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Poll results: Moving to a city with extremely inexpensive housing. What do you do?

Voters
33. You may not vote on this poll
  • I'd buy something small, and have a mortgage that is less than my cable bill.

    2 6.06%
  • I'd buy a middle-classish house at a bargain price.

    9 27.27%
  • I'd buy a move-up house that was well within my budget.

    13 39.39%
  • I'm livin' large, baby! Gimme' the 3000 sq ft house on an acre for $200K

    4 12.12%
  • I'd rent for a while. It could get worse!

    3 9.09%
  • Hey, Dan, you forgot ...

    2 6.06%
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Thread: Moving to a city with deflated housing prices: do you move up?

  1. #1
    Cyburbia Administrator Dan's avatar
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    Moving to a city with deflated housing prices: do you move up?

    Recently, I was checking out real estate prices in the Cleveland area, and the decline in prices is staggering, even in very desirable areas.

    When I was living in South Euclid, a suburb to the east of Cleveland, you couldn't find anything in Beachwood, the suburb immediately to the south, for anything less than $200,000. Now, houses in Beachwood start in the low $100,000s. Many other once somewhat pricey eastern suburbs, like Mayfield Village, Highland Heights, and Chagrin Falls, are now filled for houses for sale in the mid-$100K range..What's especially scary is that it's now possible to break into Pepper Pike and Moreland Hills, once-unapproachable wealthy suburbs, for around $200,000.

    Let's say you found yourself moving to a region with extremely deflated home prices. If you buy a house, would you buy something similar to where you lived before for a song, or buy someplace spectacular that you can now actually afford?
    Growth for growth's sake is the ideology of the cancer cell. -- Edward Abbey

  2. #2
    Cyburbian imaplanner's avatar
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    Quote Originally posted by Dan View post
    Recently, I was checking out real estate prices in the Cleveland area, and the decline in prices is staggering, even in very desirable areas.

    When I was living in South Euclid, a suburb to the east of Cleveland, you couldn't find anything in Beachwood, the suburb immediately to the south, for anything less than $200,000. Now, houses in Beachwood start in the low $100,000s. Many other once somewhat pricey eastern suburbs, like Mayfield Village, Highland Heights, and Chagrin Falls, are now filled for houses for sale in the mid-$100K range..What's especially scary is that it's now possible to break into Pepper Pike and Moreland Hills, once-unapproachable wealthy suburbs, for around $200,000.

    Let's say you found yourself moving to a region with extremely deflated home prices. If you buy a house, would you buy something similar to where you lived before for a song, or buy someplace spectacular that you can now actually afford?

    We are trying to move (wife has already moved) to a place with substantially deflated home prices. Trying to sell our huose here and in the process of buying one there. Our mortgage here is 2k a month. The new mortgage will be about 700 a month
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  3. #3
    Cyburbian hilldweller's avatar
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    Where do you think you could get more equity when/if the economy turns around?
    I'm guessing that the pricier suburbs would rebound better, but I don't have any familiarity with the Cleveland area.

  4. #4
    OH....IO Hink's avatar
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    I would buy more for my money now if I planned on living there for over 10 years. I have faith that in 10 years the housing market will be much stronger. If I can buy at 60-70% of the true value, I am making that much more when I sell in 10 years.
    A common mistake people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools. -Douglas Adams

  5. #5
    Unfrozen Caveman Planner mendelman's avatar
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    Well, our recent job move brought us to a region with housing prices at least 50% less then where we came from, and our household income is essentially the same.

    We are being conservative and buying a nice comfortable middle class house that will be a mortgage et al for about 2x our monthly income, whereas if this house was where we used to live would have been easily 4-4.5x our monthly income.

    Using the traditional statsitic of 3x monthly income that has been used for years, we could have bought something much bigger and fancier, but we didn't think it was wise financially and certainly don't need 3,000+sqft. Though, the new house is 1,905sqft 4 bed ranch with full LR, DR, FR and 2-car attached garage.

    Trying to maximize the mortgage+space equation is what has gotten us into the current economic and national land use mess we are in now.
    I'm sorry. Is my bias showing?

    Let's not be didactic in this profession, because that is a path to disillusion and irrelevancy.

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  6. #6
    Cyburbian ofos's avatar
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    I'd cash out my current house(s) and buy whatever I could afford without a mortgage.
    “Death comes when memories of the past exceed the vision for the future.”

  7. #7
    Cyburbian mike gurnee's avatar
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    At this stage in my career, which is the dead end, I agree with ofos: get rid of debt. Earlier, I would go for the house I wanted more than the size or value. That would be one that is historic up through the Craftsman era within walking distance of a community center that started as the end of a trolley line. I guess that puts me in the "moving up" category.

  8. #8
    Cyburbian TerraSapient's avatar
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    I think my vote was tainted by the fact that I cannot even buy a 1 bedroom condo with 500 sqft. for $200k where I live. So I chose the giant fancy-pants house for that price range.

  9. #9
    Cyburbian Plus dandy_warhol's avatar
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    The problem with LARGE homes is that you have to be able to afford to furnish them and maintain them. And then you have to have to clean it all. Bleck. Now if I could afford a cleaning lady, that's a different story...

  10. #10
    Cyburbian btrage's avatar
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    What I really want to do is sell my house and become a renter for the rest of my life. All expenses that would have gone to maintenance would then be invested. I believe I would be better off at the end of my working days, and would have created enough wealth that continuing to pay rent until I die would be no problem.
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  11. #11
    maudit anglais
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    We moved up...the cost of the mortgage is not an issue for us, it's the cost of renovations!

  12. #12
    Cyburbian JimPlans's avatar
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    I did actually live in a place with deflated house prices (an old, depressed NE city with lousy job prospects), and bought 2,000+ SF of single-family house with a two-car garage on almost a quarter-acre of land for a little more than $100K. The replacement value of the house alone (according to insurance) was $150K, and the land was assessed at $25K (according to the city), so in essence I was being given over $75K in house value just to live there. This was in the nicest neighborhood in the (rather depressed) city.

    However, when I sold this house at the height of the real estate market in 2006, I got less than $200K for it. Prices went up, but not like they did in the truly desirable towns outside the city (where that house would have sold for about $350K-$400K). Now I live in an area where that same house in a similar neighborhood would cost me about $400K-$500K, even after all the recent house price deflation. Why did I sell? Because when it was time for a new job there weren't any in the area for me (depressed house prices=depressed local economy).

    The morals? (1) Undesirable areas are undesirable for a reason, so don't think your cheap house will be anything but cheap in the future. (2) Never sell the house and move, because you will be spoiled and unhappy about not being able to afford anything like it in an area with a vibrant economy and expensive housing.

    But, it sure was nice to own a nice house and be able to afford it.

  13. #13
    Cyburbian imaplanner's avatar
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    Quote Originally posted by JimPlans View post
    I
    The morals? (1) Undesirable areas are undesirable for a reason, so don't think your cheap house will be anything but cheap in the future. (2) Never sell the house and move, because you will be spoiled and unhappy about not being able to afford anything like it in an area with a vibrant economy and expensive housing.
    .
    Yes and no. Some places with cheap housing are not necessarily undesireable. And some places with expensive housing are not necessarily desirable. There are alot of places around the country with expensive housing that I wouldn't set foot in.
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  14. #14
    Cyburbian TerraSapient's avatar
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    Quote Originally posted by imaplanner View post
    Yes and no. Some places with cheap housing are not necessarily undesireable. And some places with expensive housing are not necessarily desirable. There are alot of places around the country with expensive housing that I wouldn't set foot in.
    So true imaplanner. Hawaii is an excellent example of this. For $500,000 here, you get single walled construction, 2-3 bedrooms, maybe 1,000sf, and no yard to speak of, usually because all the lots have been condominiumized (is that a word?) and contain 2-3 homes on them, so whatever space was left over is typically paved for parking since all 2-3 homes on a lot have to share a driveway.

  15. #15
    Cyburbian Raf's avatar
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    Quote Originally posted by TerraSapient View post
    I think my vote was tainted by the fact that I cannot even buy a 1 bedroom condo with 500 sqft. for $200k where I live. So I chose the giant fancy-pants house for that price range.
    I feel your pain. With record low mortgage rates, i can't even afford a home where i live. A 1,2000 sf 3 bedroom in the neighborhood i live in now is going to cost me around $400K, and that isn't even factoring more than likely renovations. Until my wife finishes school, homeownership will be out of reach for me for at least 5 years.
    Men do dumb $hit... it is what they do to correct the problem that counts.

  16. #16
    Cyburbian TerraSapient's avatar
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    Quote Originally posted by CPSURaf View post
    I feel your pain. With record low mortgage rates, i can't even afford a home where i live. A 1,2000 sf 3 bedroom in the neighborhood i live in now is going to cost me around $400K, and that isn't even factoring more than likely renovations. Until my wife finishes school, homeownership will be out of reach for me for at least 5 years.
    It is sad isn't it? Record low mortgages~ we are missing out on the action CPSURaf. I am in the same position as you. Renting is my future for few more years.

  17. #17
    Cyburbian jsk1983's avatar
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    I live in a studio in Chicago so if I were to move to a smaller city it would probably be pretty hard to find a studio anyways so I'd probably go with a one bedroom at least. Even with the high real estate prices the fact that I can get away without a car here makes up for it.

  18. #18
    Super Moderator kjel's avatar
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    Quote Originally posted by btrage View post
    What I really want to do is sell my house and become a renter for the rest of my life. All expenses that would have gone to maintenance would then be invested. I believe I would be better off at the end of my working days, and would have created enough wealth that continuing to pay rent until I die would be no problem.
    I owned a house in South Carolina that I loved and had way more financial benefit than renting. Now I live in NJ and there is absolutely no way that owning a home would be more financially beneficial than renting. While prices have dropped it's still expensive and I couldn't afford it on my single income. Since my kid is nearing college age and I am otherwise unencumbered I like knowing that I don't have to be tied to a house that I can't unload either. At least in NJ there is a bit of a tax credit if you are a renter.
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  19. #19
    Cyburbian WSU MUP Student's avatar
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    I already live in an area with a depressed housing market and it's hard to find metro areas with prices that have dropped lower than ours (but ours do seem to be rising a bit faster now compared to other metros).

    If we were to move to an area with less expensive housing, we would not need anything larger than what we have now so we would look to upgrade in other ways but keep it in a price range similar to what we paid for our current home: maybe we would find something with slightly higher-end finishes, a bit more architectural character, and/or closer to the core of a walkable community.
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  20. #20
    Cyburbian Linda_D's avatar
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    I already live in an area with low housing prices. It's not a case of the prices here deflating but that they never really inflated. Most people don't buy houses in Jamestown, NY or environs with the intention of selling them for fat profits in 3 years and moving into bigger ones. Most people buy homes to live in for the foreseeable future.

    That said, I would be looking for a fairly modest home, probably somewhat bigger than what I have now (1 floor/2 baths would be nice). What I would really want, though, is a house in the country on enough land to have a huge garden and keep a couple of horses. In this area, I can actually afford that!

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