Author Topic: ​How To Afford a House These Days  (Read 50517 times)

roomtempmayo

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Re: ​How To Afford a House These Days
« Reply #50 on: August 20, 2024, 09:34:05 AM »
Beating the drum for a 40 year mortgage today: https://www.cnbc.com/2024/08/20/op-ed-the-case-for-a-40-year-mortgage.html

Really bad ideas from a guy who claims to be in the business of financial literacy:

Quote
A 40-year mortgage program can also address the growing wealth gap in America. Homeownership has historically been one of the most effective ways for families to build wealth. By making homeownership more accessible, particularly for young people, minorities, and those in rural areas, we can promote more equitable wealth distribution and help close the economic divide. This approach also addresses social justice concerns, particularly for historically marginalized communities like African Americans, where the homeownership rate lags at 45% compared to 75% for white Americans. Bridging the homeownership gap can help close the wealth gap, advancing social justice through an economic lens.

Extending the mortgage term and subsidizing interest would just boost prices and be a gift to all the existing homeowners.  Meanwhile, the new buyers would be on the hook for those prices for four decades, often past their working years.

Not to mention that home ownership is often a trap for poor people.  The maintenance costs are lumpy, and even if they can finance the big stuff it's on bad terms.  Houses on the bottom of the property ladder don't appreciate to the degree more desirable neighborhoods do.  It's all the risk of a house with less upside.  Renting isn't the worst thing in the world.

Squeaking into a rundown house in a bad neighborhood with a 40 year mortgage is a trap, not the path to generational wealth.

clarkfan1979

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Re: ​How To Afford a House These Days
« Reply #51 on: September 22, 2024, 01:22:52 PM »
Beating the drum for a 40 year mortgage today: https://www.cnbc.com/2024/08/20/op-ed-the-case-for-a-40-year-mortgage.html

Really bad ideas from a guy who claims to be in the business of financial literacy:

Quote
A 40-year mortgage program can also address the growing wealth gap in America. Homeownership has historically been one of the most effective ways for families to build wealth. By making homeownership more accessible, particularly for young people, minorities, and those in rural areas, we can promote more equitable wealth distribution and help close the economic divide. This approach also addresses social justice concerns, particularly for historically marginalized communities like African Americans, where the homeownership rate lags at 45% compared to 75% for white Americans. Bridging the homeownership gap can help close the wealth gap, advancing social justice through an economic lens.

Extending the mortgage term and subsidizing interest would just boost prices and be a gift to all the existing homeowners.  Meanwhile, the new buyers would be on the hook for those prices for four decades, often past their working years.

Not to mention that home ownership is often a trap for poor people.  The maintenance costs are lumpy, and even if they can finance the big stuff it's on bad terms.  Houses on the bottom of the property ladder don't appreciate to the degree more desirable neighborhoods do.  It's all the risk of a house with less upside.  Renting isn't the worst thing in the world.

Squeaking into a rundown house in a bad neighborhood with a 40 year mortgage is a trap, not the path to generational wealth.

Good points on lower appreciation for less desirable neighborhoods. I take a similar approach when buying single family rentals. Single family rentals that look really good on a spread sheet are rarely good performers long-term when you consider (tenant management, vacancy, on-time rent payments, appreciation and cash flow).

You have to start somewhere. As a result, if your first rental is at a lower price point in a less desirable neighborhood, that is fine as a starting point. Be a landlord for 5 years, learn the trade and then scale into more desirable neighborhoods. 

ChpBstrd

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Re: ​How To Afford a House These Days
« Reply #52 on: September 23, 2024, 07:15:54 AM »
Beating the drum for a 40 year mortgage today: https://www.cnbc.com/2024/08/20/op-ed-the-case-for-a-40-year-mortgage.html

Really bad ideas from a guy who claims to be in the business of financial literacy:

Quote
A 40-year mortgage program can also address the growing wealth gap in America. Homeownership has historically been one of the most effective ways for families to build wealth. By making homeownership more accessible, particularly for young people, minorities, and those in rural areas, we can promote more equitable wealth distribution and help close the economic divide. This approach also addresses social justice concerns, particularly for historically marginalized communities like African Americans, where the homeownership rate lags at 45% compared to 75% for white Americans. Bridging the homeownership gap can help close the wealth gap, advancing social justice through an economic lens.

Extending the mortgage term and subsidizing interest would just boost prices and be a gift to all the existing homeowners.  Meanwhile, the new buyers would be on the hook for those prices for four decades, often past their working years.

Not to mention that home ownership is often a trap for poor people.  The maintenance costs are lumpy, and even if they can finance the big stuff it's on bad terms.  Houses on the bottom of the property ladder don't appreciate to the degree more desirable neighborhoods do.  It's all the risk of a house with less upside.  Renting isn't the worst thing in the world.

Squeaking into a rundown house in a bad neighborhood with a 40 year mortgage is a trap, not the path to generational wealth.
At some point along the spectrum of single-family-home subsidization, it becomes a rental plan to the government. Here in the US we pay probably 1-2% lower rates than we would in a full market economy, and we get amortization schedules and terms more extreme than anywhere else - 15 to 30 year fixed rate loans. Then we invented programs so that all the people who can't put 20% down can put down 5% or even 3%.

The combo of low down payments, government subsidized rates, and extreme loan terms was supposed to make house ownership accessible to the poor, and in the long run cheaper than renting (although the "cheaper" part was due to taxpayer subsidization, i.e. transfer of the cost of ownership to the national debt). In reality, it only made homes into investments, incentivizing the expansion of the average American home to almost 3000sf, and made it possible to have housing bubbles.

40 year mortgages would extend all of these trends. As noted, they'd pump up the value of houses at the expense of new market entrants. Imagine putting down 3% on a house with a 40 year mortgage. Five or ten years in, you'd still have almost no equity, and no disincentive to walk away in an economic crisis. The house would be a highly leveraged option on future appreciation, treated more like an investment than a consumption item or place to live. We're already there to some extent with 30 year mortgages, but a 40 would make worse every trend that has made suburbia so desolate for the past 50 years.

LaineyAZ

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Re: ​How To Afford a House These Days
« Reply #53 on: September 23, 2024, 08:45:22 AM »
Related to the realities of SFH new construction, there's an independent housing inspector who does YouTube short videos on his findings. 
What he reveals in pricey homes just a few months old is pretty shocking:  leaking showers and tubs, broken welds in corners of windows, missing attic insulation, ducting not hooked up, natural gas hookups leaking, landscaping not graded properly, stucco missing on exterior, broken roof tiles, etc. 
All of these homes, costing anywhere from $400,000 to $1million, had received final approval by the state housing inspector.

When the homeowners take the evidence to the state Registrar of Contractors to force the builder to fix the issues, the ROC may or may not side with the homeowner despite video evidence.  In fact, some builders have sued the independent inspector and tried to prevent him from posting videos with their names.
These are the same building companies with multi-million dollar profits. 

I know there's a labor shortage in the construction trades but all of this is something else to consider before deciding to become a homeowner.

sonofsven

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Re: ​How To Afford a House These Days
« Reply #54 on: September 23, 2024, 09:15:43 AM »
Related to the realities of SFH new construction, there's an independent housing inspector who does YouTube short videos on his findings. 
What he reveals in pricey homes just a few months old is pretty shocking:  leaking showers and tubs, broken welds in corners of windows, missing attic insulation, ducting not hooked up, natural gas hookups leaking, landscaping not graded properly, stucco missing on exterior, broken roof tiles, etc. 
All of these homes, costing anywhere from $400,000 to $1million, had received final approval by the state housing inspector.

When the homeowners take the evidence to the state Registrar of Contractors to force the builder to fix the issues, the ROC may or may not side with the homeowner despite video evidence.  In fact, some builders have sued the independent inspector and tried to prevent him from posting videos with their names.
These are the same building companies with multi-million dollar profits. 

I know there's a labor shortage in the construction trades but all of this is something else to consider before deciding to become a homeowner.
My recent experience is the opposite.
My business partners and I recently sold a million dollar home that we built. We have decades of experience as builders.
The home inspector hired by the prospective buyers wrote a multi page report that purported to show various defects in the construction, all of which he was completely wrong about.
He even referenced certain buildings codes to reinforce his opinion, I was able to show that he was misinterpreting the code. I don't know if it was from inexperience, or a tactict to force price negotiation. We had already negotiated on the price.
Some of his opinions were so wrong as to be laughable, but I still wasted a week dealing with it. And since the buyers presumably paid good money for it, they were not easily convinced to discount the report
In the end, we did make one correction on his report: removal of a wasp nest under the eaves.

Having said all that, though, I would agree that the price point of a home built by a volume builder should in no way be a referendum on its quality.

zolotiyeruki

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Re: ​How To Afford a House These Days
« Reply #55 on: October 15, 2024, 02:17:00 PM »
Related to the realities of SFH new construction, there's an independent housing inspector who does YouTube short videos on his findings. 
What he reveals in pricey homes just a few months old is pretty shocking:  leaking showers and tubs, broken welds in corners of windows, missing attic insulation, ducting not hooked up, natural gas hookups leaking, landscaping not graded properly, stucco missing on exterior, broken roof tiles, etc. 
All of these homes, costing anywhere from $400,000 to $1million, had received final approval by the state housing inspector.

When the homeowners take the evidence to the state Registrar of Contractors to force the builder to fix the issues, the ROC may or may not side with the homeowner despite video evidence.  In fact, some builders have sued the independent inspector and tried to prevent him from posting videos with their names.
These are the same building companies with multi-million dollar profits. 
Yup, I know the channel: https://www.youtube.com/@cyfyhomeinspections

Some of the stuff he finds is just mind-boggling, as in "how on earth do you sleep at night, having done such a terrible job?"  The stuff I see makes me want to oversee the building of my own home, inspecting every single day.

bacchi

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Re: ​How To Afford a House These Days
« Reply #56 on: October 27, 2024, 08:42:53 AM »
Related to the realities of SFH new construction, there's an independent housing inspector who does YouTube short videos on his findings. 
What he reveals in pricey homes just a few months old is pretty shocking:  leaking showers and tubs, broken welds in corners of windows, missing attic insulation, ducting not hooked up, natural gas hookups leaking, landscaping not graded properly, stucco missing on exterior, broken roof tiles, etc. 
All of these homes, costing anywhere from $400,000 to $1million, had received final approval by the state housing inspector.

When the homeowners take the evidence to the state Registrar of Contractors to force the builder to fix the issues, the ROC may or may not side with the homeowner despite video evidence.  In fact, some builders have sued the independent inspector and tried to prevent him from posting videos with their names.
These are the same building companies with multi-million dollar profits. 
Yup, I know the channel: https://www.youtube.com/@cyfyhomeinspections

Some of the stuff he finds is just mind-boggling, as in "how on earth do you sleep at night, having done such a terrible job?"  The stuff I see makes me want to oversee the building of my own home, inspecting every single day.

I kept a journal of the problems I found at our place. Like the toilet flange/drain was too close to the wall and the concrete was coming the next day. That would've been discovered eventually but, damn, it would've been messy to fix.

GilesMM

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Re: ​How To Afford a House These Days
« Reply #57 on: October 27, 2024, 09:31:09 AM »
Related to the realities of SFH new construction, there's an independent housing inspector who does YouTube short videos on his findings. 
What he reveals in pricey homes just a few months old is pretty shocking:  leaking showers and tubs, broken welds in corners of windows, missing attic insulation, ducting not hooked up, natural gas hookups leaking, landscaping not graded properly, stucco missing on exterior, broken roof tiles, etc. 
All of these homes, costing anywhere from $400,000 to $1million, had received final approval by the state housing inspector.

When the homeowners take the evidence to the state Registrar of Contractors to force the builder to fix the issues, the ROC may or may not side with the homeowner despite video evidence.  In fact, some builders have sued the independent inspector and tried to prevent him from posting videos with their names.
These are the same building companies with multi-million dollar profits. 
Yup, I know the channel: https://www.youtube.com/@cyfyhomeinspections

Some of the stuff he finds is just mind-boggling, as in "how on earth do you sleep at night, having done such a terrible job?"  The stuff I see makes me want to oversee the building of my own home, inspecting every single day.


A shocking percent of all tradework is shoddy in my experience.  Every single house has their share of horrific problems and shortcuts from initial construction and right through all repairs.  We have had inspectors turn up nightmares on brand new homes and older homes.  The great thing about new homes, is that you can demand the builder fix every single thing and they will do it.  They will just yell at the tradies who did the rotten work and make them redo it on their own dime.  Inspecting brand new houses is a must.


When people do work at your house, you not only need to inspect the final result you absolutely need to watch over them to some degree.  Ask questions.  I'm surprised at the number of times I have ask an "expert" a question which changed the course of the work scope. And a certain percentage of these people will simply defraud you by taking shortcuts, chatting on their phones while charging you hourly rates, taking breaks on the clock,  and doing slipshod work then hiding it.  There is no way to predict who will do this or under what circumstances, from a casual laborer to a professional operations GM at a name brand company.

41_swish

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Re: ​How To Afford a House These Days
« Reply #58 on: January 28, 2025, 10:32:01 AM »
I have felt good about my finances even before I was a mustache, but Home Ownership is one thing that still worries me.

Right now, I am young and value the flexibility of renting, so I have no problem with that for the time being. However, housing is just so expensive in CO. I am tasked with buying a 500k cookie cutter new build deep in the burbs or a crappy condo for 350k closer to everything. It just feels like an uphill battle to home ownership.

I think the current plan is rent for a few more years with a roommate and use that money to save up to buy a townhome or condo and then try to convince a friend or family member to move into it with me to offset some of the price. Or, I could have a spouse by then and two incomes.

Log

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Re: ​How To Afford a House These Days
« Reply #59 on: January 28, 2025, 04:10:04 PM »
I have felt good about my finances even before I was a mustache, but Home Ownership is one thing that still worries me.

Right now, I am young and value the flexibility of renting, so I have no problem with that for the time being. However, housing is just so expensive in CO. I am tasked with buying a 500k cookie cutter new build deep in the burbs or a crappy condo for 350k closer to everything. It just feels like an uphill battle to home ownership.

I think the current plan is rent for a few more years with a roommate and use that money to save up to buy a townhome or condo and then try to convince a friend or family member to move into it with me to offset some of the price. Or, I could have a spouse by then and two incomes.

I think around our age it's best not to sweat about home ownership. I like JL Collins' take on home ownership.

Just build the stash in stocks. Real estate "investment" is more consumption than investment, so save that expensive consumption for when you're rich.

41_swish

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Re: ​How To Afford a House These Days
« Reply #60 on: January 28, 2025, 05:52:53 PM »
I have felt good about my finances even before I was a mustache, but Home Ownership is one thing that still worries me.

Right now, I am young and value the flexibility of renting, so I have no problem with that for the time being. However, housing is just so expensive in CO. I am tasked with buying a 500k cookie cutter new build deep in the burbs or a crappy condo for 350k closer to everything. It just feels like an uphill battle to home ownership.

I think the current plan is rent for a few more years with a roommate and use that money to save up to buy a townhome or condo and then try to convince a friend or family member to move into it with me to offset some of the price. Or, I could have a spouse by then and two incomes.

I think around our age it's best not to sweat about home ownership. I like JL Collins' take on home ownership.

Just build the stash in stocks. Real estate "investment" is more consumption than investment, so save that expensive consumption for when you're rich.
I have never though real estate returned as much as equities. In millionaire next door there is a part of the book where it shows home value as a portion of net worth. Really rich people have way more in securities than real estate. Normal people are the inverse.

I guess it just feels daunting, but I like the JL Collins take on it. I have a ton of time left to decide where to settle down. The last thing I would want is to hastily jump into something that isn't right and then sell in four years. At that point renting is better. There are just too many unknowns in my life.

Morning Glory

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Re: ​How To Afford a House These Days
« Reply #61 on: January 29, 2025, 08:49:41 AM »
I have felt good about my finances even before I was a mustache, but Home Ownership is one thing that still worries me.

Right now, I am young and value the flexibility of renting, so I have no problem with that for the time being. However, housing is just so expensive in CO. I am tasked with buying a 500k cookie cutter new build deep in the burbs or a crappy condo for 350k closer to everything. It just feels like an uphill battle to home ownership.

I think the current plan is rent for a few more years with a roommate and use that money to save up to buy a townhome or condo and then try to convince a friend or family member to move into it with me to offset some of the price. Or, I could have a spouse by then and two incomes.

I think around our age it's best not to sweat about home ownership. I like JL Collins' take on home ownership.

Just build the stash in stocks. Real estate "investment" is more consumption than investment, so save that expensive consumption for when you're rich.
I have never though real estate returned as much as equities. In millionaire next door there is a part of the book where it shows home value as a portion of net worth. Really rich people have way more in securities than real estate. Normal people are the inverse.

I guess it just feels daunting, but I like the JL Collins take on it. I have a ton of time left to decide where to settle down. The last thing I would want is to hastily jump into something that isn't right and then sell in four years. At that point renting is better. There are just too many unknowns in my life.

This is highly local. The real value of owning the place you live is that you don't have to worry about rent going up every year or your landlord deciding not to renew your lease (and you can make changes etc but that's more of a lifestyle thing). Yes equities return more on average but when you are looking at  4% withdrawal rates a house can cost a lot less than 25x your annual rent.
An example:
House cost 350k and ownership costs are 5k/yr, or another 125k you would need in the stash. Total 475k. That's the same amount you would need to continue renting forever at a 4%WR if your rent is $1583/month. Good deal in some places, not so much in others.

41_swish

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Re: ​How To Afford a House These Days
« Reply #62 on: January 29, 2025, 09:37:16 AM »
I have felt good about my finances even before I was a mustache, but Home Ownership is one thing that still worries me.

Right now, I am young and value the flexibility of renting, so I have no problem with that for the time being. However, housing is just so expensive in CO. I am tasked with buying a 500k cookie cutter new build deep in the burbs or a crappy condo for 350k closer to everything. It just feels like an uphill battle to home ownership.

I think the current plan is rent for a few more years with a roommate and use that money to save up to buy a townhome or condo and then try to convince a friend or family member to move into it with me to offset some of the price. Or, I could have a spouse by then and two incomes.

I think around our age it's best not to sweat about home ownership. I like JL Collins' take on home ownership.

Just build the stash in stocks. Real estate "investment" is more consumption than investment, so save that expensive consumption for when you're rich.
I have never though real estate returned as much as equities. In millionaire next door there is a part of the book where it shows home value as a portion of net worth. Really rich people have way more in securities than real estate. Normal people are the inverse.

I guess it just feels daunting, but I like the JL Collins take on it. I have a ton of time left to decide where to settle down. The last thing I would want is to hastily jump into something that isn't right and then sell in four years. At that point renting is better. There are just too many unknowns in my life.

This is highly local. The real value of owning the place you live is that you don't have to worry about rent going up every year or your landlord deciding not to renew your lease (and you can make changes etc but that's more of a lifestyle thing). Yes equities return more on average but when you are looking at  4% withdrawal rates a house can cost a lot less than 25x your annual rent.
An example:
House cost 350k and ownership costs are 5k/yr, or another 125k you would need in the stash. Total 475k. That's the same amount you would need to continue renting forever at a 4%WR if your rent is $1583/month. Good deal in some places, not so much in others.
I have always tried to think about it like you just said, a way to stabilize your biggest expense. So, long term it is definitely a goal to own, but I think that while I am this young renting is very fine. I still need some flexibility and renting affords that.

HPstache

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Re: ​How To Afford a House These Days
« Reply #63 on: January 29, 2025, 09:58:40 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.

41_swish

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Re: ​How To Afford a House These Days
« Reply #64 on: January 29, 2025, 10:31:36 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?

ChpBstrd

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Re: ​How To Afford a House These Days
« Reply #65 on: January 29, 2025, 12:38:45 PM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.

41_swish

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Re: ​How To Afford a House These Days
« Reply #66 on: January 29, 2025, 12:46:07 PM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.
A constitutional federal repubic is a type of democracy.... All jokes aside, I would want to leave the south, too.

VanillaGorilla

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Re: ​How To Afford a House These Days
« Reply #67 on: January 30, 2025, 11:49:58 AM »
I have felt good about my finances even before I was a mustache, but Home Ownership is one thing that still worries me.

Right now, I am young and value the flexibility of renting, so I have no problem with that for the time being. However, housing is just so expensive in CO. I am tasked with buying a 500k cookie cutter new build deep in the burbs or a crappy condo for 350k closer to everything. It just feels like an uphill battle to home ownership.

I think the current plan is rent for a few more years with a roommate and use that money to save up to buy a townhome or condo and then try to convince a friend or family member to move into it with me to offset some of the price. Or, I could have a spouse by then and two incomes.

I think around our age it's best not to sweat about home ownership. I like JL Collins' take on home ownership.

Just build the stash in stocks. Real estate "investment" is more consumption than investment, so save that expensive consumption for when you're rich.
JL Collins' attitude is rooted in the 1980s Chicago market. I am so incredibly happy to not have read his book until after I bought a house, otherwise I would never have made one of my better wealth building decisions. I've spent roughly $500k on homeownership, and rent over the same period would have cost about $360k. However, the house is now worth $800k, so I've made $300k by owning this house, putting me ahead of renting by more than half a million bucks.

Simplifying, $500k down (for house, maintenance, and taxes) netted me $800k in equity + $360k in imputed rent over a decade, or 8% annualized returns with much lower risk than equities.

Of course, buying a California house at 2% in the early 2010s was a total slam dunk, my mortgage cost less than a one bedroom apartment did at the time. Today things are far murkier. The NYT rent vs buy calculator is excellent, by the way.
« Last Edit: January 30, 2025, 11:55:31 AM by VanillaGorilla »

ChpBstrd

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Re: ​How To Afford a House These Days
« Reply #68 on: January 31, 2025, 07:13:41 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.
A constitutional federal repubic is a type of democracy.... All jokes aside, I would want to leave the south, too.
I don't think it matters which state or province you live in if you've living in a declining/dying democracy. Policy is made at the national level, and has been consolidating that way for two centuries in the US.

Morning Glory

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Re: ​How To Afford a House These Days
« Reply #69 on: January 31, 2025, 07:51:00 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.
A constitutional federal repubic is a type of democracy.... All jokes aside, I would want to leave the south, too.
I don't think it matters which state or province you live in if you've living in a declining/dying democracy. Policy is made at the national level, and has been consolidating that way for two centuries in the US.

I disagree. State and local policies matter more to the lives of ordinary people when the federal government is unable or unwilling to enforce civil rights or protect citizens from oppressive state laws. For example,  look at differences in maternal mortality between states with and without abortion bans.
« Last Edit: January 31, 2025, 07:54:55 AM by Morning Glory »

41_swish

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Re: ​How To Afford a House These Days
« Reply #70 on: January 31, 2025, 10:27:42 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.
A constitutional federal repubic is a type of democracy.... All jokes aside, I would want to leave the south, too.
I don't think it matters which state or province you live in if you've living in a declining/dying democracy. Policy is made at the national level, and has been consolidating that way for two centuries in the US.

I disagree. State and local policies matter more to the lives of ordinary people when the federal government is unable or unwilling to enforce civil rights or protect citizens from oppressive state laws. For example,  look at differences in maternal mortality between states with and without abortion bans.
I just wanted to know if waiting to buy a house was okay.....

ChpBstrd

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Re: ​How To Afford a House These Days
« Reply #71 on: January 31, 2025, 11:32:33 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.
A constitutional federal repubic is a type of democracy.... All jokes aside, I would want to leave the south, too.
I don't think it matters which state or province you live in if you've living in a declining/dying democracy. Policy is made at the national level, and has been consolidating that way for two centuries in the US.
I disagree. State and local policies matter more to the lives of ordinary people when the federal government is unable or unwilling to enforce civil rights or protect citizens from oppressive state laws. For example,  look at differences in maternal mortality between states with and without abortion bans.
Without a doubt, state-level decisions have previously led to massive differences in outcomes and brain-drain from certain areas. Another example is the better health outcomes enjoyed in states that expanded Medicaid with the ACA, or the faster economic growth enjoyed in areas that look the other way as their industries hire undocumented immigrants.

However, abortion will be outlawed at the federal level within the next few years. Medicaid will either have its funding cut nationwide OR will be smothered in red tape. In terms of local enforcement, your local police and military are most likely Trumpers. State or local diversity initiatives, civil rights laws, election integrity laws, or LGBTQ protections will be summarily executed by the Supreme Court, trumped by new federal laws, or walked back in the face of federal funding threats. This is what it will mean to have all 3 branches of the federal government in GOP hands for the foreseeable future.


FINate

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Re: ​How To Afford a House These Days
« Reply #72 on: February 02, 2025, 08:43:40 AM »
@ChpBstrd I don't think anyone here is worried about hipness or posting on Instagram.

Replace "hipness" with political color of state/city/region and I see it all the time here.
Isn't it a tale as old as time to want to live in a place that relatively aligns with your political beliefs?
I'm saving up to live in a democracy someday.
A constitutional federal repubic is a type of democracy.... All jokes aside, I would want to leave the south, too.
I don't think it matters which state or province you live in if you've living in a declining/dying democracy. Policy is made at the national level, and has been consolidating that way for two centuries in the US.

I disagree. State and local policies matter more to the lives of ordinary people when the federal government is unable or unwilling to enforce civil rights or protect citizens from oppressive state laws. For example,  look at differences in maternal mortality between states with and without abortion bans.
I just wanted to know if waiting to buy a house was okay.....

Yes, it's fine but with some caveats...

Beware tales of those who bought in an area with rapid price appreciation. My house in Boise went up 50% since 2020. I did not expect this nor plan for it, was purely dumb luck. Whereas prices in San Francisco declined (https://wolfstreet.com/2024/12/26/san-francisco-house-prices-drop-back-to-2019-condo-prices-to-2015-as-tech-jobs-in-the-city-silicon-valley-evaporate-after-drunken-hiring-binge/). There's a ton of Survivorship Bias in housing anecdotes that can make it seem like buying a house is always a slam dunk. It's not, and I'm very skeptical of housing markets that are overly reliant on a single industry, whether a company town that depends on a single factory or the SF Bay Area with tech.

The tax benefits of owning are often overstated, especially since the standard deduction was increased and SALT was capped (interested to see what happens with this Trump 2.0).

Owning is a great way to mostly lock in your cost of living, but this only works if you don't overspend on too much house or get into bidding wars. And then you have to resist pumping tons of money into it with vanity projects like lux remodels. And you actually have to live there 5-10 years or longer for this to start to pay off.

In short, the same general advice on these forums still applies: If you want to be a homeowner then buy what you can reasonably afford in a location you like and plan to say in 5+ years while keeping your expenses down. It's not a guaranteed way to get rich, so have reasonable expectations. Being realistic about it also gives you a ton of freedom. -- you don't *have* to buy a house, not something you need to stress about. It can be part of your FIRE journey, but lots of people do just fine renting. Incidentally, living in this freedom means you're way less likely to pay too much for a house, which means if you do buy this has way better odds of being successful long term.

41_swish

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Re: ​How To Afford a House These Days
« Reply #73 on: February 02, 2025, 02:37:12 PM »
@FINate I totally get at what you are saying about buying in Boise and then the housing market going bonkers. That feels good, but not reliably repeatable. Also, housing is a very illiquid asset.

Go look at the Case-Shiller for Atlanta from 2007 to 2017. I really do think buying is good, but for every time you hit it good in Boise, someone hit it bad in ATL in the late 2000s.
https://fred.stlouisfed.org/series/ATXRNSA/

The same thing happened in Detroit.
https://fred.stlouisfed.org/series/ATNHPIUS19804Q

roomtempmayo

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Re: ​How To Afford a House These Days
« Reply #74 on: February 06, 2025, 08:42:04 AM »
"A house" is still available to anyone who is willing to work. It's just that said house may not be anywhere near a beach, ski slope, tourist resort, scenic vista, or international airport. So what are we really complaining about, if it's not the impossibility of owning one's own house?

The reply is usually something like "yea but those are undesirable areas that aren't hip or cool". OK, fine, we can agree on that.

I think I've trained the Zillow algorithm to regularly remind me of how true this is even within my own city.

I live in a city that's regularly profiled by urbanists, with all sorts of green space and amenities.  It's nationally desirable. 

And among our dual income professional friend group, we hear regular moaning about how houses appropriate for a family of four are now a million dollars.

The truth is there are two or three exclusive suburbs where houses used to be ~$600k, and now they're $1M+.  And if only 1% of the city's housing stock is acceptable, then houses do indeed cost a million dollars.

But, Zillow regularly shows me solid houses in perfectly fine middle and working class neighborhoods (not dangerous, not filled with crime) for ~$300k, sometimes $250k.

Even within markets, the prices are totally bifurcated.  Only a small percentage of the market has gone to the moon.

 

Wow, a phone plan for fifteen bucks!