Home Buying in 15317>Question Details

Mike Abraham, Home Buyer in Pittsburgh, PA

Should I buy a new townhome in this market?

Asked by Mike Abraham, Pittsburgh, PA Sun Apr 12, 2009

My fiancee and I want to know whether it makes sense to buy a new townhome in this economy and market. We seem to have a good deal offered to us and in a good location, but we don't know whether we should hold out. We have looked at a lot places but we haven't seen a lot of things that compare to the townhome. In many of the existing single family homes the kitchens are so small and the overall square footage is less the townhome as well (the townhome is 2300 qs ft with the basement and has a huge kitchen, and upgraded master bath with a seperate jacuzzi tub and full size shower). What do you think we should do?

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Debra (Debbie) Rose’s answer
Mike
This is a "PS" to my earlier response........whatever you decide to buy, whether it be a new townhome, or a resale single family, make sure you're NOT stretching yourselves financially to do so. You mentioned in another post that you might be starting a family in 2-3 years. Well, even though they are tiny, babies are very expensive!

Just make sure you can comfortably afford whatever you buy now, with starting a family in mind - stay on the conservative side! Once a baby comes along , your expenses will soar, and the last thing you will need is the added stress of paying a high mortgage payment!
Good luck to you in whatever you decide to do!
Debbie
0 votes Thank Flag Link Sat Apr 18, 2009
Mike,

Prior to seriously considering new construction purchases we strongly recommend carefully considering the resale market. Many resale homes are new or near new condition and offer enormous savings.

We are not saying, not to buy new, but to consider all options before committing.

If you decide to go wiith a new construction be sure to include a clause that protects you from the property not appraising for the sale price, when it's completed. We also recomment being pre-approved for financing prior to speaking with a builder....and of course, most importantly, be represented by a licensed real estate professional that is familiar with this area.

Proceed with caution.

Good luck
0 votes Thank Flag Link Sat Apr 18, 2009
HI Mike
You asked a simiolar question in another post which I responded to.
Here is what I think. - hyope it helps!

Clearly you and your fiancee are enthused by the newness of this townhome - most young couples easily fall in love with "pretty and new". Who doesn't love a new kitchen or elegant bath? Youi said you have looked at a lot of places, so you have done your due dilligence - good for you!

You mentioned in that other post that your plan was to be in this home for at least 5 years. As long as you are buying for the longer term, I see no reason to "hold out". Yes, prices may dip more, but if you are buying to live there for a longer period of time, then go for it! Buy what excites you, and you love.

This sounds like a large and spacious home, so you certainly won;t grow out of it any time soon. Many young couples I have worked with prefer starting off in a townhome development for the amenities that are offerred, and the freedom from not having to worry about snow removal, lawn care, exterior painting, etc. You are buying into a lifestyle, not just a home. That might be the appeal for you at this time, too.

Your enthusiasm for this townhome is palpable. Buy it, and enjoy creating memories with your fiancee!
Best wishes......
Debbie
0 votes Thank Flag Link Sat Apr 18, 2009
Hi Mike,

That's a really big townhome. Is it really that big? Sorry to ask but I have seen NUMEROUS occassions where the sq feet for a townhome is listed incorrectly - they use the Building Sq Feet instead of just the one unit, or simply outright incorrectly state the sq footage.

Please do consider that the townhome MAY not be as good a bargain as it appears. The association fees can dramatically change the cost model of those homes. For instance - every $50/month is pretty close to another $10,000 on a 30 year mortgage. So, if those townhomes have a $150-200 / month fee - that needs to be thought of in that way. Also the taxes might be high on those units, especially if they are newer.

Please do consider the true monthly cost of any property, factoring in all taxes, association fees, etc. It can be sometimes that you'll get a truly exceptional deal on a single family home - especially now with so many distressed sellers.
0 votes Thank Flag Link Sun Apr 12, 2009
RealEstate#1

Why is now the worst time to buy? Interest rates are low and home prices arent at the peak like they were at the top of the market?

Why throw your money away on rent? So lets say on a $200k home...mortgage would be about $1400 a month. So would you rather throw away even $1200mth on rent or put $1400mth in equity? Even if home prices declined 5% in one year which would be $200k down to $190k...thats $10k loss...if you rented that would be $1200mth x 12 = $14,400 loss

Homes will not go down another 5%. Even if they did, prices will rise again. you dont buy to sell the next month.
Web Reference: http://www.SeanDawes.com
0 votes Thank Flag Link Sun Apr 12, 2009
I would recommend you consult the advice of a realtor. Reason why is do you have good comparables for sales that reflect that townhome?

I would be curious to see if you are truely getting a good deal. So this is with a builder? Are they offering any incentives? Also are they the ones showing you the comps and saying its a good deal?



Sean Dawes
Long and Foster Real Estate
Web Reference: http://www.SeanDawes.com
0 votes Thank Flag Link Sun Apr 12, 2009
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