The I need to buy a house thread

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Re: The I need to buy a house thread

Post by Jerloma »

Alright, thank you.
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Re: The I need to buy a house thread

Post by BSF21 »

BSF21 wrote: Sun Mar 31, 2013 11:33 pm Renting is no longer an option. I've done it for years. I'm tired of not building my time and efforts into anything. I'm sick of sitting around every weekend when I could be doing projects or making something my own. I've got too many ties to renting and this area. I'm going to be here at least 5 more years, probably longer. I have a relationship that is going somewhere. I need a place to call my own.

As for the FHA loan or whatsit thing, I've heard about this. Without going into too many specifics, I've got 10k put back and I anticipate that moving towards 20k by the end of summer/time I need to pull the trigger and buy.

Any other tips are always appreciated. How to find a good mortgage company, etc. (I say this because my buddy bought his first house with his wife and they went with a local mortgage company. Someone they could find and get ahold of for questions, etc. Their mortgage was sold to Chase 3 days after they moved in) Any handy tips on little things. I've heard good things about home warranties?

Thanks as always frogs.
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Re: The I need to buy a house thread

Post by Johnnie »

When I get back from this deployment I'm going to get a condo. I figure it will be a worthwhile investment and easier to rent than a house if and when I'm not in Albuquerque anymore.

I've been having my buddy who's a realtor send me all the available stuff that's come across his desk and there's such an awesome array of options. Hopefully those options remain once back.

I'm excited for it. Plus, with a VA loan it should be a smooth process.
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Re: The I need to buy a house thread

Post by sancarlos »

BSF21 wrote: Fri Feb 09, 2018 3:28 pm
BSF21 wrote: Sun Mar 31, 2013 11:33 pm Renting is no longer an option. I've done it for years. I'm tired of not building my time and efforts into anything. I'm sick of sitting around every weekend when I could be doing projects or making something my own. I've got too many ties to renting and this area. I'm going to be here at least 5 more years, probably longer. I have a relationship that is going somewhere. I need a place to call my own.

As for the FHA loan or whatsit thing, I've heard about this. Without going into too many specifics, I've got 10k put back and I anticipate that moving towards 20k by the end of summer/time I need to pull the trigger and buy.

Any other tips are always appreciated. How to find a good mortgage company, etc. (I say this because my buddy bought his first house with his wife and they went with a local mortgage company. Someone they could find and get ahold of for questions, etc. Their mortgage was sold to Chase 3 days after they moved in) Any handy tips on little things. I've heard good things about home warranties?

Thanks as always frogs.
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This sounds like wiseass advice, but I mean it. Go to the person you know in your area that you think has the best business acumen, who is also a homeowner. Ask him if he used a mortgage broker. If he did, ask him if he'd use him again. If so, ask for contact info.

eta: And, your mortgage is going to get sold. Don't sweat it. It doesn't affect you. Ask for a home warranty in your bid offer.
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Re: The I need to buy a house thread

Post by sancarlos »

mister d wrote: Fri Feb 09, 2018 2:27 pm First part is the tax laws: The amount of mortgage interest you can write off is going down while the standard deduction is going up so the "benefit" of having mortgage interest is reduced.

Second part is market speculation and that its ready for a downturn, which probably makes sense about now. The super-over-simple way of looking at that is saying if you have $120K in the market and a $100K mortgage, you're "up" $20K. If the market dips 25%, your investments are $90K and now you're "down" $10K overall. If you paid that all off now, you'd avoid the potential downside of being under.

(There are a ton more considerations here, long term strategy, cap gains taxes, mortgage rate, market projections, etc. I'm assuming this was written for someone who has a lot more in investments than they're carrying on their mortgage and can pay it off without anything resembling a full liquidation. I have no idea where you stand.)
I think I see one hole in that article's logic.
But remember, in this example, your $27,000 of itemized deductions are barely above your $24,000 standard deduction. Result: Your itemized deductions, including that $17,000 in mortgage interest, are reducing your taxable income by a modest $3,000. Paying off the mortgage—and getting rid of that 4% annual interest cost—looks smarter than ever.
So, in a vacuum, that makes a lot of sense. But, the writer of the article ignores the fact that you might have been earning a pretty good return on the money you'll have to spend to pay off your mortgage. Whatever you are earning with that money needs to be added to that side of the comparison. (As we know, the stock market took a shit this week, but it was doing really well, previously, and still looks pretty good when measured over time.)
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Re: The I need to buy a house thread

Post by A_B »

sancarlos wrote: Fri Feb 09, 2018 3:56 pm
BSF21 wrote: Fri Feb 09, 2018 3:28 pm
BSF21 wrote: Sun Mar 31, 2013 11:33 pm Renting is no longer an option. I've done it for years. I'm tired of not building my time and efforts into anything. I'm sick of sitting around every weekend when I could be doing projects or making something my own. I've got too many ties to renting and this area. I'm going to be here at least 5 more years, probably longer. I have a relationship that is going somewhere. I need a place to call my own.

As for the FHA loan or whatsit thing, I've heard about this. Without going into too many specifics, I've got 10k put back and I anticipate that moving towards 20k by the end of summer/time I need to pull the trigger and buy.

Any other tips are always appreciated. How to find a good mortgage company, etc. (I say this because my buddy bought his first house with his wife and they went with a local mortgage company. Someone they could find and get ahold of for questions, etc. Their mortgage was sold to Chase 3 days after they moved in) Any handy tips on little things. I've heard good things about home warranties?

Thanks as always frogs.
This is a trip to ready through.

I'm marrying that girl in like 4 months. See, I knew I was right.
This sounds like wiseass advice, but I mean it. Go to the person you know in your area that you think has the best business acumen, who is also a homeowner. Ask him if he used a mortgage broker. If he did, ask him if he'd use him again. If so, ask for contact info.

eta: And, your mortgage is going to get sold. Don't sweat it. It doesn't affect you. Ask for a home warranty in your bid offer.
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Re: The I need to buy a house thread

Post by sancarlos »

Ah, missed the dates there. As always, thanks to AB the Wiseass for helping me out.
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Re: The I need to buy a house thread

Post by A_B »

sancarlos wrote: Fri Feb 09, 2018 4:20 pm Ah, missed the dates there. As always, thanks to AB the Wiseass for helping me out.
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Re: The I need to buy a house thread

Post by Johnnie »

I knew there was a home buying thread...

Anyhoo, the details about what I'm buying:

Home cost: $180,500
APR: 4.25% (Navy Federal Credit Union) while using the VA loan
Taxes of the home last year: $2,500
VA Funding Fee: 2.15% ($3,880.75) on total OR 1.5% ($2,572.13) with at least 5% ($9,025) down.

Note: there are multiple ways to get lower than that APR, but they cost $$$ to buy down and don't seem to be worth it.

If the Google mortgage calculator is correct, my mortgage payment (not mortgage plus taxes) is $907 if I just go no money down and add the VA funding fee to the overall cost. ($184,380.75 is the owed amount)

If I put 5% down ($9,025), the immediate return is $1,308.62 less in the VA funding fee and a monthly mortgage payment of $856. ($174,047.13 is the owed amount.)

Note: I can just pay the VA Funding Fee without rolling it into the mortgage. That can lower mortgage payments, obviously. It would be $841 if I pay the 5% down plus the funding fee. ($11,597.13)

Basically, what's the best way to decide on a way ahead? I guess it would help to know that I intend to live in the house for the next 3 years (until retirement) and then make it a rental property.

Overall, is it worth it to spend the 5% and maybe the VA Funding Fee ($11,597.13) to save something like $66 a month ($792 a year) on my mortgage? (It would take 14.6 years for that to equalize, btw.) Am I missing a monetary avenue here or is my math wrong? I almost feel like it would be more worth it to go completely zero down, finance everything and spend $9,025 to upgrade the bathroom/kitchen/whatever.

What say ye, Swamp?
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Re: The I need to buy a house thread

Post by brian »

If you buy through the VA, do you have to pay for any kind of mortgage insurance (PMI) or is that covered through your VA loan. That seems to me to be the biggest question. If you're dodging the PMI somehow while still putting no money down (or even just 5 percent -- usually the threshold is 20 percent) then it's really just a question of if you want to roll the loan fees into the mortgage. There's not really much of a right or wrong answer there. As you noted you could get a bigger bang for your buck by using the money you would use to pay down the principal a little on improvements to the home. And you gain a small measure of additional tax savings on the mortgage interest deduction, which offsets (a little bit) the additional monthly payment towards the interest.

Generally speaking, I would rather have control over the money myself as opposed to putting it down and might elect to just pay an extra $100/mo. on the mortgage which in the long-term will reap almost as much savings as paying down an extra $9K from the start but in that scenario you have the money on hand in case you DO need to pay for home improvements, which I can assure you as a homeowner will happen and probably when you least expect it.
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Re: The I need to buy a house thread

Post by A_B »

If VA loans have no PMI I'm enrolling my daughter in the military immediately.
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Re: The I need to buy a house thread

Post by brian »

A_B wrote: Tue May 15, 2018 12:14 pm If VA loans have no PMI I'm enrolling my daughter in the military immediately.
I doubt they do, but it's worth asking. Getting rid of the PMI is the main thing since that's money you're spending for literally nothing.
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Re: The I need to buy a house thread

Post by Johnnie »

To your question:

https://www.veteransunited.com/valoans/ ... iding-pmi/
VA borrowers aren’t required to pay private mortgage insurance (PMI) with a VA loan. Avoiding any kind of mortgage insurance saves VA homeowners from forking over thousands of dollars in mortgage insurance during the initial stretch of their mortgage term.
Nope. No PMI.
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Re: The I need to buy a house thread

Post by A_B »

brian wrote: Tue May 15, 2018 12:18 pm
A_B wrote: Tue May 15, 2018 12:14 pm If VA loans have no PMI I'm enrolling my daughter in the military immediately.
I doubt they do, but it's worth asking. Getting rid of the PMI is the main thing since that's money you're spending for literally nothing.
Yes. Don't forget that your "mortgage+Interest" is not going to be your all in monthly cost when you factor in pmi/property taxes & insurance (if you don't pay those cash on your own each year, that is. Some lenders won't let you pay hazard insuarance on your own because they want to insure their investment is protected.).
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Re: The I need to buy a house thread

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Well. Now I have to go break it to her that she's not going to Boston.
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Re: The I need to buy a house thread

Post by Johnnie »

Yea, with all the costs identified and variables made constant, it just seems like a worthwhile investment. My rent and bills prior to deploying was too fucking much. Now that I've saved some money (put everything in storage while gone) and I have good credit, it's the right move.

I just find it will weird as someone crunching numbers and understanding the math that it'll take way too long to recoup 10+ grand and needed to ask.
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Re: The I need to buy a house thread

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In that case I don't think there's a right or a wrong answer, just what you're most comfortable with. If that potential 5 percent down represents most of your available cash savings, then I would probably lean towards towards going zero down and hanging on to that in case of an emergency.
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Re: The I need to buy a house thread

Post by Johnnie »

Honestly, it's just saved money that I thought "Hmmmm...I can reduce my principal if I did this thing..."

I think it would be better spent on upgrades. The house was built in 1974.
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Re: The I need to buy a house thread

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Thanks to both of you, btw.
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Re: The I need to buy a house thread

Post by mister d »

Rent.
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Re: The I need to buy a house thread

Post by HaulCitgo »

Always keep your cash. Preferably buried in the backyard where the creditors cant get to it.
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Re: The I need to buy a house thread

Post by BSF21 »

Quick chime in here. What's your emergency savings look like in both cases? That would make a big difference for me.

Also when it comes to living for 3 years then turning it into a rental property, what's the plan there? Pay it down very quickly? Carry 2 mortgages, one for your home and one for a rental? I wouldn't be a fan of that at all, at least not until the property you're going to rent is damn near paid. If you for some reason run into problems or can't get renters, that snowballs into a bad situation very quickly.

Disclaimer that I've gone against a lot of the advice I got about my home, but I'm very happy with the results. YMMV, but certain things have worked out for me. No PMI is awesome, if for some reason you lose that option, pay your mortgage to 78% as quickly as possible to get that thing off there...
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Re: The I need to buy a house thread

Post by Johnnie »

I have a considerable amount of money in savings currently compared to most Americans. I just typically save money more than I spend. (I would've had more money had I actually completed my entire deployment, but not by an enormously significant amount.) The only debt I have is what's owed on my car currently.

Also, after 3 years I retire and have a guaranteed income with full benefits and everything from the military and VA rating. I'll just try to rent out the property at that time once I decide where to retire exactly. My plan after that is to go to school on the Post 9/11 GI Bill. I'll get paid there too plus whatever very low stress part time job I get. (Costco ID checker.)
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Re: The I need to buy a house thread

Post by Sabo »

mister d wrote: Tue May 15, 2018 12:38 pmRent.
Terrible idea.
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Re: The I need to buy a house thread

Post by brian »

Sabo wrote: Tue May 15, 2018 2:10 pm
mister d wrote: Tue May 15, 2018 12:38 pmRent.
Terrible idea.
Not always though. He's only going to be in ABQ for three more years. I wouldn't say renting is necessarily the right move, but if you're only going to be somewhere for a relatively short amount of time, sometimes renting is the right option. I think 2007-2012 proved that home prices can go down as well as up.
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Re: The I need to buy a house thread

Post by mister d »

Right. And if he wants to leave the area, he then has to worry about finding renters and hiring a maintenance company and all that stuff. I have a couple friends with rentals they'd love to get out of and atleast one with a place he sold he'd kill to get back to rent. It goes both ways.
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Re: The I need to buy a house thread

Post by Sabo »

I didn't read the part where Johnnie was gonna be in ABQ for three years. In that instance, renting might be the best choice.

I assumed it was the standard "buying a house sucks" comment that's so prevalent among the New Jerseyians on the Swamp.
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Re: The I need to buy a house thread

Post by Johnnie »

I've definitely been weighing the sides here for a bit. If my rent didn't shoot up so much from last year to this year and if I didn't get to save some money by going on a deployment, I probably wouldn't have decided to buy.

Ultimately it feels like the right deal came along at the right time. Plus, my girlfriend will be living with me too, so she'll contribute to costs. We'll see where I am a few years down the road and where I ultimately retire to. (Las Vegas is still on the list, but that's very much up in the air right now.)

Time will tell. Regardless, I'm glad that I can get perspective from all she's in the matter. Thanks, everyone.
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Re: The I need to buy a house thread

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Sabo wrote: Tue May 15, 2018 3:20 pm I didn't read the part where Johnnie was gonna be in ABQ for three years. In that instance, renting might be the best choice.

I assumed it was the standard "buying a house sucks" comment that's so prevalent among the New Jerseyians on the Swamp.
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Re: The I need to buy a house thread

Post by sancarlos »

The Sybian wrote: Tue May 15, 2018 3:54 pm
Sabo wrote: Tue May 15, 2018 3:20 pm I didn't read the part where Johnnie was gonna be in ABQ for three years. In that instance, renting might be the best choice.

I assumed it was the standard "buying a house sucks" comment that's so prevalent among the New Jerseyians on the Swamp.
Buying a house in New Jersey does suck.
Are you just making a crack, or are there rules/laws/situations in NJ that are worse than in other places?
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Re: The I need to buy a house thread

Post by brian »

At a minimum the property taxes are pretty outrageous (at least compared to anything I've ever been used to paying).
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Re: The I need to buy a house thread

Post by sancarlos »

brian wrote: Tue May 15, 2018 4:07 pm At a minimum the property taxes are pretty outrageous (at least compared to anything I've ever been used to paying).
Ahh. And to compound the misery of having high property taxes, the fucking new tax bill limits the deduction for state and local taxes (including property tax) to $10k per year. That's a big deal out here.
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Re: The I need to buy a house thread

Post by Brontoburglar »

I am so freaking spoiled with what I spend on my house + taxes every month. flyover country is awesome!
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Re: The I need to buy a house thread

Post by mister d »

But you have a job that lets you avoid your home so it works out.
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Re: The I need to buy a house thread

Post by The Sybian »

sancarlos wrote: Tue May 15, 2018 4:06 pm
The Sybian wrote: Tue May 15, 2018 3:54 pm
Sabo wrote: Tue May 15, 2018 3:20 pm I didn't read the part where Johnnie was gonna be in ABQ for three years. In that instance, renting might be the best choice.

I assumed it was the standard "buying a house sucks" comment that's so prevalent among the New Jerseyians on the Swamp.
Buying a house in New Jersey does suck.
Are you just making a crack, or are there rules/laws/situations in NJ that are worse than in other places?
Just referring to housing costs and taxes, both of which I assume are worse for you.
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Re: The I need to buy a house thread

Post by Shirley »

My next door neighbor just sold her house. She had it on the market for less than a week, which is a crazy turnaround time for a million dollar house (just under, actually). While that's kind of great, what's depressing is that she listed (and presumably sold) it for LESS than she bought it for in 2000. Now, I know growth here hasn't matched other markets (Austin, Seattle, SF, etc.), but we never tanked either. So, that's just baffling to me. All I can think is that this area just built too many million+ dollar homes, so that particular market stagnated. My house (not a million dollar house) has increased in (potential) value by about 50% in that same time range.
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Re: The I need to buy a house thread

Post by sancarlos »

Shirley wrote: Tue May 15, 2018 11:16 pm My next door neighbor just sold her house. She had it on the market for less than a week, which is a crazy turnaround time for a million dollar house (just under, actually). While that's kind of great, what's depressing is that she listed (and presumably sold) it for LESS than she bought it for in 2000. Now, I know growth here hasn't matched other markets (Austin, Seattle, SF, etc.), but we never tanked either. So, that's just baffling to me. All I can think is that this area just built too many million+ dollar homes, so that particular market stagnated. My house (not a million dollar house) has increased in (potential) value by about 50% in that same time range.
If it sold that fast, maybe she priced it too low?
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Re: The I need to buy a house thread

Post by Shirley »

sancarlos wrote: Tue May 15, 2018 11:54 pm
Shirley wrote: Tue May 15, 2018 11:16 pm My next door neighbor just sold her house. She had it on the market for less than a week, which is a crazy turnaround time for a million dollar house (just under, actually). While that's kind of great, what's depressing is that she listed (and presumably sold) it for LESS than she bought it for in 2000. Now, I know growth here hasn't matched other markets (Austin, Seattle, SF, etc.), but we never tanked either. So, that's just baffling to me. All I can think is that this area just built too many million+ dollar homes, so that particular market stagnated. My house (not a million dollar house) has increased in (potential) value by about 50% in that same time range.
If it sold that fast, maybe she priced it too low?
Yeah, we thought it was too low when we saw the price. Then it sold like a $200K house, so probably. But at the same time, lots of expensive houses sit on the market forever.

Coincidentally, the house right across the street from us also went on the market in the last 2 weeks or so. He bought that house at nearly the same price, and also in 2000, as my next-door neighbor. He currently also has his house listed pretty close to what my next-door neighbor has and I haven't seen a single person look at his house.

So maybe her price was right AND she has a much better agent. They're both huge, beautiful houses.
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Re: The I need to buy a house thread

Post by The Sybian »

Shirley wrote: Wed May 16, 2018 12:13 am
sancarlos wrote: Tue May 15, 2018 11:54 pm
Shirley wrote: Tue May 15, 2018 11:16 pm My next door neighbor just sold her house. She had it on the market for less than a week, which is a crazy turnaround time for a million dollar house (just under, actually). While that's kind of great, what's depressing is that she listed (and presumably sold) it for LESS than she bought it for in 2000. Now, I know growth here hasn't matched other markets (Austin, Seattle, SF, etc.), but we never tanked either. So, that's just baffling to me. All I can think is that this area just built too many million+ dollar homes, so that particular market stagnated. My house (not a million dollar house) has increased in (potential) value by about 50% in that same time range.
If it sold that fast, maybe she priced it too low?
Yeah, we thought it was too low when we saw the price. Then it sold like a $200K house, so probably. But at the same time, lots of expensive houses sit on the market forever.

Coincidentally, the house right across the street from us also went on the market in the last 2 weeks or so. He bought that house at nearly the same price, and also in 2000, as my next-door neighbor. He currently also has his house listed pretty close to what my next-door neighbor has and I haven't seen a single person look at his house.

So maybe her price was right AND she has a much better agent. They're both huge, beautiful houses.
Judging by the large number of high school and college friends that moved to your area around 2000, I'm going to guess it was a seller's market around that time. I'm curious how much work they put into the house in that time. In my town, houses pretty much doubled in value between 2000 - 2008, then took a bit of a hit during the housing crises, but not as much as most of the country. Value returned to 2008 prices a few years ago, and seem to be above 2008 levels now.
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Re: The I need to buy a house thread

Post by Shirley »

I don't think they were overpriced in 2000. These are big (5,000+ sf), brick houses on 1+ acre lots in Cary. What I think happened is that there was a boom in high-end neighborhoods and homes built in the next decade or so and I think they saturated the $1M+ market. Checking Zillow, I now see that other huge homes in my neighborhood have also sold for under $1M in the past year. I guess they set the market for the current ones.

What's crazy is that from my office window, I can see two big office buildings going up. My building is less than 2 years old. There's another one going up right across from my neighborhood. There is a lot of economic growth going on here. But maybe there was so much real estate supply that it hasn't driven up home prices yet.
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