Celebrating 10 years! 2007-2017

How Can Anyone Buy a House Anymore?

Serious question, for those who've been through the increasi barnone05/29/17
Not paying in years is an exaggeration. You can go 11-15 mon vohod05/29/17
I own my home. If I lost my job, I would sell my place. If I siezetheday05/30/17
Your romanticism of the nomadic lifestyle suggests you're si mrtor05/30/17
Seems like you follow the Dr Housing Bubble blog. If you do kancho05/29/17
Namely I get a 4br house, with a decent yard, in a great sch thirdtierlaw05/29/17
My rent for a 650 sq ft one-bed is $1400. For the condo I'm rubbersoul1405/29/17
I bought a house and hate it OP. 65 hours of small law M-Sat vohod05/29/17
Fair points. I have a governmental job that pays relatively rubbersoul1405/29/17
Haha, neither my wife nor I make 6 figures. But if you buy w thirdtierlaw05/29/17
This is such a jdu thread. If you believe you are going to l trollfeeder05/29/17
just don't be a poor dingbat05/29/17
You can get a massive house in Western New York for about a kramer71605/29/17
Another downside is that you have to live in western (really 3lol05/29/17
I guess living in western NY isint a bad thing if you like t greenhorn05/29/17
I have a friend who works for Google. Not long, just for a f imoothereforeim05/29/17
Relevant: http://imgur.com/CCkqCIK vohod05/29/17
Hey, I'm not exactly happy about this either. I'm not the t imoothereforeim05/29/17
lol kancho05/29/17
If you did lose your job, it takes your lender at least a ye fettywap05/29/17
This begs the question. What exactly IS the downside to buy kancho05/29/17
The years of that mortgage on your record = paying highrents vohod05/29/17
My Fantasy World (Places Where I Could Buy A Home, But Where cacrimdefense05/30/17
For me, the greatest impediment to owning a home is the down joshdoctson05/30/17
1) You don't need 20% down to buy a house. 2) If you and bucwild05/30/17
Fha loans mostly. There use to be loans through the usda tha trollfeeder05/30/17
I bought a house that was about 1/2 what I would have been a superttthero05/30/17
Smart! jeffm05/30/17
Very good idea. Oftentimes biting the bullet and massively p vohod05/30/17
"Oftentimes biting the bullet" Investing in a home in an sanka05/30/17
We bought a cheap house about 3 yrs. back. Just shy of 1,00 supesnation05/30/17
Managed to get an estate sale for 225k in '14. Home was ter jd4hire05/30/17
Mortgage owners = glorified renters. To see if it makes persius05/30/17
I agree that a home is NOT an investment. Its your home, and vohod05/30/17
You don't seem to take into account that you can rent and ha downwardslope05/30/17
I am not familiar with your area. I am in a tertiary market vohod05/30/17
Where I am now, $1000 a month might get you a lower end 1-be downwardslope05/30/17
The latest rent vs buy study from Trulia or whatever it is p kancho05/30/17
1. It's a hedge against inflation. Initially, the mortgage p onehell05/30/17
Most of what you said is untrue in NYC/LI. adamb06/02/17
The luxury market around Lake Geneva has seen an even steepe sanka05/30/17
Yea, at least in the USA you can move to Phoenix, Atlanta, S kancho05/30/17
A mortgage doesn't cost any more per month than rent, at lea perkinwarbeck05/30/17
This. It's actually quite easy to justify buying a home in a starchild05/30/17
Childcare is only like 4-5 years, no? kancho05/30/17
I bought a house because I was so tired of landlords ! masculine05/30/17
A DC condo fee easily can be a very reasonable $700/month, o sanka05/30/17
I bought my first house when I was a law clerk making 44k, a psusurf05/30/17
I think it depends on where you're at in life and what your barneystinson05/31/17
heres what i learned buying a house in calif.: theres mor defensivelawyer05/31/17
Deep thoughts bro. Mind blown. starchild05/31/17
lol kancho05/31/17
sometimes in law and life the answer is simple. defensivelawyer05/31/17
Most memorable post so far this year. vohod06/21/17
It really depends where you are in life and your exact locat alphadog1505/31/17
1. location 2. Location 3. LOCATION 3 part b. President sanka05/31/17
I tried to post this underwater map but failed. I'm a JDU f sanka05/31/17
I bought a 3 bedroom house on half an acre in a great school flyer1406/05/17
Median house price in Los Altos, Ca three million dollars. taxman12806/05/17
I have a relative who just went to see a condo there. 3 bedr downwardslope06/05/17
I don't know, this one looks like a good bargain at $18,000, zuma06/05/17
With straight cash homie. isthisit06/05/17
Renting is for proles and hipsters. 3rdamendmentscholar06/05/17
Cash and elbow grease. (No mortgage) Paid 23k including c nazlaw06/20/17

barnone (May 29, 2017 - 4:01 pm)

Serious question, for those who've been through the increasingly turbulent, post-Great Recession, post-globalization economy:

How can anyone justify taking out a 30 year mortgage anymore? No one has any idea for how long they'll be employed. If they lose their job, they would want the flexibility to relocate to pursue another one. And with ageism only increasing, what makes someone think that they'll have comparable earning power in the workplace in 30 years?

I'm not trying to sound overly pessimisstic, but I'm genuinely curious. I understand the cultural allure of having your own home, but I haven't purchased a primary residence because I like being able to move at virtually any time. I read occasional commentary about others (esp. Millenials) feeling the same way, but I haven't seen the data suggesting this is yet a real phenomenon. An exception might be those who live in a particularly job-rich market, like greater NYC metro or the SF Bay Area, as they are reasonably likely to find their next job in the area.

I have, however, read some pretty persuasive articles suggesting that many (so-called) homeowners haven't paid their mortgages in years, and that the default rate remains elevated at near GR levels. After mark the market rules were suspended, banks stopped foreclosing on delinquents, so everyone is playing the "extend and pretend" game. If that's true, maybe a change in the views/perception of homeownership is being delayed by the obscuring of the state of the market.

Thoughts?

Reply Like (0)
vohod (May 29, 2017 - 5:22 pm)

Not paying in years is an exaggeration. You can go 11-15 months then some soulless bitter creditor's rights shill like me proceeds towards foreclosure.

Reply Like (0)
siezetheday (May 30, 2017 - 7:19 am)

I own my home. If I lost my job, I would sell my place. If I couldn't sell before I ran out of money for the mortgage then I would be foreclosed on.

Reply Like (0)
mrtor (May 30, 2017 - 10:09 am)

Your romanticism of the nomadic lifestyle suggests you're single with an unstable work history.

Buying a house generally makes sense for most families. No one wants to raise kids in an apartment and renting a house usually costs around the same as paying a mortgage. Why wouldn't you choose to build equity? Once you have a house, you're also not as likely to flip your bosses the bird and move on at the drop of a hat. Maybe that's repressive or maybe that's maturity. If you do get bounced, most people can find work locally. Only on JDU do people seem to struggle so terribly that they need to move to new major markets to find work.

As others have said, if you lose your job, you'll be out on the street far quicker in a rental than in your own house. If you buy smart, you can flip your house quickly, pull out the equity, and move on. In the interim, though, you have a stable home for your family and you're building wealth. With the exception of a few markets, renting just doesn't make sense longer term (unless you cannot qualify to purchase).

Reply Like (0)
kancho (May 29, 2017 - 4:16 pm)

Seems like you follow the Dr Housing Bubble blog. If you don't, you should check it out as he shares some of your views, especially the uncertainty that comes with locking yourself into a 30 year mortgage.

I guess post GR housing prices have crept up, so people are pretty confident they'll be positive equity if they have to sell and move, or figure they can just rent the place out.

I personally haven't bought for 2 reasons. One is I don't mind living in and renting a small apt (my wife and I share a 900 sqft 2 br), but would not want to actually buy a place like this, it's kind of depressing. And the other is I can't out of pure principle pay $800k-$1 million for some generic 3 bedroom house built in the 1960s, as is common here in the SF Bay Area.

Reply Like (0)
thirdtierlaw (May 29, 2017 - 4:48 pm)

Namely I get a 4br house, with a decent yard, in a great school district, and a 10 minute commute for ~$1500 a month. A small rundown 2 bedroom apartment in my town rents for ~$1600.

Sure not being able to pack up and move within a month is somewhat limiting. But we can afford our mortgage on either my wife or my salary alone. So if things get so bad that both my wife and I lose our jobs and we can't sell our home. Dodging foreclosure would be the least of my worries.

But I couldn't justify paying more for less in rent. Especially if the market doesn't completely plummet we at least have the chance of recouping some our mortgage payments. And even if not that was going to be money lost anyway.

Reply Like (0)
rubbersoul14 (May 29, 2017 - 5:05 pm)

My rent for a 650 sq ft one-bed is $1400. For the condo I'm in the process of buying, 3-bed/2-bath/1600 sq ft is $2100. Plus, in the area I live, housing prices have remained relatively stable over decades.

Reply Like (0)
vohod (May 29, 2017 - 5:19 pm)

I bought a house and hate it OP. 65 hours of small law M-Sat AM, 15 hours fixing things or doing routine chores Sat PM-Sun.

Do not buy unless both spouses make six figures, like thirdtierlaw above.

Reply Like (0)
rubbersoul14 (May 29, 2017 - 5:27 pm)

Fair points. I have a governmental job that pays relatively well and the odds of me losing it from factors beyond my control are slim. And it's a condo, so the management association takes care of a lot of the maintenance.

Reply Like (0)
thirdtierlaw (May 29, 2017 - 6:45 pm)

Haha, neither my wife nor I make 6 figures. But if you buy within your means even a lowly S-lawyer like myself can own a home.

Reply Like (0)
trollfeeder (May 29, 2017 - 5:58 pm)

This is such a jdu thread. If you believe you are going to lose your job at any moment, then sure, don't buy. If you stay in a house for about 5 years, you probably have enough equity to at least break even on moving, so there's that. You are vastly over generalizing the market.

Reply Like (0)
dingbat (May 29, 2017 - 5:58 pm)

just don't be a poor

Reply Like (0)
kramer716 (May 29, 2017 - 6:19 pm)

You can get a massive house in Western New York for about a 100K. NY taxes suck, but housing is pretty dam cheap

Reply Like (0)
3lol (May 29, 2017 - 7:14 pm)

Another downside is that you have to live in western (really upstate) New York

Reply Like (0)
greenhorn (May 29, 2017 - 7:40 pm)

I guess living in western NY isint a bad thing if you like to ski or go ice fishing/hunting.

Personally, I need to be by the coast, but living upstate can be peaceful.

Reply Like (0)
imoothereforeim (May 29, 2017 - 8:28 pm)

I have a friend who works for Google. Not long, just for a few years. She bought a million-dollar condo about 1.5 years ago in Sunnyvale. The condo has since increased in value by $150K. She does rent out part of that condo. She is currently in the market for another million-dollar condo, since making money is so easy.

Reply Like (0)
vohod (May 29, 2017 - 8:33 pm)

Relevant: http://imgur.com/CCkqCIK

Reply Like (0)
imoothereforeim (May 29, 2017 - 8:45 pm)

Hey, I'm not exactly happy about this either. I'm not the type to be happy for others, especially people younger than me making boatloads more money. Think I'm just going to cut out my Google and Apple friends.

Reply Like (0)
kancho (May 29, 2017 - 9:22 pm)

lol

Reply Like (0)
fettywap (May 29, 2017 - 11:03 pm)

If you did lose your job, it takes your lender at least a year to foreclose. You can drag it out longer if you try. Your landlord can kick you out in less than a month.

Reply Like (1)
kancho (May 29, 2017 - 11:23 pm)

This begs the question. What exactly IS the downside to buying if you live in a non-recourse state? There are 3.5% down payment options due to FHA, so you don't need to put much skin in the game. If you lose your job and/or housing market collapses, just live there for free for a year till they foreclose, and all you are really out is your down payment and your mortgage payments, which if you had been paying rent would have been throwing $ away anyways.

Wait till the foreclosure comes off your credit, rinse, repeat.

Reply Like (0)
vohod (May 29, 2017 - 11:35 pm)

The years of that mortgage on your record = paying highrents in skid row. My foreclosed sister pays $600/mo rent where there is gunfire twice a week. $600/mo with great credit in her town gets you a 2/2 apartment with large living area.

The beauty of the global economy is everyone can borrow money. My dead grandma gets CC offers. You could probably get a shady secondary market credit card from within prison.

Reply Like (0)
cacrimdefense (May 30, 2017 - 12:23 am)

My Fantasy World (Places Where I Could Buy A Home, But Where I Will Never Live Because My Wife Is A Big City Girl):

Mississippi Gulf Coast (Waveland through Long Beach)
Boise/Meridian Area
Northwest Nevada (Within an hour's drive of Lake Tahoe)

----------

1 bedroom apartments in my section of town rent for $2000 to 2250 ...

Reply Like (0)
joshdoctson (May 30, 2017 - 7:41 am)

For me, the greatest impediment to owning a home is the down payment. Even a 300k home would require 60k in the bank. Unless you have rich parents or live like a peasant for several years, I just do not see how regular people can afford to throw that down so easily.

Reply Like (0)
bucwild (May 30, 2017 - 7:58 am)

1) You don't need 20% down to buy a house.

2) If you and your spouse are fairly educated and over 32, each of you coming up with 30k shouldn't be that difficult

3) "Regular" people don't buy 300k houses. That is significantly higher than the median price of a house. 300k is not especially extravagant, but a substantial portion of the population would not expect to drop 300k on a first home.

Reply Like (1)
trollfeeder (May 30, 2017 - 8:03 am)

Fha loans mostly. There use to be loans through the usda that allowed 100% subsidation, and the loop hole was that perfectly good residential neighborhoods had properties that were eligible.

Reply Like (1)
superttthero (May 30, 2017 - 10:31 am)

I bought a house that was about 1/2 what I would have been approved for.

We can deal with job loss of probably 6 months, more if we dip into retirement funds. Also, we have two sets of parents within 5 miles that would let us live with them for a year or two while we rent the house in the event of longer-term financial problems.

Also, though I signed a 30 year mortgage, unless we again have financial problems, I think it should be done in another 10 years (13 total) at the rate we are paying.

Buy like me, cheap.

Reply Like (0)
jeffm (May 30, 2017 - 10:46 am)

Smart!

Reply Like (0)
vohod (May 30, 2017 - 11:20 am)

Very good idea. Oftentimes biting the bullet and massively prepaying a 30 is just the way to go. All of us locked in at or below 3.5% have little value in refinancing.

Reply Like (0)
sanka (May 30, 2017 - 11:58 am)

"Oftentimes biting the bullet"

Investing in a home in an up-and-coming neighborhood in DC? Those illegal firearms may be priced out, soon.

Reply Like (0)
supesnation (May 30, 2017 - 10:41 am)

We bought a cheap house about 3 yrs. back. Just shy of 1,000 sq. ft. with a monthly price tag of about $650.

When we rented, we were paying about 2x that amount for a 2/2 apartment.

All of my friends, many of whom make much less than my wife and I do, all bought houses that cost $225k+. The mortgage on those is around $1,800 per month. They complain constantly about not having enough money for things.

Just seems to be a waste to buy a big house and a pain to keep clean.

Reply Like (0)
jd4hire (May 30, 2017 - 11:33 am)

Managed to get an estate sale for 225k in '14. Home was terribly undervalued. Scratched up 20% throguh both my wife and I's families and some personal savings to avoid PMI. We have notes with each parents and make payments to them. When rates hit rock bottom, we re-financed at 2.75% on a 15 year mortgage.

It's beautiful watching principal drop so quickly. We're super lucky and when we dwell on student loans both of us remind ourselves of our house - either neighbor on both sides bought their homes for 450 in '06 and '07 and they have the same footprint as our home. While student loans suck, it seems we might make out on our first house. We have no plans of moving, but I'm confident we could get 325k for our house right now. We most likely will refinance or take out a home equity when it's time for kids and add on. If not, we'll have one or two and be bursting at the seems, but sell and take the cash to get a bigger home.

Our 15 year mortgage is the same payment as our last rental home. Building equity in a property versus paying rent so a land lord can build equity feels 1,000 times better. We were approved for 375 and bought a 225k house. I can't imagine had we bought at 375, there's no way we could have afforded that.

Reply Like (1)
persius (May 30, 2017 - 11:44 am)

Mortgage owners = glorified renters.

To see if it makes sense to buy vs own google "buying versus renting break even year". There will be a calculator that helps you determine how many years you need to own a house in your market before you break even vs renting given transaction costs, maintenance, property taxes, etc. It is usually about 4-8 years before you even catch up to a renter without accounting for the risk of market bubbles, etc.

Reply Like (1)
vohod (May 30, 2017 - 11:58 am)

I agree that a home is NOT an investment. Its your home, and owning may or may not make sense.

The maintenance cannot be stressed enough. Even if the home is newer. You will be looking at one or two big big dollar maintenance jobs if you stay somewhere 4 or more years. The time, stress, and costs of these repairs wipe out the equity unless you get a 1:1,000 bargain to start.

Generally if rent is confiscatorily high, so are home prices. Now if you are bragging your home 45 minutes from work is a bargain compared to rent down the block from your office, you are being disingenuous.

Owning isn't always a great idea unless you plan to live in one area your whole life, have kids, and are OK shelling out a lot of money on maintenance or DIYing stuff every light hour on the weekend. If you like handyman work it is likely very enriching.

Reply Like (0)
downwardslope (May 30, 2017 - 12:14 pm)

You don't seem to take into account that you can rent and have your rent go up by 7% each year. You might also be in an area with really low rental stock where rental stock is insanely priced while buying is inexpensive because 90% of the community is a homeowner.

Where I am now, it is expensive to rent but cheap to buy because there is not much to rent. The last place I lived had all the rental places remodel and drastically increase prices for the same reasons.

Reply Like (0)
vohod (May 30, 2017 - 12:19 pm)

I am not familiar with your area. I am in a tertiary market so most people buy as soon as they are eligible for an FHA or US Dept of Ag rural development loan. Different economics.

Reply Like (0)
downwardslope (May 30, 2017 - 6:02 pm)

Where I am now, $1000 a month might get you a lower end 1-bedroom apartment or you could get a 2-bedroom condo in a great school district. We have condo options for under $100K (remodeled) and single family homes starting at $200K.

In my last community, rental prices were a little lower and housing prices were slightly higher, The school district was consistently ranked one of the best in the state so it was hard to go wrong buying there. I think they were considering building another apartment complex and people were literally up in arms about it bringing down property values. Most communities don't allow new purchasers to be investors either, which also limits the rental stock. As a result, the rents are only going to keep going up dramatically. I lived by the three rental complexes and two of the three rebranded and upgraded, which I assume meant the rents increased in excess of 7-8%. I think one increased 20% in one year.

Reply Like (0)
kancho (May 30, 2017 - 8:27 pm)

The latest rent vs buy study from Trulia or whatever it is pretty much supports you and a lot of other posters here. Due to rising rents and still low mortgage rates, I think the equation is firmly on the side of "buy" in most anywhere in the USA except super expensive areas like the Bay Area. And I think even then if you plan on staying 7 years or so it makes sense to buy.

Reply Like (0)
onehell (May 30, 2017 - 12:30 pm)

1. It's a hedge against inflation. Initially, the mortgage payment will be about the same as, or a few hundred more than, renting a comparable place. But assuming fixed-rate, in 10 years your payment will still be the same. Rents will not. I've owned since 2008 and despite my obvious bad timing my mortgage payment is a hell of a lot less than comparable rents are in my area now, for no other reason than the passage of time. Remember, rents are among the first things to respond to overall inflation and wages are among the last. This fact alone makes buying homes with fixed-rate debt (particularly in the current low-rate environment) a wise move.

2. The term of the note is irrelevant. What matters is how long it will take you to make back your closing costs. As others have pointed out, after maybe 5-8 years you have enough equity that you've made back the closing costs and could sell the house if you needed to move. True, it's not quite as easy as packing up an apartment, but it's not THAT much more difficult to sell and you might walk away with some cash rather than paying an early lease-termination fee and (usually) losing your security deposit (which the landlord always finds a reason to ding). I would say it's actually pretty rare for someone to just stay in the same house for the full 30 year term.

3. Also as others have pointed out, there is somewhat more security in that it will take more time for a lender to foreclose vs. a landlord to evict and once again, if you have equity foreclosure will not be an issue because you will just sell if you can't make the payments. In a non-recourse state like mine, even if you don't have equity (e.g. if there's another real estate crash) walking away/strategic default is always an option.

4. If you do stick around and eventually pay the house off, you will have very low expenses. So low, in fact, that I have seen a lot of people able to get by of little more than their social security check because they've got nothing to pay for other than groceries, utilities and property taxes. You can also downsize and pocket the difference and/or take out a reverse mortgage which will be a big help if you haven't saved much for retirement.

Note that none of these things are primarily driven by seeing the home as an investment, and certainly not a short-term investment. It might work out that way, but that should never be the primary motivator. It doesn't have to be. For buying to make sense, home values only need to rise commensurate with inflation and you need to plan on staying for at least long enough to make back closing costs. Of course, the longer you stay the more you tend to gain, but it doesn't really take THAT long to hit the breakeven point.

I agree that it doesn't make sense to buy if your job is so unstable that you come in every day genuinely and realistically thinking that it might be your last. But most people aren't THAT unstable, even now. If you could see yourself at your same job in even another 5 years or so, even this small amount of stability can be enough to make buying the better choice.

Reply Like (0)
adamb (Jun 2, 2017 - 9:55 pm)

Most of what you said is untrue in NYC/LI.

Reply Like (0)
sanka (May 30, 2017 - 4:31 pm)

The luxury market around Lake Geneva has seen an even steeper drop, of 20 to 30 percent, since 2012, Ms. Chabloz said, noting that her company defines that category as homes priced at more than 4 million Swiss francs



Prices, of course, vary significantly by region, Mr. Risse said. Luxury apartments can go for around 11,000 Swiss francs a square meter (or about $1,022 a square foot) in Lausanne and double that in Gstaad; in Geneva, luxury apartments cost around 15,000 Swiss francs a square meter (or $1,394 a square foot), he said.

Near Lake Geneva and Lake Zurich, prime apartments can cost between 13,000 and 20,000 Swiss francs a square meter (or between $1,207 and $1,858 a square foot), Ms. Chabloz said.

For the majority of aspiring buyers, Swiss housing prices are out of reach. A report by Credit Suisse published in March described homeownership in Switzerland’s urban centers as a “fata morgana,” or a mirage, for most buyers with average earnings, despite the current low interest rates. Given the combination of high prices and strict mortgage requirements, “the low mortgage interest rates,” it said, are “merely an optical illusion for many households.”


I don't know if Switzerland is faring better than desirable neighborhoods in DC, SF, or NYC.

Reply Like (0)
kancho (May 30, 2017 - 8:02 pm)

Yea, at least in the USA you can move to Phoenix, Atlanta, St. Louis, etc and get comparatively dirt cheap housing.

Reply Like (0)
perkinwarbeck (May 30, 2017 - 8:43 pm)

A mortgage doesn't cost any more per month than rent, at least in the DC market and assuming you don't have some outrageous condo fee (definately not a given). If you add to that the mortgage interest deduction, then you really want to stop pissing away money on rent.

What's really confounding is how anyone can afford to raise a kid. My wife and I both work, and we make ends meet okay, but it would pretty much take a third salary to cover childcare.

Reply Like (2)
starchild (May 30, 2017 - 9:02 pm)

This. It's actually quite easy to justify buying a home in a market where rent is really high and the costs of money is the cheapest it's ever been combined with the mortgage interest deduction.

Daycare costs are another mortgage and pretty outrageous. This is where other industrialized nations have got it right. My Israeli friends can't believe childcare isn't covered by the government. Their daycare costs are covered by the consulate, and they find it unconscionable in an economy where two parents are expected to work that we have to fork over a pound of flesh from our paychecks just to ensure our kids are supervised and learning their shapes, colors, numbers and the alphabet.

Reply Like (0)
kancho (May 30, 2017 - 10:06 pm)

Childcare is only like 4-5 years, no?

Reply Like (0)
masculine (May 30, 2017 - 9:03 pm)

I bought a house because I was so tired of landlords !

They'll jack up the rent on you when they see you're "settled" on their place. They'll take forever to make repairs and do their bare minimum w/ cutting the grass and removing the snow.

Reply Like (0)
sanka (May 30, 2017 - 10:00 pm)

A DC condo fee easily can be a very reasonable $700/month, on, say, a $600k condo.

Hope you pick a good management company.

Actually, DC real estate market is efficient. All this get-rich-in-real-estate stories rely on finding that rare undervalued property from an unrepresented seller and flipping it through some straw man transaction.

Reply Like (0)
psusurf (May 30, 2017 - 10:50 pm)

I bought my first house when I was a law clerk making 44k, and my wife was making about 60k. Paid 307k in 2010 and did a fha loan so closing costs were manageable. My mortgage with taxes hovered around 2300 month. Life went on, we did modifications and repairs, most by ourselves, and sold the house this winter for 340k, and walked away with about 60k after fees. Needed a bigger house for two kids, 2 dogs, etc. Bought a new house for 650k, and my mortgage with taxes went to 3600. Scrapped together enough money for a 20% down payment to not have PMI. My goal is to stay here and raise my kids so as long as I can cover the mortgage and still put money away I'm happy. Waiting on mortgage rates to hopefully bottom out again, I miss my prior rate of 3.5% as I locked in at 4.2. Still better than my first rate of nearly 6% back in 2010.

Once you sack up and buy your first house, it just becomes part of life. Next goal is to pull some equity out in about five years or so and buy a rental property, and then keep buying more properties as i age up. That is my retirement plan. 401k and real property.

Reply Like (0)
barneystinson (May 31, 2017 - 1:00 pm)

I think it depends on where you're at in life and what your plans for the future are. My wife and I were fine in our 2 bedroom apartment and had all the space/stuff we needed. Still, I hated the fact that our rent would go up every year and that we had noisy neighbors with kids in our building. Our plan is to raise a family soon and we knew that we didn't want to raise kids in an apartment. Plus it's likely that her parents will move in with us at some point, so we wanted a house with plenty of space.

Apartment rent was $1350/month and our house (which is gigantic) is $2500/month with all taxes/insurance factored in. Higher utilities and maintenance costs (plus had to buy lawnmower, snow blower, etc) add up too. However, it feels good to have "control" - no increase in monthly payments, pure silence when trying to relax, ability to do whatever the hell you want with the place, etc). And our area has much higher demand than supply. Rather than rent going up 5% per year, we have a home whose value is going up around 5% per year. And in 20 years, that $1350 rent payment could be the same $2500 that I pay for my mortgage (and in 20 years the mortgage will be paid off so it'll just be taxes and insurance by that point).

Reply Like (0)
defensivelawyer (May 31, 2017 - 1:14 pm)

heres what i learned buying a house in calif.:

theres more money out there than you think

one thinks everyone is like ones self, but its not so

it can be done with hard work and lots of saving. lowball offers wont work. i tried

but just cause youre broke has nothing to do with anyone else.

theres cash buyers out there. lots of them.

its crazy but true.

people buy houses.

Reply Like (1)
starchild (May 31, 2017 - 1:39 pm)

Deep thoughts bro. Mind blown.

Reply Like (1)
kancho (May 31, 2017 - 3:03 pm)

lol

Reply Like (0)
defensivelawyer (May 31, 2017 - 4:58 pm)

sometimes in law and life the answer is simple.

Reply Like (0)
vohod (Jun 21, 2017 - 12:21 am)

Most memorable post so far this year.

Reply Like (0)
alphadog15 (May 31, 2017 - 1:50 pm)

It really depends where you are in life and your exact location. Some places it doesn't make sense to buy. We decided to buy for similar reasons described above- frustration with landlords, increase in rent, no control over our property etc. Also, in areas such as ours (metro NY) where property and state income taxes are high, we get a nice deduction every year on our tax returns.

A huge reason though is building equity- every payment made per month not only is partially deductible on our tax returns, but we're also building equity as each payment decreases the principal.

Reply Like (0)
sanka (May 31, 2017 - 1:59 pm)

1. location
2. Location
3. LOCATION
3 part b. President Obama ended the business cycle. Real estate is returning to its 2007 peak boom, and, now, ten years hence, never ever will go bust, again.

Reply Like (0)
sanka (May 31, 2017 - 2:01 pm)

I tried to post this underwater map but failed. I'm a JDU failure.

http://banksandtheeconomy.blogspot.com/2010/04/headwinds-to-labor-market-recovery-part_15.html

Reply Like (0)
flyer14 (Jun 5, 2017 - 8:30 am)

I bought a 3 bedroom house on half an acre in a great school district on a 49k salary... Added bonus: there was no public transportation that far from the city center so that kept the riffraff out too. My salary has since gone up considerably, my house payment has remained the same, while my prole friends who rent have seen their rent hit the roof.

Reply Like (0)
taxman128 (Jun 5, 2017 - 6:41 pm)

Median house price in Los Altos, Ca three million dollars. Two thousand five hundred square feet on a one quarter acre lot.



https://julianalee.com/los-altos/los-altos-statistics.htm

Reply Like (0)
downwardslope (Jun 5, 2017 - 6:43 pm)

I have a relative who just went to see a condo there. 3 bedroom no AC, coin laundry downstairs for over $1.2 million. Unreal.

Reply Like (0)
zuma (Jun 5, 2017 - 7:21 pm)

I don't know, this one looks like a good bargain at $18,000,000.

https://www.zillow.com/homedetails/10718-Mora-Dr-Los-Altos-Hills-CA-94024/2094619374_zpid/?fullpage=true

Reply Like (0)
isthisit (Jun 5, 2017 - 8:05 pm)

With straight cash homie.

Reply Like (1)
3rdamendmentscholar (Jun 5, 2017 - 10:24 pm)

Renting is for proles and hipsters.

Reply Like (1)
nazlaw (Jun 20, 2017 - 10:02 pm)

Cash and elbow grease. (No mortgage)

Paid 23k including closing costs on a HUD home just last month. I know how to, and also know a lot of people who can fix homes. Things I find worth doing myself I handle, things that waste too much time I have family/ friends do or pay for someone else to do (usually work requiring license).

In about 1 month the house will be ready for move in, only thing left is addition of a second bath (converting an odd room off the Mud room and Kitchen) and some Drywall/ painting interior work. Most of that I am handling myself and the plumbing is being handled by a family friend on the cheap.

All said and done I called in about $20K worth of chits and came out $10k from pocket in materials and some labor. $23K for the house and $30K (more like $50K if had to use contractors)is $53K~$55K home in an area with $75K+ homes.

No I don't live in NYC or near it

I am 31, have 3 kids, and pay taxes that are far less then any equivalent rent would come to. The math works out to living in this house for 6 years to recoup cost, and after that it is straight positive income. This also does not take into account that I will be equity positive immediately and will have a house in better shape than the rest in the area. Oh and favorable homestead protection if I fall on bad times.

Not a glamorous life, but I am in a better position that a lot of 30 something millenials I know, especially those with large student loans to carry.

Mortgages are a loss though.

Reply Like (0)
Post a message in this thread