“Is Now the Time to Buy a 1 Million Home”
Is-Now-the-Time-to-Buy-a-1-Million-Home: Personal Finance News from Yahoo! Finance
For buyers with good credit and healthy bank accounts, a million dollars buys a lot more home than it did a few years ago.
Congrats to Belmont for being featured!!!
Too bad this perfectly good article was ruined by the mention of unlivable Connecticut:
Maybe next time the piece feature only Bay Area residences. One can wish!
April 15th, 2008 at 7:58 am
Frankly, I’d rather live in, and heat, the one in the BA than the one in Conn.
April 15th, 2008 at 8:31 am
The answer is clearly YES in the case of Belmont.
Looks like the house was sold for way over asking! (check Zillow)
April 15th, 2008 at 8:38 am
Under $1 million dollars just doesn’t work for BA people. It’s not good for the neighborhood, and we’ll have no part of it!
April 15th, 2008 at 10:16 am
Who’d want to live on a turnpike? I’d hate having to pay toll every time I wanted to get to my house. (Does the Harpsichord Turnpike at least accept the equivalent of FasTrak?) It’s even stupider than spending two million in Los Altos Hills to live right next to 280.
April 15th, 2008 at 10:22 am
Did you know that the law has just passed in the BayArea that paytolls will be set up along 101 and 808 during the commute hours? They said that motorists dont have to slow down to pay toll because noone is able to drive fast during that time anyway.
April 15th, 2008 at 10:58 am
If you buy this house, you’ll get creamed in CT in terms of property taxes The millage in that area of Stamford is about $28 per $1000 of assesed value. However, you’ll more than make it up in income taxes, as they only have 2 tax brackets – over $10k and under $10k. Sales That’s almost a flat tax. Sales tax is also a flat 6% statewide.
Also, you’ll save money if you commute in a Diesel, but don’t think about smoking.
CONNECTICUT
Sales Taxes
State Sales Tax: 6% (food, prescription & non-prescription drugs exempt).
Gasoline Tax: 43.9 cents/gallon
Diesel Fuel Tax: 37.0 cents/gallon
Cigarette Tax: $2.00/pack of 20.
Personal Income Taxes
Tax Rate Range: Low – 3.0%; High – 5.0%
Income Brackets: * Lowest – First $10,000; Highest – Over $10,000 (Click here to estimate your tax)
Number of Brackets: 2
Property Taxes
Taxes and real and personal property are assessed and collected by individual towns or other taxing districts. All assessments are at 70% of fair market value.
CALIFORNIA
Sales Taxes
State Sales Tax: 6.25% (food and prescription drugs exempt. Tax varies according to locality. Can be as high as 8.75%)
Gasoline Tax: * 44.4 cents/gallon
Diesel Fuel Tax: * 45.0 cents/gallon
Cigarette Tax: 37 cents/pack of 20 plus an additional surcharge of 50 cents per pack, bringing the total to 87 cents.
Personal Income Taxes
Tax Rate Range: Low – 1.0%; High – 9.3%
Income Brackets: ** Lowest – $6,622; Highest – $43,814
Number of Brackets: 6
Property Taxes
Property is assessed at 100% of full cash value. The maximum amount of tax on real estate is limited to 1% of the full cash value.
Source: http://www.retirementliving.com/RLstate1.html
April 15th, 2008 at 11:01 am
Okay everyone, let’s play Find the Outlier!
There are 20 different million-dollar homes in the Business Week article. Most of the homes are within 30 minutes of a large city. Most of the homes are over 3000 square feet.
Your mission: Find the house that’s way smaller than the others, so much smaller that you can’t believe you have to pay a mill for it.
Then find the commute that’s way longer than the others.
Draw your own conclusions on how Special this makes those two regions, and which is more Special.
Your other mission: Find the really big cities that didn’t get featured.
Answers:
1. The Almost Real Bay Area home is only 1979 square feet.
2. The two NYC-commuter homes are an hour away
3. There is nothing featured in the Los Angeles area. Los Angeles is the second largest metro region in the United States. There were other large cities that didn’t make the cut, but who cares? They aren’t anywhere as Special.
April 15th, 2008 at 11:12 am
Bonus Round! Find a home in my Almost Real Bay Area zip code for under a million bucks! Then write it up so it can run in Business Week. Here’s one for my house.
April 15th, 2008 at 11:18 am
dang, I said for Business Week, didn’t I? I was stuck in realtese. Here ya go:
April 15th, 2008 at 3:02 pm
Madhaus,
If you have 4 bedrooms, you’re head and shoulders above 90% of the folks. Price should be $100K higher than what’s shown. It’s impossible that you don’t have a dining room. Where are you going to eat?
April 15th, 2008 at 3:10 pm
RealEstater,
isn’t that why man invented TV dinners?
April 15th, 2008 at 4:28 pm
Has anyone considered, besides the CAGR of a house in the RBA, the tax implications of living in this area? I haven’t considered it before, but I wonder what kind of trade off is 8.5% CAGR, vs. 6.5% in a state that has no income tax. I just realized that if I lived in Washington, my wife and I would be saving around $17k a year in state taxes. Also, if we lived near the border, we could drive to Oregon and buy stuff without paying a sales tax. Even with the extra appreciation here, I did some calculations using the NYT buy vs. rent calculator and we would come out ahead in a 30 year period… even with the 17k being uninvested. With the 17k being invested an MUNI bond rates, with no capital gains taxes, we would trounce the returns here by a wide margin. We wouldn’t even have to buy up there. The rent is cheap, and the NYT calculator shows that if we bought a house that costs 500k up there with 6% CAGR on the house, we wouldn’t be close to making back our initial investment vs. a 1000/month rent.
So, i’m starting to think that living in the RBA vs. somewhere that has no state income tax, and low sales tax, is the best way to go. Even with the higher appreciation factored in. As for the property taxes, I’m sure Washington’s tax is 2x as high as California’s, but who cares if you’re just renting.
April 15th, 2008 at 4:35 pm
But if you moved to Washington, you’d also be paying less for groceries:
http://www.burbed.com/2007/12/25/merry-christmas-are-you-eating-lets-talk-groceries/
What the hell would you do with all that extra money?
Oh that’s right… nothing. Because there are no tech companies except Amazon, Microsoft, and Google. Where’s the Facebook?
April 15th, 2008 at 5:26 pm
burbed,
Are you the guy that runs this blog?
We just noticed another house in the Easton area of Burlingame that came down in price. Originally going for 1.71 million a month ago, now down 1.65 million. Another home in Belmont, on Monserrat, is down about 30k from the last time we looked at the MLS listing. They are coming down slowly, but surely.
Yeah, I think we’ll be better off living in a state like Washington. The only thing I might have problems with is the weather up there. I spent a week in Seattle, and I was ready to leave. It’s a trade off, but we’ll see how it goes.
April 15th, 2008 at 7:54 pm
I used to live in a house just like that in Belmont. The problem is the square footage. The top of the house is what you live in, my guess is that is about 1250 sq feet. The other 500 sq feet is in the bottom floor which is usually a large bonus room. The bonus rooms were never designed to be real living rooms though, because they usually have lower than 8 ft ceilings if you can believe that. They are almost like basements with brick walls, you can see the bottom floor in the picture. So in the end you really have a 1250 sq ft house. Views are beautiful though, we certainly don’t get those views in San Jose.
April 15th, 2008 at 8:50 pm
Willow Glenner
You are correct. Give me a 1500 sq foot rancher of the layout on a lot of those Belmont Hill Houses
April 16th, 2008 at 12:24 pm
WG, thanks for the clarification.
I was horrified to see a Belmont house with this much square footage selling for under a million.
This is probaby on a hill, in Belmont there are quite a few houses with this kind of floorplan, and they are all on the Belmont hills.
April 16th, 2008 at 9:07 pm
I know the East Bay isn’t the RBA ™ but I thought I’d share the view from over there. Click on my name for some info on a 8000 sqft mansion languishing at $1.9M.