Anyone else getting discouraged as a “move up” buyer?
Just wanted to start off by saying first time homebuyers definitely have it worse, between the rapid appreciation of the past five years and interest rates that are significantly higher than they were.
My wife and I are currently in a 1,000 sf starter home in a nice area with a garage and finished basement that I bought almost ten years ago. I’ve done a lot of work to it and it’s nicely updated and in great shape, but we have a little one now (and are planning for more) and would like a little more space. We’d also like to be a little closer to family, we aren’t terribly far but it would be nice to be closer for childcare, visits and other support. I fully recognize that we are fortunate to have a home and don’t *need* this, but it would be nice.
We are very fortunate that we have significant equity in this house (it’s appreciated and I refi’d down to a 15-year when rates were ultra low) and have saved a significant amount of cash to put down on top of that. So we did not think it would be terribly difficult to find something we’d like when our new budget is almost double what our current home is anticipated to sell for.
We were wrong. The inventory in both our area and the ones we’re looking (Detroit Suburbs) is still well below historical levels. So it’s hard finding anything to look at. On top of that, a lot of the stuff that *does* come to market is garbage. It seems like it’s all either new builds that are absurdly out of our price range ($700K+) or existing homes that need a TON of work. Homes that either haven’t been updated at all in decades or have been updated very shoddily. Some of these homes aren’t just dated, they’re downright gross and decrepit.
We don’t need something completely turnkey. And it would be fine if these homes were priced accordingly… but they’re not. Everyone demanding top dollar for their turds, thinking they’re sitting on a pot of gold. These houses mostly sit, but sellers refuse to negotiate.
And we really aren’t getting much more for spending nearly double. More square footage, but not significantly more. A larger yard, but not acreage or anything like that. Homes in our new area sell comparably for what they do in our existing area, so it’s not like we’re moving to a much more upscale area. I just feel very discouraged.
We went into this knowing rates are higher. And it’s not like we couldn’t just settle and buy something. But it’s hard to stomach paying $1,000-$1,200 more per month (almost double our current payment) on a 30 year rather than 15 year, for a marginally larger house and yard that needs a ton of work. It just seems like an extremely poor value proposition and I’m starting to understand why more sellers are sitting tight and not listing their homes. Anyone else going through this? At this point we’re considering just sitting tight another few years, saving more money and only making a move when we can actually find something we *really* like.