2023 Real Estate Observations (Harvard: managers, customer, structure)

[yesmaybe]

Well, since this is the Real Estate thread... how long do you think you could survive being able to pay the mortgage, etc... with no job and no unemployment because you quit because of RTO? I'm guessing most people in this state with crazy high mortgages can't last long.

Unemployment, esp white collar is still very low. It won't take much.

[newenglandgal123]

Originally Posted by yesmaybe

Well, since this is the Real Estate thread... how long do you think you could survive being able to pay the mortgage, etc... with no job and no unemployment because you quit because of RTO? I'm guessing most people in this state with crazy high mortgages can't last long.

Unemployment, esp white collar is still very low. It won't take much.

Well, I personally could survive a few years with no job and no unemployment paying my mortgage, utilities, food etc. b/c my overhead is low and I have a nice emergency fund. When I purchased my home I bought below my means so that I have some cushion if anything were to go awry w/employment. However, I agree with your statement that most folks probably won't be able to last very long at all given all the $600K+ and jumbo mortgages out there right now. I mean I'd like to believe many people have an emergency fund, but exactly how big is that emergency fund?

[charolastra00]

Originally Posted by newenglandgal123

Well, I personally could survive a few years with no job and no unemployment paying my mortgage, utilities, food etc. b/c my overhead is low and I have a nice emergency fund. When I purchased my home I bought below my means so that I have some cushion if anything were to go awry w/employment. However, I agree with your statement that most folks probably won't be able to last very long at all given all the $600K+ and jumbo mortgages out there right now. I mean I'd like to believe many people have an emergency fund, but exactly how big is that emergency fund?

And it all comes back around to the cost of living. If you are trying to get into the market over the past 2 years, $600K is a pretty average mortgage for a relatively small home if you need to commute into Boston, particularly if you need a commute that works around childcare hours.

It's not much better with rent when you're stuck paying $3000+ or more and locked into leases for 2 or 3 bedrooms.

That's the whole reason so many people took advantage of remote work to move further out. Companies aren't increasing salaries enough to keep up with rent anywhere close enough to commute 4 or 5 days a week.

[Iced_Coffee]

Originally Posted by charolastra00

And it all comes back around to the cost of living. If you are trying to get into the market over the past 2 years, $600K is a pretty average mortgage for a relatively small home if you need to commute into Boston, particularly if you need a commute that works around childcare hours.

For real - I bought a pretty middle-of-the-road house in spring of 2021 with a $590k mortgage. The house is on the smaller side, but it's very commutable to Boston. Even at 2.8xx%, the monthly mortgage payment is ~$2,450 before taxes and insurance ($3,500 with everything factored in). A house in the mid-700s now is not considered terribly high, even in further out towns that have historically been much more affordable (think Maynard, Hudson, Norfolk, etc). With current interest rates, the monthly costs are STEEP even when putting 20% down.

For reference, my local bank has a 6.625% conforming 30 year mortgage advertised on their site. At that rate, a theoretical house purchase at $725k with 20% down is $3,810 for just principal and interest. Taxes and insurance can easily be another $1,000 on top of that.

I initially thought I should have been a bit more prudent budget-wise when I bought 2 years ago, but now know this is probably the best I'll ever do from a monthly cost perspective. I feel for current buyers in similar shoes.

[msRB311]

The COL has changed a lot in the Boston area in just a few years.

But remember, anytime someone complains about COL and house costs in the area Matrix shows up to remind us of all those buyers able to pay with cash.

[newenglandgal123]

Originally Posted by charolastra00

And it all comes back around to the cost of living. If you are trying to get into the market over the past 2 years, $600K is a pretty average mortgage for a relatively small home if you need to commute into Boston, particularly if you need a commute that works around childcare hours.

It's not much better with rent when you're stuck paying $3000+ or more and locked into leases for 2 or 3 bedrooms.

That's the whole reason so many people took advantage of remote work to move further out. Companies aren't increasing salaries enough to keep up with rent anywhere close enough to commute 4 or 5 days a week.

Yes, well I'd be in the same boat if I were buying something now too. Someday I'll probably make a move but not right now. Luckily my mortgage is in the $200K range so cost of living for me is crazy low right now, even compared to renting.

[gf2020]

Originally Posted by AtkinsonDan

Most RTO we've seen so far is really fully remote going to hybrid. Very little seems to be going back to the pre-pandemic standard of 5 days in the office.

Other than jobs in manufacturing, healthcare or hospitality, I don't know anyone in the Boston area who was in the office 5 days per week, even before March 2020. Work from home Fridays has been pretty common around here for a long time. I've worked from home at least 2 days per week starting in 2006.

[massnative71]

Originally Posted by gf2020

Other than jobs in manufacturing, healthcare or hospitality, I don't know anyone in the Boston area who was in the office 5 days per week, even before March 2020. Work from home Fridays has been pretty common around here for a long time. I've worked from home at least 2 days per week starting in 2006.

Then you live in a bubble.

[msRB311]

Originally Posted by gf2020

Other than jobs in manufacturing, healthcare or hospitality, I don't know anyone in the Boston area who was in the office 5 days per week, even before March 2020. Work from home Fridays has been pretty common around here for a long time. I've worked from home at least 2 days per week starting in 2006.

He's not wrong. A lot of work places did allow people to wfh 1 or 2 days a week prior to covid. I had this as well.

[massnative71]

Originally Posted by msRB311

He's not wrong. A lot of work places did allow people to wfh 1 or 2 days a week prior to covid. I had this as well.

Not saying they didn't, but it doesn't apply to the majority of folk.