/rant start Looking forward to buy a house for a yearish, almost a FOMO, but then was excited to see the stock market go down. Hearing that Seattle and SFO market getting hit and was hoping the pricing comes down a tad bit. We are only interested in buying a new home so working with a couple of builders. Until recently, our TC was 300K, and very recently got a bit of bump for both of us to get us to 400K ish. My main concern is that I am not seeing prices drop in our area at least with the builder I am working with - and instead the builders are still adding on lot premiums, claiming that all the neighborhood homes are going around 1.8M. I checked in the county website which has contract dates of late last year, and they were all in $1.3M range - so if the builder is not lying, the recent interest rate spikes, and the recent market crash, the layoffs etc, have not actually impacted the pricing but rather increased the price??? How is that possible? Context - Homes from October, November, December 2021 - if you average out their Price per sq ft - they are at $250 range, but the builder is now demanding in August 2022 at $350 range which seems completely illogical and am unable to wrap my head around it. I'm completely confused about the 30% spike in the price per sqft. We were really hoping that we stay within that 1.5M even with an inflated price per sqft around $300 - $310 ish /rant end Can we concentrate on the core point of the post instead of scrutinizing if I can afford it or not, because none of you have any details whatsoever about what my networth is, nor how much i am going to pay down nor if i have kids or not, or any other details that matter to what i can afford or not. It is such a distraction and waste of time. Down payment of 650k, no monthly debt whatsoever, property tax of 1.2%, insurance of may be 2500 per year, no pmi. And to add to the above, because i am sure there will be folks still asking questions about affordability - this will leave me with about 250k in retirement, and about 100k in checking account and 50k in bonds approximately, if you ignore the 150k or so in stock. Downpayment of 33% and about 450K spread in multiple other accounts in case we need it for a rainy day. #mortgage #housing
FOMO is not real - at least with unreal estate; wait it out a bit longer.
If you plan on living at that place for the next 25+ years, just buy it. If not, just rent and chill.
Who thinks about living at a place for 25+ yrs on a starter home
What? Who said anything about a starter home? Based on the numbers provided they're buying a 5000+ sq ft home.
Why would you only buy a brand new house? That doesn’t seem very logical from a financial perspective. Not sure about the builder but raw material costs are still high and inflation is real including cost of transport due to oil so what that cause the cost to go down since 1 year ago?
Wait it out until after the election. Market will be good until election and then who knows what will happen. Inflation and interest rates are not down, companies slowing down on spending. Ripple effects will be there if not seen already.
Mid term election , or presidential election?
Presidential 2032
He is lying. Prices do cool down a little around Seattle. The houses that were gone half a year ago within hours of being listed for much higher than list price today receive one or two offers on a review date, both being below listing price. I'm not sure for how long it will last though. One of the reasons for the cool down was the fact that most people who could afford buying these homes were paid largely in stock, which tanked. But lately the stocks seem to be rebounding, so unless we see layoffs from Amazon, MSFT, Google, etc - it might be that the cool down is only temporary.
Demand is still high for RE and for new homes depending on location. Your builder is still trying to capitalize on that demand so take that into account. At the new seven figure price range, demand is less impacted by layoffs and interest rates. This is cash and jumbo loan territory so your expectation that some market activity would have you saving big bucks is off. And even if you are paying $500k for the land, you are asking for a 3700sqft home? How about downsizing?
People seem so obsessed with buying new. Most old homes are so much better built and have far more charm than most new homes. You could buy a really beautiful "used" home for $1.5M and still have $300k to fix it up. Only looking to buy new means your getting had.
Plus a lot of the time you have to do backyard landscaping and such, so you add even more
100%
You can’t afford it anyway, even at 1.5
Yeah, a 1.5 house is probably going to be 9k a month for principle+interest+escrow. Wonder how much of OPs income is base vs RSU
What does escrow mean? Sorry, fellow Brit here!
This is what people get for listening to the "it's gonna crash!" fearmongering nonsense. These rate increases are going to wipe out or even far exceed any money you think you're saving by "waiting for prices to drop." The time to buy is always now.
Username checks out
You can think I'm being harsh, but do you realize what even 0.5% equates to over 30 years on a $1.8m home?
Just walk away, don’t buy into builder bs. There’s always going to be another “perfect home”
Unfortunately builders in seattle area are slowing down projects and stopping future projects. If you want a new home you don’t have a lot of options. Plus prices were def lower 10-20% this time last year so makes since why OP sees increase in price then.
Yeah builder tools is bs..oh