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I can tell you first hand that I bought a condo right at the start of the recession thinking I was getting a great deal, and subsequently lost my job in a round

I can tell you first hand that I bought a condo right at the start of the recession thinking I was getting a great deal, and subsequently lost my job in a round of layoffs. The next couple years I would have been better off if I’d moved but it took me three years to stabilize my situation enough to do it, mostly because I couldn’t sell and I couldn’t rent for enough to cover the mortgage, and I couldn’t afford two housing payments. I don’t know how common that sort of situation is, but I can easily imagine a much milder version of it in today’s housing bubble, which is people who bought ten years ago and now feel that if they moved, yes they’d get some equity out, but not enough to move to a home that would be “as nice” in the destination they’re considering. For example suppose you work in software and bought a house in Dallas, but you’re getting all these great offers to move to SF...

opencl 8y ago
I don't understand your second example at all. If you own a house during a bubble it seems like the ideal time to move. Sell your house to get the equity, move to a rental, then buy a house after the bubble pops.
- trustno1 8y ago
  Until everyone who bought during the bubble tries to get out at the same time. This is what we're on the cusp of now -- house sales are finally starting to fall.
- claydavisss 8y ago
  Or leave a particular metro. Or leave California. If you are open to moving when you have to, most real estate problems are non-issues. Once you limit yourself to a hard requirement of living in a particular metro or state, you are subject to the market. Everyone reading this can afford a home somewhere decent in the US, but you have to be willing to move. How many people reading this in the Bay Area would even consider moving to Gilroy or Benicia? Not many I presume.
- burlesona 8y ago
  The point of the example is you could own a nice 4bd 3ba in the Dallas area for $300-400k. But say you work in software and your career has plateaued. It’s tempting to move to SF because there are so many great jobs. But you cash out your $60k of equity or whatever in Dallas and go look for housing in SF.... well, you’ll have to accept a significant lifestyle change and switch to renting. There are a lot of people who feel tied down by that deal and so don’t move even though it might be better long term to be climbing the ladder at a major company than to be maxed out in the best available local job you can get.

opencl 8y ago

I don't understand your second example at all. If you own a house during a bubble it seems like the ideal time to move. Sell your house to get the equity, move to a rental, then buy a house after the bubble pops.

trustno1 8y ago
Until everyone who bought during the bubble tries to get out at the same time. This is what we're on the cusp of now -- house sales are finally starting to fall.
claydavisss 8y ago
Or leave a particular metro. Or leave California. If you are open to moving when you have to, most real estate problems are non-issues. Once you limit yourself to a hard requirement of living in a particular metro or state, you are subject to the market. Everyone reading this can afford a home somewhere decent in the US, but you have to be willing to move. How many people reading this in the Bay Area would even consider moving to Gilroy or Benicia? Not many I presume.
burlesona 8y ago
The point of the example is you could own a nice 4bd 3ba in the Dallas area for $300-400k. But say you work in software and your career has plateaued. It’s tempting to move to SF because there are so many great jobs. But you cash out your $60k of equity or whatever in Dallas and go look for housing in SF.... well, you’ll have to accept a significant lifestyle change and switch to renting. There are a lot of people who feel tied down by that deal and so don’t move even though it might be better long term to be climbing the ladder at a major company than to be maxed out in the best available local job you can get.