You say you can afford it, but you’re worried about what are mostly incidentals? I’ll admit that things like landscaping can be expensive, but if that’s an issue for you, why are you looking at $1.1 million dollar homes? You say you can afford it, but sure doesn’t “sound” like it…

No offense as I’m sure you’re a nice person, but step back and think what you’re asking (and read what you wrote). If these are your concerns, at least drop your price range a few hundred kilobucks.

And your first home purchase no less? Most people don’t start at a million-plus.

Any Derby Hill owners out there, or not? I say we leave housing bear’s decision up to him and provide him with the information he wants.

FWIW, I lived in a 3100 sf house very near DH for a couple years. The gas and electric were pretty cheap. Around $100/mo, if I remember. Probably only a bit more now. We didn’t have a/c, and if we did, we’d only have used it once or twice. There’s a great breeze up there, and it’ll blow right through your house unless you’re situated exactly wrongly. And it’s not too cold in the winter, either. Plus, being new houses, they’re very energy efficient. Your water bill will, of course, depend on your landscaping. Most of a typical home’s water goes to landscaping. I think we paid around 100-150/mo. It was a 5k sf lot with lots of grass. Trash is free (city provided).

We did our landscape very much on the cheap. We did most of our own landscaping work. We spent about 6k on concrete and flagstone, and maybe 2-3k on plants, grass, sprinkler parts, etc. Plus maybe 500 for day laborers. We had neighbors who spent well over 100k on their landscaping. So you can basically spend whatever you want.

Good luck.

No nerves here, housingbear

You did however stoke my curiosity – you start by acknowledging that now may not be a good time to buy but then you say you are probably going to buy anyway

I’d like to understand why an intelligent person who has access to Piggington’s would be considering buying a million dollar tract home right now

As a ‘numbers guy’ you should be able to understand that a 30-60% correction over the next five years means you will lose $300-600K

Do your ‘special circumstances’ make this loss acceptable or do you not believe that the correction will be significant?

I tend to think that if the collapse that some of the posters foresee, happens, then both renters and homeowners will be in alot more trouble then any of us care to admit.

———————– 

Think of the 1990s. It was painful then but we got on fine. It'll be more painful this time around but we'll get on fine.

Think of Japan. In many cases the prices dropped by 2/3. In the suburbs of Tokyo prices are not even back up to 1989 levels. The great depression didn't hit. Japan had a "lost decade" but people got on fine. The Japanese standard of living is still one of the highest in the world and Japanese companies are still some of the most productive. Some companies were inefficient and were acquired by foreigners. The French bought 40% of Nissan.

Think of Hong Kong where, in many developments, real estate prices collapsed by 50%. Borrowers were under water. But now, thanks to the influx of Mainland Chinese, the economy is booming again. And Hong Kong per capita GDP is now higher than England's.

In the coming RE downturn, we'll do fine. Many will loose their jobs and move away like they did in the 1990s. But we'll do fine. It won't be the great depression.

If you think in economic terms, the RE crash, will cleanse our economy of structural inefficiencies and misallocation of resources and return us to more productive endeavors — a very good thing.

You make alot of sense Perry… I think that the downturn will take an interesting shape with a wider variance of depreciation then I originally thought. I think condos will get pummelled but I think the detached home depreciation will vary widely with geography due to the type of owner, or shall I say the type of financing the owners used. I am not as sure that a widespread hammer will fall on everything. I think the slow secular downtrend over many years is likely something we agree on. Also yes of course crashes/corrections are quite beneficial for inefficiences. Unfortunately the golden rule is in effect. Those with the gold rule (lenders, banks, etc…) and I think those with the gold are going to stretch things out enough to avoid the hard crash…Good post. As usual your points make alot of sense.

SD Realtor