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  • #31
    Originally posted by Hank View Post

    It’s a college town with a good med school. I wouldn’t be terribly surprised if the South Bend, Boulder, or Ann Arbor real estate market acted like a coastal city even though they’re far from Manhattan and San Francisco.
    I am amazed at what realestate has done. Prices where I grew up in AL have gone nuts. Like so many things, I do not fully understand it. I really wonder what will happen.

    I think OP did the absolute correct thing. You were careful, and it was the right time for a house and a house that was not out of line financially etc.

    Overall I wonder if prices will continue to go up due to lack of supply and supply chain/building costs/issues (and cost of gas and materials) or if rising interest rates will force people to buy lower priced homes or rent, due to inability to make higher interest monthly mortgage payments.

    No one can time the market and be right repeatedly.

    Best to buy when it is right for you and to buy something you can afford.

    Life frequency is improved by owning your own home IMO and some things are worth paying for (if you can afford it).

    OP you can absolutely afford it, and it was the first house on a list of 40 houses for a reason(s).

    Sorry to beat a dead horse (perseverate) but good job!

    What will prices do next 1, 2, 5, 10, 20 years? Zero clue but with time they usually go up.

    If they don't, so what, you cannot control it, nor perfectly predict it.

    No one can.

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    • #32
      Originally posted by Tangler View Post
      What will prices do next 1, 2, 5, 10, 20 years? Zero clue but with time they usually go up.

      If they don't, so what, you cannot control it, nor perfectly predict it.

      No one can.
      And even if real estate prices fall long-term, so what? The OP and spouse love the house and the neighborhood, the school district is good, the commute is reasonable, they have reasonable expectations of living there long-term, and they can afford the purchase. All those factors mean it's the right house for them even if its value doesn't go up over time.

      While it often appreciates, a primary residence should never be chiefly thought of as an investment. It's a consumption item. If it grows in value, great, but that is not why you bought it. You bought it to live in it.

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      • #33
        Originally posted by mamaham View Post
        Did your lender do an appraisal? Was it saying you “overpaid” by $250k?

        I agree with others. Everyone is paying over price right now. You stayed within the acceptable loan amount and have down payment. Stay on track and you will be fine.
        Lenders appraisal just came back recently. They price the home at 1.2 million (we paid 1.15 million on asking of 900k). Not sure how objective these estimates are but seems like what we have paid may be in line with rest of the local market.

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        • #34
          Appraisal estimates aren't really objective. I don't think there is anything nefarious about it, just human fallibility.

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          • #35
            Originally posted by MW_doc View Post

            Lenders appraisal just came back recently. They price the home at 1.2 million (we paid 1.15 million on asking of 900k). Not sure how objective these estimates are but seems like what we have paid may be in line with rest of the local market.
            Those appraisals are kind of a joke. The lender just basically wants to make sure they aren't lending money they could possibly lose on a mortgage that is automatically upside down.

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            • #36
              Well you didn't undo it all, you only undid 10% of it. But you guys are killing it so much that it doesn't matter. You can't take it with you, might as well spend it on the house you want.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #37
                I read too quickly and saw 1.5 million after the brutal bidding war and thought "thats insane...but hey they can afford it" so it could've been worse.

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                • #38
                  I agree that the OP will be fine. I agree that OP can afford to pay too much for something that brings him/her pleasure. I disagree with most of the rest of the advice above.

                  You can value a home. You can use replacement/construction cost or price to rent ratios.

                  The former requires quite a bit of research unless you are a general contractor already in the business of building homes, but it can be done. The latter is somewhat difficult with single-family homes because sometimes there isn't a deep market of comparable rentals. Nevertheless, you don't have to follow the crowd and pay soaring prices because it's the going rate.

                  The 2000-2007 market was hotter with even more ridiculous behavior than today. I moved to Chicago in 2003 and rented because real estate was obviously (to me) in a bubble. I rented a 2-bed, 2-bath condo in a River North (central location) high-rise for an initial $1800/month. My landlord purchased the unit for about $648K (might have been $645K), and carried the mortgage as well as a $700/month HOA. He was massively cash-flow negative every month, but his son told me that he only bought it for appreciation, and planned to sell in a few years. I was bewildered, but accepted his gift.

                  The same sort of deal was available all over town at that time. When I moved in early 2009, the condo was headed for foreclosure, and multiple identical units were offered at $425K in foreclosure. I learned that one woman had purchased 10 units with essentially no money down during the frenzy and defaulted on all of them.

                  Remember that a house is just a depreciating physical asset made of drywall, wood, shingles, bricks, appliances, paint, etc. None of these things increase in value with time. To the contrary, they gradually disintegrate. Most houses will be razed in the future. If you enjoy real appreciation in your "home" price, it's the value of the land beneath the house that appreciated. If you buy with the expectation of appreciation then you're a land speculator with a heavily concentrated portfolio. Nothing wrong with that. Just realize what you're doing.
                  Erstwhile Dance Theatre of Dayton performer cum bellhop. Carried (many) bags for a lovely and gracious 59 yo Cyd Charisse. (RIP) Hosted epic company parties after Friday night rehearsals.

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                  • #39
                    Zillow has trouble keeping up with rapidly changing markets.

                    A friend bought a house a year and a half ago while the local market was zooming up. Bidding war, paid much more than asking. More than the Zillow estimate. Well above the appraisal. 18 months later, Zillow estimates the house is worth 50% above the purchase price.

                    Same problem with falling markets. During the Crash, for a long time Zillow was listing houses at their pre-crash values. There were lots of complaints from sellers that no one would buy their houses for the Zillow prices. They would get hostile when I pointed out that houses sell for their market value. The prices were falling but Zillow was not keeping up.

                    I would not assume the OP overpaid for the house. It could have been the right price and it takes time for people and automatic valuations to adjust to the market.

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                    • #40
                      We bought our house for 680k a year ago. Thought we overpaid. Redfin now shows 750k. Doubt we would get a buyer for it at 750k but we are happy with it. Gonna put another 200k to remodel it and finish the basement. ROI of that 200k will be maybe 50%. At the end of the day though it’s about living in a nice place. I see a personal home as more of a consumption item and less of an investment. We are putting all the top end appliances in etc because we want to enjoy our home. Not because its an investment. Our combined income is around a million a year now so actually thinking we should have gone bigger than 4200 sq feet. Oh well. Maybe we will get the dream home in 10 years.

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                      • #41
                        4200ft for 880k remodeled on 1M income- you're kicking it. Here's a sampling of our area:

                        https://www.redfin.com/CA/SAN-DIEGO/...home/145704095


                        Sunshine tax at its best.

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                        • #42
                          Originally posted by StarTrekDoc View Post
                          4200ft for 880k remodeled on 1M income- you're kicking it. Here's a sampling of our area:

                          https://www.redfin.com/CA/SAN-DIEGO/...home/145704095


                          Sunshine tax at its best.
                          Man, this is gorgeous though.

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                          • #43
                            Originally posted by StarTrekDoc View Post
                            4200ft for 880k remodeled on 1M income- you're kicking it. Here's a sampling of our area:

                            https://www.redfin.com/CA/SAN-DIEGO/...home/145704095


                            Sunshine tax at its best.
                            Every darn photo is on on ultrawide lens to make it far bigger in size than it actually is. Making a 4000 sq foot home into a 10K sq ft home.

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                            • #44
                              Yeah they did a pretty good job on the styling and maximized the backyard space. The photos really expanded the views nicely without distorting it.

                              We're happy if they get it. Makes our paper value that much more

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