Buying A House: C or D?

im not a fan to be honest. I mean it'll be nice getting some of the money back we put in, assuming I dont die first, but this being stuck in one place is the pits

Sometimes i daydream about a natural disaster that flattens our house when none of us are home and somehow all the animals are safe. oh the freedom.

https://www.homedepot.com/p/Getaway-Pad-540-sq-ft-1-Bed-and-Roof-Deck-Tiny-Home-Steel-Frame-Building-Kit-ADU-Cabin-Guest-house-GPRD540/320746688

So we've circled back to the Sears catalog.

Replacement cost seems reasonable. State Farm might even insure it.

Sometimes i daydream about a natural disaster that flattens our house when none of us are home and somehow all the animals are safe. oh the freedom.

Not gonna lie, I was thinking this in March when the tornado was going through town and we were in the bedroom closet. "Just leave the safe and my rum collection and take everything else, c'mon Mr. Tough Storm"

home insurance? what's that?

https://www.nytimes.com/2023/05/31/climate/climate-change-insurance-wildfires-california.html

im not a fan to be honest. I mean it'll be nice getting some of the money back we put in, assuming I dont die first, but this being stuck in one place is the pits

― But who are we doing it versus? (sunny successor), Friday, May 26, 2023 1:23 PM (six days ago) bookmarkflaglink

Sometimes i daydream about a natural disaster that flattens our house when none of us are home and somehow all the animals are safe. oh the freedom.

― But who are we doing it versus? (sunny successor), Friday, May 26, 2023 1:54 PM (six days ago) bookmarkflaglink

really hard to feel sympathetic tbh

state farm is our home insurer in CA. we're going to rent our place out (joining the landlord class), so i called our agent there to switch it to landlord insurance last month and they said "no, we're not doing any new policies insuring residential structures in CA, can't tell you why, but you'll see in a couple of weeks". haha.

what do they know?!

caek - you would probably want to contact CA Fair Plan - I mean, if you want to make sure you have insurance and the regular companies are denying you?

fire insurance is earthquake insurance now

(Though of course you won't even get a mortgage without fire insurance)

I've read that one reason housing prices haven't gone down despite the rise in interest rates is that the recession hasn't started yet - people aren't losing their jobs and being forced to sell their houses in firesales like in 2008. so, it's good because people with houses are keeping their jobs and not getting evicted by the banks, but it's bad because people who don't have houses yet all of a sudden are finding it much more expensive to buy

― 龜, Wednesday, May 24, 2023 1:34 PM (one week ago) bookmarkflaglink

So you have really low inventory which is basically holding prices up a lot, sometimes creating bidding wars even though interest rates have increased so much. The conforming mortgage level has basically increased 50% over the course of three years (from around $500k to $740k now).

It is a very unusual dynamic.

― horizontal, Thursday, May 25, 2023 1:52 PM (one week ago) bookmarkflaglink

right. there's this sense that prices should be down (via 7% mortgage rates), but apparent prices (well, zestimates) are being held up by a lack of homes on the market (i.e. comps). could change

What happens in Vegas doesn't always stay in Vegas. https://t.co/gZHRbsNxV9

— Aaron Layman (@dfwaaronlayman) June 5, 2023

it's probably Henderson and not actually Vegas but ...

If you bought a home anytime between 2010 and now, mortgage rates are meaningfully higher than whatever rate you have on your current home, so moving means paying more for the same amount of house (often hundreds or even thousands of dollars per month), even after you account for whatever equity you have accumulated from your own home's rising price. There are certain buying years in the past decade or so where your mortgage interest rate is likely half of current rates. So there's not a lot of incentive to sell your home as long as you can afford your payment. And there aren't a lot of current homeowners with ARMs or subprime mortgages that legit can't afford their homes. Hence low inventory.

well, yes. the point is inventory is rising.

Hmm. I’ll look into this tomorrow.

While active listings as tracked by https://t.co/tBRH4VE5ZA won’t be a perfect match with MLS data, it (Vegas) shouldn’t be off like this. https://t.co/96ADTWjv3O

— Lance Lambert (@NewsLambert) June 5, 2023

in one market, not nationally if you read the thread

(even putting aside the potential data issue, xp)

we all know inventory is low, and why it's low. you're missing the point.

but if you want to write a paragraph explaining why mortgage payments go up when mortgage rates go up then far be it from me to stand in your way.

new housing inventory due to suburban sprawl vs. less inventory in areas that won't/can't sprawl anymore ... is that the point?

kinda doubt caek would be a fan of the development model of Henderson, NV

I went to a house party in Henderson once

Lee Hazlewood spent his last years in Henderson.

im not a fan to be honest. I mean it'll be nice getting some of the money back we put in, assuming I dont die first, but this being stuck in one place is the pits

― But who are we doing it versus? (sunny successor), Friday, May 26, 2023 1:23 PM (six days ago) bookmarkflaglink

Sometimes i daydream about a natural disaster that flattens our house when none of us are home and somehow all the animals are safe. oh the freedom.

― But who are we doing it versus? (sunny successor), Friday, May 26, 2023 1:54 PM (six days ago) bookmarkflaglink

really hard to feel sympathetic tbh

― budo jeru, Thursday, June 1, 2023 10:46 AM (three weeks ago) bookmarkflaglink

Eh, your sympathy wasnt exactly my goal. if i still lived in the city/country i grew up in i would never even come close to being able to afford to buy a house. Doubtful on the renting without sharing too. However, i live in one of the poorest states in the US now and housing is ridiculously cheap. So, yeah, Id prefer renting for the ability to move about.

I'm now living in the model home version of my own condo, I had to put 98% of my stuff into storage but (hahaha) they let the vinyl stay because it looks cool. A giant wall of CDs however does not entice buyers I guess.

I love living in my house, but my current feeling is that I would have been fine not owning if there were stronger tenant protections and better/more rental houses available in my area.

Out of curiosity just checked. For $1200/mo more than my current total cost, I could rent a shittier, smaller house in a worse location in my town.

owning a house really means something different depending on where you are living and who lives with you imo

OTM

Somebody on npr just said that divorce is down because ppl can't afford to move

Ugh

tbf, I think they meant, "If you are living in an upper-middle-class home and have a mortgage at 3%, it discourages you from taking out a new mortgage to buy YET ANOTHER upper-middle-class home at 6%."

tl;dr. They are talking mostly about rich people problems. No one knows what - gasp - RENTERS do when their marriages deteriorate. That is beyond our purview to contemplate.

NPR fucking sucks -- news at 11

would it not also....apply to renters

Budo you may be right, but I am not sure a better option arises in its absence (vs. a worse option).

Like, sure, like most of us I want better options than NPR, the Washington Post, the New York Times, and for that matter the Democratic Party.

Unlike most of us, I am not sure that the institutions that would/could rush in to fill the resultant vacuum would be better.

owning a house really means something different depending on where you are living and who lives with you imo

― mh, Monday, June 26, 2023 2:37 PM (five hours ago) bookmarkflaglink

There's definitely much more incentive to own one in that I have kids and want them to grow up in a place and not multiple places. I would consider renting again once they move out permanently.

Not convinced that inventories are low simply because selling would mean a higher interest rate mortgage. In Australia, inventories are low too, which is holding up prices. But we don't have mortgages with an interest rate fixed for the duration. Like the UK, most homeowners are on a variable rate mortgage or on 2 or 3 year fixed rate mortgages. But still we have the low inventory/prices holding up dynamic, so something else is going on.

well yeah it's never just one factor is it? where i live the mortgage interest rates plus lack of inventory are crippling the market, and there's no quick solution to the inventory problem.

In 2021 I bought a "house" (older double wide in a park where I pay monthly rent in the lot) and it's... fine but not exactly where we want to be for the rest of our remaining time. So last week I bought nearly 20 acres of unimproved land about an hour south of us. Initial plan is off-grid infrastructure and a group of tiny houses/cabins and eventually live there full time and have a pet sanctuary while managing the natural wetland area as well as we can. So - come camp?

That sounds amazing! It will be a lot of hard work no doubt but what a project!

tha does sound good. all my Grand Designs fantasies.

radio 4 did a 'but what about the renters?' piece the other day, re the interest rate increases. but the estate agent they talked to was more interested in telling them about the bloke who'd just sold his 14 rental properties because the paperwork was now too much of a faff.

Bless

Jaq, that's awesome!

tbf, I think they meant, "If you are living in an upper-middle-class home and have a mortgage at 3%, it discourages you from taking out a new mortgage to buy YET ANOTHER upper-middle-class home at 6%." tl;dr. They are talking mostly about rich people problems. No one knows what - gasp - RENTERS do when their marriages deteriorate. That is beyond our purview to contemplate.

this is less of a rich people problem than a middle class/working class problem, esp. if there are kids. Because it isn't just a sell one house and buy another house, it's a "support two households with the same income that only had to support one" ... It's often less "sticker shock" for renters to move, though it depends on a bunch of things

I know people who are going through this right now - they're selling the house and renting two apartments nearby, which is still significantly more combined than their house payments, although their house had appreciated since they bought it so they benefited from that at least. You do have to be pretty well off to think about buying a second home while keeping the first.

you just have to get married again immediately

I joke, but a friend’s sister-in-law kind of did this

We’re going back to renting.

This is how I break it down.

Pros:

The rent is the most you pay each month for housing. The mortgage is the least you pay.

Problems are someone else’s problem.

We’re able to afford a nicer home in a nicer neighborhood than if we bought. This is NYC. YMMV.

We can move more easily.

Cons:

Rent goes up every year.

Might have to move when you don’t want to.

Neither:

Equity vs “throwing your money away” only relevant if house prices definitely rise faster than whatever else you’d do with the money (not true for us).