Author Topic: The Cheapest House in the Neighborhood  (Read 4008 times)

getsorted

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The Cheapest House in the Neighborhood
« on: April 29, 2022, 02:01:06 PM »
Two years ago, a couple of days after my divorce was finalized, I closed on an 808 square foot house, after living with various relatives over the 18 months. It was my first home purchase ever. I knew I had gotten a good deal - my low-ball as-is offer was unexpectedly accepted. But, although there was a lot of delayed maintenance, the house was basically solid. My realtor, who owns rental property himself, told me that if I didn't buy it, he was going to-- and he meant it.   

The other night, I was scrolling through Zillow, eyeballing other houses in the neighborhood. As I looked at the Zestimates, I began to notice a pattern. I set the boundary on my neighborhood and began to systematically comb through, street by street.

I realized that I purchased what was literally, actually, the cheapest house in the entire neighborhood.

I know the estimates aren't everything-- I honestly feel my home is undervalued-- but, considering my lifelong history of being an absolute cheapskate? I feel like SUCH a badass.

cool7hand

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Re: The Cheapest House in the Neighborhood
« Reply #1 on: April 29, 2022, 02:48:40 PM »
Impressive. Most impressive.

AMandM

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Re: The Cheapest House in the Neighborhood
« Reply #2 on: May 01, 2022, 07:57:35 AM »
Well done you! Even if it wasn't totally on purpose!

iris lily

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Re: The Cheapest House in the Neighborhood
« Reply #3 on: May 01, 2022, 08:12:19 AM »
That indeed is the sweet spot to be in: nice neighborhood, least expensive house on the block!

We went from least expensive (1941  bungalow, first one built on the block) to one of the most expensive properties on the block when we renovated it.  But it is ok because we are old and do not need to accumulate assets.

We are now officially “those people who have more money than brains” we used fo privately make fun of, those people who “will never get what they put into that house out of it.”

Like I said, it is ok. We are renovating it because we like it. It has a perfect setting. And so what if we can only get $250,000 for our $400,000 property?

AMandM

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Re: The Cheapest House in the Neighborhood
« Reply #4 on: May 02, 2022, 02:36:37 PM »
We are renovating it because we like it. It has a perfect setting. And so what if we can only get $250,000 for our $400,000 property?

This is one of my pet peeves. So many people think it's fine to spend $25k on a car or a wedding, but if you want to spend it improving your house, that's only OK if it will pay itself back in resale value.

getsorted

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Re: The Cheapest House in the Neighborhood
« Reply #5 on: May 03, 2022, 09:28:22 AM »
That indeed is the sweet spot to be in: nice neighborhood, least expensive house on the block!

We went from least expensive (1941  bungalow, first one built on the block) to one of the most expensive properties on the block when we renovated it.  But it is ok because we are old and do not need to accumulate assets.


I hope that someday, I will be making exactly that "mistake!" Enjoying the home you are in can be as nice as travel or anything else you choose to spend your excess funds on.

I have a 1947 house, also the oldest house on the block, "minimal traditional" style with just a few Spanish Revival leanings (stucco, arched doorways). It would look stunning with a tile roof... which I couldn't afford this time around, but hey, maybe in 30 years when it needs redone!

shureShote

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Re: The Cheapest House in the Neighborhood
« Reply #6 on: May 04, 2022, 07:44:20 AM »
We are renovating it because we like it. It has a perfect setting. And so what if we can only get $250,000 for our $400,000 property?

This is one of my pet peeves. So many people think it's fine to spend $25k on a car or a wedding, but if you want to spend it improving your house, that's only OK if it will pay itself back in resale value.

That's an insightful statement. I never thought about it from that angle. I'd like to think it's because I don't spend that type of money on weddings or cars, but it's more that I never considered it. I will definitely file that one away.

We have moved numerous times due to work, and besides a deck on one house we have never done any real updates. The deck was done because the house did not have one, but did have a door off the kitchen nook that opened to a seven foot drop and we wanted to use that as our dog's access point.

OP, that's awesome that you ended up at the bottom of the list. We spent five years in one that was far and away the most expensive one (and one of the few available period in that area in late 2014), and am happy to be in the lower half now.


Dicey

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Re: The Cheapest House in the Neighborhood
« Reply #7 on: May 04, 2022, 09:19:42 AM »
Sigh. We bought the most expensive house in the neighborhood. Even though it was a short sale, it was still the most expensive. However, DH can walk to work, and it suited the needs of our (then) family of four adults. Prior to that, every home either of us owned was in the cheapest in the neighborhood and the "needs work" category. Because this house was "done" (Ha! Houses are never "done".) we had the energy to rehab a couple of others, which earned us handsome rewards. We thought we'd be lucky to keep up with inflation, then the market exploded.

My point is: stay in a house long enough and either approach will probably work out.  It is a lot of fun to take something that needs a little love and make it your own. Congratulations!
« Last Edit: July 24, 2022, 07:50:58 AM by Dicey »

getsorted

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Re: The Cheapest House in the Neighborhood
« Reply #8 on: May 04, 2022, 05:19:54 PM »
DH can walk to work

Full stop, that's enough. A bargain at any price!

I fully believe that a massive amount of our problems in living, as a society and individuals, would be greatly relieved if we could all walk to work.

BicycleB

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Re: The Cheapest House in the Neighborhood
« Reply #9 on: May 05, 2022, 10:56:12 AM »
Well done, @sadiesortsitout! Thanks for sharing your adventure.

Dicey

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Re: The Cheapest House in the Neighborhood
« Reply #10 on: May 06, 2022, 08:20:35 AM »
DH can walk to work

Full stop, that's enough. A bargain at any price!

I fully believe that a massive amount of our problems in living, as a society and individuals, would be greatly relieved if we could all walk to work.
Clarification: DH is on vacation until July 1, at which point he will be fully retired, so no more walking to work, lol. It was an awesome experience and I highly recommend it.

mspym

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Re: The Cheapest House in the Neighborhood
« Reply #11 on: July 17, 2022, 12:57:32 AM »
That is awesome, Sadie. I had a similar thought about our house - poking around real estate sites, ours was a solid 90k cheaper than every other house in the town.

Bateaux

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Re: The Cheapest House in the Neighborhood
« Reply #12 on: July 17, 2022, 07:45:43 AM »
We bought the cheapest house in our neighborhood back in 2018.  According to Zillow estimates it's now the most expensive on our street.  Took some repairs and sweat equity.

Tempname23

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Re: The Cheapest House in the Neighborhood
« Reply #13 on: July 19, 2022, 02:55:19 PM »
My daughter and son in law, bought a HUD Repo that was the cheapest house in the neighborhood. The bought for $243k and now after remodel have about $305k into it. The neighbors house is asking $465k and next to him a house sold for $940k! (lotta house)
  Did I mention it's on the water with easy access to the Gulf of Mexico. And they are avid boaters/fishermen. 

One of dad's happy moments, because my daughter just graduated and started making big* money, they are now solidly into the 24% tax bracket and I was afraid the they would be looking at $500k or $600k homes.
* big, anything more than me, but 4 times me is really big. :-)

Money Badger

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Re: The Cheapest House in the Neighborhood
« Reply #14 on: July 24, 2022, 07:23:59 AM »
Also a fan of the cheapest house in the n’hood IF the house meets long term needs.  We did this 2 houses ago, but it was a driveunder  garage setup we called “The Stairmaster” due to how much hoofing up and down we did for a dozen years.  We did well selling for a gain relatively though, so it is a good way to build equity.  But it’s one level living for us from now on!

badger1988

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Re: The Cheapest House in the Neighborhood
« Reply #15 on: July 24, 2022, 07:34:24 AM »
We bought the cheapest house in our neighborhood back in 2018.  According to Zillow estimates it's now the most expensive on our street.  Took some repairs and sweat equity.

How does zillow know you made repairs?

Dicey

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Re: The Cheapest House in the Neighborhood
« Reply #16 on: July 24, 2022, 08:38:24 AM »
We bought the cheapest house in our neighborhood back in 2018.  According to Zillow estimates it's now the most expensive on our street.  Took some repairs and sweat equity.

How does zillow know you made repairs?
It doesn't. I've noticed that all the RE sites have a kind of recency bias. When a house sells, they seem to assign different values.

Here's an example: I mentioned the story of our house upthread. In 2018 we bought a flip house in the same town for $725k. It was a dump and we spent over a year doing a full gut remodel. We sold it for $1.2+k in late 2019. For comparison, our own clown house is custom-built, one story*,  2600 sf, 4BD, 3.5BA, 3-car 1050sf garage, bigger lot, better neighborhood, blah x3. The flip house is a two-story, 1900 sf, 3BD+2.5BA, 2-car garage in a less desirable part of town.  Though it's full of custom cabinetry and updated finishes, it's still a boxy tract house in a neighborhood of similar homes. Oh, it's in a Flood Zone and requires extra insurance, too.

Zillow pings us every time the value changes. The flip house "Zestimate" is now the same as our primary, which we purchased in. 2013.  We see this over and over. For free mustachian entertainment, choose any neighborhood of tract homes. The ones with the highest value will be those that were most recently sold.

*Our population skews much older than average. Therefore, single story homes command a premium, particularly if they're large. Also, our house has 14' ceilings in the living areas and 9' in the bedrooms. The flip house is the standard 8' everywhere. Lovely as the flip house is, there's no comparison. On the open market there's no way they would sell for the same price.

getsorted

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Re: The Cheapest House in the Neighborhood
« Reply #17 on: July 24, 2022, 02:23:27 PM »
We bought the cheapest house in our neighborhood back in 2018.  According to Zillow estimates it's now the most expensive on our street.  Took some repairs and sweat equity.

How does zillow know you made repairs?
It doesn't. I've noticed that all the RE sites have a kind of recency bias. When a house sells, they seem to assign different values.

Here's an example: I mentioned the story of our house upthread. In 2018 we bought a flip house in the same town for $725k. It was a dump and we spent over a year doing a full gut remodel. We sold it for $1.2+k in late 2019. For comparison, our own clown house is custom-built, one story*,  2600 sf, 4BD, 3.5BA, 3-car 1050sf garage, bigger lot, better neighborhood, blah x3. The flip house is a two-story, 1900 sf, 3BD+2.5BA, 2-car garage in a less desirable part of town.  Though it's full of custom cabinetry and updated finishes, it's still a boxy tract house in a neighborhood of similar homes. Oh, it's in a Flood Zone and requires extra insurance, too.

Zillow pings us every time the value changes. The flip house "Zestimate" is now the same as our primary, which we purchased in. 2013.  We see this over and over. For free mustachian entertainment, choose any neighborhood of tract homes. The ones with the highest value will be those that were most recently sold.

*Our population skews much older than average. Therefore, single story homes command a premium, particularly if they're large. Also, our house has 14' ceilings in the living areas and 9' in the bedrooms. The flip house is the standard 8' everywhere. Lovely as the flip house is, there's no comparison. On the open market there's no way they would sell for the same price.

That makes something make sense about my place! I bought  in late 2029 for 20% under appraisal. Before purchase, the Zillow value was close to appraisal value, but after purchase, it dropped to close to the price I bought it for-- in other words, 20% in one day. Then in the last two years, Zillow's estimate has climbed 74%, much more than neighboring houses have gone up. I even corrected some misinformation (Zillow gave us a non-existent dining room and garage!).