Post # 46
amongclouds : Remember, the US is huge. We got our house for 325, but we live rurally and I’m pretty sure it was hand built by someone who knew just enough to keep it from falling down, lol. Also we’re about to build a 3-room (ish) addition and it’ll cost us another 200 anyway. Many, many people in my area live in trailers and/or spend the money on the property more so than the house (ours is 3.5 acres, for example… the house itself is probably worth less than 200). Anyway the next town north of here is in another state and costs out the wazoo for a home, though still nothing like a city. All depends!
Post # 47
skunktastic : 500k here barely gets you a one-bedroom apartment. It’s actually ridiculous how much housing costs. Even the really dangerous areas with hospitals famous for high infant mortality rates and terrible school results are still 700k+ for a landed property.
Post # 48
$470k. Calculator put us at $1.7m but fuck that. Our house is perfect for us.
3x2x2, 600sqm block. Outdoor deck overlooking a valley. STUNNING property. 20 mins to the city, 5 mins to the beach. Lucked out tbh
Our repayments are 13% of our income after tax(about 8% before). I would prefer to live comfortably financially than in a massive house .
Post # 49
amongclouds : Where do you live? Australia? Are your salaries high to match though? Based on this thread housing is much cheaper in the UK than in the US on average, but our salaries are much lower too. Average house is around £230,0000 here and the average salary is just under £30,000.
Post # 50
Seriously how are homes that cheap where you live? The average hoise price in my city is $650,000 USD. We are buying our house off our in laws and it’s $1,700,000 interest free we will probably never pay it off. It’s in a desirable inner city suburb but still. We are the lucky ones.
So many of my friends cant get into houses as theyre so expensive even on good salaries. Or they are stuck moving cities where there is no work. It’s so wrong.
Welcome to New Zealand
Post # 51
sbl99 : yeah same here in New Zealand
Post # 52
amongclouds : where are you from?
Post # 53
We bought at almost the top end of our budget, at the time. It was about the equivalent of $500k for a one bedroom and we didn’t have the luxury of picking something significantly under what we could afford because we live in a very high cost of living city. We all but maxed out our borrowing (I think under by like 30k) and we had the smallest deposit – 10% and a long mortgage to keep the monthly payment low initially.
This was still “affordable” for us though as the mortgage payment was less than 2/3rds of what we had been paying in rent for a tiny flat.
The property needed work which was what we wanted in the first place and why we were comfortable maxing out our situation. We have added value from the renovations and in 18months we have increased our equity from 10% to 25%.
We have a phase two of renovations starting in spring and at our next mortgage fixed term, about 2 years from now, we expect equity to be somewhere between 40-50% so our risk is paying off.
Also at the time of our purchase we had no kids, minimal expenses, only 1 commute cost, no car to run, no debt etc so it was much more feasible. When we buy our family we plan to move out of the city and a 5 bedroom house will costs less in 4-5 years than our 1 bedroom cost 2 years ago.
Post # 54
I live in a high COL area, where the ratio of average house price / salary is still extremely high.
We are lucky that we are married, so there are two of us chipping in for a deposit. We also have family help (husband is from a culture where that is common). People who are single on ordinary salaries here are effectively locked out of the market. It causes a massive social welfare problem, especially for older, divorced women who don’t have retirement savings and who might be unable to find employment.
Post # 55
amongclouds : Just re-reading through this thread again after originally commenting because you are really surprised by the cost of homes in some areas. I felt like I should shock you even more to share what Darling Husband and I paid for our house.
My home cost $175k and its 1200sq-ft (3bed,1bath) WITH 7 acres of land, lol. Land is also fenced with a barn too. That being said… we live rurally and in a LCOL area so if you see a house for $300k or more then you’re getting a 3000sq-ft home on a 3 acre lot in a larger subdivision and that is considered a “mansion”
So on the flip side, I’m just as astonished to hear what some bees pay for their homes. Never in a million years would I be able to afford something like that.
Post # 56
kmbumbee190618 : Your house sounds beautiful. I also can’t get over the price!
The thing is, for those of us in areas with high ratios of housing prices / income, we have to afford it. This means compromising on other things, such as travel, children’s education, discretionary purchases and for some people, the type of food they cook. On the plus side, we have a better healthcare system than the US, so we’re not exposed to the same risk of extremely high medical costs. Whilst I would love to spend 10% of our income on housing, that’s just not realistic.
Again, we are the lucky ones – we have some family support and we’re in it as a couple. For people without those factors at play, affording housing can be very difficult.
Post # 57
I actually found the calculator to be really accurate and not inflated at all for my situation. It returned almost exactly the amount of my pre-approval. We spent slightly less than our pre-approval amount/the calculator amount. I live in an area with very low inventory and intense competition for houses, and this was really our only option to buy a house and start building equity (rent is extremely high here as well). Buying a fixer-upper is not a thing here – they are all snapped up by companies/flippers who pay cash.
Post # 58
amongclouds : Oh I absolutely agree with you. At least homes aren’t like cars as far as investment goes. I’ve always viewed a home as good investment and not a bad one. Although, some opinions may differ on that depending on where you live and other factors.
Its funny you mention you HAVE to afford the homes available to you based on your demographic. I only point this out because I realize sometimes you have no option and you have to purchase what is available and make compromises, which I’m sure truly sucks.
Fortunately in our area we don’t really have to conform to certain pricing because there’s a wide range of homes/property to suit nearly any demographic. We could’ve bought even cheaper in a subdivision with no land, but our compromise was purchasing an older, smaller home that could use some minimal TLC and get more bang for our buck.
Its just so interesting seeing the difference in home and land prices across the US and even the world, and to see what other people value more or less than yourself. Also interesting how the dollar will stretch in different counties even versus different states/countries and what you can buy for your dollar.
Post # 59
Well, I feel a lot better now. I was mad that all the houses I liked were in the $180k – $190k range and I didn’t want to spend that much because it was at the top of my preapproval and made me nervous.
That calculator says I can afford a mansion – it’s a liar and a fraud.
Post # 60
amongclouds : agreed – HCOL areas you just have to make it work if you want a roof over your head. I live in the Boston area and $500k buys you a piece of crap house that smells like pee and needs a ton of work. The market has gone insane in the last few years! Luckily we bought several years ago before the market took off, but if we hadn’t we would never be able to afford to buy now.