Buying A House: C or D?

the ability to install decent quality heating/insulation/cooking facilities over the years also strikes me as a value being handwaved away here but having rented in places with storage heaters or cardboard walls or etc etc its also a very real benefit

i really feel like im missing something here

i pay a mortgage and its the same as rent month to month or its higher or lower, grand ok month to month im better or worse off

after 300 months i own a thing worth todays equivalent of half a million or so or whatever

i feel like you're handwaving that away a fair bit?

― Ár an broc a mhic (darraghmac), Thursday, July 6, 2023 6:08 PM (one minute ago)

monthly homeownership costs are much higher than rent in a lot of places in the US where hipster ilxors prefer to live, is the simple answer

xps i feel reasonably confident that homeowners wont be left to deal with such consequences as individuals in my society in my lifetime but its dair to consider that this is a risk with different variables in the states i guess

xp fair! i did mean to note that property tax here is like ...300 quid

i'm not trying to say that there aren't risks or expenses associated with homeownership, but i agree with darraghmac that the benefits are profound and obvious in a way that makes it difficult for me to understand why you'd prefer renting except when relocating, or short-term stays, etc.

even in cases where you're forced to pony up for taxes or giant repair bills, you still get *some* return on your investment

simple example: a 1BR in flushing where i live starts at about $500k, which translates into a monthly payment (according to zillow) of about $4200 a month. a comparable 1BR for rent - and since these are condos, it's easy to make apples-to-apples comparisons since the units are all the same - starts at $1800 a month.

mortgage payments...are not...the same amount...as rent payments... in NYC!

re climate change, I know a retired couple who used to own a place in Tucson that they sold because, as they put it, "It's too hot to live there now." Obviously people do still live in Tucson, but if the trend lines continue there's going to be fewer of them. It's not like we don't already have a lot of cities where a lot of the housing stock became worthless because so many people left. The investment/savings side of home ownership is entirely dependent on being able to sell it at some point.

xp i mean, you always have to pay taxes, but ... syntax

rent is also scandalously high here pretty much baked in at this stage which ofc i treat as the norm when i shouldn't

The investment/savings side of home ownership is entirely dependent on being able to sell it at some point.

― a man often referred to in the news media as the Duke of Saxony (tipsy mothra), Thursday, 6 July 2023 22:17 (fifty seconds ago)

i dont agree with this statement but im gonna have to think about why for a minute

xp to tipsy - yes, that is also a great point. i'm currently posting from butte, montana, where it is very self evident that the fixed bid from fannie/freddie is not always great at keeping housing prices propped up.

simple example: a 1BR in flushing where i live starts at about $500k, which translates into a monthly payment (according to zillow) of about $4200 a month. a comparable 1BR for rent - and since these are condos, it's easy to make apples-to-apples comparisons since the units are all the same - starts at $1800 a month.

mortgage payments...are not...the same amount...as rent payments... in NYC!

― 龜, Thursday, July 6, 2023 5:17 PM (one minute ago) bookmarkflaglink

you're posting in a thread called BUYING A HOUSE

in other exciting homeowner news, our washer just died. off to the store to get on a payment plan! it was used and cheap and a decade old, it had a good run.

i really feel like im missing something here

i pay a mortgage and its the same as rent month to month or its higher or lower, grand ok month to month im better or worse off

after 300 months i own a thing worth todays equivalent of half a million or so or whatever
― Ár an broc a mhic (darraghmac), Thursday, July 6, 2023 6:08 PM (twenty-six minutes ago) bookmarkflaglink

i *think* what you're missing is that the total monthly cost of renting can be lower than the total monthly cost of owning. if that's the case, and if you invest that difference, then you're usually going to have more money than that home is worth after the 30 years, because stocks (or whatever) go up in value faster than homes (historically). if you piss away that difference then sure, you are just "paying someone else's mortgage".

xp haha my dishwasher and dryer died *on the same day* last month. not going to miss unexpected $3000 expenses tbh.

in other exciting homeowner news, our washer just died.

I wouldn't attempt this with a washer, but one of my proudest moments of home-ownering was managing to fix our dryer last year. I took it apart, replaced the belt, fixed a few other small things, put it back together and so far have added at least a year to its useful life. (But dryers are much simpler contraptions than washers.)

theres quite a few assumptions there, again admittedly a few of them local/cultural

i think mortgage incorporating a savings/investment product that locks the occupier in to that while (to whatever extent applies with mortgage/rent ratio) covering the housing need monthly payment is an important factor

xps caek

yeah, i have no idea if "because stocks (or whatever) go up in value faster than homes (historically)" is true where you live. it's true in most of the US on decade+ timescales.

One nice side-effect of renting rather than owning rn, is that I'm not freaking out from having my house insurance cancelled because of ever-increasing fire risk. It seems like half of my neighbors are struggling with that.

The investment/savings side of home ownership is entirely dependent on being able to sell it at some point.

― a man often referred to in the news media as the Duke of Saxony (tipsy mothra), Thursday, 6 July 2023 22:17 (fifty seconds ago)

i dont agree with this statement but im gonna have to think about why for a minute

― Ár an broc a mhic (darraghmac), Thursday, 6 July 2023 22:19 (thirty minutes ago) bookmarkflaglink

i. remortgage/liquidity
ii. rent free after mortgage
iii. possibility of renting with or without vacating yourself
iv. the component of the monthly payment that serves as "housing need met" for want of a better definition is passively paying down the debt of the mortgage

i get that for iv especially all sorts of assumptions need to be true but the same can be said for an argument that holds homeownership as inherently risky vs the cost/availability of mortgage financing and the low but reasonably privileged/protected growth in the asset while it also provides a fundamental utility etc etc

xp i'm becoming a capitalist (landlord) right now and am dealing with that too. apparently i have two options. i have never heard of either insurance company. even allowing for the fact that people don't go online to write positive reviews of their insurance company, they both have the worst online reviews of any business i've ever seen.

nb i cant overstate how weird irish property market is tbf and yes when shit like that crashes it crashes hard

but mostly rhat only superfucks you if you have to sell at the wrong time which i may be underplaying as a risk idk

it’s almost as though a sign of middle or upper middle class status is less likely to include home ownership in certain large cities 🤔

meanwhile I think for a certain class of people my age (upwardly mobile, often childless, socially active) it’s been aspirational to shift to renting or downsizing to a condo from a house the last few years, at least in my area. there’s a loss of equity but a lot of the nesting instinct (or a discovery of a lack of the same) during certain world events made people change their minds about where they wanted to live

fwiw I still have a house but I have a love/hate relationship with it because I’m in my little nest and have difficulty motivating myself to get back out there when I’ve got all these little things to do here. but it’s kind of lonely

xp to darragh

i. and iii. are affected by those same factors though (i.e. being able to sell) - if there's market for your house, then the bank is not really gonna want to let you take out a big mortgage on your house. same with trying to rent it out - it's likely you can't sell your house because where you live has become undesirable to live, so renters are probably looking elsewhere.

ii. is definitely true but as I've explained you're not escaping all the other annual costs of owning a home like taxes and insurance.

if there's *no* market i should say

how do taxes work in ireland? there's no equivalent of US property tax in the UK. the tax is on the resident, not the owner. is it the same in ireland?

but mostly rhat only superfucks you if you have to sell at the wrong time which i may be underplaying as a risk idk

― Ár an broc a mhic (darraghmac), Thursday, July 6, 2023 6:58 PM (two minutes ago) bookmarkflaglink

this does happen! if you bought with 20% down in LA around 2006 you likely *could not move* until like 2012, unless you also had significant cash savings. it's happening in NZ right now. i'm slightly worried we're making a mistake not selling up completely in LA tbh.

iii is not necessarily so cut and dried, depending on the factors preventing purchase (locally that would be difficulties in buyers getting mortgages due to bank lending restrictions)

but again im doubtless coloured by that local scenario which also covers next-nothing property taxes, historical high protecrion for homeowners even in significant arrears, rents >>> mortgages etc

xps i think just answered!

xps Right, it's just not a given that you can get money back out of a house, or can get out what you put in. Definitely true that there continues to be value in the house for as long as you live there. But a big part of the argument for home ownership as wealth-building is the idea that once you don't live there any more, either you or your heirs will be able to liquidate it. Which is generally true but can also not be. In the scenario where you never want to move and aren't worried about an estate to bequeath to anyone, you can just live there til you die and if it then falls to pieces, it doesn't really matter. (You see a lot of that in rural parts of the U.S. Houses are kept up until the owner dies, and then they just rot because there's nobody who wants to move there.)

welcome to butte, montana

xxp yeah if rents >>> mortgages and house prices are stable (or rising) then it's basically impossible to come up with an argument for long term renting.

xps re getting stuck absolutely it does happen we had five years of it after our all encompassing property/banking crash but there's at leasts ways to manage that risk (the idea of a property ladder being anathema to yours truly for a start, we're here until we're carted out if possible)

can get out what you put in.

*less* the component that wouldve constituted rent in the equivalent circumstance over the period is i guess the only arm id have in the air here

my views may be colored because my parents bought in 2006 - they topped the market, in a bad way. their house lost 1/3 of its value in the crash and has literally only now returned to where it was pre-2007, thanks to the current housing crunch. that's almost 20 years.

all that said, as might be evidenced by how i've been posting, i am seriously thinking about buying. somewhere. at the end of the day, i do agree with darragh and budo jeru. there is a certain, incalculable benefit to owning a home that can't be put into financial terms. knowing that you can finally erect a shrine to ned raggett in your bedroom without worrying about your security deposit being withheld - priceless!

i wonder also to what extent the personal history skews the weighing up giving all the moving uncertain net present value opportunity cost etc parts but we moved house growing up like i buy shoes now and i gotta say lads "when renting you can always just move" shruggery aint, imo, it

the housing market is rarely left subject to the invisible hand such that a disaster for yr individual homeowner/occupier spells out an equivalent benefit to yr opportunistic genteel housesitter if you get me

xp re personal history!

worse fates befall homes with raggett shrines if i recall my seventies vhs horror correctly

I rented until I was 45 — it suited my peripatetic lifestyle, I moved every few years, lived in different cities, etc. I was somewhat resistant to buying at the time that my wife really pushed it — but now as a homeowner for nearly nine years, I see a whole lot of advantages, for sure. I agree that there is a great sense of assurance about it being your own place — along with yes the hassles of maintenance and so forth. But we've made it really feel like our place in a way I never quite did in any of my rentals, even though I was very fond of some of them. Also of course it helped that we bought in 2014, which in retrospect was a very good time to buy. So I definitely don't discourage it in any way. I just think that the "best investment you'll ever make" hype gets overblown.

their house lost 1/3 of its value in the crash and has literally only now returned to where it was pre-2007, thanks to the current housing crunch. that's almost 20 years.

i absolutely dont want to minimise this, firstly

im trying, i guess, to see how id feel if my house was still worth 'only' x in 2035', at which stage the debt ratio on it is < 50% and ive lived in it the whole time for an unchanging monthly amount- and in my specific circumstance that sounds good to me (im not seeking a year on year asset increase as 'value' is i guess where im setting my own stall here?)

(known graph guy caek will overlay here a line chart of:

interest rates
house prices
rents
wages

over time and simply tap the sign that says "ireland isnt a real economy, remember", im thinking)

yeah to be clear they have definitely not regretted buying it, have gotten 20 years of use out of it, etc. etc.

but i know it did weigh on my mom, who's very risk-averse - knowing that the place you live in is 'underwater', would have to take a loss if we had to sell in an emergency, etc. etc.

knowing that you can finally erect a shrine to ned raggett in your bedroom without worrying about your security deposit being withheld - priceless!

Now I'm curious how destructive to the property such an ofrenda to Ned might be! Also a very specific benefit to home ownership I hadn't innately considered before

yeah i get it

ofc another factor not brought in is there are times in yr life where the cheapest monthly option is simply the biggest factor to be weighed up

xp sorry my post timing game sucks tonight

If you don’t plan to sell or move and you’re confident you’ll never be forced to move by e.g. healthcare costs or climate change, then granted it doesn’t matter what your house is worth.

their house lost 1/3 of its value in the crash and has literally only now returned to where it was pre-2007, thanks to the current housing crunch. that's almost 20 years.

OH HI DERE

otoh our payments have remained almost the same or possibly even gone down slightly, it was $1140 WITHOUT taxes/insurance in 2003 and $1400 with everything now

I feel for your parents, 龜, and I’m glad they’ve been happy enough there to feel it’s home, despite worries

I had the absolutely bizarre experience of dating someone who bought a condo in like, 2006ish and it seemed bad but I wasn’t invested in the relationship yet, then I was, and then I wasn’t. I think she took an absolute bath when she sold it in 2009.

Meanwhile, I had a brief respite and bought my place post-crash when the federal subsidy was fully in effect, just an instant $8k (iirc) from the government. I think I overpaid a tiny bit and don’t really care now.
It was a fixer-upper and if anyone wants to know about HVAC, roof (complete re-sheathing, some frugal people never reroofed and just threw more shingles on for 80 years) and building a whole new garage, hit me up. I still need a kitchen remodel but I think I’m now appraised at 80% higher than what I bought this for

But it’s still regional because I’ve got like, a house under $230k and presumably my lot alone would be that in San Francisco or w/e