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Resident first time buyers feeling dread

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  • Resident first time buyers feeling dread

    Hi all, are there any other residents looking ahead to graduation and a (responsible) home purchase after a few years? My wife and I are both PGY-3s. We have a financial plan and will rent/live like residents for a period after training, but eventually a home purchase will be in the cards. We plan to go back to a MCOL/LCOL area for family reasons, but a big benefit was being able to get a very nice home on <2x annual salary. Sadly, these homes have doubled in price over recent years, supply has dried up, and "the plan" isn't looking as sunshine and rainbows as it used to. Patience and responsible saving will overcome this problem after a few years of practice, but there is a real sense of loss and dread as we look at Zillow and see ourselves priced out of the neighborhoods we've dreamed about for the last 7 years of med school and training.

    How are the other WCIs in our positions feeling?

    It's strange even write a post like this because we can't publicly discuss these concerns with family or non-medicine peers. Maybe we're disconnected and entitled, but I'd hope it was no more than the average resident who is about to leave training.

  • #2
    You should at least be happy that you're targeting a LCOL/MCOL. In my already HCOL area, houses seem to be selling for 50% more than they were a few years ago, and median home prices topped 1M. theoretically, your average doc couldn't afford the median house. Absolute insanity

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    • #3
      It is the feeling of everyone who has not yet bought a house.
      Additionally, those that have bought at recent elevated prices, console themselves with a lower interest rate. The feeling of dread is that they overpaid.
      You can talk with anyone, this is not taboo. Of course those not impacted won’t really care. Some will sympathize, bad luck.
      You will be fine.

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      • #4
        Originally posted by Turf Doc View Post
        You should at least be happy that you're targeting a LCOL/MCOL. In my already HCOL area, houses seem to be selling for 50% more than they were a few years ago, and median home prices topped 1M. theoretically, your average doc couldn't afford the median house. Absolute insanity
        Ouch, I can't imagine having to decide on a seven figure home purchase... That puts our worries in perspective. Sorry for you guys.

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        • #5
          Sadly, these homes have doubled in price over recent years, supply has dried up, and "the plan" isn't looking as sunshine and rainbows as it used to.
          Home prices will lag the upcoming recession by a few years. You'll be ready to buy someone else's mistake.

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          • #6
            Definitely feeling the same sentiments right now. Increasing prices and interest rates, all compounded by the fact that we have a growing amount of cash on hand (for a down payment) losing value to inflation. We’ve been out of residency for nearly two years now. “Live like a resident for 3-5 years” I keep telling myself…

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            • #7
              Originally posted by holeinone View Post
              Hi all, are there any other residents looking ahead to graduation and a (responsible) home purchase after a few years? My wife and I are both PGY-3s. We have a financial plan and will rent/live like residents for a period after training, but eventually a home purchase will be in the cards. We plan to go back to a MCOL/LCOL area for family reasons, but a big benefit was being able to get a very nice home on <2x annual salary. Sadly, these homes have doubled in price over recent years, supply has dried up, and "the plan" isn't looking as sunshine and rainbows as it used to. Patience and responsible saving will overcome this problem after a few years of practice, but there is a real sense of loss and dread as we look at Zillow and see ourselves priced out of the neighborhoods we've dreamed about for the last 7 years of med school and training.

              How are the other WCIs in our positions feeling?

              It's strange even write a post like this because we can't publicly discuss these concerns with family or non-medicine peers. Maybe we're disconnected and entitled, but I'd hope it was no more than the average resident who is about to leave training.
              It can help to remind yourself that trees don't grow to the sky. 30% increase in the price of housing can't happen every year. If you can't buy a house on a $400K+ income, who do you think is going to be able to? Thus, prices will either drop or flatline as wages catch up. When and at what level no way to say. But the likelihood of housing in your LCOL area doubling again in the next 3 years is extremely low and that's really what you're afraid of isn't it?

              The other thing to keep in mind is that your income is likely to be higher when you graduate than it is for those graduating now. I know it seems hard to believe, but I ran all of my financial plans making $225K for my entire career. Now emergency docs make $375K and the average pediatrician is up over $225K. That'll make it easier to wipe out student and buy a house than it now appears. Those who had to pay off student loans and buy houses on today's salary have less in student loans.
              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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              • #8
                Worry less. Spend less than you earn. Avoid debt.
                Save, invest, and enjoy the little things.
                There is a house on every corner, literally.

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                • #9
                  Originally posted by PocketChange View Post
                  Definitely feeling the same sentiments right now. Increasing prices and interest rates, all compounded by the fact that we have a growing amount of cash on hand (for a down payment) losing value to inflation. We’ve been out of residency for nearly two years now. “Live like a resident for 3-5 years” I keep telling myself…
                  If you wait for the 5 years, there is real chance you dodged a bullet and hit the jackpot.
                  Your ability to pick and choose might allow you to cherry pick. Job moves and divorces are ripe for the picking when finances didn’t support the “assumed appreciation “ of housing and investments.
                  Silver lining is a real possibility.
                  Last edited by Tim; 05-05-2022, 08:39 PM.

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                  • #10
                    Yeah, dread is a fair word, its a horrible feeling. I'm two years out of residency making 450k+ but median home price in my area is 1M and everything we thought we could afford 6 months ago is going 400k over asking (like 1.6M!), now rates are up and we are essentially priced out for now! Its a complicated feeling when you look at redfin at a bunch a of properties that all look like crap that I woulnd't want to live in... but I can't even afford it (at least comforatbly!) It sucks and its nice to have a little outlet for it here (because yeah I also hear how annoying its is to hear all this woe is me I don't make enough money when other people have real problems out there). But back off boomers! It really is a bit depressing! "We should have bought when rates were lower, should have bought before prices spiked, should have been born a few years earlier!" I kept saying to my wife it feels like we missed the boat in life - we really need to consider renting for our whole life, or downgrading cities, but definitely lower our expectations significantly... to like 1500sqft and no exciting features. But when we take a step back... we are saving, we can afford whatever basic living expenses come up, we live in a great place, our rental is actually great, we are gonna be just fine!

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                    • #11
                      Real estate prices in a MCOL area that I have been investing in are now at the inflection point. Prices have flattened and look like they are going to start coming down a bit in the coming months. Rents, however, have not yet come to an inflection point. Time will tell.

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                      • #12
                        If you're 3 years from buying there is a great chance the timing will be perfect and homes will be much cheaper then. Or maybe not. But you've got a shot.

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                        • #13
                          Yes, it’s a horrible feeling to be priced out . We have gone through all the emotions .
                          we waited 9-10 years to start looking for a better house .

                          First just after Covid wave , we didn’t buy as we thought this is transient and the craziness would end . It just kept on getting worse , then interest rates started rising

                          finally we are under contract , still feel we overpaid suffering buyers regret ? , but to keep our sanity , we have decided to keep that behind us and move on to other things important to us

                          For OP, as a Dual physician couple , you will be fine . Just need to be patient , once you know you like the job and have your EF and knocked down student loans , you guys can buy a decent house and you will be fine


                          In our area, market seems to slow down , have seen more houses, this is a low to medium cost of living area, but surprisingly the million and higher houses are still pending after a day or two , but 400-600 k houses are sitting longer . I find this interesting.

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                          • #14
                            Originally posted by uksho View Post
                            In our area, market seems to slow down , have seen more houses, this is a low to medium cost of living area, but surprisingly the million and higher houses are still pending after a day or two , but 400-600 k houses are sitting longer . I find this interesting.
                            Similar here which I haven’t seen in the past. During slower times the higher end properties used to languish while more affordable properties continued to sell.
                            Last edited by StateOfMyHead; 05-28-2022, 04:18 AM.

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                            • #15
                              Housing market in my area is crazy. Post-divorce it is even harder to handle the prices— but rents are going up big-time too. I ended up purchasing - I don’t quite have that “sense of dread.” But the high purchase price for a modest home will constrain what I can do going forward. Will see if I regret my purchase in 5 years or not.

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