenadines.

Mmm.. San Diego. I lived in La Jolla for 4 years and never appreciated it. How I wish I would have stayed there instead of moving back home to smoggy, trafficky L.A!

 

[twinkletoes]

I think just about every person I know has made a profit on their homes - mostly in California & Vegas.

My friend bought his townhouse in Hermosa about 5-6 years ago for around $300- $400K. He sold for just over $900K.

My parents'' house is up, though not sure how much.

A couple friend bought their house in OC maybe 3 years ago for $350K-$400K and it''s up another $200K this year.

My aunt sold her house in Saratoga for $700K more than she bought for.

My bf''s home he purchased (last year) in Palm Springs is up almost $100K.

 

[Mara]

Yes pretty much everyone I know as well has had great luck with homes. That is why I believe so strongly in RE.

My parents bought their house 10 years ago for 400k in Cupertino and now its well worth over 1m. That is mostly the land and area, desirable school districts especially. My grandmother paid about 1/10 for her house 20 years ago as what it is worth now.

Greg''s dad and stepmom own a beautiful piece of property in Maryland along the Chesapeake Bay, one of the smaller inlets. Apparently this area is very up and coming, alot of old money is moving in for vacation homes. They paid something like 400k for the house about 5-8 years ago and it''s worth well over 1m now...beautiful views, they did alot of work to the house and do alot of boating. They are SO ecstatic as they didn''t expect it to appreciate the way it has and it''s their retirement home so it''s kind of an extra perk really since they don''t intend to sell. But before that they owned 2-3 homes and kept ''moving up'' until they got into this one, on the land of their dreams.

So property can definitely be your ally depending on what you plan to do with it. I would love to pay off a mortgage early in the long run, but for this particular place, it''s our starter so we are hoping that it appreciates enough to help us get into a bigger and better place about 5 years down the road--that was part of the reason we bought a townhouse. About 4 other couples in our complex moved this last year, they bought, owned for 2 years and then moved into a house. The townhouse appreciation helped them get into the home they wanted to be in for the long-term.

In the end, who really knows what will happen as the market is unpredictable, but again if it doesn''t meet or exceed our expectations down the line, at least we lived in a beautiful house, paid less rent than we would have (including taxes etc etc) elsewhere for something similar and take a huge tax break (almost $15k) per year which we would not have with renting. We were willing to take that chance on a potential good thing for later.

I don''t think anyone is going to convince one or the other that yes property is good or no property is bad. Most people believe the way they do for a reason, aka experience, which will most likely not be easily changed by an online discussion.

 

[Kamuelamom]

Date: 1/25/2005 10:47:25 PM
Author: MichelleCarmen

Date: 1/25/2005 9:32:52 PM
Author: ursulawrite
Wow. This post is a total shocker to me. I was under the impression that most people on here were absolutely minted, given the baubles I see posted every day. And the prices people pay for them.

My husband and I have just bought our first home, in NYC. We saved long and hard -- no monster rock here -- and it's paid off. We move into a lovely Soho loft in a month's time.

When reading here, I think the impression comes across that everyone is loaded, but in reality there are tons of one-time purchases (for the big rock) and the few here and there lucky individuals who purchase lots of baubles once or twice, or more, per year.

ursula, congratulations on accomplishing the American Dream!

Michelle I agree with your interpretation of the impression of this response. When in actuality, if you read and really get to know the members, you'll see that most of us here are are regular folks who just enjoy the occasional sparklie. Being "minted" is certainly NOT my status.

 

[Kamuelamom]

Date: 1/26/2005 2:35:14 PM
Author: Mara
I don''t think anyone is going to convince one or the other that yes property is good or no property is bad. Most people believe the way they do for a reason, aka experience, which will most likely not be easily changed by an online discussion.

Maybe not Mara, but as long as the exchange of ideas is healthy, I think its rather interesting to hear of the different scenarios of individuals in different areas. You never know when such a discussion could be helping someone.

 

[Mara]

It is definitely interesting to discuss the various costs of living and people''s experiences...but I wanted to note that most likely one camp will not CHANGE the beliefs of the others on something that is very entrenched in one''s heart or state of mind. The debate is the fun part...but I wouldn''t expect to see anyone change their mind one way or the other.

 

[Dancing Fire]

Date: 1/26/2005 10:47:11 AM
Author: fire&ice

Date: 1/25/2005 10:22

8 PM
Author: perry
Dancing Fire:


The other thing that is a general myth: the concept that people make money on home appreciation. In general that is not true as homes in general (on average in the US) only appreciate at about the cost of inflation (long term averages). There are isolated cases where this is not true (realestate hot markets- typically in some metropolitan areas), but remember that there are areas in the US where prices go down (and don't much get reported because they are not in a major population center where the news media reports on them).

Perry

Even if I entertained your myth, which I don't, homes are an asset. And, one you can *add* value to. Renting does nothing.

F&I
buying a home was our first goal after we got marry in 86.we had to beg & borrow to come up with $30k = 20% down payment to avoid PMI.i think everybody should own a home but look at it as a savings account not a investment that you gonna get rich off of.i agree with you F&I ,renting does nothing.

 

[lindsal]

Date: 1/26/2005 11:23:32 AM
Author: strmrdr
hmmmm looks like my tax info may be a bit out of date.
I still wouldnt want to be tied down by a house at this point of my life.
Sometimes the freedom to pick up and move is priceless.

Tooo true Strm... that''s why I am still here renting in Chicago... but, ya know what, one moring I might just wake up and deicde I''ve had enough with downtown, enough with the 10 minute L ride to work, enough with everything... and pick up and move out to that cute little neighboorhood you posted earlier in this thread. Or move to Hawaii. Or Paris.

And all I''ve got to do is give 30 days notice. In terms of one who loves to unburden herself fairly frequently. THAT ROCKS. In terms of my long term finanancial ability to invest in more diamonds, when I''ve gotta keep paying rent. That DOESN"T rock.

PS STRM... if I ever do talk about moving THAT far out.. shoot me, because I wouldn''t make it a month with that commute... how do people do that and stay sane?

 

[Diamonds4Me]

Date: 1/26/2005 4:51:54 PM
Author: lindsal

Date: 1/26/2005 11:23:32 AM
Author: strmrdr
hmmmm looks like my tax info may be a bit out of date.
I still wouldnt want to be tied down by a house at this point of my life.
Sometimes the freedom to pick up and move is priceless.

Tooo true Strm... that''s why I am still here renting in Chicago... but, ya know what, one moring I might just wake up and deicde I''ve had enough with downtown, enough with the 10 minute L ride to work, enough with everything... and pick up and move out to that cute little neighboorhood you posted earlier in this thread. Or move to Hawaii. Or Paris.

And all I''ve got to do is give 30 days notice. In terms of one who loves to unburden herself fairly frequently. THAT ROCKS. In terms of my long term finanancial ability to invest in more diamonds, when I''ve gotta keep paying rent. That DOESN''T rock.

PS STRM... if I ever do talk about moving THAT far out.. shoot me, because I wouldn''t make it a month with that commute... how do people do that and stay sane?

I used to commute 1 1/2 hours to work and 1 1/2 hours from work. After five months of heavy heavy traffic I finally had to call it quits. I totally understand where road rage comes from.

 

[fire&ice]

Date: 1/26/2005 3:21:24 PM
Author: Kamuelamom

Date: 1/26/2005 2:35:14 PM
Author: Mara
I don''t think anyone is going to convince one or the other that yes property is good or no property is bad. Most people believe the way they do for a reason, aka experience, which will most likely not be easily changed by an online discussion.

Maybe not Mara, but as long as the exchange of ideas is healthy, I think its rather interesting to hear of the different scenarios of individuals in different areas. You never know when such a discussion could be helping someone.

Owning your own home is personal. I know people who just simply don''t want to be bothered with the responsibility of up keep. I don''t think anyone should feel pressured into the "American Dream". It''s not for everyone. But, like you, from experience, I know of no one who has lost money on RE (especially their own home). One has to be able to view the *big* picture. Home ownership is the last great tax incentive. It should be pointed out that focusing on just one aspect of the economics of owning a house isn''t the smartest of views. You know that when you actually do own & reap the benefits involved (simply if it''s for the tax break).

Trading up is always a savvy way of affording more house.

 

[TLS]

the situation in the northeast where i live is insane and very depressing as first time buyers. We couldn't afford a decent single family house in the area. Anything in the low 300 thousand range bought you a complete dump that need to be totally renovated. We were walking into capes/ranches that hadn't had any work done on them in decades and
were in crappy locations to boot... We are talking orange formica countertops, day glo carpetting from 1970, 700 sq ft, edge of a cliff (ok kidding on that one, but you get the point) etc. People were still asking in the mid 300k range for complete dumps that needed tens of thousands of dollars of work put into them and knew they would get it from someone. Not their fault, i would be asking the same I am sure too... all about what the market will bear. Anything even remotely decent for a starter home and you had to shell out a lot more money. even calling them "starter" homes is a complete misnomer.

We ended up buying a new condo in a so-so town. over 325k for a 2 bedroom condo. Granted we like it, it has a couple fireplaces, 2 and half baths and some very nice features... but pretty depressing that we couldn't find a decent house. We got the most bang for our buck going with a townhouse and I personally like the fact that we have no manual labor(no lawn work, shoveling etc.), but would like to own a single family some day. condo living is nice right now but our mortgage is over 2 grand a month and that doesn't include anything. I definitely feel that I am depriving myself of certain things with these types of monthly payments.

Living in the northeast is definitely taking its toll on me. The weather stinks most of the year, prices are insane. CA is even worse, but at least they have nice weather!

It has gotten so bad that I would consider moving at this point, I can't imagine leaving my friends & family, but living like this is insane. Jeesh! I would like to have kids down the road and with this kind of mortgage payment it doesn't leave us with much options as far as me reducing my work schedule or changing careers, and certainly not being a stay at home mom which is what I would really like to do!

anyway... i am ranting... but yes it is a horrible problem and many of these states are forcing young buyers out because of this. Very sad sad fact of life in many areas of the country today...

my friend just bought a wonderful starter home in kansas for 70K, really makes me want to move somewhere else.....I know they say that you make considerably less income in those areas but there is still no way that peoples incomes are even remotely keeping up with what is going on in CA and the northeast.... I think people are living with very huge amounts of debt.

 

[Blue824]

Its been a similar situation for my bf and I trying to find a place in Chicago. We started scoping out the market even though we won''t be ready to buy for about 2 years with securing our lives and him moving, etc, just a bunch of issues...Anyway, I''ve always known that we wouldn''t be able to afford any kind of property with a yard in the city. So we''ve always been thinking a condo to start, and originally thought we could get away with 200,000 for a 2 bedroom 2 bath...how naive we were! It seems like anything that''s anywhere near where we want to be is $350-400!!! For a condo!!! We could get a townhome in a suburb, but we''re young, and don''t necissarily want to give up our lifestyle so sso we''ve upped our budget from originally thinking we could get away with 200,000 to now having to almost double it. It is really rough...we wanted to do this on our own, but now we''ll definitely have significant help from our parents. Right now, the only options besides Chicago are Washington, D.C. where he is finishing up school, but hello, not much better there, or NYC, and thats just a joke! I mean, the situation could change or maybe we''ll find some great deal by the time we''re ready to buy, but it is so frustrating when we are trying to put together the savings and all that before hand.

Its just been nuts reading all of your stories and get other perspectives and other stories reassuring to know I''m not the only one so frustrated by this!

 

[sevens one]

Well Hubby and I did everything backwards. We were married 15 years before we bought a home.
We were very fortunate to get into a new home community before the prices soared.
Home ownership is wonderful.

 

[Superidealist]

Thanks for the advice, Fire and Ice. I''d actually prefer a change of seasons; I just want to avoid the harsh midwestern winters I grew up with. We need to find some place with a moderate climate near a major medical center or teaching hospital, preferably with something of an asian community. Raleigh-Durham fits the bill but I''ll look into the Greensboro area.

 

[Kamuelamom]

Date: 1/26/2005 6:26:55 PM
Author: fire&ice
Owning your own home is personal. I know people who just simply don't want to be bothered with the responsibility of up keep. I don't think anyone should feel pressured into the 'American Dream'. It's not for everyone. But, like you, from experience, I know of no one who has lost money on RE (especially their own home). One has to be able to view the *big* picture. Home ownership is the last great tax incentive. It should be pointed out that focusing on just one aspect of the economics of owning a house isn't the smartest of views. You know that when you actually do own & reap the benefits involved (simply if it's for the tax break).

Trading up is always a savvy way of affording more house.

You're right, it's totally personal and not for everyone. Like strmrdr, some just like the feeling of not being committed to anything like that (the yard, the maintenance, the mortgage

), and there is a beauty in being able to just up and go. For us, especially at this point in our lives, though, we love owning a home, and we are soooo blessed to now say we are on our second home.

Fifteen years ago I never thought I'd be saying those words.

On trading up, does that thinking also apply with sparklies?

I wouldn't know since I'm only on my first diamond.

But I have hope.

 

[Dancing Fire]

don't be FOOL by the tax write off on the interest ,thats a bunch of B.S. ,on the avg ,for every dollar you paid on interest you will get back 30 cents so you think thats a good deal ? if you have the cash i would advise you to pay off your mortgage instead of sitting in the bank paying you what 3 % ?

 

[cflutist]

Date: 1/26/2005 9

3:11 PM
Author: Dancing Fire
don't be fool by the tax write off on the interest ,thats a bunch B.S. ,on the avg ,for every dollar you paid on interest you will get back 30 cents so you think thats a good deal ? if you have the cash i would advise you to pay off your mortgage instead of sitting in the bank paying you what 3 % ?

DF, websailor is telling me the same thing, which is why I am trying to pay my house off. Only problem is that there is less money left to spend on diamonds and cruise vacations

 

[Kamuelamom]

Date: 1/26/2005 9

6:48 PM
Author: cflutist

Date: 1/26/2005 9

3:11 PM
Author: Dancing Fire
don''t be fool by the tax write off on the interest ,thats a bunch B.S. ,on the avg ,for every dollar you paid on interest you will get back 30 cents so you think thats a good deal ? if you have the cash i would advise you to pay off your mortgage instead of sitting in the bank paying you what 3 % ?

DF, websailor is telling me the same thing, which is why I am trying to pay my house off. Only problem is that there is less money left to spend on diamonds and cruise vacations

Waaaah the choices we must make! DF, I don''t know which bank pays 3% in interest anymore. Maybe I just don''t have enough cash for a bank to offer us 3% in the first place.

Seriously, our liquid cash savings earns earns nearly *nothing.* We wanted to keep some cash incase we found some proprty to invest in and build anothr house on, but there''s nowhere productive to keep it until we do. I doubt will be anytime soon so in the meantime I''d like for it to earn something. OTOH, I wouldn''t want to tie it up so much where we couldn''t get to it in the event something miraculous does come our way. What to do, what to do?

 

[Dancing Fire]

Date: 1/26/2005 9

6:48 PM
Author: cflutist

Date: 1/26/2005 9

3:11 PM
Author: Dancing Fire
don''t be fool by the tax write off on the interest ,thats a bunch B.S. ,on the avg ,for every dollar you paid on interest you will get back 30 cents so you think thats a good deal ? if you have the cash i would advise you to pay off your mortgage instead of sitting in the bank paying you what 3 % ?

DF, websailor is telling me the same thing, which is why I am trying to pay my house off. Only problem is that there is less money left to spend on diamonds and cruise vacations

cflutist
websailor is a smart man

chinese just think different from americans.last week i was talking to a friend i said, if i had the money i would buy a lexus LS 430 he said ,sure you do, just use the equity in your home + you can write off the interest.i just told him we can''t afford the extra payment because my daughter just started college.

 

[AGBF]

Date: 1/26/2005 9:43:53 PM
Author: Kamuelamom
What to do, what to do?

I don't know what to do, but if you call my husband, he will tell you. (Do you still have my phone number?) Now all we have to do is figure out when both you and he are awake at the same hour!

Deb

 

[cflutist]

Date: 1/26/2005 9:49:32 PM
Author: Dancing Fire

Date: 1/26/2005 9

6:48 PM
Author: cflutist

Date: 1/26/2005 9

3:11 PM
Author: Dancing Fire
don''t be fool by the tax write off on the interest ,thats a bunch B.S. ,on the avg ,for every dollar you paid on interest you will get back 30 cents so you think thats a good deal ? if you have the cash i would advise you to pay off your mortgage instead of sitting in the bank paying you what 3 % ?

DF, websailor is telling me the same thing, which is why I am trying to pay my house off. Only problem is that there is less money left to spend on diamonds and cruise vacations

cflutist
websailor is a smart man

chinese just think different from americans.last week i was talking to a friend i said, if i had the money i would buy a lexus LS 430 he said ,sure you do, just use the equity in your home + you can write off the interest.i just told him we can''t afford the extra payment because my daughter just started college.

DF, websailor is not Asian, but from a humble background (his parents lived through the Depression), and thus is very careful on how he spends money. We are from the old school I guess, the only loan we have is for my house. We pay cash for our cars and websailor owns his property south of Mendocino out right.

As for putting your daughter through college, I applaud those parents that choose to help their children. Although my mother had the means to help (she owns multiple rental properties in SF), she made all of the children pay for their own college education so that is what I did, worked part time to put myself through school. It was no fun, no time for play, just attend classes, do homework, and work from 4 - 8 pm every night, then back home to do more homework ... hey but I still managed to graduate Summa Cum Laude.