Where to live: What would you do (TAKE 2 )!

[Dreamer_D]

Okay, thank you so much to everyone who responded to my first poll here. From the questions people asked and the issues people brought up, though, it became clear that I left out some important details that are weighing on my mind when I make the decision, so I'd like to see what you all think about the two options when you add some new variables into the mix. Some of this new information comes from friends who live in the area, and I just got is last night.

Again, SH will work from home, I will commute off-peak times 4 days a week and work from home one day a week. We have one child and will have another in a couple years. Our incomes will increase faster than inflation in the coming years. This is not to be our "forever" home, but we would like to stay at least 5 years, though longer would be nice. We are a one car family and I hate commuting.

Option 1:
-older, established neighbourhood, highly desirable area in which to live
-median home price $600k; nice appreciation in value over time
-excellent schools
-many of my faculty colleagues live in this area
-daycare would probably be in this area
-about 1-2 miles from my work
-about 3 miles from the city center
-easily remain a one car family
-*everything* you could possibly want is within about 3 miles, though you can't really walk to shopping etc.
-easy access to University amenities like pool, gym, etc.
-to comfortably afford this area, we would need to have a 1 bedroom rental suite
-suite is totally self-contained and would bring in about $800 per month;
-vacancy rates are *extremely* low; we would probably have a graduate student tenant
-our living space would be about 1200sq ft.
-3 beds, one bathroom
-our home would be in need of a lot of cosmetic upgrades over time, though we would choose a house that is comfortably livable, if ugly

-after paying the difference in mortgage between Option 1 and 2, this would leave us an additional ~$350 per month for completely disposable income, so our lifestyle would be comfortable (but is it worth the tenant?)

Option 2:
-formerly working class area with lots of new subdivisions being added. "Transitional" or mixed area with pockets of high socioeconomic status areas with young
professional families and pockets of working class areas (note: this area does not have much separation between high and low socio-economic status, so we
aren't talking about ghettos and shootings... just low education and factory working parents. Lots of teenagers hanging out on street corners

Possibly more drug use, though. Will we be living here when Hunter is in school? Will the area have changed enough? Most new residents are professional families).
-median home prise $475k; moderate appreciation in value over time
-mixed schools, like the population (schools in Canada are all funded differently than in the US -- it isn't the school that would differ here from Option 1, but
rather the students in the school would be possibly of the low income/uninvolved parents variety)
-commute to daycare on days I work at home
-about 10 miles from my work
-commute taked 25 minutes off peak and about 45 minutes during peak hours
-about 8 miles from city center
-would probably need a second car at some point
-shopping is close, but the city center is further.
-*very* close to parks, lakes, recreation, which is a big part of the lifestyle in the area and a big plus for us
-no suite required
-our living space would be about ~1600 to 1800 sq ft.
-brand spanking new home, nice flooring, multiple bathrooms, new kitchen etc etc... a very very nice home that would never need anything done to it while we live there.
- Finances would be tight for a couple years, but we would be ok -- we just couldn't take vacations or eat out, we would have to budget carefully and
basically cut our disposable income down to a minimum. We could still save money and afford all the important things. No diamonds!

Option 3:
-We could also wait and hope an affordable home comes up in the area of Option 1. This does happen, one came up last month that we loved but it was too soon

Finances would be about the same as Option 2, but we would be living in an older home that would need lots of upgrades, similar to Option 1, and we could not afford those upgrades for a number of years. Home would be about 1400 to 1600 sq ft.

Option 4
-We can rent for a year or so and save more money. I estimate we could save about $600 per month renting... not sure if this is worth it? May be required short term if we want option 3.

 

[janinegirly]

Getting more complicated, but the details do change the picture a bit. I guess it might be a quetion of personal taste, but I'd probably go for "Option 1" neighborhood in this case. Although the multitude of rented out suites attached to houses still bothers me, but maybe this is just how things are in this particular community. For me personally, I would not want to deal with someone renting a space within my own house so I'd go with rent option and then make a more permanent decision down the line. I don't know about the Canada market, but this is a renters market in the U.S. and allows the luxury to shop around for your permanent home since it also a buyers market. Plus there is money saved and allows you time to see if you feel different once you're actually living there.

 

[April20]

I voted option 3 as it seemed it might have the return on investment. I lean towards buying a home in an established, desirable area, especially if you only plan to own for 5 years. Highly desirable areas tend to remain highly desirable and therefore homes increase in value. Transitional areas can be great, but you have to be willing to take the risk and ride it out if values fall or remain steady.

From a less analytical side, I voted Option 3 (option 1 being fine too) as I simply like the character in older homes. If I had to choose between an older home and a new home, I''d take the older one pretty much every time.

Good luck on your move! It sounds exciting.

 

[Jas12]

I am still going with option 1. It seems to be the best lifestyle choice and when it comes down to it, i would rather have the lifestyle (i.e. good school and teachers, community of like-minded ppl, walkability and city centre, good daycare etc. ) over a new house and a slightly lower mortgage. I know it is a stretch financially but you have a stable career and it is almost a given that if you had to sell the older home you would get back what you paid, and then some. It''s not a major risk IMO.
Good luck with your decision! You have lots of good advice.

 

[steph72276]

With this new info, I would just say rent (see if you can do a 6 month lease), save up, and see if a lower priced home in the desirable area came up. Again, I would NOT want to deal with being a landlord, a new baby, a new job, and a new house all at the same time....especially when the tenants will be in your own home (although self contained).

 

[Dreamer_D]

Another option is buying a townhome or a semi-detached/half-duplex in a nice area... if anyone can comment on those options I''d appreciate it!

 

[rainwood]

I voted Option 1. My sister, who lives in B.C., has a rental suite in her house and it''s worked out fine. The city where she lives (starts with V and is on an island) has lots of houses with rental suites, usually in the basement. And the rental market is always tight so getting tenants is never difficult. The first rule of real estate is location, location, location, and Option 2 doesn''t have that. And you never know how long a transitional neighborhood is going to be in the transitional stage. We bought in one once and lived there 6 years. That was 20+ years ago and the neighborhood is still in transition.

 

[Mrs]

DD, I voted for #4 since I think there''s a lot to be said for living in the area and having a chance to get to know the neighborhoods once you''re there. I think renting for 6-12 mos will give you a better sense for the market there and you''ll have a little more flexibility. Like Steph said, having a new job, new baby, new place to live, etc are all so stressful - why not wait on the house until you''re more settled. With that being said though, I know how it feels to be ready to own and know you wont have to move again for a while. DH and I have been renting forever and we''re so sick of it... Good luck!

 

[Dreamer_D]

Date: 7/7/2009 11:54:31 AM
Author: rainwood
I voted Option 1. My sister, who lives in B.C., has a rental suite in her house and it''s worked out fine. The city where she lives (starts with V and is on an island) has lots of houses with rental suites, usually in the basement. And the rental market is always tight so getting tenants is never difficult. The first rule of real estate is location, location, location, and Option 2 doesn''t have that. And you never know how long a transitional neighborhood is going to be in the transitional stage. We bought in one once and lived there 6 years. That was 20+ years ago and the neighborhood is still in transition.

Good to know this... that is a very familiar location!

 

[rainwood]

I was thinking that might be where you''re headed based on the other info. One of my nieces has spent all of her university years renting various basement suites in a house. The rental market is amazingly tight all the time if the house is anywhere near the university or within commuting distance. The other thing I thought I should mention is that even if a location is walkable, the weather often makes that a not very attractive option unless you have excellent raingear. They get less rain than we do, but it''s still a factor.

 

[swimmer]

DD, I went with option 1, you can bike to work, its a good neighborhood (to live and for resale) and rental near university areas is a guarantee that you will have your pick of grad students for tenants. My parents always had Chinese or Indian grad students in the "MIL suite" and I loved learning how to cook their cuisines, still the basis of my dinner planning. My brother learned a great deal of Mandarin from one long term doctoral student. Not that you have to be close to them, but it sometimes happens and my family really had a great time of it while my parents were faculty. Does your uni have a model pre-school? There are so many amenities that come from living in the community where you teach. My DH grew up a uni brat and we both are moving towards wanting to settle in a college town if he stays in academia and i ever finish my diss... anyway, it is a really great way to grow up. All your options are really great, good luck deciding!

 

[Haven]

I vote Option #1, definitely.
But, for me, location completely trumps everything else, so that's why. I would never choose to live in a less desirable location (for whatever reasons make it less desirable) just to buy a nicer/newer/bigger home. That's why we ended up living in a small home in our ideal location.

 

[Dreamer_D]

Date: 7/7/2009 11:02:30 AM
Author: janinegirly
Getting more complicated, but the details do change the picture a bit. I guess it might be a quetion of personal taste, but I''d probably go for ''Option 1'' neighborhood in this case. Although the multitude of rented out suites attached to houses still bothers me, but maybe this is just how things are in this particular community. For me personally, I would not want to deal with someone renting a space within my own house so I''d go with rent option and then make a more permanent decision down the line. I don''t know about the Canada market, but this is a renters market in the U.S. and allows the luxury to shop around for your permanent home since it also a buyers market. Plus there is money saved and allows you time to see if you feel different once you''re actually living there.

Apparently where we are moving is not a renters market in the sense that it is actually hard to find a rental. We also have 2 small dogs further complicating matters when renting

I feel the same way you do about having someone living "with" us, but at the same time "Location Location Location" right? Thus my conundrum.

 

[Dreamer_D]

Date: 7/7/2009 11:08:12 AM
Author: April20
I voted option 3 as it seemed it might have the return on investment. I lean towards buying a home in an established, desirable area, especially if you only plan to own for 5 years. Highly desirable areas tend to remain highly desirable and therefore homes increase in value. Transitional areas can be great, but you have to be willing to take the risk and ride it out if values fall or remain steady.

From a less analytical side, I voted Option 3 (option 1 being fine too) as I simply like the character in older homes. If I had to choose between an older home and a new home, I''d take the older one pretty much every time.

Good luck on your move! It sounds exciting.

I do too, but the character we would be buying is 1970''s "chic"

Not exactly a lovely victorian! LOL!

 

[janinegirly]

Date: 7/7/2009 2:10:06 PM
Author: dreamer_dachsie

Date: 7/7/2009 11:02:30 AM
Author: janinegirly
Getting more complicated, but the details do change the picture a bit. I guess it might be a quetion of personal taste, but I'd probably go for 'Option 1' neighborhood in this case. Although the multitude of rented out suites attached to houses still bothers me, but maybe this is just how things are in this particular community. For me personally, I would not want to deal with someone renting a space within my own house so I'd go with rent option and then make a more permanent decision down the line. I don't know about the Canada market, but this is a renters market in the U.S. and allows the luxury to shop around for your permanent home since it also a buyers market. Plus there is money saved and allows you time to see if you feel different once you're actually living there.

Apparently where we are moving is not a renters market in the sense that it is actually hard to find a rental. We also have 2 small dogs further complicating matters when renting

I feel the same way you do about having someone living 'with' us, but at the same time 'Location Location Location' right? Thus my conundrum.

I'm all for location location location (hence why I lived in boxes and basements in the best areas of the most expensive cities in the world: NYC, London. And now we're in a small house that needs updating in a town with a highly desireable school system and short commute to NYC)........ but only if it makes sense. And I guess that's where it is more of a personal decision, but to me it doesn't make sense to if you can't afford it. Yes of course you can get creative in order to afford it (as your options dictate), but with children, creative options are more limited and to me that would rule out the tenant scenario (particularly since you do not sound comfy with the concept). Rental makes sense to me, Option #3 sounded good as well, until you described it as '70's chic...haha.

 

[zoebartlett]

So it sounds like option #1 is in a slightly better area. That would be a consideration for me, but if option #2 is in a nice and safe area, I'd still go with that one. It's a bigger house, and I would think that a small family (that might grow some day) would fit better in a bigger house.

Duh -- I replied before I scrolledd down far enough to see that there were two more choices. I also agree with Haven's point of view. I suppose it would come down to how transitional a neighborhood is. If it's at all sketchy, I'd pass. Renting could be a good option since you'd be able to save money and move when you've found the perfect place for you and your family.

Okay, so you see, I'm no help whatsoever! Sorry DD!

 

[April20]

Date: 7/7/2009 2:11:08 PM
Author: dreamer_dachsie

Date: 7/7/2009 11:08:12 AM
Author: April20
I voted option 3 as it seemed it might have the return on investment. I lean towards buying a home in an established, desirable area, especially if you only plan to own for 5 years. Highly desirable areas tend to remain highly desirable and therefore homes increase in value. Transitional areas can be great, but you have to be willing to take the risk and ride it out if values fall or remain steady.

From a less analytical side, I voted Option 3 (option 1 being fine too) as I simply like the character in older homes. If I had to choose between an older home and a new home, I''d take the older one pretty much every time.

Good luck on your move! It sounds exciting.

I do too, but the character we would be buying is 1970''s ''chic''

Not exactly a lovely victorian! LOL!

We have friends here that bought a home of about that vintage (well, maybe a little older- mid-late 60s?). They did put quite a bit of work into it, but at the end of the day, that place rocks! She''s really into that style of house and all her furnishings are in keeping. I guess my point is, you can make almost any era of home really great if you want to.

 

[Dreamer_D]

Date: 7/7/2009 4:13:01 PM
Author: April20

Date: 7/7/2009 2:11:08 PM
Author: dreamer_dachsie

Date: 7/7/2009 11:08:12 AM
Author: April20
I voted option 3 as it seemed it might have the return on investment. I lean towards buying a home in an established, desirable area, especially if you only plan to own for 5 years. Highly desirable areas tend to remain highly desirable and therefore homes increase in value. Transitional areas can be great, but you have to be willing to take the risk and ride it out if values fall or remain steady.

From a less analytical side, I voted Option 3 (option 1 being fine too) as I simply like the character in older homes. If I had to choose between an older home and a new home, I''d take the older one pretty much every time.

Good luck on your move! It sounds exciting.

I do too, but the character we would be buying is 1970''s ''chic''

Not exactly a lovely victorian! LOL!

We have friends here that bought a home of about that vintage (well, maybe a little older- mid-late 60s?). They did put quite a bit of work into it, but at the end of the day, that place rocks! She''s really into that style of house and all her furnishings are in keeping. I guess my point is, you can make almost any era of home really great if you want to.

Oh I agree completely! I guess the issue is that we won''t really be able to afford to do any major renos for probably a year or two, so it would need to be a place that we liked well enough as it was! I don''t really care about ugly, my worry is dirty or run down too much. We are going to visit the area we are moving to at the end of the month, so it will really help to see these places in person I think!

 

[Dreamer_D]

Date: 7/7/2009 12:15:27 PM
Author: Mrs
DD, I voted for #4 since I think there''s a lot to be said for living in the area and having a chance to get to know the neighborhoods once you''re there. I think renting for 6-12 mos will give you a better sense for the market there and you''ll have a little more flexibility. Like Steph said, having a new job, new baby, new place to live, etc are all so stressful - why not wait on the house until you''re more settled. With that being said though, I know how it feels to be ready to own and know you wont have to move again for a while. DH and I have been renting forever and we''re so sick of it... Good luck!

Us too! Also, the idea of moving twice in a short period of time stinks

Of course, if the right place doesn''t come up by the time we have to move (which is end Oct at the latest!) we won''t buy something wrong, and we would rent.

 

[Dreamer_D]

Date: 7/7/2009 12:46:06 PM
Author: rainwood
I was thinking that might be where you''re headed based on the other info. One of my nieces has spent all of her university years renting various basement suites in a house. The rental market is amazingly tight all the time if the house is anywhere near the university or within commuting distance. The other thing I thought I should mention is that even if a location is walkable, the weather often makes that a not very attractive option unless you have excellent raingear. They get less rain than we do, but it''s still a factor.

I grew up where you live, me thinks

I am all too familiar with the rain! Funny thing is that DH has only visited in the summer and I keep saying, "It isn''t like this all the time!" and he seems not to care! Every time it gets cold and rainy where I live now I say, "So can you handle this 8 months of the year??" He says yes, but I don''t know. We shall see!

 

[April20]

Date: 7/7/2009 4:28:33 PM
Author: dreamer_dachsie

Date: 7/7/2009 12:46:06 PM
Author: rainwood
I was thinking that might be where you''re headed based on the other info. One of my nieces has spent all of her university years renting various basement suites in a house. The rental market is amazingly tight all the time if the house is anywhere near the university or within commuting distance. The other thing I thought I should mention is that even if a location is walkable, the weather often makes that a not very attractive option unless you have excellent raingear. They get less rain than we do, but it''s still a factor.

I grew up where you live, me thinks

I am all too familiar with the rain! Funny thing is that DH has only visited in the summer and I keep saying, ''It isn''t like this all the time!'' and he seems not to care! Every time it gets cold and rainy where I live now I say, ''So can you handle this 8 months of the year??'' He says yes, but I don''t know. We shall see!

I lived in Seattle for six years, so quasi-close to where I think you''re moving.... The first year I lived there it was a fairly dry winter and I wondered what all the fuss was about. It wasn''t until a couple years later when it''d been raining for weeks and I thought I was going to have to buy hip waders that I really got it. You should stick your DH in the yard and turn the hose on him for a couple hours and see if he can still handle the wet.

 

[Dreamer_D]

Date: 7/7/2009 12:46:55 PM
Author: swimmer
DD, I went with option 1, you can bike to work, its a good neighborhood (to live and for resale) and rental near university areas is a guarantee that you will have your pick of grad students for tenants. My parents always had Chinese or Indian grad students in the ''MIL suite'' and I loved learning how to cook their cuisines, still the basis of my dinner planning. My brother learned a great deal of Mandarin from one long term doctoral student. Not that you have to be close to them, but it sometimes happens and my family really had a great time of it while my parents were faculty. Does your uni have a model pre-school? There are so many amenities that come from living in the community where you teach. My DH grew up a uni brat and we both are moving towards wanting to settle in a college town if he stays in academia and i ever finish my diss... anyway, it is a really great way to grow up. All your options are really great, good luck deciding!

I never heard "uni brat" before, but it makes sense! My mom is an "army brat" but that is a little different. I agree, a University town is a little different than a regular town because of the demographics being scewed towards higher SES. No model pre-school, but lots of other great kids resources!

 

[lyra]

I voted for interim renting because I used to live around where you are moving, and I believe there is going to be a downward housing market very soon. The prices have gone too high again. There was a correction in the market there in 1980-ish and people who had bought on the high side ended up having to walk away from townhouses especially since they don''t hold the same value as houses. I''d give it the year to see what happens with the market. I''m betting those 600K houses go into the 500K region in that time. JMO of course.

 

[Dreamer_D]

Date: 7/7/2009 7:09:33 PM
Author: lyra
I voted for interim renting because I used to live around where you are moving, and I believe there is going to be a downward housing market very soon. The prices have gone too high again. There was a correction in the market there in 1980-ish and people who had bought on the high side ended up having to walk away from townhouses especially since they don''t hold the same value as houses. I''d give it the year to see what happens with the market. I''m betting those 600K houses go into the 500K region in that time. JMO of course.

You are not the only one thinking that such a correction will happen, others I have spoken to have suggested similar misgivings. I think you are thinking of a different city

, but there is still some room for correction where I head as well. I believe in the last year there was a 10-15% drop already. I''m not sure if it makes a difference, but we are looking to buy a house well under the median, so perhaps we wouldn''t be as affected? Still, it is hard to predict the future, as you mention, many people are forcasting another round of mortgage busts in the US that will affect Canada indirectly.

Apparently the government has put policies in place to prevent something happening like what happened in the 80s, where interest rates topped 20%

But I just don''t know!!