6 ms·

If the house was your primary residence, and not an investment instrument, you didn't really "lose" anything - other property is now also cheaper, and you alway

by esteth 11y ago

If the house was your primary residence, and not an investment instrument, you didn't really "lose" anything - other property is now also cheaper, and you always need somewhere to live. Sure, you're paying more than you would have if you waited, but you were happy to pay XXXXUSD per month to have somewhere to live, and your relative mobility has actually increased if we assume that the housing market fell by a flat percentage.

Scarblac 11y ago
Assuming that I will always move on to another own house, and not a rented one.
- logfromblammo 11y ago
  I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. And I don't believe those actually exist any more. Also, I no longer trust the justice system to protect my rights as a property owner. Having been primed by software-based DRM to not want to buy something unless I can truly own it, I find that land property in the US is often heavily encumbered with covenants, regulations, local ordinances, mortgage terms, and recurring taxes, to the point where it feels like paying rent and signing a lease feels less restrictive.
  - JoeAltmaier 11y ago
    Takes all kinds. I bought my place after 20 years of payments, on a dozen different jobs. Had savings, so 'between jobs' didn't impact mortgage payments. And I'm out in the county, where if they have zoning rules, there sure as heck aren't any inspectors. So I do as I please. Feels pretty unencumbered to me!
    - logfromblammo 11y ago
      I have been burnt twice on home ownership, and didn't enjoy the pain. Other people will have different experiences. I do know for certain that I will never sign another mortgage for as long as I live. Those lenders can go FOADIAF.
  - Scarblac 11y ago
    > I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. I don't get this. If you rent instead, you'll just be sinking monthly payments into that (maybe more, maybe less than with buying). And there's no need for a job that lasts 30 years, you just need to keep the ability to make the payment every month. But that is also true when renting.
    - logfromblammo 11y ago
      You don't understand, because you have probably just done the math on paper, rather than lived it. Anecdotally, I have realized more value per dollar spent on rented homes than on purchased homes. If I had never purchased a home in the past, renting instead, I believe without a shred of doubt that I would have a greater net worth today. I cannot make a rational case for home purchase now, because I cannot guarantee so many years of steady paychecks within an acceptable commuting radius of any home I could buy. Look back 30 years before now, to 1985. How many jobs existed then in the U.S. that no longer exist now? Do you think you can predict what the job market will look like in 2045? If your job was to make buggy whips, would you feel safe making a 30-year financial commitment in 1890? Perhaps, but the Ford Model T came in 1908. Technology develops faster now. I get the impression that jobs that don't even exist this year may become obsolete before 30 years elapse, and yet employers still routinely hire based on specific experience rather than aptitude or trainability. Perhaps it would have been more accurate to say that I will never take on debt to buy a home again, and I don't expect to ever be able to afford to buy anything without doing so.
      - Scarblac 11y ago
        Fair enough. I'm lucky to live in a small country.
      - AnimalMuppet 11y ago
        It's a bit more complicated than what you're presenting. Let's say I'm a buggy whip maker in 1890. I buy a house. 1908 comes, and I'm out of a job. I can't afford the house. But if I'm living in a town that wasn't too dependent on the buggy whip factory, then there are probably people who are looking to buy houses, so I'm still able to get out of the house without losing my shirt. The problem comes when the town's economy crashed (because the buggy whip factory was the big business), or the nation's economy crashes (recession/depression/downturn/whatever), and I have to sell my house. Then I can really get burned. And the next problem: When I buy a house, I can't be sure what the economic environment will be when I need to sell it. I would say that, over the long haul, if you live in a town where there's enough variety of employment that you can probably continue to find work even if you lose your current job, most of the time owning your own house is a net win. (Be sure to hear all the caveats in that sentence!)
esaym 11y ago
I think the problem is when you finally do need to move, and you owe 200k still but will only be able sell the house for 150k. You'll still be making mortgage payments on a house you won't even have then.
- at-fates-hands 11y ago
  Real estate markets are a fickle beast. After the 2008 crash, I was planning on moving, but abruptly changed my plans when I lost close to a 80K on the value of my home. Fast forward 6 years and suddenly the market was showing signs of rebounding. I had always been in contact with my real estate agent, but I was considering a large scale remodel and staying put where I was. My agent offered to start looking for something that I might like. A year later the process went shockingly fast. I was assuming the house would sit for a while since the market was still pretty soft. I cleaned and de-cluttered my house and it went on the market. Within hours I had two listings for the next day - which ballooned to four the morning of. When I got back, I had two offers. The house was on the market less than two days. I credit the ability to sell my house and make a few grand on it to my agent. It was priced and marketed really well by him and his company. This is the second house he's sold for me. The other house was on the market at the height of the housing boom and sold in less than a week.
jellicle 11y ago
Just because the loss hasn't been realized yet doesn't mean it isn't real. Among other things, prior commenter can't move to a different house because s/he no longer has a downpayment and won't be able to refinance to take advantage of lower rates. An increase in housing values is real, and so is a decrease, and it's real even before those losses/gains have been realized by selling (for instance, a HELOC can get the gains out before selling).
- Scarblac 11y ago
  In particular my wife has no job now and mortgage lending rules are much stricter now. So although we can make the payments on our current 240k mortgage each month on my income, the maximum mortgage we could get now is something like 180k.
cpursley 11y ago
Exactly, we're all naturally short housing. https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...

by esteth 11y ago

Scarblac 11y ago

Assuming that I will always move on to another own house, and not a rented one.

logfromblammo 11y ago
I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. And I don't believe those actually exist any more. Also, I no longer trust the justice system to protect my rights as a property owner. Having been primed by software-based DRM to not want to buy something unless I can truly own it, I find that land property in the US is often heavily encumbered with covenants, regulations, local ordinances, mortgage terms, and recurring taxes, to the point where it feels like paying rent and signing a lease feels less restrictive.
- JoeAltmaier 11y ago
  Takes all kinds. I bought my place after 20 years of payments, on a dozen different jobs. Had savings, so 'between jobs' didn't impact mortgage payments. And I'm out in the county, where if they have zoning rules, there sure as heck aren't any inspectors. So I do as I please. Feels pretty unencumbered to me!
  - logfromblammo 11y ago
    I have been burnt twice on home ownership, and didn't enjoy the pain. Other people will have different experiences. I do know for certain that I will never sign another mortgage for as long as I live. Those lenders can go FOADIAF.
- Scarblac 11y ago
  > I'm never buying again. If they want me to sink 30 years of my life into monthly payments, I'm going to need a job that will last for at least 30 years of steady paychecks. I don't get this. If you rent instead, you'll just be sinking monthly payments into that (maybe more, maybe less than with buying). And there's no need for a job that lasts 30 years, you just need to keep the ability to make the payment every month. But that is also true when renting.
  - logfromblammo 11y ago
    You don't understand, because you have probably just done the math on paper, rather than lived it. Anecdotally, I have realized more value per dollar spent on rented homes than on purchased homes. If I had never purchased a home in the past, renting instead, I believe without a shred of doubt that I would have a greater net worth today. I cannot make a rational case for home purchase now, because I cannot guarantee so many years of steady paychecks within an acceptable commuting radius of any home I could buy. Look back 30 years before now, to 1985. How many jobs existed then in the U.S. that no longer exist now? Do you think you can predict what the job market will look like in 2045? If your job was to make buggy whips, would you feel safe making a 30-year financial commitment in 1890? Perhaps, but the Ford Model T came in 1908. Technology develops faster now. I get the impression that jobs that don't even exist this year may become obsolete before 30 years elapse, and yet employers still routinely hire based on specific experience rather than aptitude or trainability. Perhaps it would have been more accurate to say that I will never take on debt to buy a home again, and I don't expect to ever be able to afford to buy anything without doing so.
    - Scarblac 11y ago
      Fair enough. I'm lucky to live in a small country.
    - AnimalMuppet 11y ago
      It's a bit more complicated than what you're presenting. Let's say I'm a buggy whip maker in 1890. I buy a house. 1908 comes, and I'm out of a job. I can't afford the house. But if I'm living in a town that wasn't too dependent on the buggy whip factory, then there are probably people who are looking to buy houses, so I'm still able to get out of the house without losing my shirt. The problem comes when the town's economy crashed (because the buggy whip factory was the big business), or the nation's economy crashes (recession/depression/downturn/whatever), and I have to sell my house. Then I can really get burned. And the next problem: When I buy a house, I can't be sure what the economic environment will be when I need to sell it. I would say that, over the long haul, if you live in a town where there's enough variety of employment that you can probably continue to find work even if you lose your current job, most of the time owning your own house is a net win. (Be sure to hear all the caveats in that sentence!)

esaym 11y ago

I think the problem is when you finally do need to move, and you owe 200k still but will only be able sell the house for 150k. You'll still be making mortgage payments on a house you won't even have then.

at-fates-hands 11y ago
Real estate markets are a fickle beast. After the 2008 crash, I was planning on moving, but abruptly changed my plans when I lost close to a 80K on the value of my home. Fast forward 6 years and suddenly the market was showing signs of rebounding. I had always been in contact with my real estate agent, but I was considering a large scale remodel and staying put where I was. My agent offered to start looking for something that I might like. A year later the process went shockingly fast. I was assuming the house would sit for a while since the market was still pretty soft. I cleaned and de-cluttered my house and it went on the market. Within hours I had two listings for the next day - which ballooned to four the morning of. When I got back, I had two offers. The house was on the market less than two days. I credit the ability to sell my house and make a few grand on it to my agent. It was priced and marketed really well by him and his company. This is the second house he's sold for me. The other house was on the market at the height of the housing boom and sold in less than a week.

jellicle 11y ago

Just because the loss hasn't been realized yet doesn't mean it isn't real. Among other things, prior commenter can't move to a different house because s/he no longer has a downpayment and won't be able to refinance to take advantage of lower rates. An increase in housing values is real, and so is a decrease, and it's real even before those losses/gains have been realized by selling (for instance, a HELOC can get the gains out before selling).

Scarblac 11y ago
In particular my wife has no job now and mortgage lending rules are much stricter now. So although we can make the payments on our current 240k mortgage each month on my income, the maximum mortgage we could get now is something like 180k.

cpursley 11y ago

Exactly, we're all naturally short housing. https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...