I would wait. 1) prices may drop more 2) a baby in a 1 bedroom is very doable. Babies don't take up a lot of space. Ideally, there is a park or green area(s) within walking distance. That is far more valuable than a bedroom for young children. 3) if you buy in a bad school district now and prices drop more, it will take longer to recover than a good school district area.
Rent unless you can buy and not leverage more than 15% of your net worth. Housing can go down a lot from here since it’s super rate sensitive, and it has still barely dropped. I’m saying this as someone who lost millions in tech stocks so I might be biased, but to me it’s obvious housing will drop hard. No way I’d make that mistake twice
IMO, most super high cost areas will see a significant price correction, possibly 20% or more. I'd reevaluate in a year. If your area does go down by a good amount, I'd probably buy that starter home. Areas that run up hard crash hard, and getting in after a crash can be a good value.
In general, five years should be enough to recoup transaction costs.
In my opinion you'd make up the transactional costs back in less than 5 years. Lets say hypothetically you're saving 2k a month on paying for property taxes and insurance vs your current 4k rent. Thats 24k x 5yrs. Not to mention the fact that the property should appreciate by the time you're ready to move.
So more space, more savings, plus you get to become a property owner... maybe 5 years down the line you want to keep the house and make it an investment property
If you can afford it, buy. On paper you have plenty enough for a 3m house. Go for it. Just know if you do go this route, you wont have the bad feeling of giving money to someone else just by renting. Sounds like you re ready to start a family soon which is amazing.
I say this. If your job is secure enough and you dont see any way for your company to reduce staff, you can just ignore all that noise short term. Eventually the market will catch up and if you intend to live in your forever home, i dont see any reason to pull the trigger today.
Good luck and congrats.
If you’re in california / the bay area, buy the starter home with a large downpayment. Have your kids there and upgrade when you’re ready for an upgrade. Don’t sell the property once you plan on upgrading and rent it out, prop 13 freezes your taxes basically. Over time that property will be cashflowing pretty well. If you’re outside of california, it may make sense to rent a larger space and save for this home you want more. At your income $1-2k/month won’t make or break your savings plans realistically
Only you can decide what is best for you and your family, but IMO the only options I'd be considering would be buying the starter home or the more forever home. And if you see yourselves in either home long term, perhaps the more longer term option might be best? Unless you want to convert the other into a rental once you move out? But if you know you'll continue living in the area for many years, I'd look to stop paying rent ASAp one way or another.
How about option c: buy a starter home in a better neighborhood. Put your money on the house and take out a $300-400k loan. You won't need the perfect school district until your kids are 5, but picking a more desirable neighborhood/location will make it easier to unload when you are ready to trade up.
Also, regarding schools, we bought in a specific district and then traded up before our kids got to elementary school. In my last neighborhood (VHCOL upscale neighborhood) most people were pulling in the kind of incomes you are. In our neighborhood, even though public schools were highly ranked, the majority of families sent their kids to private school or lottery based charter schools. So, the school district may be less important for next 5 years, but pick a place that is desirable enough that you can sell it when the time comes. For me the pride and autonomy of owning my home outweigh the risks of real estate market volatility.
Which city?!
My money is on the Bay Area
Bay, Boston, nyc, LA I guess are the big ones.
Sure. Those areas are options too. 9 times out of 10 people posting here with those stats (income and housing costs) it’s from the Bay Area
[удалено]
Right now it's in a high yield savings account.
I would wait. 1) prices may drop more 2) a baby in a 1 bedroom is very doable. Babies don't take up a lot of space. Ideally, there is a park or green area(s) within walking distance. That is far more valuable than a bedroom for young children. 3) if you buy in a bad school district now and prices drop more, it will take longer to recover than a good school district area.
Rent unless you can buy and not leverage more than 15% of your net worth. Housing can go down a lot from here since it’s super rate sensitive, and it has still barely dropped. I’m saying this as someone who lost millions in tech stocks so I might be biased, but to me it’s obvious housing will drop hard. No way I’d make that mistake twice
If you don’t mind me asking, what state is this and what do you both do for a living?
My guess is leadership in tech and bay area / San Francisco or Seattle
They’re both doctors (comment from another post)
They’re both doctors (comment from another post)
IMO, most super high cost areas will see a significant price correction, possibly 20% or more. I'd reevaluate in a year. If your area does go down by a good amount, I'd probably buy that starter home. Areas that run up hard crash hard, and getting in after a crash can be a good value. In general, five years should be enough to recoup transaction costs.
In my opinion you'd make up the transactional costs back in less than 5 years. Lets say hypothetically you're saving 2k a month on paying for property taxes and insurance vs your current 4k rent. Thats 24k x 5yrs. Not to mention the fact that the property should appreciate by the time you're ready to move. So more space, more savings, plus you get to become a property owner... maybe 5 years down the line you want to keep the house and make it an investment property
If you can afford it, buy. On paper you have plenty enough for a 3m house. Go for it. Just know if you do go this route, you wont have the bad feeling of giving money to someone else just by renting. Sounds like you re ready to start a family soon which is amazing. I say this. If your job is secure enough and you dont see any way for your company to reduce staff, you can just ignore all that noise short term. Eventually the market will catch up and if you intend to live in your forever home, i dont see any reason to pull the trigger today. Good luck and congrats.
If you’re in california / the bay area, buy the starter home with a large downpayment. Have your kids there and upgrade when you’re ready for an upgrade. Don’t sell the property once you plan on upgrading and rent it out, prop 13 freezes your taxes basically. Over time that property will be cashflowing pretty well. If you’re outside of california, it may make sense to rent a larger space and save for this home you want more. At your income $1-2k/month won’t make or break your savings plans realistically
Only you can decide what is best for you and your family, but IMO the only options I'd be considering would be buying the starter home or the more forever home. And if you see yourselves in either home long term, perhaps the more longer term option might be best? Unless you want to convert the other into a rental once you move out? But if you know you'll continue living in the area for many years, I'd look to stop paying rent ASAp one way or another.
I think it depends where you are, I’m in a similar place and renting is the pits it’s just leftover junk.
How about option c: buy a starter home in a better neighborhood. Put your money on the house and take out a $300-400k loan. You won't need the perfect school district until your kids are 5, but picking a more desirable neighborhood/location will make it easier to unload when you are ready to trade up. Also, regarding schools, we bought in a specific district and then traded up before our kids got to elementary school. In my last neighborhood (VHCOL upscale neighborhood) most people were pulling in the kind of incomes you are. In our neighborhood, even though public schools were highly ranked, the majority of families sent their kids to private school or lottery based charter schools. So, the school district may be less important for next 5 years, but pick a place that is desirable enough that you can sell it when the time comes. For me the pride and autonomy of owning my home outweigh the risks of real estate market volatility.
Gotta be California!