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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Sun 08, 2018 3:49 pm 
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Joined: May Tue 01, 2007 4:01 am
Posts: 1728
Location: Hamilton Square, New Jersey
I bought my house in July, 2007 just before the bubble burst. I paid $255k to live in the most reasonably priced home in the nicest neighborhood. The home has not increased in value, but relative to the market, I can still get what I paid for it. I have no intention of moving. 11 years of weekend sweat equity as mentioned in a previous reply has given me a gorgeous 102 year old arts and crafts home with a huge picturesque yard. I have a separate 2 car garage with running water and 250 volt 50 amp service. Behind that is a fenced off garden that offers great privacy and sanctuary. It's not what one ends ups with, it's what one does with it.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Sun 08, 2018 7:39 pm 
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Joined: Aug Sat 16, 2014 2:19 am
Posts: 1612
Location: Palos Verdes, CA
I bought my house in July 1989, which was when prices peaked in Palos Verdes, CA. Two years later, values had dropped significantly and my house had no equity, even though I had put down 20%. As interest rates had dropped significantly, I drove to my local bank that held the mortgage and told them that if they refused to refinance the loan, I was prepared to give them the keys. The bank did refinance the loan, but it took about 16 years for the value of my house to get back to what I had paid in 1989. When the financial crisis hit in 2008, I was somewhat surprised to see that home values in my area didn't drop.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Sun 08, 2018 8:00 pm 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 35127
Location: SoCal, 91387
I bought two acres for our home to be built on, putting up the down payment in 1986, and then having to wait 3 years before the seller got L.A. County Building & Safety to approve his 6 acre/3 lot parcel split. Had the house built in 1991. Lot cost $135,000, construction about another $300,000, so $435,000 total.

Today it's worth -I don't care- since I'll be here until they carry me out, tits 'n toes up, lol. I guess about 1.2 or so though, so a tad under triple.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Sun 08, 2018 11:10 pm 
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Joined: Feb Wed 25, 2009 4:06 pm
Posts: 1452
Location: Morristown, N.J.
Bought my house for $37K in 1975; this north Jersey area is known to have some the highest housing prices in the nation. This house was built in 1885 and was the cheapest house in the realtor’s listings in 1975. Today it would sell for ten times or slightly more. But I did add a large addition, aluminum siding, totally new wiring, replaced all walls and ceilings with sheetrock, added half-bath, driveway paved, hot tub, installed two LMR400 coaxes from attic to basement inside the walls for transmit and receive use, and many other improvements.

As to the question, yes I can afford to pay this current value for another house. However at my age that would be dumb since I’ve aged considerably and just can’t do physical labor anymore.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Sun 08, 2018 11:33 pm 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 22589
Location: Haledon, NJ, usa
If the price today is around $650k

and if i put down $30k

And if I got a 30yr 5% fixed loan mortgage.

The payment including my $1k/mo property tax bill
would be about $4700 per month.

But the 2nd floor apt rental brings in about $2k / mo
So that leaves only $2700 .

My last full time job back in 1999 as an IT dept manager was paying $125k/yr

and if they took out $25k in taxes ... that leaves $100k take home.
... that comes out to about $2k per week take home.

So ... YES... I probably could easily afford it.

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Last edited by Pbpix on Jul Mon 09, 2018 8:41 am, edited 1 time in total.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Mon 09, 2018 12:18 am 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 2844
Location: Massachusetts
Had a lot more money when I bought my house 12 yrs ago, house prices are crazy $299K +$40K in renovations in 2006. Today the price is around $400K (even then they need updating). Also can't beat my current interest rate of 2.78%


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Mon 09, 2018 5:13 am 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 3464
Location: Freehold NJ 07728
I paid $215,000 for my house in 1993 and put a down payment of $95,000. I just checked Zillow.com that states it is worth $463,000 so the answer is no, I could not afford to buy it at today's rate.

This photo is a year after I had the house resided, new windows and a porch added to the front.

Sal


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Mon 09, 2018 6:43 am 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 35127
Location: SoCal, 91387
Here's my little shack. To answer the OP question, yes, I certainly could afford to repurchase it at it's present value, AFTER I had liquidated some of my other assets.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Mon 09, 2018 3:43 pm 
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Joined: Jul Sun 09, 2006 3:11 am
Posts: 6882
Location: Aurora, CO 80013
No, I couldn't afford my house now. Paid $254k 5 years ago. Would probably go for $400k or so. Now that my wife doesn't work in downtown Denver any more, I wanted to move to the southern suburbs, closer to our jobs. And now that all the grandkids are out of state, we don't need 3200sq ft. Apparently everyone else wants to move south too.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Mon 09, 2018 8:50 pm 
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Joined: Nov Wed 27, 2013 5:59 am
Posts: 722
Location: Metzger Oregon
Our situation is a little different, we moved to our present house a little over a year ago (or should I say "started moving"). To afford the down payment, I had to borrow from my parents as well as selling stock and investments. Even after that, we were slowly nibbling away at savings each month. We were finally able to sell our old place at the end of May and get everyone paid back, and are working on getting a shorter term loan that we can actually afford. So I guess the answer is yes we could re-buy, but only with a lot of help again. Our previous place was a bank repo, that took a lot of sweat equity over the 14 years that we lived there, but it was well worth it in the end.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 12:37 am 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 7086
Location: Litchfield Minnesota USA
Seems to me that if you are having trouble making the payments a shorter term would be counter productive. You probably want to extend the mortgage to as many years your lender is willing to give you. In the future if it becomes possible, you should be able to shorten the terms, thus raise the payment and ultimately save on interest and get the place paid off sooner.

Mark D.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 12:46 am 
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Joined: Dec Mon 08, 2008 8:27 pm
Posts: 10509
Location: alameda,CA
Prior to buying the house we're in we were saving up like mad because for years the previous housing boom had priced us out and we figured save as much of the good Bay Area money and then move to a cheaper state, buy a house for cash and be done with it. And then the recession hit and in a few years the prices fell and so too did interest rates and it made sense to buy here... for exactly 6 months and then it started right back to being crazy again.

What we live in is a pretty basic, 1,300 square foot rancher home and there's a further 15 or so around us that are identical. The one down the street from us just sold for 1.2 Million bucks, which is asinine. I have no clue who these folks are buying these now and what they do for a living. They would probably not like knowing we paid 1/3rd of that for ours, which is the exact same model.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 1:14 am 
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Joined: Apr Thu 12, 2007 3:24 am
Posts: 2236
Location: Milwaukee WI
Yes.I could buy my house again. My parents bought the house and land for 15K back in the late 50s. Its been accessed for around 150k today. I got lucky on a gamble I took in my 30s that set the stage for my retirement at age 59. Decades of interest really do add up. My only income is the interest I get from my savings. While I could pay for the house again,in cash,it would take too big a chunk out of my savings. I'm comfortable but not a millionaire.


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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 1:44 am 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 35127
Location: SoCal, 91387
bobwilson1977 wrote:
They would probably not like knowing we paid 1/3rd of that for ours, which is the exact same model.

On the contrary; they would love knowing that the greater fool theory is alive and well there, and that they may be able to triple their own investment in about the same number of years as you did.

BTW, it sounds like your place is worth about the same as mine...

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 3:05 am 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 8789
Location: Beaver Falls, PA. USA
Theoretically, I could buy my house again; I bought it cheap from my wife's mother, and put a lot of money into renovations, including siding, new windows, a new roof, and a nice big front porch.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 11:26 am 
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Joined: Jun Sun 15, 2008 3:34 pm
Posts: 759
Location: Portland, Oregon USA
No way, no how could we afford to re-buy our home; the value has just about doubled since we bought in 2002, with homes in the area going for half a million dollars. And, dare I say it lest we get on a political bent, the homeless crisis is careening out of control in Portland, Oregon as a result. Rents for a two bedroom apartment here are roughly $1600 per month. It's ridiculous.


Last edited by MariaR on Jul Tue 10, 2018 4:31 pm, edited 1 time in total.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 3:14 pm 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 1972
Location: Georgetown, Indiana
I could easily afford my home right now. When I bought it in 2013 I got a pretty good deal considering it was an older home and needed some renovations. Buying a house that allowed me to live below my means has given me the opportunity to quickly pay off all of my other debt (car, student loans) and save at least 15% of my salary in retirement (401k) and personal savings (emergency fund). Each year I have been slowly increasing my contributions into savings.

While I like my house, it's not what I really want to live in for the long run. It is smaller, no full basement, and being nearly a century old is always full of surprise repairs. Right now real estate in my area is expensive and in short supply, so I'm taking the opportunity to slowly make improvements to my house to increase the value/appeal and saving money so that I'll be able to put down some decent equity into that next house when the market is lower.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 7:25 pm 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 35127
Location: SoCal, 91387
MariaR wrote:
Rents for a two bedroom apartment here are roughly $1600 per month. It's ridiculous.

All depends on the local market. I'm renting a 2 Bdrm 2 Ba condo in an apartment style building to my daughter for that same rental amount, and giving her a steal; $2100 is where 2+2's start at now in our city. Very cheap as compared to L.A. proper, West L.A., Santa Monica, etc.

Jeremy S wrote:
Right now real estate in my area is expensive and in short supply, so I'm taking the opportunity to slowly make improvements to my house to increase the value/appeal and saving money so that I'll be able to put down some decent equity into that next house when the market is lower.

But the rub is, when the market cools and prices dip, your equity will shrink just as the value of the house you want to move up to does, + you may have trouble selling in a cold market.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 9:56 pm 
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Joined: Dec Tue 01, 2015 5:31 am
Posts: 2705
Location: Columbus Ohio
Would you have to pay PMI, (Private Mortgage Insurance)?

PMI used to be based on appraisal vs loan amount at 80-90% equity.
BUT, remember when appraisals were used to "justify" a loan. For example, if you bought a $200,000 VALUED house
and got a deal for $100,000 and went to finance it, the appraisal would have certainly came in at 105K, just above the
price, to justify the loan, you pay PMI because you have no equity, but in fact you have 50% equity because you got a deal from a friend.
So you were scammed to buy PMI all those years because the appraiser knew the loan value to start with.
I 'think' about 15 yrs ago in Ohio the Appraiser was no longer allowed to know the loan value so he had to present a real market value.
To me this represents a HUGE class action lawsuit for all those who were scammed into buying PMI because the appraiser and the bank shared insider info that devalued your purchase thus forcing un-needed PMI.

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 Post subject: Re: How many of you could afford to re-buy your houses?
PostPosted: Jul Tue 10, 2018 10:37 pm 
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Joined: Jan Thu 01, 1970 1:00 am
Posts: 22589
Location: Haledon, NJ, usa
MariaR wrote:
No way, no how could we afford to re-buy our home; the value has just about doubled since we bought in 2002, with homes in the area going for half a million dollars. And, dare I say it lest we get on a political bent, the homeless crisis is careening out of control in Portland, Oregon as a result. Rents for a two bedroom apartment here are roughly $1600 per month. It's ridiculous.

I have no idea about Portland's gvt .... but I do know that bums and street-people and otherwise homeless types will always gather where the sympathies are the greatest and they can continue to get a free, if lousy, life.
The more free stuff you give people and the more you coddle people the less incentive anyone has to find a job ... right?
This is one reason why we have so many 30 year old kids still living at home in Mom's basement... usually with their GF and often a baby too.

The nice waitress lady that waits on me Tuesdays at a local diner has 4 adult kids... all educated.
But only two went off to support themselves. The other two her daughter and son still live w/her and do not contribute any money to the household to help her buy food or pay the mortgage.
Her son (collecting unemployment) even has his GF and kid with him.
When they spend money .. it's only for luxuries that they want to buy for themselves.
The daughter has a good job but keeps all her money and does not pay anting toward the household.
The mother tells me that her goal is to one day pay off her mortgage so she can leave the house to her kids free.
The Mom is too nice ... me thinks.
And... she has to work 3 jobs to make ends meet.
Hummm.

When I was a kid in the 50s we had people on the street around here and there... but they were known as "BUMS" .. when did that more shameful term get replaced with the sympathetic term "homeless"?
... And when did the shame term of "un-wed mother" get replaced by the now-proud label of "single mom" ?
A few years back there was a house for un-wed mothers near here. It was called the Florence Christian Home for un-wed mothers.
No more.
New social norms I guess.

Interesting... humm?

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