GammaGeek: House Hunting

Monday, October 17, 2005

In keeping with the completely random theme of my various postings, today I will stray into the realm of house hunting.I figure I’ve spent enough money on rent during the past 12+ years to have owned 1/3 of a home by now, so I’ve been thinking about taking the plunge for the past 5 months or so. Being single, I have no “wifey” income to rely on for making house payments, so I’m trying to balance out all the factors and make a good decision.On one hand, I could wait another 12 months to jump in. That would allow me to save even more money for a down-payment and for furnishings, landscaping, etc. On the other hand, 12 months from now I’ll have spent another small fortune on rent money with nothing to show for it. Complicating the matter are the unknowns: will interest rates be higher or lower 12 months from now?

Will housing costs be higher because of increased demands for lumber and other building materials as a result of the recent hurricanes? If so, I may pay 10-15% more next year than I would today for the same home. Homes in Omaha appreciate at about 5.5% per year. Interest rates today are between 5.875% and 6.5%. That stinks.I’ve been thinking about buying a brand new home – for two reasons:1. Property taxes on a newly constructed home don’t kick in until after the first year. This means my house payments for year one would be hundreds of dollars lower than year two and on.2. Homes have two appraisal values. The first value is the one assigned by the county assessor. It is typically based on the actual hard value of the home, and is the lower of the two. This is good, because your property taxes are based on this amount. The second appraisal value is one you would receive from an outside appraiser, such as a realtor or someone who specializes in home appraisals. They take into account things like proximity to shopping centers, schools, the “view,” landscaping, etc. People looking to sell their homes naturally try to sell for the higher valuation. This means that buying an existing home will generally be more expensive than building a new one that is identical to it, unless you can negotiate the seller down quite a bit.Maybe I’m opening up a can of worms for myself, but I’ve always wanted to design a home. I could hire a general contractor to do all the work for me I suppose. I’m not sure whether that would be cheaper in the long run or not. Anyone got a lot for sale?

posted by Nate @

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