2022 Real Estate Observations (legal, pay, quality)

[newenglandgal123]

Originally Posted by msRB311

Why are people so curious to know these details about how someone made payment for their house? Does it make you feel better about yourself when someone has put a small percentage down?

You can kind of get an idea of what's going on in certain towns or your own neighborhood and it gives you some insight into how people are 'winning' homes/bidding wars. As one other poster mentioned, he was able to look up all recent sales in his neighborhood today and the trend was that folks have been putting very little down. If they're only putting 2% down they could be really strapped just trying to get in a home. On the other hand, some folks might find that the majority are paying cash in their neighborhoods. It can also give you some insight into what it takes to 'win' the bidding war. If you look up recent sales/mortgages in neighborhoods you are hoping to purchase in, it can tell you what type of financing, down payment they put, if it was cash etc. and this might help you structure you're own bid.

[msRB311]

got it. I can think of a few folks i might be curious about.

[newenglandgal123]

Originally Posted by msRB311

got it. I can think of a few folks i might be curious about.

and if curiosity gets the best of you and you want to find out if that neighbor down the street who just put in the new pool and outdoor kitchen took out a home equity loan in order to do it, you can find that out there too! lol

[simplexsimon]

The low down payments are pretty interesting too because it says something about the market for sellers… I thought it was very recently that only big down payments or cash offers won bids.

[msRB311]

Originally Posted by newenglandgal123

and if curiosity gets the best of you and you want to find out if that neighbor down the street who just put in the new pool and outdoor kitchen took out a home equity loan in order to do it, you can find that out there too! lol

Hah, my DH actually said that's what people often do when they the pool/outdoor kitchen thing. I had no idea so I just learned that this year.

[jayrandom]

Originally Posted by msRB311

Bottom line is that I don't think it's necessarily a good thing if people with 300k HHI are paying for 1M homes. I'm sure plenty of them wished they could have found a better home for less but they most likely couldn't or they were trying to keep up with the Jonses'. They were maybe lured into a town for the schools as well. With normalizing this prices will just keep on going up.

Originally Posted by msRB311

I don't know why anyone would want a mortgage payment that high? But it's telling me that people perhaps just aren't able to save a good chunk for a down payment?

First off, I can’t think of anyone who wants to pay a mortgage at all. It’s just that no one is giving out free houses, so a mortgage becomes a necessity for most people.

Second, $300k is a really high household income. Even in Massachusetts. The take home for a married couple would be close to $200k. If you save $50k of that for retirement, you have $150k or about $12.5k/month. An $800k mortgage at 2.5% is about $3k/month. Add $1.5k/month for taxes and insurance, and you are left with about $8k/month. If you can’t cover the remainder of your monthly expenses on $8k/month, I don’t think the problem is your housing budget. At 6.5% interest that becomes $5k and you have $6k/month for other expenses. Maybe if you have two kids in expensive daycare that starts to become tough, but it definitely isn’t poverty.

That isn’t to say that anyone would want to spend $1m if what they wanted could be had for $500k, just that a couple with the very high (relative to the median in MA, at least) income of $300k can absolutely make an $800k mortgage work.

[WestieWhitie]

Originally Posted by jayrandom

First off, I can’t think of anyone who wants to pay a mortgage at all. It’s just that no one is giving out free houses, so a mortgage becomes a necessity for most people.

Second, $300k is a really high household income. Even in Massachusetts. The take home for a married couple would be close to $200k. If you save $50k of that for retirement, you have $150k or about $12.5k/month. An $800k mortgage at 2.5% is about $3k/month. Add $1.5k/month for taxes and insurance, and you are left with about $8k/month. If you can’t cover the remainder of your monthly expenses on $8k/month, I don’t think the problem is your housing budget. At 6.5% interest that becomes $5k and you have $6k/month for other expenses. Maybe if you have two kids in expensive daycare that starts to become tough, but it definitely isn’t poverty.

That isn’t to say that anyone would want to spend $1m if what they wanted could be had for $500k, just that a couple with the very high (relative to the median in MA, at least) income of $300k can absolutely make an $800k mortgage work.

$800K is easy for $300K earners but given the quality of our housing stock chances are the type of house they would want costs far more than $800K.

[newenglandgal123]

Originally Posted by WestieWhitie

$800K is easy for $300K earners but given the quality of our housing stock chances are the type of house they would want costs far more than $800K.

Exactly, a lot of this older housing stock hasn't had a bath or kitchen upgrade in decades so in addition to that $800K there are also going to be renovation costs to factor into someone's budget as well and that ain't cheap! Easily can eat away $300K income.

[simplexsimon]

So it’s less easy. Still not seeing what the problem is if it’s affordable. If one wants to have a lot more discretionary income then make some more difficult decisions like moving further away for a cheaper house, cutting back on something else, or get a better paying job/side hustle.

[matrix5k]

So lots of people here like to look up their neighbor's mortgages and home equity loans... For "research". That's stalkerish.