4 ms·

The financial outcome for not buying property adds up after ~10 years. On paper, I've been paid to live in my current residence every year that I've owned due t

by lumost 2y ago

The financial outcome for not buying property adds up after ~10 years. On paper, I've been paid to live in my current residence every year that I've owned due to housing appreciation. If I had rented - the financial delta compared to renting would be between ~400k-1MM dollars over 10 years depending on how one counts. It would require a very large income to offset the financial cost of renting a home, which would in turn reduce the likelihood that I would take a financial risk on a new startup or push harder at work.

AlchemistCamp 2y ago
Your post I was responding to was complaining of financial pain in buying a home. Now you're saying it's a financial benefit. Either way, what I'm saying is that you have a choice. Also, it's worth pointing out that your 10 year sample happened to be one during which housing construction was at historically low rates, which lead to exceptional increases in housing prices. There are other 10 year spans in which your outcome would have been very different.
- toomuchtodo 2y ago
  There is currently a shortage of ~3-4 million housing units in the US. This shortage will continue into the future due to a shortage of people to build housing, the cost to build, and a population that remains steady due to immigration inflows. Buying in the US will remain a net positive financial decision well into the future based on these housing fundamentals.
  - AlchemistCamp 2y ago
    Many have had similar confidence in the past, including during the early-mid 2000s, right before the crash.
    - toomuchtodo 2y ago
      A black swan event caused by unique financial engineering conditions that won’t occur again is not a compelling rebuttal.
      - AlchemistCamp 2y ago
        Before 2008, there was a bust in 1980. Most attribute that to rising interest rates at the time. Given that the prime rate now is just 40% of what it was in 1980, it's not like interest rates can't rise enough to impact the housing market at some point in the future.
- lumost 2y ago
  Original point was that a forced move carries a financial cost, as home prices rise - this financial cost rises relative to income. This dynamic creates a disincentive for individuals to move due to the cost relative to income. If individuals are disincentivized from working on the highest impact projects they can - you'd expect an impact on economic productivity. It's a large financial benefit to own a home, it's a massive cost to move for a job if that forces you to abandon home ownership in favor of renting. This cost would incentivize workers to work at jobs which don't make use of their skills or avoid jobs which could leave them in a career desert of a location.

by lumost 2y ago

AlchemistCamp 2y ago

Your post I was responding to was complaining of financial pain in buying a home. Now you're saying it's a financial benefit. Either way, what I'm saying is that you have a choice. Also, it's worth pointing out that your 10 year sample happened to be one during which housing construction was at historically low rates, which lead to exceptional increases in housing prices. There are other 10 year spans in which your outcome would have been very different.

toomuchtodo 2y ago
There is currently a shortage of ~3-4 million housing units in the US. This shortage will continue into the future due to a shortage of people to build housing, the cost to build, and a population that remains steady due to immigration inflows. Buying in the US will remain a net positive financial decision well into the future based on these housing fundamentals.
- AlchemistCamp 2y ago
  Many have had similar confidence in the past, including during the early-mid 2000s, right before the crash.
  - toomuchtodo 2y ago
    A black swan event caused by unique financial engineering conditions that won’t occur again is not a compelling rebuttal.
    - AlchemistCamp 2y ago
      Before 2008, there was a bust in 1980. Most attribute that to rising interest rates at the time. Given that the prime rate now is just 40% of what it was in 1980, it's not like interest rates can't rise enough to impact the housing market at some point in the future.
lumost 2y ago
Original point was that a forced move carries a financial cost, as home prices rise - this financial cost rises relative to income. This dynamic creates a disincentive for individuals to move due to the cost relative to income. If individuals are disincentivized from working on the highest impact projects they can - you'd expect an impact on economic productivity. It's a large financial benefit to own a home, it's a massive cost to move for a job if that forces you to abandon home ownership in favor of renting. This cost would incentivize workers to work at jobs which don't make use of their skills or avoid jobs which could leave them in a career desert of a location.