patrick.net

Some people buy a place and stay for many years - even tho there are unforeseen circumstances that can change that plan (illness, job loss, personal issues...), I believe it's important to buy a place you'll want to hang out in & will meet your needs now and in the future. If you can afford it and you want it, you should do whatever the hell you want to.

Thats been my mindset for years. Still not quite sure how its working for me...

You probably have a very good plan. It is very likely that whatever you buy you will be there for quite sometime in this RE market. Plans do change for many of us, but we went with the plan that what we buy we will stay in for a long time. We may be at or near a bottom but I don't see any real price increases for a long time with the foreclosures and the bank hocus pocus.

I think it makes sense to buy a house that will be suitable for quite some time. The most expensive thing you can do with a house is sell it. Realtor's fees, excise taxes, moving costs, fix up costs (on both) add up.

So, assuming that you can afford the payments with some room to spare, and are comfortable that the house will suit your needs for 10 to 20 years, buying a bit more than you need today makes sense.

We have lived in the same house for 21 years, raised two kids there and are quite satisfied with it until we move to the empty nester. We avoided the "move up" mentality that has trapped many late boomers in expensive mortgages at time when thier earning capacity is diminishing. We are very happy with that decision.

Spokaneman says

We have lived in the same house for 21 years, raised two kids there and are quite satisfied with it until we move to the empty nester. We avoided the “move up” mentality that has trapped many late boomers in expensive mortgages at time when thier earning capacity is diminishing. We are very happy with that decision.

I absolutely agree. Our income has continued to climb over the 12 years since we purchased our house and because our mortgage is a fixed 30-year loan, it feels like our mortgage becomes relatively cheaper every year. Our home is plenty big for the family, but not a McMansion. We have taken out small, short-term home equity loans against the house, mainly for the tax advantages, but we have promptly paid those off. Now if only the cost of raising children remained flat...

My thoughts have not changed. I still want a small fixer on a small acreage. You can always expand a house, but with property taxes, etc, I want to spend as little as possible. I only care about the location and lot, I do not want to pay for a larger house, or something that is already remodeled in someone elses taste.

greg1 says

We have taken out small, short-term home equity loans against the house, mainly for the tax advantages

What tax advantages? You do not sound like someone with piles of credit card debt to have refi'd with home equity. Even if you have enough deductions from your 12 year old modest mortgage to exceeed the standard deduction (and thus have deductable interest on the equity loans), you will still be able to reduce your tax bill by only a third or less of interest actually paid.

Housing for you and your family is a "fine Balance". It is important to be flexible so that you can maneuver life's inevitable changes but also sustainable: meaning if unable to sell when life changes present themselves that you can live and sustain in that home.

The 1 bedroom condo would seemingly make you pretty flexible. The lower price range would (potentially) make it easier to sell, however, buying the dream home you can “be in and love with” for the rest of your life has its perks. Such as hopefully never needing to sell it, But life comes with no guarantees.

I say go for the realistic approach. Buy a home that may not be you "dream home" and don't stretch yourself to your max. Live under your income and save some money for a rainy day. Don't opt for the 1 bedroom condo purchase either. It will leave you in a bad position when the unexpected arises. Such as: a new baby is on the way. Then what do you do if you can't sell?

Balance.... do we really need mini mansions? Do we really all need an acre or can we purchase a conservative home next to the park and community trails?

Do think long term… but be conservative enough that you can sustain when you get a curve ball.

zetabeos1 says

“Some people buy a place and stay for many years, I believe it’s important to buy a place you’ll want to hang out in & will meet your needs now and in the future.”
Sorry but does not explain or justify why prices went up 300%.

um........ prices went up because money was so easy to come by that anyone could get it and pay next to nothing for a couple of years. So, people who couldn't afford a starter home under normal circumstances all of the sudden could buy themselves a McMansion. Meanwhile, the loans, which obviously would never be paid back, were lumped together and sold as securities and this absolved the banks of all responsibility for the crap loans they were giving out. Construction boomed, creating tons of jobs so that people could buy houses and goods & services which created more jobs that were sustained by the easy loans. People were buying places, fixing 'em up and selling them for more money which jacked up the prices that Appraisers were supporting because they were told beforehand what price to meet. Prices went up 300% for these, and many more reasons...

...Certainly not because ECBB wants to buy himself a house.

I only care about the location and lot, I do not want to pay for a larger house, or something that is already remodeled in someone elses taste.

Ditto: I hate seeing a beautiful old house that's had someone else's crude (and rarely earnest) attempts at home improvement. I would rather battle blight than have to rip out all that cheap trendy crap that was installed to impress a would-be buyer.
That said, why can't your dream home be a fixer-upper? You can take pride in customizing it to suit your needs and take satisfaction in knowing that only the best quality work/parts went into it.

Austinhousingbubble says

That said, why can’t your dream home be a fixer-upper? You can take pride in customizing it to suit your needs and take satisfaction in knowing that only the best quality work/parts went into it.

Unfortunately, I have neither the time nor the ability to fix things in a satisfactory manner. (For example I once tried to do my own oil change, and end up with a small engine fire). I'm just not handy with the hammer.

Interesting topic. I'm looking to buy, but held off after reading this site. What would be a good time? Was looking at around January or so. That's when the market is slow, correct? Looking to offer a reasonably price on a new construction. I'm in Delaware if that's any significance.

EastCoastBubbleBoy says

Austinhousingbubble says

That said, why can’t your dream home be a fixer-upper? You can take pride in customizing it to suit your needs and take satisfaction in knowing that only the best quality work/parts went into it.

Unfortunately, I have neither the time nor the ability to fix things in a satisfactory manner. (For example I once tried to do my own oil change, and end up with a small engine fire). I’m just not handy with the hammer.

I think the basic issue may have to do with using a hammer to do an oil change ... ;)

The other thing to worry about is whether the people you are buying from (or the people before them) bodged the "upgrades". Check in teh kitchen cabinets (especially the ones under the granite counter top to make sure there are no lurking problems there for starters).

I would like to buy a house that I do not have to do anything to (done the buy a house and do it up and believe me it's always expensive and takes a long time - some stuff we had to do to get it ready to sell and we both said that we wished we had got to enjoy some of the stuff we did).

Plus when we buy - we probably won't have a lot of money to do repair work for a while.......and I don't think the banks will be giving out helocs as easily as they have.