US real estate

They are money pits dude. Especially as a designer. I always have a project in mind.

That’s true.

Real estate is what you make of it - buy low, improve with smarts, enjoy it and sell high when the market is right. When everyone else is selling, buy…and buy the worst house in a great neighborhood (location, location, location) then repeat and rinse!

I feel bad for those who bought into the interest-only craze or who got variable rate (balloon) mortgages - get a 30 (or better yet, a 15) year fixed rate mortgage and then make the equivalent of one extra payment a year, you’ll pay off a 30 year in 17 years!

15year fixed mortgages? Don’t think they have those hear in Canada. I think 10 is max. But with rates pretty stable over the last 10 years doesn’t make sense to do more than 5 fixed. I’d even say variable is better if you don’t mind having the stability and peace of mind of no fluctuation. Here in Toronto real estate has been increasing in price about 15-20% per year so really it paid off to get into the market when I did almost 15 years ago. Average single family home in Toronto now around $1M. I bought my first loft almost 15 years ago in an up and coming area. Sold it for double what I paid 5 years ago (rented it out while I lived abroad at a profit), and traded up to a place almost double the size 5 years ago for only 100k more than I sold the original one for. Now it’s probably already worth $3-400k more. Don’t plan on moving again until I can again double up in size/value or find something unique but 3000sf lofts are hard to come by.

Then again I know people who choose to live an hour outside the city where you can buy a 3000sf house for the price of a shoebox condo downtown.

R

I still can’t believe prices I see sometimes in the U.S. $200k for a house? Here that’s a 300sf condo! If you are lucky. In a crappy area. 10 years old.

R

It depends on where you live. $200k doesn’t buy you much even in Minneapolis downtown area, get out a ways and you’ll have better luck. Way out in the burbs, you’ve got 5 bedrooms for that. But try getting anything above a studio in California or NYC…

Agree with NURB. 200k won’t even buy you a condo in NJ. NC?..you can buy a nice place with land.

For 200k in Cali you can get an uncovered parking spot.

I’m currently researching condos for my mother in law in the Long Beach/Huntington Beach area in California and they are about 250K-350K in a decent area and less than 1K square feet. I swear they were 50K less last year.

Talking about home improvements. We’re replacing eight 3’ x 6’ double hung windows in our home and after about 6 quotes I realized what a scam it is. I had estimates from 6K - 8K (after 1/2 off and free installation and other fake promotions) with a couple of companies willing to come down 1K-2K to match prices. It was also interesting to see how each of the salesmen pitched their product and turned their perceived weaknesses into advantages.

Good to know. All new windows is on my long term project list. Going to try to make it a few more years though.

I have bought in flipped 3 properties here in Florida. Back in 2008-2009, there were amazing deals to be had! I bought my first property a 3 bedroom, 2 bath, 2 car garage home( 1600sqft) with a 1/4 acre lot, built in 2006 for $45k. Two years later I sold it for 90k. My second flip, I purchased a 1bed, 1bath loft style condo (700sqft) for $25k. I Sold it for more than double the price, same as the third.

The real estate market in Florida is relatively cheap still and back on the rise since the 2008 housing collapse. However, for
200k here you can easily find a nice size pool home. It may need some work, but nice bang for your buck!

http://www.realtor.com/realestateandhomes-detail/9505-Norchester-Cir_Tampa_FL_33647_M63944-04081?row=4

Salary with no dependents, for sure.

I can’t believe prices are that cheap.

R

FluffyData’s chart looks pretty accurate. Yes Richard, its pretty inexpensive, the homes are selling quickly. The home link I posted is already pending…

I think I know why it is off…they are using median, not mean. There is no way SF is twice the price of NYC and NYC average home price is $388k. So since I would assume there would be very little salary differences for the same job in different countries/states I’m guess this is why everyone lives in a McMansion in the US? Seems odd that you can buy a median value home on the salary of a McDonalds job…

R

That is what I was thinking as well.

I meant to paste in some context and source article- Laziness and haste on my part- Apologies.

HSH: The salary you must earn to buy a home in the 50 largest metros

Zillow Price-to-Income Ratios: Comparing Price-to-Income Ratios to Affordability Across Markets - Zillow Research

San Francisco is a bit of a shocker…

$434K in LA would get you a small 2 bed 1 bath. If you want 3 bed 2 bath and/or a nicer area then you’ll be in the 550K-750K range easily.
The RE market is insane. We bought a house about 2 years ago and it already went up $150K, not counting improvements we have already made. Back then houses were getting multiple offers (10+) and a lot of them were being bought cash. Before we bought we kept seeing home prices rising every month because of all the quick flipping going on.

That’s the most misleading chart I’ve ever seen.

Take Minneapolis for example (just because I live here).

A salary of $47105 for the year, filing married with 3 exemptions (which means you count your spouse and probably a child), nets you $818.93/ pay check. That’s WITHOUT any additional deductions like 401K, Insurance, etc.

Let’s also assume a 4% Interest rate financing just under 80% of the purchase price of 209400. Your payments with tax, insurance, etc. would be about $1100/month. That’s 67% of your TAKE HOME PAY. Putting food on the table, keeping the lights on, and clothes on the kid become a pretty tough ask at that point.

“Ok, your spouse should work, too.”

Awesome. But if he/she is also making 47105/year, he/she is probably working full time, which means the kid has to go to day care. And there goes another $1100/month. So you’re right back where you started.

The American Dream of investing in a home in order to make money is a sham.