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gamerfreak
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March 10th, 2023 at 7:43:56 AM permalink
Is the housing market near you still completely f$&$ked?

I am in Philadelphia suburbs and inventory is dismally low. Last night I went to an open house and the street was packed with about 50 cars, and touring the house was shoulder to shoulder, like a crowded museum or something.

Even with a somewhat decent budget around $670k, Iíve put in around 10 offers at this point, all $50k-$100k over asking, and keep getting beat by all cash offers and people waiving any inspections or contingencies.

Trying to figure out if I want to wait until the economic shoe drops, or find somewhere else to live.

Is it still this bad everywhere?
billryan
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March 10th, 2023 at 7:50:31 AM permalink
If you can work remotely, why not move? I'd guess there are thousands of houses in Southern Arizona for $200,000 and less. I'm meeting more and more people who work remotely. Someone I know that works for Disney just bought a six-acre ranch with a decent manufactured house for $76,000.
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gamerfreak
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March 10th, 2023 at 7:56:26 AM permalink
Quote: billryan

If you can work remotely, why not move? I'd guess there are thousands of houses in Southern Arizona for $200,000 and less. I'm meeting more and more people who work remotely. Someone I know that works for Disney just bought a six-acre ranch with a decent manufactured house for $76,000.
link to original post


Yes, thinking about this a lot since my wife is WFH too. Couple of reasons holding us backÖ.

We WFH but still occasionally need to go into office (couple times a month).

Moving across country is daunting to me, especially with a dog.

And all of our family lives in this area.
Dieter
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March 10th, 2023 at 8:08:43 AM permalink
Quote: gamerfreak


Is it still this bad everywhere?
link to original post



I don't know about everywhere, but everywhere I've looked... yes it is.

Unimproved land far from population centers still seems affordable and reasonable, but that's not exactly housing.

It does seem that the market is somewhat less bad where "people" (meaning the public at large) don't want to go on vacation.

I did just talk to a guy who was laughing about how one of the nearby resort hotels is converting some of their hotel buildings to "aparthotel" condominia. I suppose if people can rent out their houses as hotels, hotels can rent out their hotels as houses.
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billryan
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March 10th, 2023 at 8:11:13 AM permalink
You don't have to move cross country. Lots of houses in the Poconos/ Port Jervis area. You just have to decide to leave the city.
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gordonm888
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March 10th, 2023 at 8:37:58 AM permalink
My wife's family is heavily into real estate. The market has cooled down somewhat in Tennessee, with prices dropping a bit after the large increases during the Covid period. Nashville is the exception and continues to be crazy. Availability of rental units is extremely low. Real estate corporations have been aggressively buying small houses in certain suburbs and converting them to rentals. I own a couple of houses and I probably receive an average of 5 unsolicited offers per week to buy one of my houses. That's down from previous levels of receiving about 8-10 unsolicited offers/week to buy them.

Market here is fueled by exodus of people from NYC and large northeastern cities; Tennessee is also getting some of the emigration out of California. (Tennessee was 2nd to Idaho as a site for relocations during/after the pandemic.)

In Minneapolis/St Paul region, the frenzied real estate market has also slowed a bit. To buy a house, you still have to offer above asking price (certainly in the downtown areas). But houses are now reasonably available in some of the suburbs.

Those are the areas I'm familiar with.
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DRich
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March 10th, 2023 at 8:43:45 AM permalink
Quote: gamerfreak

Is the housing market near you still completely f$&$ked?

I am in Philadelphia suburbs and inventory is dismally low. Last night I went to an open house and the street was packed with about 50 cars, and touring the house was shoulder to shoulder, like a crowded museum or something.

Even with a somewhat decent budget around $670k, Iíve put in around 10 offers at this point, all $50k-$100k over asking, and keep getting beat by all cash offers and people waiving any inspections or contingencies.

Trying to figure out if I want to wait until the economic shoe drops, or find somewhere else to live.

Is it still this bad everywhere?
link to original post



I don't think it is that bad everywhere. Lots of areas are down close to 10% in the last year. Don't get me wrong, it is still expensive.

My wife and I both work from home and we moved about 18 months ago. We ended up buying near the top of the market and my wife flew back and forth between Las Vegas and Florida every week for seven weeks trying to buy a house. She would shop, put an offer in on a house above market price, return home to Las Vegas and find out we didn't get the house. Repeat for seven weeks. I believe we ended up getting the eight or ninth house we made an offer on. I never even saw the house until after driving 2000 miles to move in. I saw it on the day we moved in.

Prices here in Florida are going back down as the market is softer with interest rates being higher. I think I got in at 2.9% and todays rates are over 7%. On my house that alone would cost over $1000 more a month.
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vegas
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March 10th, 2023 at 8:54:58 AM permalink
In Canada the market for houses has slowed down a lot. House prices have also dropped a ton. The problem now is high mortgage interest rates have made the buyers afraid. So lower house prices are offset by high mortgage interest. An example of falling prices, my houses was valued at 750,00 in late 2021 and today is worth 550.00 or less.
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ChumpChange
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March 10th, 2023 at 9:40:42 AM permalink
Miami Beach walk & talk - Florida: MASSIVE Insurance Increases Starting To BANKRUPT Homeowners - YouTube
DRich
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March 10th, 2023 at 11:40:05 AM permalink
Quote: ChumpChange

Miami Beach walk & talk - Florida: MASSIVE Insurance Increases Starting To BANKRUPT Homeowners



I think these stories are exaggerated for effect. My house insurance went from $3800 to $8200 in one year. I shopped it around and was able to get it for $4200. I was happy with a 10% increase.
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rxwine
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March 10th, 2023 at 12:02:31 PM permalink
Quote: DRich

Quote: ChumpChange

Miami Beach walk & talk - Florida: MASSIVE Insurance Increases Starting To BANKRUPT Homeowners



I think these stories are exaggerated for effect. My house insurance went from $3800 to $8200 in one year. I shopped it around and was able to get it for $4200. I was happy with a 10% increase.
link to original post



For that you could probably insure a medium size RV and a one man helicopter to launch off the roof.
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EvenBob
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March 10th, 2023 at 12:03:41 PM permalink
It's the same around here I know somebody that tried to buy 10 houses and bid over the asking price 10 times and got beat every time. They finally gave up and are just staying where they are.
It does not suck to be me.
gamerfreak
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March 10th, 2023 at 12:37:51 PM permalink
Quote: DRich

Quote: gamerfreak

Is the housing market near you still completely f$&$ked?

I am in Philadelphia suburbs and inventory is dismally low. Last night I went to an open house and the street was packed with about 50 cars, and touring the house was shoulder to shoulder, like a crowded museum or something.

Even with a somewhat decent budget around $670k, Iíve put in around 10 offers at this point, all $50k-$100k over asking, and keep getting beat by all cash offers and people waiving any inspections or contingencies.

Trying to figure out if I want to wait until the economic shoe drops, or find somewhere else to live.

Is it still this bad everywhere?
link to original post



I don't think it is that bad everywhere. Lots of areas are down close to 10% in the last year. Don't get me wrong, it is still expensive.

My wife and I both work from home and we moved about 18 months ago. We ended up buying near the top of the market and my wife flew back and forth between Las Vegas and Florida every week for seven weeks trying to buy a house. She would shop, put an offer in on a house above market price, return home to Las Vegas and find out we didn't get the house. Repeat for seven weeks. I believe we ended up getting the eight or ninth house we made an offer on. I never even saw the house until after driving 2000 miles to move in. I saw it on the day we moved in.

Prices here in Florida are going back down as the market is softer with interest rates being higher. I think I got in at 2.9% and todays rates are over 7%. On my house that alone would cost over $1000 more a month.
link to original post


Higher interest rates might help stabilize prices, but will make the overall situation even worse.

The reason everything is so crazy is lack of inventory. Potential sellers can either not afford a lateral move, or donít want to give up that sweet sweet 2.5% they locked in.

Of course, interest rates donít matter to cash buyers, of which there are plenty. I partly blame that on PPP loan forgiveness, but more broadly the overall post pandemic boom.
AZDuffman
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March 11th, 2023 at 3:05:58 AM permalink
Quote: gamerfreak



The reason everything is so crazy is lack of inventory. Potential sellers can either not afford a lateral move, or donít want to give up that sweet sweet 2.5% they locked in.



It is deeper than this. One problem is after the 2008 crash lots of development plans were mothballed. From finding land to selling the first house can take 10 years. The same thing happened to used cars, where there were just few at the auctions around 2011-2013 so new car sales took off. But you can build cars far easier than houses. By the late 2010s thing started to come back, but that inventory will only start hitting in a couple years.

But it is deeper than that! New developments tend to be at edges of metro areas. Metros in the east, from Boston to Miami, are mostly built out. New supply of single family homes is just not going to happen like it used to. It can be more profitable to put in apartments. Rentals are such a thing now that there are new single family developments that are not for sale---all rentals!

The question is how does it sustain itself? When I got into mortgages in 2003 a jumbo loan was about $360000. That equates to about $580000 today. And you only got 1-2 at that level a month. Today a jumbo starts at $726,200, or $442600 then. But there are now more "cutout" high cost areas today. Back then the only real cutout I remember was Hawaii. Clearly the top end is pulling everything else up.

The median home price today per a google search is $428,700. Using the rule of thumb that you should not buy more than 300% of annual income that means you need over $140,000 in income to buy at the middle. Just 1/3 of USA households make over $100K.

The USA is on her way to being a society of serfs who will never own their homes. For decades about 2/3 own. Expect that to fall over the next generation. This is really big as less and less home wealth gets passed generation to generation. The difference between black and white wealth levels is largely driven by this.

Expect it to keep getting worse.
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billryan
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March 11th, 2023 at 5:16:31 AM permalink
The sooner people get over the myth of home ownership, the better. Nothing stifles one's economic potential more than committing to a thirty-year loan on the house at a young age. It's always amazed me that people buy a home for $200,000, spend $350,000 on interest for the loan, sell the house for $400,000 and think they did well.
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gamerfreak
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March 11th, 2023 at 5:39:00 AM permalink
Quote: billryan

The sooner people get over the myth of home ownership, the better. Nothing stifles one's economic potential more than committing to a thirty-year loan on the house at a young age. It's always amazed me that people buy a home for $200,000, spend $350,000 on interest for the loan, sell the house for $400,000 and think they did well.
link to original post


Big disagree.

Buying a home at age 25 was the best thing I could have done.

I paid $150k in 2017 for a small townhouse and now have about $130k in equity.

My mortgage is $900. The cheapest rent in the area is around $2,500 for a dumpy apartment. Iíve had to do almost no maintenance to the house.

Tell me how this is worse than renting?
AxelWolf
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March 11th, 2023 at 5:55:57 AM permalink
I thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters. I don't know how that breaks down.
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billryan
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March 11th, 2023 at 6:13:22 AM permalink
Quote: gamerfreak

Quote: billryan

The sooner people get over the myth of home ownership, the better. Nothing stifles one's economic potential more than committing to a thirty-year loan on the house at a young age. It's always amazed me that people buy a home for $200,000, spend $350,000 on interest for the loan, sell the house for $400,000 and think they did well.
link to original post


Big disagree.

Buying a home at age 25 was the best thing I could have done.

I paid $150k in 2017 for a small townhouse and now have about $130k in equity.

My mortgage is $900. The cheapest rent in the area is around $2,500 for a dumpy apartment. Iíve had to do almost no maintenance to the house.

Tell me how this is worse than renting?
link to original post




Your equity is a phantom. It's trapped in until you sell; if you sell, you are most likely to move up in house, not down. In that case, you traded one mortgage for another, and they rarely get smaller. Paying interest on an "investment "for the next thirty years makes so much financial sense that the government is willing to subsidize it partially. Why is that?
By the way- $100,000 in a stock tracking fund in 2017 would be worth $230,000 today. A Fantastic Four #1 in 2017 was under $25,000. Today they are close to $200,000.

Seriously- If the banks and the government try to steer people into a thirty-year commitment, it must be a good deal, right?
What have you paid in taxes, upkeep, and insurance since 2017? Pay a HOA? Closing costs? PMI?
Houses generally appreciate, but not always, and prices are cyclical. It's great if you want to sell in a high cycle. Only you'd also be buying in a high cycle.
A real-life example- housing in Vegas peaked around 2007 and didn't recover until 2018. That means people didn't make a dime on their biggest investment in a decade while the stock market was on a fantastic run.
Homeowners tend to spend more time working on their homes than renters; throughout a thirty-year loan, that's thousands of man-hours lost.
It's also about loss of investment opportunity. Every dollar you have tied up in your home is a dollar not available to invest.
Last edited by: billryan on Mar 11, 2023
The difference between fiction and reality is that fiction is supposed to make sense.
ChumpChange
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March 11th, 2023 at 6:13:32 AM permalink
I think it'd be the difference between $2,500 and $100K. Over half the country doesn't have $500 to spare.
gamerfreak
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March 11th, 2023 at 6:50:49 AM permalink
Quote: billryan

Quote: gamerfreak

Quote: billryan

The sooner people get over the myth of home ownership, the better. Nothing stifles one's economic potential more than committing to a thirty-year loan on the house at a young age. It's always amazed me that people buy a home for $200,000, spend $350,000 on interest for the loan, sell the house for $400,000 and think they did well.
link to original post


Big disagree.

Buying a home at age 25 was the best thing I could have done.

I paid $150k in 2017 for a small townhouse and now have about $130k in equity.

My mortgage is $900. The cheapest rent in the area is around $2,500 for a dumpy apartment. Iíve had to do almost no maintenance to the house.

Tell me how this is worse than renting?
link to original post



Your equity is a phantom. It's trapped in until you sell; if you sell, you are most likely to move up in house, not down. In that case, you traded one mortgage for another, and they rarely get smaller. Paying interest on an "investment "for the next thirty years makes so much financial sense that the government is willing to subsidize it partially. Why is that?
link to original post


Still not following. How did buying a house at a young age leave me worse off financially?

Why is paying rent preferable to ďthrowing money awayĒ on interest?

Equity is not trapped, I have a HELOC that I will use for a down payment on my next house.

Even if we want to pretend that real estate is not an investment, the monthly payment on a mortgage is always going to be less than the rent of a comparable property.
billryan
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March 11th, 2023 at 7:07:15 AM permalink
NY has one of the lowest rates of home ownerships.
West Virginia, Alabama, Louisiana, and South Carolina are among the highest.
What might one infer from that?

Sounds like you plan on taking out another loan, based on your house going up in value, so you can "invest" in a bigger, more expensive house.
Sounds like a plan.
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mcallister3200
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March 11th, 2023 at 7:07:40 AM permalink
One might infer NY real estate is unaffordable or unavailable to a larger percentage of the population or they have a larger percentage of residents that donít want to be there long term. Both true in this case.

This is a silly circular debate where anyone can cherry pick real life anecdotal scenarios to make sense and you guys know it.

For people who WANT to be tied to a specific area for long period of time itís tough to justify the math of not owning if they can afford it. Some others canít imagine WANTING to be tied to a small area for a long period of time if they donít have children. Taking on EXCESSIVE debt because itís theoretically ďgood debtĒ is the trap.
billryan
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March 11th, 2023 at 7:21:19 AM permalink
Quote: AxelWolf

I thought I read somewhere where that homeowners had a net worth of 30-40 times that of renters. I don't know how that breaks down.
link to original post



Don't confuse homeowners with mortgage holders. Until it is paid in full, the bank owns the house.
The difference between fiction and reality is that fiction is supposed to make sense.
gamerfreak
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March 11th, 2023 at 7:26:21 AM permalink
Quote: billryan

NY has one of the lowest rates of home ownerships.
West Virginia, Alabama, Louisiana, and South Carolina are among the highest.
What might one infer from that?

Sounds like you plan on taking out another loan, based on your house going up in value, so you can "invest" in a bigger, more expensive house.
Sounds like a plan.
link to original post


I would infer that a higher percentage of folks in those states live in rural areas rather than cities.

What exactly is the problem with wanting to move up in housing? Of course the calculation is different if you live alone, but with 2 adults working from home full time and potentially starting a family, a 1200sqft townhouse gets cramped very quickly.
billryan
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March 11th, 2023 at 8:10:08 AM permalink
I bought my first house in the late 1970s. Interest rates were high, but I forget what rate I was paying. Around seven or eight if I recall correctly. I was the first of my single friends to buy a house and I was quite pleased with myself.
The house was $39,000, worth 42,000 and I put $6,000 down, so I had a twenty-year $33,000 mortgage which with closing costs and points came out to just over $35,000. I paid a few hundred at closing to bring it down to exactly $35,000. The market got hot and I told a real estate agent I'd sell for $50,000. I'd made 14 monthly payments of a few hundred dollars each and was thinking my mortgage must be closer to $30,000 by now so I'd walk away with 20K. That was more than I was making in a year so I was very happy. Only twelve of those payments had gone only to interest so after 14 monthly payments on a $35,000 loan, I still owned almost that same amount. My anticipated profit dropped, especially when you factored in moving twice,taxes, and the realtor's commission.
Home loans are frontloaded so for the first few years you pay for the interest.
I started to do my own research. Buying a $50,000 house with a 5% loan for twenty years ends up costing you double that, plus all the benefits one gets with ownership- taxes, maintenance, landscaping, and the like.
Twenty-year loans used to be the standard, but the banks have very generously raised it to thirty years and offer wonderful instruments like no money down, interest-only loans or interest only, five-year loans because houses always go up in value and you can refinance later.
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Dieter
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March 11th, 2023 at 8:26:08 AM permalink
Quote: billryan

The sooner people get over the myth of home ownership, the better. Nothing stifles one's economic potential more than committing to a thirty-year loan on the house at a young age. It's always amazed me that people buy a home for $200,000, spend $350,000 on interest for the loan, sell the house for $400,000 and think they did well.
link to original post



That sounds like paying around $420 a month for housing rent, which is a number I haven't seen since the early 1990's.
May the cards fall in your favor.
FatGeezus
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March 11th, 2023 at 8:49:39 AM permalink
Quote: billryan

The sooner people get over the myth of home ownership, the better. Nothing stifles one's economic potential more than committing to a thirty-year loan on the house at a young age. It's always amazed me that people buy a home for $200,000, spend $350,000 on interest for the loan, sell the house for $400,000 and think they did well.
link to original post



They are selling their house and walking away with $400,000.

How much money do you think a renter could get if they sold their box of rent receipts?
gamerfreak
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March 11th, 2023 at 8:59:28 AM permalink
Quote: billryan

Home loans are frontloaded so for the first few years you pay for the interest.
I started to do my own research. Buying a $50,000 house with a 5% loan for twenty years ends up costing you double that,


How is this a revelation? Borrowing money isnít free, and mortgages are amortized. It sounds like you should have done that research before buying.

I would agree that buying typically doesnít make sense if you are planning on moving in less than 5 years.

Quote: billryan

plus all the benefits one gets with ownership- taxes, maintenance, landscaping, and the like.


And you donít think these costs are built into rent?

When property taxes go up, rent goes up. When interest rates go up, rent goes up. When maintenance costs go up, rent goes up.

Renting does not shield you from these costs, you are just paying them by proxy. And at a premium, since the landlord still needs their cut.
billryan
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March 11th, 2023 at 10:02:28 AM permalink
Run some numbers.

You bought your townhouse for 150K and its gone up $130K. If you sold it, lets say you walk away with $200K.
That's a nice down payment on your next place but suppose you decide to rent for a while. You said you want more space for a future family so you don't need it now. Your mortgage was 900, plus homeowners insurance, maintenance, snow removal, PMI, etc, etc so your monthly nut is much bigger. Lets call it $1400 but plug in your own numbers. Now think forward ten years. Your kitchen appliances will have some breakdowns, your HVAC will need servicing, your sidewalk may need replacing. All expenses a homeowner has but a renter doesn't. Once you've made these list a few times, you'll get a better understanding of what you are paying to own your house.
If right now, you are paying $1500 a month but are on the hook for any costly repairs, is paying a bit more from a rental really a bad deal when you have your 200K working for you, and enjoying compound interest instead of laying dormant in your equity? If and when you need more space, you move.

In Vegas, it was a no-brainer as my apartment came with a clubhouse, two pools, and two gyms. My cable/internet package was $75 a month, a higher tier than my friend who paid $160 at his house a few blocks away. That had real value to me.
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rxwine
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March 11th, 2023 at 10:06:32 AM permalink
Renting doesn't force people to invest any of the extra money they may gain. They can just spend willy nilly if they want. If it did, I'd be interested in the comparison between home owning and renting.
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gamerfreak
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March 11th, 2023 at 10:16:30 AM permalink
Quote: billryan

Run some numbers.

You bought your townhouse for 150K and its gone up $130K. If you sold it, lets say you walk away with $200K.
That's a nice down payment on your next place but suppose you decide to rent for a while. You said you want more space for a future family so you don't need it now. Your mortgage was 900, plus homeowners insurance, maintenance, snow removal, PMI, etc, etc so your monthly nut is much bigger. Lets call it $1400 but plug in your own numbers. Now think forward ten years. Your kitchen appliances will have some breakdowns, your HVAC will need servicing, your sidewalk may need replacing. All expenses a homeowner has but a renter doesn't. Once you've made these list a few times, you'll get a better understanding of what you are paying to own your house.
If right now, you are paying $1500 a month but are on the hook for any costly repairs, is paying a bit more from a rental really a bad deal when you have your 200K working for you, and enjoying compound interest instead of laying dormant in your equity? If and when you need more space, you move.

In Vegas, it was a no-brainer as my apartment came with a clubhouse, two pools, and two gyms. My cable/internet package was $75 a month, a higher tier than my friend who paid $160 at his house a few blocks away. That had real value to me.
link to original post


My mortgage+insurance+taxes+HOA are $1050 a month. HOA includes grass and snow removal as well as a pool.

The cheapest rent in my area is around $2,200/month. It is not costing me anywhere near $1,250/month to maintain this house in the 6 years Iíve lived here. Even if a big repair came in unexpectedly, it wouldnít be anything close to that amount. Plus I gained about $130k in equity.

Iím still failing to see how I didnít come out ahead here versus renting.
ChumpChange
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March 11th, 2023 at 10:20:34 AM permalink
A 1 bedroom apartment may be only 500-700 square feet. A house is a few times bigger.
billryan
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March 11th, 2023 at 10:22:57 AM permalink
Quote: gamerfreak

Quote: billryan

Home loans are frontloaded so for the first few years you pay for the interest.
I started to do my own research. Buying a $50,000 house with a 5% loan for twenty years ends up costing you double that,


How is this a revelation? Borrowing money isnít free, and mortgages are amortized. It sounds like you should have done that research before buying.

I would agree that buying typically doesnít make sense if you are planning on moving in less than 5 years.

Quote: billryan

plus all the benefits one gets with ownership- taxes, maintenance, landscaping, and the like.


And you donít think these costs are built into rent?

When property taxes go up, rent goes up. When interest rates go up, rent goes up. When maintenance costs go up, rent goes up.

Renting does not shield you from these costs, you are just paying them by proxy. And at a premium, since the landlord still needs their cut.
link to original post



The difference, and it is a big difference is I paid my rent and knew that was it for the month. You pay your mortgage and have no idea if your microwave, ac or dishwasher might need replacing. Those expenses sneak up on you while my pay one price covers all.

I know my cost of shelter- it's the price of rent. You can only guess when a major expense is coming.

If you are happy , that's all that matters. If I was 25 and had 200K to invest, it wouldn't be in a house to live in. It might be for a couple of houses to rent out, but not for one to live in, but I understand many people like plain vanilla. Then again I wish I knew half what I know now when I was twenty-five but that's not how the world works.
The difference between fiction and reality is that fiction is supposed to make sense.
DRich
DRich
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March 11th, 2023 at 11:11:21 AM permalink
Quote: billryan



The difference, and it is a big difference is I paid my rent and knew that was it for the month. You pay your mortgage and have no idea if your microwave, ac or dishwasher might need replacing. Those expenses sneak up on you while my pay one price covers all.

I know my cost of shelter- it's the price of rent. You can only guess when a major expense is coming.

If you are happy , that's all that matters. If I was 25 and had 200K to invest, it wouldn't be in a house to live in. It might be for a couple of houses to rent out, but not for one to live in, but I understand many people like plain vanilla. Then again I wish I knew half what I know now when I was twenty-five but that's not how the world works.
link to original post



Unless you are signing a 30 year lease at your apartment you really can't compare. On most 30 year mortgages the principle payment and interest payment stay the same for 30 years. Most rental payments will probably triple in that time.

I am not arguing against your premise because I do think it is better for some people to rent and better for some people to own.
At my age, a "Life In Prison" sentence is not much of a deterrent.
billryan
billryan
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March 11th, 2023 at 11:29:04 AM permalink
Quote: DRich

Quote: billryan



The difference, and it is a big difference is I paid my rent and knew that was it for the month. You pay your mortgage and have no idea if your microwave, ac or dishwasher might need replacing. Those expenses sneak up on you while my pay one price covers all.

I know my cost of shelter- it's the price of rent. You can only guess when a major expense is coming.

If you are happy , that's all that matters. If I was 25 and had 200K to invest, it wouldn't be in a house to live in. It might be for a couple of houses to rent out, but not for one to live in, but I understand many people like plain vanilla. Then again I wish I knew half what I know now when I was twenty-five but that's not how the world works.
link to original post



Unless you are signing a 30 year lease at your apartment you really can't compare. On most 30 year mortgages the principle payment and interest payment stay the same for 30 years. Most rental payments will probably triple in that time.

I am not arguing against your premise because I do think it is better for some people to rent and better for some people to own.
link to original post




Property taxes will go up over time as well. If you stick around to the end of your thirty-year loan, you will be paying it in dollars that are deeply discounted, but that limits your ability to move for the next thirty years.
I agree renting isn't for everyone. No one approach works for everyone. I just hate people obsessing over home ownership, credit scores and using their houses as ATMs.
The difference between fiction and reality is that fiction is supposed to make sense.
MDawg
MDawg
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March 11th, 2023 at 11:35:46 AM permalink
Property taxes and repair costs are the only reasons that real estate isn't the #1 investment over time (right behind the stock market).
I tell you itís wonderful to be here, man. I donít give a damn who wins or loses. Itís just wonderful to be here with you people. https://wizardofvegas.com/forum/gambling/betting-systems/33908-the-adventures-of-mdawg/
EvenBob
EvenBob
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March 11th, 2023 at 12:01:57 PM permalink
Got my annual tax assessment today from the Township and the assessed value went up $15,000 from last year. That means my house has a cash value of $30,000 more than last year. Which is comical when you think that my family paid $8,000 for this property in 1960. I'll never sell it because I paid it off 35 years ago and I can live here for $145 a month which is what the property tax breaks down to. Where the hell can you live for $145 a month on two acres of land in the country with a creek that runs around the edge of the property. Don't tell me homeownership doesn't pay off. I had the Xfinity guy out here in November he was in his fifties and the leaves were off the trees so you could see the creek from my house at the top of the hill. I won't tell you what he said just take my word for it that it was nothing negative. I'm in the middle of a major remodel now because at my age I won't be able to do it again. Facebook Marketplace just paid off again, last night at 2:00 a.m. I saw a 100-year-old glass door kitchen hutch 30 miles from here for $25 and I immediately sent the woman a message and I went and picked it up today. That was before noon and she said she already had 12 people wanting to buy it if I didn't show up. If I was still in the antique business I could put $175 on this and sell it next week.
It does not suck to be me.
EvenBob
EvenBob
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March 11th, 2023 at 12:06:02 PM permalink
Quote: ChumpChange

A 1 bedroom apartment may be only 500-700 square feet. A house is a few times bigger.
link to original post



My house is fairly large but I only live in a small portion of it, the whole upstairs here I rarely even go up there. But the point is all the space is there if I need it you never know when you're going to need it.
It does not suck to be me.
DRich
DRich
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Thanks for this post from:
RogerKint
March 11th, 2023 at 12:32:02 PM permalink
Quote: EvenBob

Quote: ChumpChange

A 1 bedroom apartment may be only 500-700 square feet. A house is a few times bigger.
link to original post



My house is fairly large but I only live in a small portion of it, the whole upstairs here I rarely even go up there. But the point is all the space is there if I need it you never know when you're going to need it.
link to original post



You could always get a second wife and have some kids to utilize that space.
At my age, a "Life In Prison" sentence is not much of a deterrent.
rxwine
rxwine
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March 11th, 2023 at 12:46:05 PM permalink
Surely someone on the internet somewhere has compared 30 years of home ownership to 30 years of rental.Or 20 years or somewhere long term.

Thereísí things you can control with both and things you canít. Do you want a home in East Palestine right now after that train derailment or an apartment? Less hassle and waiting in an apartment to move. Maybe in the long run you make out on a settlement in several years from a home, but you might get screwed as well, plus the waiting.

Timing when you sell something is crucial, but not always knowable. I hate to snitch on my parents R.I.P. but they knew their last house had a whole septic system major problem, but it wasnít something that the buyer knew.
There's no secret. Just know what you're talking about before you open your mouth.
EvenBob
EvenBob
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March 11th, 2023 at 12:51:30 PM permalink
Quote: DRich

Quote: EvenBob

Quote: ChumpChange

A 1 bedroom apartment may be only 500-700 square feet. A house is a few times bigger.
link to original post



My house is fairly large but I only live in a small portion of it, the whole upstairs here I rarely even go up there. But the point is all the space is there if I need it you never know when you're going to need it.
link to original post



You could always get a second wife and have some kids to utilize that space.
link to original post



Or I could just kill myself a quick way, like with a gun
It does not suck to be me.
rxwine
rxwine
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March 11th, 2023 at 12:53:55 PM permalink
Quote: EvenBob

Quote: DRich

Quote: EvenBob

Quote: ChumpChange

A 1 bedroom apartment may be only 500-700 square feet. A house is a few times bigger.
link to original post



My house is fairly large but I only live in a small portion of it, the whole upstairs here I rarely even go up there. But the point is all the space is there if I need it you never know when you're going to need it.
link to original post



You could always get a second wife and have some kids to utilize that space.
link to original post



Or I could just kill myself a quick way, like with a gun
link to original post



Just think, a harem of nagging women. (Thatís a jokeÖ)
There's no secret. Just know what you're talking about before you open your mouth.
billryan
billryan
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March 11th, 2023 at 12:55:10 PM permalink
Quote: rxwine

Surely someone on the internet somewhere has compared 30 years of home ownership to 30 years of rental.Or 20 years or somewhere long term.

Thereísí things you can control with both and things you canít. Do you want a home in East Palestine right now after that train derailment or an apartment? Less hassle and waiting in an apartment to move. Maybe in the long run you make out on a settlement in several years from a home, but you might get screwed as well, plus the waiting.

Timing when you sell something is crucial, but not always knowable. I hate to snitch on my parents R.I.P. but they knew their last house had a whole septic system major problem, but it wasnít something that the buyer knew.
link to original post



I'm not sure how you would measure that because it would depend how the money was invested, and when, not to mention when you bought and what rate you paid. It wasn't too long ago you could get a loan at 3% or so, now it is almost double. My aunt inherited almost 2,000 shares of Lucent that was up to almost $100. She decided she didn't want to pay tax so she kept it as it descended down its death spiral. It didn't change her life but pissing away two million dollars because you don't want to pay tax on it was crazy.
The difference between fiction and reality is that fiction is supposed to make sense.
DRich
DRich
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March 11th, 2023 at 1:16:20 PM permalink
Another thing people don't seem to be considering, you have to compare the rent vs the mortgage for the same house. It is easy to say I pay $1,500 a month in rent and your house payment is $2,000 but you may be in a two bedroom apartment and I am in a five bedroom house. The question is the 5 bedroom house for a mortgage of $2,000 a month need to be compared to what you could rent that same 5 bedroom house for. Compare apples to apples.
Comparing a condo to an apartment in the same building might be a valid comparison.
At my age, a "Life In Prison" sentence is not much of a deterrent.
ChumpChange
ChumpChange
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March 11th, 2023 at 1:19:40 PM permalink
A very outdated comparison might be $500/month rent vs a $150K condo. I don't know the math, and I wouldn't have more than $300/month income at $3/hr.

Updated: How many years do you have to pay for a condo?
After 12 years (two years down payment, 10 years installment) of paying your monthly mortgage plus interests and taxes, this will enable you to own a condo unit.
So 144 months x $1,000/month = $144K for the 800 square foot condo in dump-town, NY

Does it make sense to buy a condo for 3 years?
When you add up the cost to buy and the cost to sell, ďThe property will have had to appreciate about 10 percent for you to break even,Ē explains Ailion. That's why buying a condo is only recommended if you plan to live in it for at least 3-5 years. Otherwise, you could actually lose money when you sell.

Buying a Condo? Hereís What You Need to Know in 2021 - Credible
https://www.credible.com/blog/mortgages/buying-a-condo/#:~:text=Getting%20a%20mortgage%20for%20a,home%20as%20a%20riskier%20investment.

I might be able to buy a house for $170K in dumpier-town, NY.
Last edited by: ChumpChange on Mar 11, 2023
AZDuffman
AZDuffman
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March 11th, 2023 at 1:44:20 PM permalink
Quote: EvenBob

Got my annual tax assessment today from the Township and the assessed value went up $15,000 from last year. That means my house has a cash value of $30,000 more than last year. Which is comical when you think that my family paid $8,000 for this property in 1960. I'll never sell it because I paid it off 35 years ago and I can live here for $145 a month which is what the property tax breaks down to. Where the hell can you live for $145 a month on two acres of land in the country with a creek that runs around the edge of the property. Don't tell me homeownership doesn't pay off. I had the Xfinity guy out here in November he was in his fifties and the leaves were off the trees so you could see the creek from my house at the top of the hill. I won't tell you what he said just take my word for it that it was nothing negative. I'm in the middle of a major remodel now because at my age I won't be able to do it again. Facebook Marketplace just paid off again, last night at 2:00 a.m. I saw a 100-year-old glass door kitchen hutch 30 miles from here for $25 and I immediately sent the woman a message and I went and picked it up today. That was before noon and she said she already had 12 people wanting to buy it if I didn't show up. If I was still in the antique business I could put $175 on this and sell it next week.
link to original post



I bought a handyman's special duplex a little over 10 years ago. Took about $70,000 all in to buy and make it right. My mortgage is less than any rent I ever had. It is less than some people I knew paid for cigarettes. We all got laid off, people were worrying about their rent. I was in a comfort zone. If I rent out the upstairs almost all my housing costs are covered. I had it paid off but used the equity to by a flip. Made on the flip about what I paid for the place I live. Paid it down when I sold. Bought stocks when the virus hit the market. Did great. Used the equity again to buy the house the old lady next door could no longer live in. Had a bum tenant last year but when I get a good one soon and have my upstairs rented oh yeah! Will take 1-2 years but will have enough to buy another flip or rental. Maybe build to sell. Who knows.

I will repeat, the USA in a generation will be a land of lords, peasants, and serfs. The serfs will be renters for life. Less hassle but zero equity. The peasants will be the class who own but with no equity. They will get equity by retirement perhaps. The lords will own with equity and have a rental or a few on the side. The serfs will be funding their retirement.
All animals are equal, but some are more equal than others
DRich
DRich
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March 12th, 2023 at 7:12:32 AM permalink
When I bought my last house about 8 years ago the price didn't appreciate all for the first 5 years. If I had to sell then it would have been a big net negative. Fortunately for me it appreciated over 50% they last two years and I made a couple hundred thousand on it. Unfortunately, when I bought my current house it was near the top of the market so I probably overpaid by about $150k based on my assumptions.

I do believe most houses will appreciate over a long period but if you plan on having it only a couple of years you are just gambling.
At my age, a "Life In Prison" sentence is not much of a deterrent.
billryan
billryan
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March 12th, 2023 at 8:04:35 AM permalink
My friends bought their house off of Ft. Apache in 2007 and paid well over 500K for it. It went down in value almost immediately and took a decade to regain its former value. Had they been forced to sell, it would have been a bloodbath. If you sell at the height of the market, it usually means you buy your next house at the height as well. The trick is to sell at the height, rent for a few years and then buy at the bottom, but people are convinced renting is just throwing their money away and you can't be a real man without owning a home.
Most houses do appreciate over time, but that doesn't make them great investments.
The difference between fiction and reality is that fiction is supposed to make sense.
AZDuffman
AZDuffman
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March 12th, 2023 at 1:16:21 PM permalink
Quote: billryan

My friends bought their house off of Ft. Apache in 2007 and paid well over 500K for it. It went down in value almost immediately and took a decade to regain its former value. Had they been forced to sell, it would have been a bloodbath. If you sell at the height of the market, it usually means you buy your next house at the height as well. The trick is to sell at the height, rent for a few years and then buy at the bottom, but people are convinced renting is just throwing their money away and you can't be a real man without owning a home.
Most houses do appreciate over time, but that doesn't make them great investments.
link to original post



The problem is you are thinking homes are ONLY investments. Unless you buy investment property the idea is you have a place to live and if you eventually sell you should at the leas keep up with inflation. Think of the mortgage interest as "rent" if you must. Bottom line is mortgage payments end in most cases after 360 payments. Rent NEVER ends. Between 5-7 years seems to be decision time. Around shorter then probably rent. Over 7 probably should buy. But in-between it depends on personal choices.
All animals are equal, but some are more equal than others
billryan
billryan
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March 12th, 2023 at 1:36:28 PM permalink
Taxes last forever. None of my family wanted my Aunts house when she died, as the taxes without her many discounts would have exceeded $23,000 a year and do nothing but go up.
Renting also makes it easier to close your estate when you pass. Nothing shows love of family like leaving a complicated estate for them to unwind.
The difference between fiction and reality is that fiction is supposed to make sense.

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