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I've lived overseas for years and while my salary for the country I'm currently in is okay, I could never afford to move back to Eastern Mass.
I love Mass and Boston, but I don't see any way we could move back unless we inherit some property. However, I'd prefer to stay in Mass, even if it means moving out to the Springfield area, just because Mass is one of the best and well-run states in the country. Springfield is nothing special, but it has nice nice burbs and you if you live in West Springfield or close by, you'll have access to the Hartford and Springfield markets for jobs.
Sure Providence and New Haven are better cities than Springfield, but CT has notoriously high taxes and Rhody government is often a basketcase. In my opinion, if you can find a good job in a less expensive part of Mass, you can really get the best of both worlds (well run state/good safety nets, etc...)
I guess another option you could have is find a place halfway between New Haven and Hartford - it's much more affordable there and you'll have access both cities' job markets.
I did the math and bought a small house on the coast in a harbor village in West Portugal 10 miles from the Rhode Island line. It's only 62 miles to South Station but Irfox can attest to the soul-crushing commute from the South Coast to metro Boston jobs. I can get to Boston in an hour but not at 7am. I telecommuted. I used TF Green for business travel or used Logan flights that departed late-morning through mid-afternoon. Real estate prices for middle class housing are 1.5x from when I bought at the Great Recession but they're likely to track interest rates and will drop some as rates rise. Like the Connecticut river valley, the local economy can't support a sustained housing bubble. Normally, the economy in my zip code can't support $300+ per square foot unless it's waterfront or behind a summer community gate.
I think that if you have an inside-128 office job with no telecommuting option and you're priced out of the starter home market and quality rental market, you should start looking for your next job. It's not like most people in their 20s through mid-30s don't flip jobs.
My final word on this.... I bought a place in 1988 at the top of a previous housing bubble. The S&L Meltdown happened and my property value dropped by ~35%. I had to accelerate payments for four years and still had to borrow money against my paid-for car to settle up at the closing. Unless you think you're going to live there for at least 10+ years, you don't want to buy housing at the top of the bubble. The last thing you want is to change jobs and be faced with an ugly commute locked into a mortgage where you're underwater. Been there. Done that. The only exception is if you can break even renting it.
My final word on this.... I bought a place in 1988 at the top of a previous housing bubble. The S&L Meltdown happened and my property value dropped by ~35%. I had to accelerate payments for four years and still had to borrow money against my paid-for car to settle up at the closing. Unless you think you're going to live there for at least 10+ years, you don't want to buy housing at the top of the bubble. The last thing you want is to change jobs and be faced with an ugly commute locked into a mortgage where you're underwater. Been there. Done that. The only exception is if you can break even renting it.
It’s sound advise, but I’ll also acknowledge it’s a tough sell on 30-something millenials who had a slow start to their career/wealth building thanks to ‘09 and feel they’re finally in a position to buy a decade plus later.
Telling people on the backside of 30 to wait another 12-24 months is not something they want to hear, particularly if they’re planning for children and are currently ‘stuck’ in some marginal urban rental.
Unfortunately, these people have spent their 20’s paying high rents and don’t have any home equity to flip like the millennials and Gen X who bought pre-2016. The fortunate ones had school costs covered and/or loaded up on meme stocks/cryptos when they were cheap, but that’s a small minority ... and likely the types bidding up the limited inventory in the desirable ‘burbs.
Unlike others on here, I will not preach ‘only up’ because Daddy Fed has net me 30-35% equity gains since purchasing in ‘14. If I did not already own, 2021 would not be the year I pulled the trigger. Rates are going up and you don’t have to take my word for it ... equity markets are already pricing it in.
My wife and I have 24 year old twins. They are both working full time, both made in the $80s last year. One son moved out last April to an apartment in Natick, the other still lives at home. The son who moved out has like $5000 in the bank, the son who lives at home has like $40,000 in the bank. Not paying rent and being thrifty has some advantages!
Son at home is now talking about moving out so we have discussed that he should think about buying a condo instead of renting an apartment, he can probably afford up to ~$380K. We have looked at a few places but he's in no rush. We looked at that Pondview condo in Lynn, I thought it was pretty nice, actually. It's been freshened up, is turnkey and has garage parking. Similarly, that $500K condo in Somerville seems fairly priced for the current market.
You can't time the real estate market just like you can't time the stock market. If you are buying a place to live in (versus as an investment property) your risks are pretty well mitigated by the fact that you have to live somewhere.
My wife and I purchased our current house in 2005, at the peak of the last market boom. For the first ~8 years we lived here it was worth less than what we paid for it. Now, after 15 years, it's probably worth ~40% more than we paid. Not a great investment return, but we had to live somewhere.
I'm telling my son the same thing. Yes, $380K for a 1 bedroom condo in Chelsea seems like a lot to pay, but with 10% down, it's about the same monthly payment as rent and you own it. You are protected against future rent increases, future mortgage interest rate increases, or if the real estate market continues to climb, price increases.
For anyone who has stable employment and plans to stay in the area, being in the housing market is better than being out of the housing market. Look at the threads that have recently been brought up about prices from 5 years ago, I bet people wish they had bought even more in 2015!
I'm in a similar boat as the OP, typing this post away while sitting in the same bedroom I slept in when I was in high school. I had moved back in with my folks right before the pandemic after some years renting north of the city. I thought I could quickly shop for a house or condo to buy but that did not turn out to be the case and major reasons were supply and prices. The OP is absolutely right, the prices in Greater Boston are disgustingly expensive. I grew up in Boston and I can remember 25 years ago, $250K could buy you a house on Moss Hill, Jamaica Plain where big time attorneys and medical practitioners lived. Half a million dollars could buy you a mansion. There is no excuse for Boston really. One should NOT be paying $250K for a 1 bedroom condo in a crummy neighborhood. This region failed to plan for a population boom, it failed to build the needed housing to fit the population, it failed to invest in necessary public transit that could have connected so many places to the city, and it failed to save the middle class from being priced out. We Bostonians used to make fun of New York for being overly expensive, not anymore. I suppose if and when we build super high speed rail, then perhaps I can move west, as far west as Buffalo maybe where homes cost the prices they ought to cost, and still work in Boston.
This. I grew up here as well and the prices astound me. A friend of mine sold a place in moss hill recently for 1 million. A 1500 sq foot house. I sometimes don't understand what the heck even happened in Boston to make it the way it is now. It feels like Boston just became the place to move to for work but why...? In the late 90s/early 2000s I remember loving Boston. But taking the crowded train to work then anytime I tried to do anything fun in the city and was just met with lines and crowds became daunting. It just didn't seem worth it anymore especially when it's 20 degrees out.
I still have hopes that the pandemic will change things slightly. Maybe with more people wfh, companies will decide to move on to cities.
You sound a little bit like myself about 15 years ago and probably what my girlfriend's son is going to start saying in 2 years. Make no mistake the Boston Market is expensive and there's a number of reasons for that. You have a high student population even with covid-19 which means you're going to have a constant flow of people in their young 20s that are willing to pay and live off campus. We've seen a back and forth with covid-19 or not colleges even wanted students to live on campus. Then you add in the highest amount of transit in the state, the only International Airport that goes to Asia in the region(tf green and Bradley only go to Europe), the city residency requirement which is about 30,000 city employees mandating them to live in Boston historical committees that might restrict adding units,people that want to live closer to Boston from Medical Care alone and it all adds up.
The 128 belt is also very expensive. How much does a starter home cost in Lexington? 850,000. Then go further south. the South Shore what's one in Duxbury cost about 600,000?
One are the reasons why I moved to Western Mass years ago is because my income went up by about 25% and the rental prices were much less. About two months ago I moved to Connecticut mostly because I found a great deal on a house as closer to my girlfriend. Yes I've got a little bit of a drive but much of my work and be telecommute. I'm within about a half an hour to 45 minutes to Springfield Hartford and Worcester.
I can tell you there's still a fair amount of flipping going on in the market. I bought a flipped house. Long story short in elderly couple gradually passed away over a 20 year period. They left behind a significant tax debt that went up for auction. It took nearly nine years to actually have a tax title sold. A flipper bought it and they put in a fair amount of work into it they tried to sell it the financing on that person didn't make it and The Flipper put in some more work on it and then I bought it. The amount I paid for the house is about three times the price to flipper bought it for. Keep in mind it took about six months before they sold it to me. A neighbor's house is in the same situation. I actually toured it before mine. They're selling it for 85 at a deeded extensive work all over the place. My real estate agent said he wouldn't allow that the even be sold to me for anything less than 25k. Someone paid about $80k in December and two months later did a whole ton of work and it's for sale for 200k. Now Can someone say that houses in the area that have doubled in price in less than 6 months? Well yeah but when you see the condition that some of these properties are in they might not have sold for that to begin with. Any flipper has to recover what they paid for the unit and what they've done for improvements and have a profit margin to justify having it for that period time. Now my property value will most likely increase because when that sells again it's going to look like a comp. My point being is that sometimes we pay attention to construction when it's major buildings worth tens if not hundreds of millions of dollars but we're not really paying attention to five-figure and six-figure improvements residential properties. In aggregate though is a very significant and that can lead to increased house values. If they bought it for 85 or so and put in about 60 Grand worth of work and is selling it for 200 that's about a profit margin of 33% I don't think 33% is that high of a margin relative to other Industries.
I would recommend the combination of things that one might call house hacking. What you do is you contribute to a Roth IRA. Roth IRA as can be used for the first-time purchase of a house. You put in 5 years of payments with the first year being a double payment. Each year is right now $6,000. When you invest this into a fun the fun can grow you can take out 5 years of contributions reading about $36,000. Maybe go to a Gateway City or an area around it. Find a 2 family house buy one and rent the other side out. If you can put more than 20% down you avoid PMI. I don't think renting in an affordable area is a bad idea in the short-term but in the long-term it doesn't always create flexibility. For me the price was good and the terms were good and I had all of my credit and financing in order. I'm saving about 35% on owning vs renting and I'm putting a fair amount of that difference into improvements. So between the increase in equity, the increase in the value of neighboring properties and improvements my net worth increases versus renting
I know it's frustrating because why would you want to move out of your parents place only to have a couple of roommates and have literally the same living situation that you dealing with but paying for it? I would recommend getting a good reliable car and making sure your computer works. If you can keep driving to places and can telecommute you should be able to find some type of work. I would argue that the only time to really accommodate a long commute would be when you're younger. Once you get married and have kids and have a house and maybe in your forties are older having an hour or hour and a half each way is going to be much more taxing.
For how long? Saving for the last year or so has been great, but I never wanted this to be a long-term solution!
I graduated in May of 2009, took five months off and traveled around Europe, started working October 2009 and didn't purchase my condo until four years later.
People often point out that the high student population is the reason for the high costs but the student population has been high for decades. I think the tech/bio boom brought more people here and had more people stay after going to school here. People move here from all over the world.
I think the tech/bio boom brought more people here and had more people stay after going to school here. People move here from all over the world.
I agree.
I may not be a fan of MA in general, but the state has a number of good things going for it and the job market is one of them. It's been very competitive and saturated with offers and compensation plans that would blow your mind.
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