HaulCitgo wrote: ↑
Wed Oct 14, 2020 2:54 pm
Even if you could, would you want to? BSF has got the math right but Syb points out that you cant assume the appreciation on the tail end to offset tax/interest/insurance even you add in a cost to alternative housing. Particularly in a market with recent high appreciation and a disconnect between stock prices and economic activity and a looming democratic federal government. Not only do you have to pay the higher monthly costs for a mortgage vs rent for comprable housing but you also take the risk (and benefit) of suffiently high appreciation to offset not only higher monthly costs but sunk no benefit costs of tax, insurance, interest. Its like you pay more to gamble and this seems like a bad time to gamble.
I think it all depends on where you are buying. Move to a town on the cusp of growth, and go nuts and buy at the higher end of your budget. I think cities and commuter towns just outside of cities with small houses and little land are going to get crushed, while more spacious suburbs will have huge demand. It's too late to get a good deal buying anywhere in NJ commutable to NYC, except for maybe a Jersey City or Hoboken, as people are fleeing in droves. Houses are still selling within a week or two here. I'm very curious to see what happens with a house two down from me on the corner. Just went up for $30k more than I paid for mine, and it's 1,500sq ft smaller and 50 years old, while mine was new construction. It looks great on the listing, kitchen could be 15- 20 years old, but high end. I hope they get their price, but I think it's crazy over priced, but maybe the current market will bear it out. Zillow estimates exactly at ask, so maybe? Looks like my Zillow estimate is $40k over what I purchased it for. Zillow was well over purchase price when we bought, but our purchase brought down Zillow's estimate.
Anyways, I'll bring up my parent's and in-law's houses again. Purchased about the same time. My parents paid slightly more. Their house is worth about $150,000, and in good condition, fairly recent upgrades on just about everything. In-laws house is a teardown, original kitchen and baths from 1972, Zillow has it at $875,000. Their neighborhood is almost entirely new construction now, starting well over a $1 million, and I think they could get $850,000 easy and not have to even clean the house for showings.
An honest to God cult of personality - formed around a failed steak salesman.