What if you just don't buy a home? - aka. "Housing market is dogshit" general

Hippopatumus

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Jan 9, 2020
Mortgages get cheaper the longer you have them, rent gets more expensive the longer you do it, and it's a 100% guaranteed sunk cost.

And you are paying a mortgage either way--either yours or your landlord's.

Leasing can make sense short-term, or if you are wealthy enough that it's not relevant. Otherwise it's always better to own.

People look at 500k houses and think that's too much, but in reality that is a 250k house in 2018 dollars. Salaries will catch up eventually, so it's better to bite the bullet and get a home than to eat 40% rent increases as we sail through inflation.
 

cybertoaster

Chairman of the mammary regulation committee
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According to a few websites, in many states (not the expensive ones) it should be possible to build a 1000-1400 sq.ft. home within 50 minutes from a decent-sized city for under $150K, including the cost of the land. Just searching "cost of new construction dollars per square feet" brings up $100-150/sq.ft. as the common estimate for 2021/22. The price appears to have risen this year and last because of the supply chain issues (including things like lumber) which are affecting the construction sector.

How much of this is accurate information?
Whats the cost of using steel framing instead of lumber?
 

HOMO FOR LIFE

flaunting her autism like a title of nobility
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Mortgages get cheaper the longer you have them, rent gets more expensive the longer you do it, and it's a 100% guaranteed sunk cost.

And you are paying a mortgage either way--either yours or your landlord's.

Leasing can make sense short-term, or if you are wealthy enough that it's not relevant. Otherwise it's always better to own.

People look at 500k houses and think that's too much, but in reality that is a 250k house in 2018 dollars. Salaries will catch up eventually, so it's better to bite the bullet and get a home than to eat 40% rent increases as we sail through inflation.
This makes sense in a low rate environment which we have been in for last 20 years. We have reached a rock bottom rate. Everyone is going frenzy acquiring all the assets in the world because they now believe that fed cannot possibly raise the rates due to insurmountable debt problem in US and the world.

Imagine though if they are forced the raise the rates because cost of shit has gone completely off rail. This may be the future in half a decade.

We are JUST seeing the beginning stages of rampant inflation. We will be seeing a lot more in the future.
 

Bassomatic

HOW DO I KNOW YOU'RE NOT MAKAROV
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Eh I don't think buying a home is always great esp now, esp people who are buying a few year places.

I bought and I'm nearly done my 15 year in under 10 (was goal etc don't ask not bragging) but when I did I had large cash in hand got a great area who's only kept and gone up aside shit (rich WASP area) if I sold my house would be knocked down and all, but aside.

Before I rented a fucking palace, and had a steam room etc, but well I left it 30 days no hard feelings no credit drama no wait. I coulda done it one day as a renter.

Really, I think it depends on a lot of factors the buy /don't buy only is dumb shit and you're talking 200+K for most people anymore and fuck if you don't value it enough a google you should be slapped by a loser realator, it's a lot of money and focus on that.
 

Standardized Profile

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Oct 5, 2018
We can agree that buying a standard suburban house is a gamble under only the most extreme circumstances or poorest due dilligence practices, and that you are much more likely to make money buying a house than lose money, yeah?

As a rough approximation you are likely to preserve your money, but not without risk.

1642413803450.png


I don't believe prices dropped as far as the Times predicted and the trend reversed in 2012, but what the graph doesn't show is homes have ongoing costs and transaction costs at both ends that eat away at whatever profit you hope to realize. Buy a house because you want to own a house and nothing else will do, not because you think you'll make money off of it. There are much better ways to make money. Invest in your education, move somewhere with better jobs, start a business, dump money into index funds, eat lots of food and get fat on YouTube, etc.
 

RussianParasite

Россия без Укропа!
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Owning a home is more than just mortgage payments, it's electricity, municipal water in some cases, municipal sewer fees, gas bills etc.
Seriously though, it seems like half of the posts on this thread has come from people who don’t actually own a house. This shit is expensive and often a bigger headache than renting. Property taxes in some areas is also very high, and needs to be calculated in on a monthly basis. On top of that, homeowners insurance is much much higher than rental insurance.

AC/heating goes out? That’ll be five grand out of your pocket please. Oh, and you’re the one who has to deal with the HVAC people. Washer or dryer stop working? Guess who’s paying for that. Not to mention all of the various tools and random bullshit you need to maintain your house.

The rent vs own a house calculation is not as easy as paying a mortgage compared to monthly rent.
 

moocow

Moo.
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If you do one of those no down payment home loans you get raped by mortgage insurance and you’ll be paying off interest for years before you even get to the principal (more so than a conventional loan).
Once you've paid off 20% of the original principal, you can have that removed. At 22%, they're required to do it automatically. The best way to get rid of PMI is to pay extra each month on your mortgage to chip away at the principal faster. It'll save you a boatload on interest anyway, and getting rid of that $100+/mo. PMI payment is a big win too. That's extra money you can use to pay down the principal faster to avoid even more interest.
 

Hippopatumus

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Seriously though, it seems like half of the posts on this thread has come from people who don’t actually own a house. This shit is expensive and often a bigger headache than renting. Property taxes in some areas is also very high, and needs to be calculated in on a monthly basis. On top of that, homeowners insurance is much much higher than rental insurance.

AC/heating goes out? That’ll be five grand out of your pocket please. Oh, and you’re the one who has to deal with the HVAC people. Washer or dryer stop working? Guess who’s paying for that. Not to mention all of the various tools and random bullshit you need to maintain your house.

The rent vs own a house calculation is not as easy as paying a mortgage compared to monthly rent.
Again, _you are still paying for all these things if you rent_. Do you think landlords operate at a loss?

The heat/AC both went out at my last house and it was around 10k to replace them. It hurt and then when when I sold my house having brand new high-efficiency Trane equipment was a selling point that helped close the deal.

Any time your washer or drier dies just go on Craigslist and find someone selling a scratch and dent unit and is willing to deliver:

Screen Shot 2022-01-17 at 1.27.59 PM.png


My shit sits in a laundry room I don't care what it looks like.

Tools cost essentially no money since Harbor Freight exists, and you aren't a real man unless you own tools anyway.

My first house ended up surprising me constantly in HOW CHEAP everything was. All the crap that goes into a house is commoditized in a way that I didn't understand until I was a homeowner. Oh a new outlet is 77 cents?? A light fixture is $40?
 

TheRedChair

Ultimate Chaos, Ultimate Confort.
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HMMMMMMM. If you want to be a wage slave by all means continue to rent. In the US unless you are a business you CAN NOT write off your rent off of your taxes.


However I will give you a fucking warning. IF you decide to play games and say you own a business and are renting a home/section of home.... Chances are YOU WILL BE FLAGGED.

It all about the analytical data the IRS tags on certain data. And you DON'T want to government digging in your business.

Again, _you are still paying for all these things if you rent_. Do you think landlords operate at a loss?

The heat/AC both went out at my last house and it was around 10k to replace them. It hurt and then when when I sold my house having brand new high-efficiency Trane equipment was a selling point that helped close the deal.

Any time your washer or drier dies just go on Craigslist and find someone selling a scratch and dent unit and is willing to deliver:

View attachment 2895100

My shit sits in a laundry room I don't care what it looks like.

Tools cost essentially no money since Harbor Freight exists, and you aren't a real man unless you own tools anyway.

My first house ended up surprising me constantly in HOW CHEAP everything was. All the crap that goes into a house is commoditized in a way that I didn't understand until I was a homeowner. Oh a new outlet is 77 cents?? A light fixture is $40?

Yea you got the right idea. I rebuilt my dryer. I also rebuilt my chest freezer. I've worked on my gas heater and done a lot of sweat equity.

A home is your castle. The problem is the mentality of people of our current society of today.
 

Hippopatumus

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Yea you got the right idea. I rebuilt my dryer. I also rebuilt my chest freezer. I've worked on my gas heater and done a lot of sweat equity.

A home is your castle. The problem is the mentality of people of our current society of today.
Agreed.

I'm reminded of when my washer quit working not too long ago. Nothing seemed wrong with it, it just stopped doing anything when you pushed the start button. On a hunch after reading some online posts, I pulled the control board and de-soldered all the capacitors and tested each one. One was clearly bad and so I ordered a replacement from Digikey (20 cents) and soldered it in place and that fixed it. It's been fine for over a year now.

This is something I was able to do with a bare modicum of skill and basic internet search engine usage, it took me cumulatively around an hour, and was less than a dollar.

Nowadays people are so terrified of doing anything at all in their homes that they are essentially operating in a state of learned helplessness. I could have bought a new washer. Hell, I could have bought one of the top-of-the line units, god knows I'm not broke, but that would not have contributed in any way to my objectives. Nobody fixes things anymore, nobody is willing to try and fail. Around 40% of my home repair attempts end in failure, but the 60% that succeed pay for the rest.
 

Joshuan Moon

Punished Josh: A Fallen Feeder
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Nov 13, 2019
I'm about in the same boat here. I now have enough saved for a modest down payment with a conventional loan without PMI but now property prices are near double what they were three years ago. Things have slowed down from their peak when inventory was almost non-existent but the prices are still very high.

It's not like I have heavy demands. I really just want no HOA and something livable that I can improve upon with little projects here and there. What I've seen is lots of older homes with copy paste "renovations" that were obviously done on the cheap and remove every bit of character the home once had. That or an unrenovated home that's a complete gut job. What little there is that sits in the liveable but dated and needing TLC is just priced way higher than it has any reason to be.

I'm stuck in this position of always asking:
What if I want to move somewhere else soon? What if the crash comes and I'm stuck holding a bag?
What if the money printer keeps printing and things only get worse from here as they keep kicking the can down the road forever?
And then I do nothing and I continue to pay rent and my savings get half a percent at best sitting there doing nothing.

I have a bad feeling no matter what move I make it will end up being the wrong one.
 

Lichen Bark

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Nov 19, 2020
And then I do nothing and I continue to pay rent and my savings get half a percent at best sitting there doing nothing.
If you aren't comfortable investing, at least look into what kinds of investing accounts your bank offers. You can find out if there is a minimum balance required to hold the account, what is the cost of a trade, are there monthly fees, where do I make trades? (usually through your banks online portal, just like online banking). Ask them about setting up a self-directed investing account. You can find out what kind of fee's there might be to close an account as well, or to transfer the accounts balance somewhere else. You don't have to go through with it, but then you know the steps in case you ever decide to give it a go.

Maybe read up a bit on a 60/40 portfolio, and what that is, and start to learn about index ETF investing. Investing when I was younger was the best thing I ever did. Over the long term, 10-20 years you should see reasonable returns on your investments, if you invest money over the long term you don't really have to worry about "timing the market," you average out over time. If you only invest a few hundred bucks, you at least you get a feel for the process. Maybe then you don't have to earn a half percent, some ETFs have been running 15+ years and average a 6-7% return over that time period. Again do your own research/due diligence, but maybe just peek in the door and see what it's about.
 

Joshuan Moon

Punished Josh: A Fallen Feeder
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If you aren't comfortable investing, at least look into what kinds of investing accounts your bank offers. You can find out if there is a minimum balance required to hold the account, what is the cost of a trade, are there monthly fees, where do I make trades? (usually through your banks online portal, just like online banking). Ask them about setting up a self-directed investing account. You can find out what kind of fee's there might be to close an account as well, or to transfer the accounts balance somewhere else. You don't have to go through with it, but then you know the steps in case you ever decide to give it a go.

Maybe read up a bit on a 60/40 portfolio, and what that is, and start to learn about index ETF investing. Investing when I was younger was the best thing I ever did. Over the long term, 10-20 years you should see reasonable returns on your investments, if you invest money over the long term you don't really have to worry about "timing the market," you average out over time. If you only invest a few hundred bucks, you at least you get a feel for the process. Maybe then you don't have to earn a half percent, some ETFs have been running 15+ years and average a 6-7% return over that time period. Again do your own research/due diligence, but maybe just peek in the door and see what it's about.
I'm not uncomfortable with investing in general, I have a brokerage account and a few investments made. I don't have more in it due to laziness mostly so theres room there for me to learn more and do more. I have money set aside for this but laziness wins out. Really there's no reason I shouldn't be just dumping my frivolous savings into ETFs and some stock gambles.

When it comes to the money I have for emergency savings and future down payment that is when I become extremely risk adverse. I know it doesn't all need to be liquid in cash but gambling it on the market just seems like an unnecessary risk if I'm going to cash out and make a purchase in 6 to 18 months. What tends to be the advice for that kind of situation? The whole 60/40 thing seems to be more of a long term strategy.

Do I take the house money and start day trading GME on margin?
 

Overly Serious

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I'm not uncomfortable with investing in general, I have a brokerage account and a few investments made. I don't have more in it due to laziness mostly so theres room there for me to learn more and do more. I have money set aside for this but laziness wins out. Really there's no reason I shouldn't be just dumping my frivolous savings into ETFs and some stock gambles.

When it comes to the money I have for emergency savings and future down payment that is when I become extremely risk adverse. I know it doesn't all need to be liquid in cash but gambling it on the market just seems like an unnecessary risk if I'm going to cash out and make a purchase in 6 to 18 months. What tends to be the advice for that kind of situation? The whole 60/40 thing seems to be more of a long term strategy.
There is no solid advice for that. The mainstream view is that, I think, that we will see a correction but not a crash. If that's true then it COULD be worth waiting six months but keep in mind that's six months more of rent and six months less of mortgage payments. And if there were a crash, who knows what sort of mortgage deals would be available to you - they might not be as good. I return you to my original advice: There are good times to buy a house and there are bad times to buy a house, but the bad times have to be really bad to be worse than not buying one at all.

If you want to get a feel for what a correction or crash might look like, check how much house prices have risen in the area you want to buy over the last twelve years (i.e. since the last crash). If they've gone up 40% nationally in that period and your area has gone up 80%, then you know your area is at a lot more risk of a severe drop than say an area where it's only gone up the national average or even less. I'm not talking about absolute values, I'm talking about percentage.

Just get one thing straight, because I think it's at the root of a lot of people's uncertainty - buying a house is a long-term thing. Even if you kept it for a few years and then sold and bought a different house you're on the ladder now. And you're unlikely to get off. If you're thinking about a few months here or there, you're probably not thinking about this right. You need to think of it in the context of the next twenty years of being a house owner. In that context, does waiting make sense? Are you still as worried about house prices being lower for five years before they go up again? Others have really highlighted how a lot of this isn't just about the difference in money, it's about the commitment in lifestyle, staying in work and other things.

If you want my generic advice, it's buy somewhere that you can afford reasonably safely and is okay to live in. You'll build equity, build credit history and hopefully have somewhere nice to live. Area beats property size. You don't have to buy a ratbox just to save money. Just don't use some government program to buy more than you should or gamble too much on getting pay rises, etc. Would I be tempted to wait six months right now with how high house prices are? Yes, I would be tempted. I wouldn't say it's wrong to wait a bit, particularly if you can save whilst doing it because you're living with family or something. But, I probably wouldn't because we don't know what's going to happen. And in a scenario where we don't know what's going to happen having my own house with fixed mortgage rates feels like it has higher certainty than hoping it will be some great time to buy in the Autumn, or even next year.

Really, base it around what you want - if renting and its advantages are worthwhile to you, then stick with that. If you know you want a house, then I'd get started on that. Buying a house is not a quick process, anyway. You might find somewhere and be waiting four or five months before it goes through even if you do decide "I want to buy right now".

Good luck. We are all just fools on the Internet.
 

Dr. Ricearoni

Doomposts are Fedposts in disguise.
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I understand that buying property is better than renting but as a relatively young adult just entering both the job and housing market, where the hell are you gonna get 20-40k for a down payment on a house? That's like, a yearly salary for most starting wages. At this rate of inflation, saving money is gonna be damn near impossible too. Is there something I don't get? Are you supposed to take out a loan or something?