Apr 08 2009
Over the weekend, we went on a little drive through some neighborhoods in town. We wandered into one eclectic neighborhood that overlooks a park and a lake. Each house was unique in its styling, yet they all belonged together. Some houses were odd; and some looked like places we’d enjoy calling our own.
I knew that they would be out of our near-future price range, but I wasn’t expecting to find that some of these were million-dollar houses. The “cheapest” house in the neighborhood was $500,000. The highest had sold for $1.3M. Oh. Yeah, out of our price range by a lot. A 20 percent down payment on a house like that is only $100,000. Sheesh.
We headed away from the park and ducked into another neighborhood. I knew that these houses were the kind that we would be able to afford in a few years.
Shane was unimpressed. They were small, plain, and lacked personality. I didn’t much like the neighborhood either.
We came home and logged onto Zillow.com
where we were able to find out more details about the houses we saw. It was fun to scout around the site to see houses we liked.
Ideally, we’ll move into a house in two to five years from now. I think that’s how long it will take us to save enough for a down payment and decide where we’ll want to live for awhile (be that Pittsburgh or Indiana or who-knows-where in between).
So, should we aim to buy a house at that time that fits the bill, with the intention of “upgrading” 5 to 10 years later? Or should our first house be one that we could see ourselves in for the life of the mortgage (hopefully 15 years or so)?
Reasons that support buying one house and staying put:
- We won’t have to worry about timing the markets for the right time to sell.
- Our home customizations — paint, flooring, window treatments, etc. would be more permanent. We wouldn’t have to get things the way we wanted and then change it all to make it sellable. We wouldn’t have to move into a second house and re-customize everything.
- We won’t have to deal with the hassles and double expense of selling a house, finding a new house and moving.
- We can feel free to plant roots and really become part of the neighborhood/city.
Reasons why it might be a good idea to buy a “starter house” and then upgrade a few years later:
- We can build equity in the first house and use that to put a bigger down payment on a second house (assuming, of course, the value of the house doesn’t drop like mad).
- We can enjoy the perks of living in a house, even if it isn’t our dream house.
I’m leaning toward buying a house that I want to live in for a long time. This might mean we go from seeking a $100 – $150k house to $150k-$250k to get what we want. (Big ranges, I know). If that’s the case, then we’d need to hold off on buying for a bit longer so we can save up an even bigger down payment.
Maybe that’s reasonable. I mean, why spend gobs of money on a house you don’t like that much? I think I’d rather rent just a bit longer and get a house that I really enjoy living in.
No matter what we decide, it’s important that our house is affordable.
What else can you add to my lists? What did you do?