Tuesday, August 12, 2008

House hunt

For the past year or so, I've been watching a certain mainly early 20th century neighborhood in our new hometown in Texas. It's near downtown (maybe too close) and the well-maintained housing stock is analogous to a certain leafy section of Pittsburgh (hi, MH!), but unfortunately doesn't have the same convenient village-y main street. Anyway, when I first started watching the neighborhood, the only houses available were $300k and higher. Currently, most of the listings are pretty stale, and there are a couple houses around $270k, one at $300k, one (a 1920s duplex) at $325k, an enormous and rather dated 4000 sq. foot 1980s white elephant at $460k (not in a million years) and four different houses in a small area duking it out at just below $250k. An adorable (but overpriced for the size) storybook cottage just appeared on the market yesterday There's nothing at all in the low 200s, but there are a number of slightly too small (but very pretty homes) ranging from $100k to $180k, as well as one spacious but slightly too trendy remodel at $200k.

It's funny how things work. When I was house-hunting in DC around 2006-7, $400k was the magic number. I was sure that we could manage that sort of mortgage. After we moved to Texas and I had studied local suburban developments, my number changed to $150-200k. However, now that I'm familiar with local geography and have been carefully doing a budget for most of the past year, I have come to several contradictory conclusions. 1) We should live close-in in a good neighborhood rather than far-out in a cheap newer subdivision. 2) We should have a mortgage of no more than $100,000 to allow for taxes, maintenance, higher utilities, and acts of God. 3) The cheapest house in that neighborhood that is anywhere near big enough for us (1700 sq. feet) is $180k.

What to do? As I said, there are a lot of stale listings in the neighborhood, there have already been price cuts, and a number of listings look like flips. As time goes by, house prices may continue to edge down while our downpayment fund grows. I think time is on our side, but this process is like watching paint dry.


MH said...

We were looking early this year, but went full stop when 4 houses on our block went for sale. We're a bit cramped, but not horribly so. Since we didn't need to sell, we didn't feel like dealing with such similar competition. Three of them sold, the two nicer ones very quickly. On the whole, it probably worked out for the best since our current house is bus convenient and I was able to switch when gas to expensive.

xantippe said...

Even as a housing vulture, I feel sorry for the people in my target neighborhood who are trying to sell--especially the four houses all right at $250k. That is aggressive pricing, given what other people are asking, but if those $250k houses don't sell right away, it will become clear that the market value is significantly lower. There's a long winter ahead.