I hate the housing market!

NuggetJo · March 2012

We own our home but it's small a 2bed and are looking for a bigger house for baby. Like many people our house is totally underwater but we are planning to rent it out too cover the mortgage and hold onto it for a few more years in the hop that we can eventually sell it and break even. We have excellent credit so really don't want to Short sale or foreclose on it as financially we do not have problems making payments. What baffles me is that we have great jobs, each makes over 6 six figures and yet I feel that I still can't afford a house that I want :-( It sucks! We looked at several 4 bed homes yesterday 350-450k and we didn't like any of them. Yes I will admit that we are picky too because we plan on staying in the house for many years but still......Florida is the second highest state of Foreclosures yet prices in our area are still out of our reach. How's a gal supposed to get ahead!! Ugh anyone got any tips??

lhcooper · March 2012

No tips, just want to say that I hear you. We too have a two-bedroom (plus a tiny study that won't work for a nursery) and we both work mostly from home, so we too are looking at 4-bedrooms, or 3+. We already figured out that we can't go above 350-380K, and even then we will, despite our 5-figure salaries, have trouble paying for daycare when we need it. Of course, if we hadn't taken out the massive loan to get pregnant....but then we wouldn't have the problem in the first place! We are probably staying put until the perfect thing comes along...and it is going to be crowded in here! We will share the study, there will be no guest bedroom....etc. With family help, we will probably redo part of the basement to make a second office. That's all I got!

NuggetJo · March 2012

At least I know I'm not sailing on that boat alone although I'm sorry you are in a similar position. I just think its crazy that earning over $200k a yr and it's still not enough. I look at my parents and we had a nice 3 bed house in a great neighborhood, two cars, vacations and only on my dads salary. My mom SAH. I also know that I alone make double what my dad earned so what the heck is going on. Either salaries have not increased at the same rate as the cost of living or the housing market is out of control.

benniferbaby · March 2012

I wish this post didn't hit so close to home. I also wonder how the heck my parents did it - my mom was not SAH but she worked for my dad, who ran a law practice out of our basement! I made (not anymore, since I've been out of work forever - a whole other issue!) probably double what they brought home PLUS DH's salary on top of it and still there is no way we could afford the kind of house that I lived in as a kid. It is insane!

On another note, we left our condo in Florida (FLL area) to move to a remote village in upstate NY. We couldn't possibly sell, so we have been renting the condo for the past 4 years. Or at least as much of the past 4 years as possible. It is a horrible situation, we've never been able to keep tenants past a year (they all run out of money, even the ones with excellent credit), and because we are so far, we have a property manager who takes the first month's rent each time PLUS a 10% fee. With me unemployed, this has been hellish on our budget.

Not much point to my post except to say good luck and I hear you barking, sister!!

amandaleigh1 · April 2012

Since we haven't been out of grad school long, we have been renting this whole time. We are going to make due with our two bedroom apartment to save money to buy a house. We could probably afford to buy one now if only people were selling them, and if we had a down payment. Oh well. I just hope in a years time, interest rates are still low.

mamasixpack · April 2012

Good luck to you! If you need any tips on how to cram a lot of people into a small space, just ask! I have (almost) 7 kids and two adults in a four bedroom/ 2 bath home that is about 1800 SF. Probably a little less than 1800, actually. Anyway, I hope you can hold tight until you find just what you need. Look into IKEA for great ways to get the most out of your space. Not all people like IKEA, but if you pick and choose what you use, you will find it's helpful.

SunAndRain · April 2012

What can you not afford? The bigger monthly mortgage payment or the 20% downpayment? We were in a similar boat as you, kept our home as a rental and just closed on a house that is in the price range you cited. We had a 20% down payment and are very lucky to have great renters.

You mentioned, too, that you were underwater. Again, we were in the same boat. If the rent won't cover the mortgage payment on your current house, then you might want to explore refinancing to a lower interest rate. You will likely have to dump quite a bit of cash in to the house to make up the difference between your current loan and the current appriased value, but if it turns the house in to a good investment and monthly positive cahs flow (or at least break even), then it might be worth it in the long run. If you refi after the house is rented out you might have to put 25% down.

So you would require quite a lot of cash to put 20% down on refinancing your current home and then 20% down on a new home. But it could position you well for the future. Your interest rates would be very low. Again, just depends on your current interest rate and what the reduction in the monthly payment would be.

Adi · April 2012

Would an auction be an option for you? I'm in SoCal, and people are getting awesome deals by buying forclosures at auction. Too bad for DH and I we're in a condo that we're underwater on... but at least we can say our mortgage is cheaper than the rent would be on our place (the next door unit is renting for $300/mo more than our mortgage) Since it's 3bdrm, we're sticking it out, an hoping the market comes back up. (it was a foreclosure when we got it, and I sunk my 401k into the downpayment... we didn't think for a minute that the market would continue to drop). But it's ours... and at least for now, it's plenty big enough.

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