Buying A House: C or D?

But on the other hand, I'd have to let an icky BOY live in my house then.

xpost.

I think it's a pain in the ass. I rent out a house I bought last year as a fixer-upper, to people I'm friends with, and it's a pain just making arrangements to do any little amount of work that needs to be done without intruding. So, put that into your basement .. someone always being around would suck, and if you need to pull out the tennant's bed to make sure water isn't leaking from a pipe, you can't just walk in and do it. Seems like too much work to me, but other people may be willing to put up with it for the extra money.

I've never been a landlord but dave's advice seems to make a lot of sense. What area of the country are you in? are real estate prices outrageous there?

We're still waiting to exchange too. Time is running out - once mortgage offer expires in four weeks it's all over as we can't get an extension (Pam will no longer be a full-time employee on additional maternity leave, she'll be unemployed).

This has been going on for five months. I've completely lost any enthusiasm I had for the move because every time I glance at the property section of the local freesheet or open an estate agent email, I see something better which needs less work. Each time we've decided we've had enough (early August when the estate agent couldn't find us a buyer; early October when the delays up the chain seemed neverending), we've been encouraged to stick with it by some new piece of progress. This time we're only half-heartedly looking elsewhere because it's not very likely we'll find a chain-free place that we love and that we can complete on in four weeks.

Meanwhile, we eat off the two or three plates that haven't been bubble-wrapped and listen to the handful of CDs that evaded the pack, surrounded by 90-odd boxes.

So, "D" then.

the actual house collapsing sounds like it would be far worse.

We've been looking for the past few months but the market here is quickly spiraling out of our range. stupid yuppies.

See, lodgers are different from tenants - or they should be, anyway - because they don't get an equal share, so you don't have to give them an equal amount. They are renting a room in your house, not renting half the house. That's how it works for me anyway.

::thinks about beautiful flat of mine own::

::calms down::

Also classic because our outgoings are less than they would be if we were renting, and we get to live on our own and do what we want and IT'S OURS! As Pleasant Plains said, it's the I do like the whole ownership and "this is my wall that I can put holes into" feeling feeling that makes it worthwhile.

Buying new appliances for a house seems like the most fun part of the process. Ooooh stainless steel cooktop. Ooooooh subzero wine fridge.

living room/dining room before
http://www.astro.columbia.edu/~feb/pics/livingrm2.jpg
after
http://www.astro.columbia.edu/~feb/newpics/house_livroom2.JPG
http://www.astro.columbia.edu/~feb/newpics/house_livroom3.JPG

kitchen before
http://www.astro.columbia.edu/~feb/pics/kitch2.jpg

after
http://www.astro.columbia.edu/~feb/newpics/house_kitchen.JPG

master bedroom before
http://www.astro.columbia.edu/~feb/pics/master2.jpg

after (with my old roommate using the computer)
http://www.astro.columbia.edu/~feb/newpics/house_bedroom1.JPG

and here is the bathroom, the before pic is too big but it used to be all pink and black.

http://www.astro.columbia.edu/~feb/newpics/house_bathroom1.JPG

My wife and I have owned our house since early 87. We love the place. Single family, 90 plus yrs old, awesome mountain views and we'll be here a while yet. Of course there's always something in need of work, but you gotta live somewhere.

this is the second house we've owned, we sold our condo and made $75000.

Living room before:
http://img.photobucket.com/albums/v468/cmvenuti/lvingroombefore.jpg

Living room after (nice hardwoods under shit carpet):
http://img.photobucket.com/albums/v468/cmvenuti/livingroomafter.jpg

so if they had $1.42m in home depot receipts

Clicking the link, I see it wasn't 2 million, so even better (but actualy worse of course)

so if they had $1.42m in home depot receipts

― actual veggie mexican pizza received (Sufjan Grafton), Tuesday, August 29, 2023 3:02 PM (yesterday)

you could to reduce the gain by all the selling expenses (which tend to be significant) as well as any capital improvements made during the time of ownership, though you have to recapture any depreciation you took or could have taken if you had a home office or any rental use of the property.

*you get to, not you could to

Looks like Detroit might actually do a georgism

If the Land Value Tax Plan passes, there will be a 17% average tax cut for Detroit Homeowners. pic.twitter.com/4dE2KQCjFe

— Mayor Mike Duggan (@MayorMikeDuggan) September 18, 2023

Well, not full goergism, never go full georgism. But LVT.

It's been nearly 30 years since I bought my current residence. I do not doubt the changes to the process are intended to block fraud and do as many things as possible at a distance. But I keep having to tell myself to not hyperventilate.

I'm about to scream and cry--the purchase offer assumed an all-cash deal. But now my mother isn't sure she can come up with enough money on her end. I was already trying to find a paper bag to try not to hyperventilate.

I mean, mortgage rates are high but I think the actual process of getting a loan is at worst a little better than the past. It seemed so archaic a decade ago, they even misprinted my address on the mortgage form until I pointed it out and they reprinted it. I shouldn’t have, it would have been funny to contest it to see if I could wriggle out because they claimed I was buying the next house down

I guess if you have no mortgage you’re paying off and rolling over it’s different but this is just day to day garbage overall

My realtor's preferred mortgage guy sent me some reassuring numbers (I have a paid-off condo I intend to sell after I move to a new place). Waiting to see if the sellers accept the revised offer.

Silver lining: I will be the sole purchaser of record, which should make things easier for ownership and tax purposes.

I bought my current place 3 decades ago, so the current process is a whole new world. But I believe I said upthread: Homeownership (if you can afford it): Classic. Purchasing and maintaining said home: Frequent, often distressing dud moments.

I think my most surprising lesson was how different buying a house in different US States can be.

My opinion it that Illinois is completely fucked up, but probably in a very protective-of-home-owner way (I mean, Illinois is a leader in expensive consumer protectionist things). But my word I didn't see any of that dog and pony show of Title Company's and whatnot.

I was floored by how differently real estate contracts worked in different states. In one state a contract is basically binding; in another you can blow off a contract with zero penalty.

I got the keys to my first flat last week. I should be jumping for joy (and I guess I am!) But actually my main thing is feeling daunted about the move and also owning my own place for the first time in my life. Hopefully the trepidation will pass and I'll be able to pop a cork with friends

Hey congrats! That is perfectly normal. Even when we moved from first flat into first house I felt like I had bitten off far more than I could chew. You'll be fine! And you won't be paying someone else's mortgage! Are you in the same sort of area?

Congratulations, DL!

Congrats ☺️

big news dl grats

yes well done dl -- i am seven months in from moving into my new flat and really *only just beginning* to feel my mind want to uncoil again for other projects (first of my bookshelves starts going up next week fingers x-ed; everything is still in boxes and for now i live in the spaces between them)

haven't had a second's regret tho, i love it here -- hope it's the same for you and anyone else in like situation :)

Buying a house, has to be in the top three most classic things I ever did. Actually MOVING to said house in the top three most dud. Once the storm has passed I suspect you’ll find some joy coming home (or staying home) to a set of four walls that are yours for as long as you want them to be

My main impetus to never sell is I don’t ever want to have to do the moving process again unless absolutely necessary lol

Yeah seventeen years ago I was like "they are only taking me out of here in a fucking box."

kinder, yeah it's a flat in Eastville. Somehow managed to get a decent sized two bed flat for pretty much the lowest price you could possibly wish for in that part of Bristol. Other places I was looking at were dire, mostly split conversions or pokey studio flats

And thanks all! I managed to move two carloads up three flights of steps pretty much by myself today. It was almost entirely books and records too, god knows how I'm going to get the rest moved in. But it's a dent at least!

OWNING PROPERTY IS NOT FOR THE WEAK !!!! https://t.co/zw3miD6xQF

— Cardi B (@iamcardib) October 15, 2023

https://www.bloomberg.com/news/articles/2023-10-19/nyc-real-estate-condo-co-op-expenses-rise-more-than-inflation

No one ever said living in New York City is cheap. But surging expenses in recent years are threatening to squeeze homeowners even more.

Fees paid to co-op and condo boards have soared almost three times faster than the rate of inflation. Ever-tougher rules on inspections, escalating insurance premiums and preparations for a strict new climate law are adding hundreds or even thousands of dollars to monthly bills for residents already paying some of the world’s highest housing costs.

While the charges may be little more than an annoyance to the wealthy owner of a Park Avenue penthouse, they could force New Yorkers of more modest means — from families to seniors on fixed incomes to young first-time buyers — to give up on their hard-won foothold in the city.

“When you put it all together, we’re going to end up being a city of the very rich and the very poor,” said Mary Ann Rothman, executive director of the Council of New York Cooperatives and Condominiums. The people in the middle who “want to make a commitment to the city by buying into co-ops and condos are going to be pushed out.”

At one co-op on Riverside Drive, the bill for two recent inspections was $28,000, followed by fixes that tallied $1.4 million. A building on West 80th Street spent $900,000.

The cycle of near-constant repairs and construction across the city is pushing up insurance expenses, which have jumped more than 300% for some properties. Upgrades to outdated heating and cooling systems could amount to $25,000 for each homeowner at certain buildings, according to an estimate from a supporter of the new carbon-emissions limits.

After years of steep inflation in the US, New Yorkers aren’t alone in paying higher prices for everything from taxes to water, gas and electricity. As routine expenses have surged, so have the fees the city’s condo and co-op boards charge unit owners. Those bills — meant to cover utilities, labor and basic building maintenance — jumped roughly 54% from the first quarter of 2020 to the third quarter of this year, according to appraiser Miller Samuel Inc. Across the economy, US consumer prices were up 19% in the same period.

Piled on top of that are costs for complying with the city’s stricter building standards. Some homeowners and real estate professionals vent that the rules are excessive, and speculate whether special interests that stand to profit might be behind them. Advocates argue the mandates — strengthened after a falling piece of terra cotta struck and killed a pedestrian in 2019 — are needed to keep New Yorkers safe in their homes and on the city’s streets as properties age.

“All these regulations are really putting a severe financial strain on these buildings where the shareholders really don’t have the resources to pay for everything,” said Gustavo Rusconi, vice president and director of management at Argo Real Estate. “I understand they’re in place for safety reasons, but they really are squeezing everyone.”

‘Everything’s a Cost’
The exterior walls of every property of more than six stories must be examined every five years under the Facade Inspection and Safety Program. With each cycle, the city has added more requirements, which in turn have raised the costs of compliance.

Inspecting a 100-unit building in Brooklyn with 200 feet (61 meters) of perimeter walls would cost roughly $30,000, said Peter Varsalona, principal and vice president of RAND Engineering and Architecture. It would’ve been cheaper five years ago, before the city mandated that scaffold drops be installed every 60 feet — at a cost of roughly $7,500 each. If it’s a postwar building with cavity walls that need to be probed, add another $20,000 to the price.

In Varsalona’s example, each unit would be responsible for a proportional share of the cost. While an additional $500 or so for an inspection may not be a huge burden, the repair bill often can be.

In the wake of the pedestrian’s death, the city now bans repairs to damaged terra cotta elements and instead requires that they be fully replaced. The tab could reach $2.5 million as pieces are recast and other repairs are made, pipe scaffolding is rented, the project is insured and a consultant advises on the process, Varsalona said. That would translate to $25,000 on average that each owner in a 100-unit building would have to pay on top of existing maintenance or common charges.

“Everything’s a cost. How much can you put on co-op shareholders? There are limits,” said Varsalona, who is also president of the Council of New York Cooperatives and Condominiums. “Many owners are going to have to figure out if it is affordable to live in the city or not.”

Insurers Are ‘Bleeding’
When it comes to insurance, boards are paying more and getting less.

Longtime carriers are leaving the market, forcing buildings to stitch together multiple policies to get anywhere near the coverage they had just a few years ago. One affordable co-op in the Bronx, for example, is paying 45% more for just 15% of the coverage it had previously.

While natural disasters have sent the industry reeling nationwide, much of the pressure in New York is coming from multimillion-dollar “nuclear verdicts,” payouts of sometimes more than plaintiffs sought in accidents involving construction work.

Insurers are raising prices to make up for their losses, said Sean Kent, senior vice president at FirstService Financial, which works with 600 co-op and condo buildings in the city. Annual premiums at those properties rose as much as 300% this year, though the average increase was about 25%, Kent said.

Traditionally, buildings would pool together to buy so-called umbrella policies, with better coverage at lower rates than they could secure on their own. But now that carriers are “bleeding,” those plans are disappearing, said Chip Stuart, North American real estate practice leader at insurance brokerage Hub International.

The Amalgamated Housing Cooperative, a complex of 11 buildings near Van Cortlandt Park in the Bronx, paid $2.4 million last year for $650 million of coverage, the level required by its mortgage lender. Now its bill is $3.5 million for just $100 million of coverage, cobbled from 10 different carriers.

The board is still working to make up the difference, according to its treasurer, Ed Yaker, who said skyrocketing insurance costs are a surprise to residents.

“The average guy who just lives in the building, who doesn’t think about it and doesn’t serve on the board, doesn’t understand why it’s happening,” Yaker said.

Climate Costs
For all but the most energy-efficient buildings, the largest expense on the horizon is Local Law 97. The measure requires properties of at least 25,000 square feet (2,300 square meters) to begin reducing their greenhouse gas emissions by January 2024, though proposed changes could give two more years of leeway to building owners that show a “good faith effort” to comply.

A study commissioned earlier this year by the Real Estate Board of New York estimated that nearly 15% of co-ops would be out of compliance with the emissions limits, facing average annual penalties of about $57,000. Without updates, 72% of co-ops will face similar fines beginning in 2030, when the city’s rules become more stringent.

Overhauling a residential building’s heating and cooling systems comes with “a significant cost,” generally amounting to $20,000 to $25,000 for each unit, which can be spread out over several years, said Pete Sikora, a campaigns director at New York Communities for Change, a group that advocated for the law’s passage.

Buildings will be able to apply for grants to make projects less onerous, and heating with electricity instead of gas or oil would ultimately save money, Sikora said — two reasons he and others are optimistic about compliance.

“There is no serious threat to affordability in any large-scale way,” he said.

But critics have been vocal in arguing it would put a heavy burden on homeowners. Warren Schreiber, co-president of the Presidents Co-Op and Condo Council, and his allies are suing to stop the law’s implementation while supporting city council bills to water it down.

“Yes, we should do something about the climate,” Schreiber said, “but the burden should not be put on the shoulders of co-op and condo owners.”

He estimated the tab for modernizing his building, the Bay Terrace Cooperative in northeast Queens, at as much as $5 million. That would leave each of the complex’s 200 units with a $25,000 bill, which he said is unrealistic to expect his fellow shareholders to pay.

“We have young families that are just starting out and struggling to make ends meet, we have civil servants, we have teachers, firemen, police,” he said. “We don’t have a lot of those millionaires — as a matter of fact, we don’t have any, as far as I know.”

I had a fantasy about living in the NYC area when I was in my early 20s. Which seems laughably naive and impossible now.

garbage city

Yeah I think it's basically a post-lotto-winning fantasy for most normal humans, and yet there are still millions of people there. A mystery.

I live outside DC, which is also out of reach for most humans. I have a sister in San Francisco (I have lost count but I think she has more than one house).

But even for ridiculously privileged folks, NYC just seems about as plausible as living on the moon.

https://www.visualcapitalist.com/wp-content/uploads/2022/08/SalarytoBuyaHome_Aug3-1.jpg

oh sorry that's 2022, i.e. 6% rates. here it is now:

https://www.visualcapitalist.com/wp-content/uploads/2023/09/OC_Salary-Own-Home_1200PX.jpg

Yow. I don't know if "well, at least you aren't in San Jose" is especially comforting but I guess that is where we are.

Dang, that escalated quickly.

San Jose punishing Dionne Warwick more each year

https://www.nytimes.com/2023/11/06/realestate/zurich-switzerland-renting-homes.html

But any preference for renting here collides with a stark financial reality: National surveys show that in recent decades, Swiss homeowners have been better off, at least in terms of wealth. The median net worth of a Swiss homeowner in their 30s is six times higher than that of a renter of the same age. And the wealth gap only widens with age. In their 70s, Swiss homeowners are 11 times wealthier than renters their age, according to a study by Ursina Kuhn at the Swiss Foundation for Research in Social Sciences in Lausanne.

The catch is that in order to become a homeowner, “you need wealth to get more wealth,” as Ms. Kuhn put it.

certainly seems like rentier capitalism to me

https://www.nytimes.com/interactive/2023/11/09/realestate/brooklyn-apartment-prospect-heights-clinton-hill.html

not sure if pooling together their money gave them any sort of financial advantage here

a well known former ilxor just did this in bk. aside from a bigger downpayment, four adults on the mortgage meant the bank would give them a bigger loan iiuc.

Maine prices have gone off a trampoline of gold. I don't know what younger people looking for a starter home are going to do

We have these in SF, they are called tenancies-in-common and while most major lenders shy away from them there are smaller lenders (RIP SVB) that I believe continue to underwrite them.

There's a very dark article in this week's New York Review of Books about the coming homeowners' insurance crash. It's behind their paywall, but I'm a subscriber, so if anybody wants to read it I'll paste it here.

climate change = more destruction of houses - :(

We have these in SF, they are called tenancies-in-common and while most major lenders shy away from them there are smaller lenders (RIP SVB) that I believe continue to underwrite them.

― citation needed (Steve Shasta), Thursday, November 9, 2023 11:54 AM (one month ago)

SF strictly regulated them as they were a common means of eliminating affordable rental housing from the market, and it wasn't uncommon for the new owners to not actually live in their units and basically convert them to market rate rentals.

There's a very dark article in this week's New York Review of Books about the coming homeowners' insurance crash. It's behind their paywall, but I'm a subscriber, so if anybody wants to read it I'll paste it here.

― Tahuti Watches L&O:SVU Reruns Without His Ape (unperson), Sunday, 12 November 2023 00:07 (four weeks ago) link

just got a letter saying we're getting a deductible rate adjustment due to hurricanes.

I just posted this in the Los Angeles thread today:

Found out today that the house insurance has been cancelled. We're a mile away from the state defined Very High Fire Hazard Severity Zone border (hell, we're closer to the 210 freeway than we are to the hillside) but nevertheless...

Background to all this from Sept. 2021: https://www.latimes.com/business/story/2021-09-26/california-fire-insurance-moratorium-expire

A California moratorium guaranteeing insurance in wildfire-threatened areas lapsed Saturday, putting 347,000 homes in Pasadena and other Los Angeles foothills communities at the mercy of the market.

As many as 2.4 million homes are at risk of losing protection in 2021 as yearlong grace periods expire — though new disasters may extend their shields. In all, 18% of the state’s households could effectively lose protection, the largest single group since the moratorium law took effect three years ago.

“We’re going to pay the bill for climate change one way or the other, and it’s just a question of how we divvy up that cost,” said David Russell, co-director of the Center for Risk Management and Insurance at Cal State Northridge. “What California politicians are trying to do is tinker with how we do that. They’re buying time, hoping they get a break.”

Climate change has been rough on the world’s fifth-biggest economy: Wildfires torched nearly 4 million acres last year and more than 2 million so far this year; the Dixie and Caldor fires, two of the biggest, still aren’t entirely contained.

Fires in 2017 and 2018 alone wiped out more than a quarter-century of underwriting profits for the California insurance market, according to Milliman Inc., a risk assessment company. As insurers rushed to recalibrate risks, consumers were shocked by canceled policies and soaring rates.

In 2018, after the Camp fire destroyed more than 18,000 buildings, lawmakers in Sacramento prevented insurance companies from canceling homeowner policies in or adjacent to wildfire areas for 12 months after the day of an emergency declaration. The idea was to protect consumers after traumatic episodes and to give them time to make their homes more fire resistant. That, ideally, would prevent higher rates or cancellations.

“Even when these moratoriums end, they have given people time to make their homes safer,” California Insurance Commissioner Ricardo Lara, said in a statement to Bloomberg, an argument he has made on numerous occasions. “I expect insurance companies to take that into account.”

It’s hard to tell whether this is wishful thinking or effective policy. Even before the law was enacted, California’s highly regulated market was seeing insurers quit the state or refuse to write new policies. In 2019, the last period for which information was available, the state saw a 31% uptick in non-renewals. Over the same period there was a 36% increase in homeowners using the California FAIR Plan, the state’s bare-bones alternative for those who can’t get insurance in the traditional market.

What are you going to do Elvis?

An inspector from AAA is visiting tomorrow, but I get on edge when I see stories like this: https://abc7news.com/ca-homeowners-insurance-homeowner-cancellation-policy-nonrenewal-not-renewed/13619472/