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I own a single-family house on the San Francisco peninsula which I bought three years ago (and spent the summer of 2010 remodeling it and the summer of 2011 lan
by declan 13y ago
I own a single-family house on the San Francisco peninsula which I bought three years ago (and spent the summer of 2010 remodeling it and the summer of 2011 landscaping it).
What others have said elsewhere in this thread is true: owning a home limits your flexibility in terms of moving for another job. It ties up a lot of your assets, for most people, in a decaying pile of lumber that needs maintenance and upkeep and furnace replacements and driveway repaving and so on. Patrick.net, run by a SF bay area programmer-renter, is an able representation of this point of view.
For me, the benefits outweigh the costs. I'm in the mid-peninsula off the 280, so if necessary I can work at any job between and including San Francisco and San Jose and closer portions of the east bay. I was tired of renting and wanted a place that I could customize and run multiple Cat6 and RG-6 cables to each room, install a home automation system, etc. Plus single-family homes available for rental aren't as nice as the ones available for purchase. Finally it's a hedge against inflation.
Those are reasons why, to a first approximation, anyone in the SF bay area who plans to stay here long enough and can afford to buy a home does.
As bradleyjg said further down, the relative desirability of home ownership is also due in part to government subsidies. The first $250,000-$500,000 of appreciation in home value is not taxed when you sell. And mortgage interest is tax deductible.
- scarmig 13y agoThe market has already priced those known tax benefits in, though, in setting the price of the house.
- robotresearcher 13y ago| And mortgage interest is tax deductible. In some jurisdictions. Not Canada.
- declan 13y agoQuite right. What's interesting is that the Canadian homeownership rate is similar to that of the U.S., last I checked, even despite the different tax treatments.
- robotresearcher 13y agoMy theory on this is that the prices adjust to cancel out the benefit from the tax break. The out-of-pocket expense to the buyer is the same and the general taxpayer is subsidizing a higher price for sellers. It's a cash transfer from taxpayers to established landowners cunningly disguised as a legup for the middle class. I think the prices must adjust in this way since the supply of housing close to the supply of paid work is limited. If anyone can point me to a decent analysis of this, I'd be grateful. But this is my pet theory.
- bradleyjg 13y agoDo they tax the forgone rental income from owner occupied housing? I know Switzerland does.
- nilkn 13y agoIf you're willing to disclose the data, how much did your house cost? The cost of housing is one of my major deterrents to moving to the Bay Area. Otherwise I'd be there in a heartbeat if I could bring my SO along. I just feel like with the typical developer wages quoted on Hacker News for the Bay Area I really don't see how I could afford a $1M home, which seems to be the going rate there. I'm in Houston and could get a $100k-$150k house here if I were willing to commute. Even if my salary doubled going to SF, it'd be hard to swallow the fact that housing would go up to nearly seven figures.