what's up with ~1500 sq ft houses?

[BurnItDwn]

Average home size has more than doubled in the last 50 years.
"new" houses currently built average around 2000-2200 sq feet.
It hasn't always been that way.

Most of the houses out by me range from small 1 bedroom 500sq foot sized homes to 6000+ sq foot mansions on 10 acres of land...

I live in a neighborhood that was built in the late 70s and early 80s, most of the houses are smaller ranches, but there are a few 2000+ sq foot 2 story homes...

My house is plenty big enough for me.
Decent kitchen, decent living room, nice bathroom upstairs, 2 bedrooms and a den upstairs.

Then in the basement, I've got a 1/2 bath with shower, another bedroom, and a 10x27 home theater....

It only counts as 900 sq feet since the below grade portion doesn't count.

 

[a123456]

You also forgot to add in child support cost, that is an easy 20%

Heh, you keep mentioning child support. Most people don't have that expense, but if you do, obviously, just treat it as a fixed cost so in reality, your salary isn't 36k but something lower.

While it is possible to afford a 135k house on 36k annual income, it's a bit of a stretch. Most people aren't going to want to have that lifestyle just for a slightly bigger house.

From my experience, most people who don't make that much money end up cutting costs by having one or more roommates to share the rent. So in the end, the monthly cost of housing may be closer to 200 instead of 600.

If you're married and have kids, that may not be as doable but hopefully there are 2 incomes then.

 

[JeffreyLebowski]

135,000 * .06 (6% for interest) = $143,100 - but then again, insnt the interest compounded yearly?

30 year mortgage * 12 payments per year = 360 payments

143,000 / 360 = 397.22 + home owners insurance + property tax + any property owners association fees

Lets just round that off to $600 a month.

~~~~~~~~~

36,000 - 25% for all taxes (sales tax, income tax, social security, medicare/medicaid, medical insurance, 401k deductions) = $27,000 spendable income.

$27,000 / 12 months= $2,250 per month

~~~~~~~~~

Is the person paying child support? If so how many children is he/she paying on? That is another 20% - 25% gone off the salary after taxes.

~~~~~~~~~

$300 a month for heating cooling expenses
$600 for car note and insurance
$200 for gas
$500 for food
$600 for house note

$2,200

That leaves you with maybe $50 free for the month.

I do not call that "easily" being able to afford a house.

If the person is divorced and has 1 child, subtract 20% off their monthly wages, plus half any medical expenses for the child.

Does the persons job provide insurance? If not, and the person is divorced, subtract medical off of their monthly salary.

You're understanding of how interest works is wrong.
It's compounded and revolved and manipulated so many ways it's not even funny. If they told you what the actual percentage rate was, no one would buy a house.
Take your 6% figure on a $100,000 loan. Over 30 years you will pay just north of $115,000 in interest alone. Hardly 6%
If you want to get confused, read here:http://en.wikipedia.org/wiki/Annual_percentage_rate
The APR system is set up to screw people.
If you could buy a $100,000 house at 6% interest, You could easily pay it off in 10 years at $883 a month.

 

[Texashiker]

Heh, you keep mentioning child support. Most people don't have that expense, but if you do, obviously, just treat it as a fixed cost so in reality, your salary isn't 36k but something lower.

The last numbers I heard were about 75% of todays marriages end up in divorce. So when people start talking about buying stuff, there is a good chance someone paying child support will be affected.

Lets throw out a salary of $36,000 - subtract taxes, mandated health insurance and child support. Your talking about 40% of that persons salary gone before they ever see it. If that person has 2 or 3 kids, your talking closer to 45% - 50% gone before the check is ever printed.

Its very common for someone making 36,000 a year, only to have $20,000 - $25,000 left over to pay bills with after child support, taxes and health insurance.

You're understanding of how interest works is wrong.

I figured it was wrong, thank you for clearing that up.

If you could buy a $100,000 house at 6% interest, You could easily pay it off in 10 years at $883 a month.

Is that $883 a month counting insurance and property / school taxes?

 

[jtvang125]

I just closed on my house at the end of last year. It's a 3/2.5 with about 1650 sq ft. For just my brother and I it's more than enough room. It's going to be expensive trying to furnish even a place this size. When I was still looking at houses I did see a few 1200 sq ft two story houses and yes, they were quite small. You could maybe fit a full size couch and a tv stand in the living room only.

 

[bhanson]

Do you even have a clue as to what you are talking about?

At $36,000 before taxes comes out to $10,080 yearly for housing or $600 per month.

A 30 year/fixed at 4.6% APR is $500 per moth with a 20% down payment.

It actually come in under budget when budgeting a conservative 28% for housing.

Okay, lets assume your mythical family is buying a $135k house on a $36k income.

Lets also assume they have their $27k down payment as to avoid PMI.

Lets also assume they get your magical 4.6% APR.

Your PI payment is going to be $533 (I even rounded down) alone. Lets say insurance + taxes are $150/month.

Lets assume tax at 20% so they bring home $2400/month (it's pretty close).

Lets asumme they're SINGLE.

$683 PITI
$100 House Taxes + Insurance
$100 Car Insurance
$100 Health Insurance
$100 Utilities
$100 Food
$100 Gas
$50 Internet
$30 Cell phone
= $1363/month on NEEDS

(This person also owns his own car)

SMART financial wisdom advocates for a 50/30/20 budget. 50% of your income on needs. 30% of your income on wants. 20% of your income for savings.

This person saves 20% (which is a whole hell of a lot more than most people do) of their income which is $480/month. $417 of that will go into a roth IRA. Lets assume 401k is already deducted, but that would be around $100/month for a 3% contribution. Now they're only saving $63/month for everything else, uh oh.

So lets assume this person (using excellent 50/30/20) budgeting decides to spend 2/3rds of their FUN budget for saving. Now the distribution is 50/10/40. This person is saving 40% of their income. This leaves $543 in savings for the house downpayment, assuming it's not needed for anything else. It's going to take about 5 years to save enough upfront money to buy this house. This is pretty reasonable.

Unfortunately, even with this rediculously conservative estimate, your $1363 is still more than the 50% allocation ($1200) you have for NEEDS.

This person cannot easily afford a $135k house under ANY definition.

Realistically: People spend more on cell phone, Internet, gas, food, utilities, insurance, and taxes. This person was also single. Most people also don't save 40% of their income. Your interest rate is also going to be higher.

You should NOT buy a $135k house on a $36k income unless you want to be house poor and dumb like most people that bought too much house during the bubble.

 

[jupiter57]

i have a 2 bed apartment that is 1200 sq foot. i can't imagine an entire house being only 100 sq foot larger. that's barely an extra bedroom larger than mine.
can y'all with small houses post a pic of the outside?

Your parents basement isn't technically an "apartment".

 

[vi edit]

Here's a couple new constructions from one of the most popular school districts in the area:

http://www.maloofrealty.com/search/listing.asp?mls=1122900&MLSArea=1
250k for 2100 sq/ft but it also has a full basement, 3 stall garage and includes the lot.

http://www.maloofrealty.com/search/listing.asp?mls=1117543&MLSArea=1
264k for 2200 sq/ft + 3 stall + basement + lot

Here's my house:
http://public.bay.livefilestore.com...jR4HSG5E0stSMt6-1RFxROcBA/IMG_3907.JPG?psid=1

3200 sq/ft. My base contract was $300k(no lot). That was with a more basic entry (shed roof style instead of arched porch elevation) and about 15% brick coverage instead of the 95% brick and stone that it ended up being.

So yes...you can build for under $100 a sq/ft. And it's actually much, much less than that if you finish a basement and include it in the living space.

 

[vi edit]

The last numbers I heard were about 75% of todays marriages end up in divorce. So when people start talking about buying stuff, there is a good chance someone paying child support will be affected.

One, I think that is a ridiculously high number and 2, it doesn't account for "repeat offenders" that fudge the overall number.

 

[a123456]

Realistically: People spend more on cell phone, Internet, gas, food, utilities, insurance, and taxes. This person was also single. Most people also don't save 40% of their income. Your interest rate is also going to be higher.

You should NOT buy a $135k house on a $36k income unless you want to be house poor and dumb like most people that bought too much house during the bubble.

This and this some more.

Seriously, if you're making in the 25-35k range, it's not a good idea to buy a big house. For one, most people in that range aren't going to be super fiscally responsible with huge savings in the bank.

What generally happens instead is an FHA loan with 3.5% down and the down payment gets kicked back from the seller so really it's 0 down. Then, you stuff the house with tons of people living in unpermitted spaces, like the garage, to make the finances work. It's cheaper per person than an apartment, which will have many more regulations anyway.

And, vi edit, nice house. Who did you use to get that price and what's the general area?

Edit: MLS pricing isn't always that indicative of actual costs. It's a nice house for a nice price, but it may have changed ownership along the way or have some type of taxpayer subsidy or county bonds, etc. The quote from the actual contractor means a bit more. However, I wouldn't be surprised if the big builders can build more cheaply from the mass production and economies of scale. Building from actual scratch is pretty costly because you have the initial startup stuff that's expensive, like grading, sewer, water, gas, streets, fire hydrants, etc.

 

[Texashiker]

Lets asumme they're SINGLE.

$683 PITI
$100 House Taxes + Insurance
$300 - car note
$100 Car Insurance
$400 Health Insurance
$200 Utilities - power, gas, water and garbage pickup
$300 Food
$400 Gas - its takes almost $80 to fill my truck up
$50 Internet
$30 Cell phone
$480 child support
= $2943/month on NEEDS

I made some changes to reflect what I think. Figure $100 a week for gas back and forth to work, or for car pool. I pay around 400 a month for health insurance, 100 is too average.

I also added child support because a lot of dads do have to pay it. My truck has a 20 gallon tank and gas is around 3.80 - 3.90 here now. That is why I bumped the gas up.

 

[BlahBlahYouToo]

Your parents basement isn't technically an "apartment".

lol, offended kentuckian.

 

[lokiju]

My house is technically something like 1,800sf since for whatever reason they don't tend to count the bonus room over the garage. But with that included it's 2k sf~ish.

4 bedrooms (counting bonus room) and 2 baths with 2 car garage.

 

[bfdd]

My parents home was a 1200 sqft 3 bedroom. 4 boys + my dad and step mom lived there. Built awhile ago in Torrance, CA.

 

[BlahBlahYouToo]

Here's a couple new constructions from one of the most popular school districts in the area:

http://www.maloofrealty.com/search/listing.asp?mls=1122900&MLSArea=1
250k for 2100 sq/ft but it also has a full basement, 3 stall garage and includes the lot.

http://www.maloofrealty.com/search/listing.asp?mls=1117543&MLSArea=1
264k for 2200 sq/ft + 3 stall + basement + lot

Here's my house:
http://public.bay.livefilestore.com...jR4HSG5E0stSMt6-1RFxROcBA/IMG_3907.JPG?psid=1

3200 sq/ft. My base contract was $300k(no lot). That was with a more basic entry (shed roof style instead of arched porch elevation) and about 15% brick coverage instead of the 95% brick and stone that it ended up being.

So yes...you can build for under $100 a sq/ft. And it's actually much, much less than that if you finish a basement and include it in the living space.

i wish they had new houses sized like these in the tri-state area. everything is like twice the size and $1M+.

the 16x13 master br's do seem a but small though. that's a bit smaller than mine.

 

[Golgatha]

Absolutely it is. Depends on location.

My current house cost less than $93/sq. ft.

 

[bobdole369]

135,000 * .06 (6% for interest) = $143,100 - but then again, insnt the interest compounded yearly?[/quote

Those figures were off the top of my head. Please post your estimates.

What part exactly do you disagree with? Having to pay taxes? The amount paid to child support? Food cost, auto cost, insurance?

The cost of a 135k home. It isn't 135k * 0.06

The word of the day for you is "amortization".

at 6% (You'll need what 675+ credit score to get that?) your total amount repaid is $291,382. AS others have noted - figure a $910 mortgage payment.

Add $3000/yr for taxes.
Add $1200/yr for HOA or maintenance (varies wildly if you are into condos)
$2400/yr for homeowners insurance.

$1460 for the house is more reasonable.
$200/month heating/cooling (might be part of electric)
$50-$100/month electric
1 person takes roughly $100/week to eat. $400/month food
Vehicle can run $250/month
Insurance on that vehicle the same $250/month
Fuel will vary wildly but I use $120/month.

$2780 and I haven't really gotten started on misc stuff.

 

[vi edit]

the 16x13 master br's do seem a but small though. that's a bit smaller than mine.

16 x 13 is pretty good sized. Keep in mind that it probably has a large walk in closet that you can put a lot of clothes into and negate the need for extra dressers/chests/ect in-room.

My master BR is 17 x 14 and I've got a king size bed, two nightstands, and two large pieces of furniture in there and I still have room to lay down in the middle of the floor and stretch out in any direction. Losing an extra foot each way and I'd still likey be able to do that.

 

[Uhtrinity]

I paid ~$64 / Sq Ft for 1700 SQFT last spring. Taxes and Insurance are each under $1,000.

 

[shadow9d9]

3 bedroom 1st house is normally 1300-1700 sq ft.

And posting in a stupid thread. And to slow your brag roll my house is 3000 sq feet and mortgage is 1200, likely less than your rent.

Yeah, but you live in a hick state. You couldnt' PAY ME to live in one.

 

[shadow9d9]

135,000 * .06 (6% for interest) = $143,100 - but then again, insnt the interest compounded yearly?[/quote



The cost of a 135k home. It isn't 135k * 0.06

The word of the day for you is "amortization".

at 6% (You'll need what 675+ credit score to get that?) your total amount repaid is $291,382. AS others have noted - figure a $910 mortgage payment.

Add $3000/yr for taxes.
Add $1200/yr for HOA or maintenance (varies wildly if you are into condos)
$2400/yr for homeowners insurance.

$1460 for the house is more reasonable.
$200/month heating/cooling (might be part of electric)
$50-$100/month electric
1 person takes roughly $100/week to eat. $400/month food
Vehicle can run $250/month
Insurance on that vehicle the same $250/month
Fuel will vary wildly but I use $120/month.

$2780 and I haven't really gotten started on misc stuff.

Why would they have to buy a house in a HOA?

2400 for homeowner's is a lot... double mine in either of the 2 states I have lived in.. and the one I live in now is quite expensive of a house.

 

[HamburgerBoy]

Location: New Jersey

lol

 

[alkemyst]

Most Americans pay about 1/3 - 1/2 their income to taxes and do not realize it.

You also forgot to add in child support cost, that is an easy 20%

I work for a mortgage company.

Your numbers you are pulling out your ass make no sense.

http://www.khovmortgage.com/java/MortgageQualifier.html

 

[alkemyst]

Here's a couple new constructions from one of the most popular school districts in the area:

http://www.maloofrealty.com/search/listing.asp?mls=1122900&MLSArea=1
250k for 2100 sq/ft but it also has a full basement, 3 stall garage and includes the lot.

http://www.maloofrealty.com/search/listing.asp?mls=1117543&MLSArea=1
264k for 2200 sq/ft + 3 stall + basement + lot

Here's my house:
http://public.bay.livefilestore.com...jR4HSG5E0stSMt6-1RFxROcBA/IMG_3907.JPG?psid=1

3200 sq/ft. My base contract was $300k(no lot). That was with a more basic entry (shed roof style instead of arched porch elevation) and about 15% brick coverage instead of the 95% brick and stone that it ended up being.

So yes...you can build for under $100 a sq/ft. And it's actually much, much less than that if you finish a basement and include it in the living space.

The unfinished portions are not considered usually.

Basements are bonuses in the areas that support them.

You aren't going to get much construction at below $100/sq ft that's decent, it's also a ballpark...may slide down to $90ish on a simple rectangle home or push to $110 on something with upgraded plumbing.

Anything much less than that is a fire sale.

 

[shadow9d9]

lol

Location: Too afraid to say

Lol.

NJ is actually quite beautiful in 99% of the state. If you ignore the refineries put there by New Yorkers on the edge.

Get the benefits of both Philly and NYC, the beach, small towns, young people, non hicks. Can't ask for much more. I've lived in hillbilly hell. I'll never go back.