4 ms·

Finance guy here, two things. You are looking at it in retrospect. "I should have bought a house" is no different than "I should have bought X stock" when you'r

Finance guy here, two things. You are looking at it in retrospect. "I should have bought a house" is no different than "I should have bought X stock" when you're looking at the price history backwards. At the time, it could have gone up or down. EG we just bought a house, I have many reasons to expect that it could drop in value over the next bunch of years. Second, you may not be doing proper calculations. I would not have - before I bought a house. Do you count property taxes, upkeep, larger water and electricity bills, possibly longer commute times/needing a car, relative lack of mobility, air conditioner/heating/roofing/siding/repair, lawn maintenance, etc. Yes sure, if I bought this house 10 years ago, it would have been great. But I wouldn't know 10 years ago that I'd want this house, and for example dealing with all the above shit as a single man would have been stupid. There were also points in my life where I was very open to relocation for the right job, something home ownership would have put friction on. it's very common to think of only a pro or a con of a decision (if I bought earlier, it would have only cost X) but you're not factoring the risk that existed at the time, nor the commitment you're creating on yourself, not the carrying costs I described above. May not be relevant to you but I feel fine about "losing out" on 20 years of house appreciation (if I bought at 20 not 40) because I avoided all that stuff for 20 years, too.

fartcannon 5y ago
Whatever helps you sleep at night :D My parents bought a detatched home at 20 with minimum wage jobs. I bought a townhouse at 40 with a high paying career. My kid is going to be 60 by the time he can afford a home. It's fucked. Buy now.
- xyzelement 5y ago
  > It's fucked. Buy now. Ok you certainly should go for it, but I'll give you one analysis that I have. We bought in a NYC suburb (for a bunch of reasons) and here's what I think constitutes price risk for me. At the end of the day, a house is worth what someone can and is willing to pay for it. Right now, there's reasons the demand is high for near-NYC housing because (a) people aren't sure they need to be near NYC long-run and don't want to risk it (b) it's an easiest move to make to leave the city and not go far (c) supply is low because with covid, fewer people are willing to have an open house (d) now everyone is in a rush to upsize so space is at a premium. All of these are demand factors that can change. EG: (a) it may become clear in 1-2 years that permanent remote is an option for many people, relieving demand pressure on NYC and the area. (b) once people are comfortable with leaving the city they may be comfortable moving further afield. (c) the pent-up supply of folks who didn't sell in 2020/2021 may come to market, especially if a and b occur, causing people to want to sell before it's "too late" (d) everyone who needed up upsize may have done it, relieving that pressure. Also, for New York state specifically, with the number of wealthy people leaving the states, it feels inevitable that state and property taxes will rise, making all of this even less attractive. And finally, interest rates are ridiculously low right now, rising rates will be a damper on prices when that happens. Obviously there plenty of reasons it could also go up, but if your model is so simple "it's fucked so it's always goes up" you may get fucked too.
  - zsmi 5y ago
    > All of these are demand factors that can change. Don't forget: Cities actually allowing housing stock to increase. Very unlikely but hopefully not impossible...
  - fartcannon 5y ago
    Agreed. Same with stocks. It's all gambling.
- lastofthemojito 5y ago
  Reminds me of what I've heard Porsche aficionados say: "You can't pay too much for a classic Porsche. You can only buy it too soon". They're not making any more of them, and demand and prices only go up (until maybe one day they don't, I don't know).
  - xyzelement 5y ago
    >They're not making any more of them, and demand and prices only go up (until maybe one day they don't, I don't know). You can say that about anything - limited run beanie babies, bitcoin, whatever. It's all true until it's not. In the case of classic Porsches, next time you hear someone say that, ask them (a) what's gonna happen once boomers die out. Do genX/Z/millenials give a shit about a classic Porsche the way a boomer would? (b) what happens if/when we replace ICEs with electric and the gas station infrastructure goes away (not saying it will happen but it's one likely future path.) In the world where you can't get gasoline, is a classic car still valuable? I don't know the answers to these questions but unless the person who is giving you advice has modeled this out, their advice is of no value.
deleted 5y ago
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fartcannon 5y ago

Whatever helps you sleep at night :D My parents bought a detatched home at 20 with minimum wage jobs. I bought a townhouse at 40 with a high paying career. My kid is going to be 60 by the time he can afford a home. It's fucked. Buy now.

xyzelement 5y ago
> It's fucked. Buy now. Ok you certainly should go for it, but I'll give you one analysis that I have. We bought in a NYC suburb (for a bunch of reasons) and here's what I think constitutes price risk for me. At the end of the day, a house is worth what someone can and is willing to pay for it. Right now, there's reasons the demand is high for near-NYC housing because (a) people aren't sure they need to be near NYC long-run and don't want to risk it (b) it's an easiest move to make to leave the city and not go far (c) supply is low because with covid, fewer people are willing to have an open house (d) now everyone is in a rush to upsize so space is at a premium. All of these are demand factors that can change. EG: (a) it may become clear in 1-2 years that permanent remote is an option for many people, relieving demand pressure on NYC and the area. (b) once people are comfortable with leaving the city they may be comfortable moving further afield. (c) the pent-up supply of folks who didn't sell in 2020/2021 may come to market, especially if a and b occur, causing people to want to sell before it's "too late" (d) everyone who needed up upsize may have done it, relieving that pressure. Also, for New York state specifically, with the number of wealthy people leaving the states, it feels inevitable that state and property taxes will rise, making all of this even less attractive. And finally, interest rates are ridiculously low right now, rising rates will be a damper on prices when that happens. Obviously there plenty of reasons it could also go up, but if your model is so simple "it's fucked so it's always goes up" you may get fucked too.
- zsmi 5y ago
  > All of these are demand factors that can change. Don't forget: Cities actually allowing housing stock to increase. Very unlikely but hopefully not impossible...
- fartcannon 5y ago
  Agreed. Same with stocks. It's all gambling.
lastofthemojito 5y ago
Reminds me of what I've heard Porsche aficionados say: "You can't pay too much for a classic Porsche. You can only buy it too soon". They're not making any more of them, and demand and prices only go up (until maybe one day they don't, I don't know).
- xyzelement 5y ago
  >They're not making any more of them, and demand and prices only go up (until maybe one day they don't, I don't know). You can say that about anything - limited run beanie babies, bitcoin, whatever. It's all true until it's not. In the case of classic Porsches, next time you hear someone say that, ask them (a) what's gonna happen once boomers die out. Do genX/Z/millenials give a shit about a classic Porsche the way a boomer would? (b) what happens if/when we replace ICEs with electric and the gas station infrastructure goes away (not saying it will happen but it's one likely future path.) In the world where you can't get gasoline, is a classic car still valuable? I don't know the answers to these questions but unless the person who is giving you advice has modeled this out, their advice is of no value.

deleted 5y ago

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