patrick.net

wthrfrk80 says

And there's absolutely no gaurantee that you will sell your house at a profit after 25 years, after taking inflation into account. During that 25 years, that house "investment" generated "negative dividends" in for form of:

1) Mortgage interest

2) Property Taxes

3) Insurance

4) Maintenance

The benefit of the house comes from money saved on rent. You don't want to overpay for that rental savings.

If house prices are cheap relative to rents, you should buy. If house prices are expensive relative to rents, you should rent. See Patrick's rent vs. buy calculator to see which option causes the least loss of money (yes, they BOTH result in a LOSS of money, not just the rental option!)

I didn't say there was any guarantee.

wthrfrk80 says

If house prices are cheap relative to rents, you should buy.

That's fine,but then you are stuck in that for who knows how long? cuz buy equivalent to rental are POS nowadays. There are no move up opportunities if one has bought post 2007.

1sfrenter says

I am not sure if that is what some posters are suggesting, or if they are merely saying that no one should buy right now, that it would be better if everyone help off on buying for a few years (or longer).

I think the majority of posters on this site are suggesting not to buy at this time, some of them with seemingly evangelical zeal.

wthrfrk80 says

Even when the mortgage is paid off, you don't "own" your house. Try missing a few property tax payments and see how much you really "own."

Even when the mortgage is paid off, you're renting the land from Your Local Government.

In 20-30 years time, I'd rather "rent" from the local gov't in the form of taxes than rent from a landlord (with increasing rent payments caused by inflation) 'til the day I die.

Rent for 30 years = payment for a consumable (ie., shelter)
Mortgage for 30 years = payment for 30 years with the possibility of having something at the end

I know that some people are able to rent and save and invest the difference and come out ahead, but there is something to be said for the forced savings that a mortgage allows.

If your household income is more than 150K a year, you are probably (hopefully) saving and investing. But also know that you are in the top 10%, and your situation is vastly different than the majority of Americans, and your saving and investment advice is irrelevant. The rest of us just need a place to live.

Realtors Are Liars says

Bigsby says

Aye, nobody's ever made a profit on a real estate transaction involving a house.

You're catching on. Building materials depreciate. Houses are a loss ALWAYS.

Realtors Are Liars.

As predictable as predictable can be.

Realtors Are Liars says

Bigsby says

As predictable as predictable can be.

And you backpedal from those facts every single time.

Why is that?

Realtors Are Liars.

What 'facts' would those be?

Realtors Are Liars says

Bigsby says

What 'facts' would those be?

Ducking and weaving is the same as backpedalling.

Realtors Are Liars.

I think you should go and build another one of your $60 a square foot houses you keep blathering on about and leave the rest of us in peace.

Realtors Are Liars says

Houses are a loss ALWAYS.

Compare 30 years of renting (include inflation) to 30 years of PITI (and maintenance).

Depending on where you live, even if housing goes down, at least afetr 30 years you will have something (yes you still pay taxes and maintenance) and your kids might have something.

In both cases you will have paid for shelter.

I could pay cheaper rent right now (move to a crappy neighborhood, rent a smaller house, get a place without a yard, etc.), but I choose to pay a little more for the house I rent because I want a decent place to live and raise my kids.

Does it make sense for me to pay $500 more pre month in rent because I like the neighborhood, the city, the commute, the yard, the large kitchen, etc.? Maybe not, but anyone who rents makes the choice to spend a certain amount per month based on what they can afford and what is important to them in a home.

Otherwise, we could all just rent any old hovel without windows and pay as little as possible. Which, of course, most renters don't so. Unless they are really broke and they have to, and they spend their days dreaming of living someplace nicer one day.

So buying a home (yes, renting money from the bank) has the same emotional and personal considerations.

Where you choose to live is not a simple mathematical equation, whether you rent or buy.

Realtors Are Liars says

Bigsby says

I think you should go and build another one of your $60 a square foot houses you keep blathering on about and leave the rest of us in peace.

I think I'll stay right here exposing your lies day after day.

Now refute the facts. You won't because you can't. You can't because they are facts.

Here's another fact for you;

Realtors Are Liars.

I won't because I still don't know what 'facts' you are referring to and seemingly neither do you. I guess I can put your posts down to workplace injuries - too many cheap planks of wood landing on your head.

Realtors Are Liars says

Bigsby says

I won't

Of course you won't. You're too busy ducking, weaving and running.

Realtors are Liars.

I'm still waiting.

Come on now RAL, everybody know that Real Estate only goes up. Renting is for losers.

Realtors Are Liars says

1sfrenter says

even if housing goes down, at least afetr 30 years you will have something

IF?

Housing prices are falling.

After 30 years you'll have a depreciating expense.

Realtors Are Liars.

I imagine the biggest danger most house buyers could face is purchasing one of your $60/sq. ft. efforts.

And you're still trolling. Why is that? You should be out building one of your death traps or do you not work these days?

Realtors Are Liars says

Housing prices are falling.

After 30 years you'll have a depreciating expense.

Maybe so, maybe so. But either way I am paying a monthly expense for shelter.

Are you suggesting no one ever buy a home, or that everyone just wait? If the latter, for those of us who already have been paying a chunk of money in monthly rent while waiting for this bubble to unwind (not the speculators and investors, just the hoi polloi), what exactly is it you are suggesting?

Or are you perhaps, a troll for the 1%, who is greedily licking their chops at the prospect of the barrel you'll have us all over when 90% of all property is owned by the 1% and everyone rents from them?

1sfrenter says

Or are you perhaps, a troll for the 1%, who is greedily licking their chops at the prospect of the barrel you'll have us all over when 90% of all property is owned by the 1% and everyone rents from them?

You're already renting all property from the 1%. The rent is called 30 years of "mortgage interest." Renting money to "buy" property isn't much different than just renting the property.

1sfrenter says

Mortgage for 30 years = payment for 30 years with the possibility of having something at the end

Yup, a 30 yr old piece of crap that needs major updates. You don't think there will be better building materials, better engineering technique, better built-in media and communication systems? Your 30 year old home will be a tear down, so what did you really end up with? 30 years of an inability to invest your money when you buy into today's prices. Buy in 3-5 years when the prices come down to historical averages if you must buy.

RentingForHalfTheCost says

Yup, a 30 yr old piece of crap that needs major updates

And that assumes it's still standing. There's an awful lot of shitty run-down housing in the BA. Even if it's a relatively new house, houses aren't built to last anymore. They're made of vinyl, particle board, and glue.

I would advice to avoid spending money on something you'll end up hating over years. If you buy something you aren't happy with, you'll hate it even more after you spend thousands upon thousands in repairs and maintenance.

Silicon Valley bubble isn't going to last forever. Big companies like Google will stick around, but all this random little companies that provide less than marginal service will probably be going away sooner or later. Prices will drop just like they did during DotCom crash.

Silicon Valley is relaying too much on one industry.
Detroit use to have very high pay blue collar jobs with all possible perks. If in 1950 one could tell, that in next 15-30 years Detroit will decay beyond imagination, everybody would laugh of him.

REpro says

Silicon Valley is relaying too much on one industry.

Hasn't much of Silicon Valley gone to India already?

America is in a state of permanent decline.

wthrfrk80 says

Hasn't much of Silicon Valley gone to India already?

When tech gadgets are sent for production overseas, research and technology (often with tax subsidy) attached to it, is given away for free.

wthrfrk80 says

Even when the mortgage is paid off, you don't "own" your house. Try missing a few property tax payments and see how much you really "own."

Even when the mortgage is paid off, you're renting the land from Your Local Government.

I am game for this definition. It is more in line with reality that everyone going around living in debt saying they own their leased car, leased house, leased wife, etc. The only thing you really own are your mistakes. ;)

Realtors Are Liars says

tatupu70 says

RentingForHalfTheCost says

As collateral or guarantee of payment, the lender of the mortgage holds the deed or ownership of said property, until the buyer pays the mortgage off

Ding, ding, ding, ding. Do you see the word collateral in that sentence?

Ding, ding, ding, ding. Do you see the sentence "lender holds the deed" in that paragraph?

Yup, The holder of the deed is the owner. Amazing how you just skip over the last sentence where it says "the mortgage holder occupies the house as if they were the owner". Read - "as if". I know, I'm waiting my time. Where is that ignore button before I get dumbed down in the process of trying to help. Ugh

robertoaribas says

30 years of an inability to invest your money when you buy into today's prices.

Who said I had any money to invest in the first place? The assumptions floating around here are astounding.

Rent and PITI are identical right now, in the places we are looking. 100K interest free deferred payment (40 years, heck I'll be dead by then) down payment assistance from the city and a mere 2.5% cash from me.

Not sure about the rest of the readers here, but the bottom 90% of Americans are not sitting around wondering how to invest their money: we are trying to figure out how to pay the rent or the mortgage, keep our jobs, and feed our kids.

If I decide to move and get another rental, I would probably have to come up with over 8K cash for first, last and security deposit. For a 500K house: 13K. Monthly nut: 3K whether I rent or buy.

I'll gladly pay the additional maintenance (with a house/painter carpenter and auto mechanic couple, I know we can do more ourselves than the average homeowner) than have to deal with haughty, imperious, greedy landlords for the next 5-10 years.

Besides, I want another big dog. And maybe some pygmy goats.

RentingForHalfTheCost says

Yup, The holder of the deed is the owner. Amazing how you just skip over the last sentence where it says "the mortgage holder occupies the house as if they were the owner". Read - "as if". I know, I'm waiting my time. Where is that ignore button before I get dumbed down in the process of trying to help. Ugh

Sorry, I think you were already dumbed down. Yes, the bank holds the deed. What ownership rights does that give them? Do they have any rights to the appreciation of the asset? Are they responsible for any liabilities caused by the asset? Do they have any access to the asset?

What ownership rights does the bank have??

Who cares about "ownership rights"? That's academic. The fact is: if you stop paying your mortgage, the bank gets the house. Or at least that's the way it was until recently.

Unless you're buying outright with cash, you're either renting from Your Landlord or you're renting money from Your Bank. Do whichever option is cheaper and less risky.

Mortgage interest is "rent" too: it's rent paid to use money you don't own. If it's cheaper to rent money than rent houses, do that. If it's cheaper to rent houses than rent money, do that.

wthrfrk80 says

Who cares about "ownership rights"? That's academic. The fact is: if you stop paying your mortgage, the bank gets the house. Or at least that's the way it was until recently.

Unless you're buying outright with cash, you're either renting from Your Landlord or you're renting money from Your Bank. Do whichever option is cheaper and less risky.

Mortgage interest is "rent" too: it's rent paid to use money you don't own. If it's cheaper to rent money than rent houses, do that. If it's cheaper to rent houses than rent money, do that.

+1

robertoaribas says

RentingForHalfTheCost says

Yup, a 30 yr old piece of crap that needs major updates. You don't think there will be better building materials, better engineering technique, better built-in media and communication systems? Your 30 year old home will be a tear down, so what did you really end up with? 30 years of an inability to invest your money when you buy into today's prices.

My current home was built in 1968.... I'm in the process of updating most of the interior, hardly a teardown, and close to everything, unlike new homes built way out in BFE.

By the way, most buildings people own condos in in eurpope are hundreds of years old...

Built with brick and mortar rather than wood like most SFH in the US. I guess builders never read "the three little pigs". Every contractor should able to recite this story before given their license. I spent some time in Germany and the 200 yr old houses look like they were built yesterday. Here in the U.S. after 200 yrs all you got is a liability. Horrible foresight, and you can see the greed straight in the materials list on the blueprint.

RentingForHalfTheCost says

I spent some time in Germany and the 200 yr old houses look like they were built yesterday. Here in the U.S. after 200 yrs all you got is a liability.

Yep, that's America. If we built stuff to last, we wouldn't need to keep consuming. And if we didn't need to keep consuming, our overlords would stop making money...

wthrfrk80 says

Who cares about "ownership rights"?

Obviously you don't. But they are pretty important.

wthrfrk80 says

Mortgage interest is "rent" too: it's rent paid to use money you don't own. If it's cheaper to rent money than rent houses, do that. If it's cheaper to rent houses than rent money, do that.

That much we can agree on.

RentingForHalfTheCost says

Built with brick and mortar rather than wood like most SFH in the US. I guess builders never read "the three little pigs". Every contractor should able to recite this story before given their license. I spent some time in Germany and the 200 yr old houses look like they were built yesterday. Here in the U.S. after 200 yrs all you got is a liability. Horrible foresight, and you can see the greed straight in the materials list on the blueprint.

Brick isn't exactly the best idea in a major earthquake zone.

CalifGal says

Bigsby says

Brick isn't exactly the best idea in a major earthquake zone.

Really?

Tell us about seismic zones and seismic restraint as it relates to horizontal and vertical reinforcing in double wythe masonry walls.

Does that relate to one of your $60/sq. ft. houses? Why don't you explain to me why brick isn't the material of choice in seismically active areas? In fact, I don't think I can recall ever seeing a brick house in all the years I lived in Tokyo. Are there lots of them in the Bay area?

Oh, and didn't you forget something?

She's a BRICK...HOUSE...

Oh it's a SHIT...HOUSE...priced mighty mighty, just rentin' it 'til the rout...

69Charger says

I can't put up a CMU building in seismic zone S-4? Really? REALLY?

Realtors Are Liars.

Where exactly did I say that?

Contractors Are Liars.

Most especially $60/sq ft ones.

And doesn't that mean that you are one of a handful of people on here who actually benefited from the housing bubble. Or are you just Googling your construction info?

hrhjuliet, I am in a similar boat. The biggest problem is that my husband can't get a job that pays nearly as much anywhere else. I don't think we can move. So I sit here pondering the purchase of a home. I can't figure out what to do about it. I continue to work on my down payment. I think that prices will continue to go down at a "slow hiss" pace on Peninsula. I have almost been thinking about buying a rental while we continue to rent. On the low end, it seems that there are properties that meet rent parity.

edvard2 says

Still another option is to hold out for longer, save up a LOT of cash from your supposedly cushy, well-paying California job, and basically semi-retire somewhere else. My folks live in Semi-rural NC and they own a large piece of land, a decent house, and so on and the value of all of it is well under 200k. Where they live a normal house in say- an acre of land- is still easily less than 150k. I have even seen some for under 100k. So figure you save up lots of dough and go to someplace like that, buy a house for cash, stick the rest into various savings and retirement accounts, get some crappy joe-job that at least pays for your insurance, and call it a day. Sure- it would be a huge shift in lifestyle. I grew up that way. For others it would be a real shocker

This has been our generally approach.

edvard2 says

But getting back to that question, if where you live means you actually have to pay more to get what you really want, then would it be worth it to save up some more? I personally don't see a reason to rush right now. The market is actually still depreciating and even if it bottoms out, it will probably be awhile longer before it moves.

That has also been my view of things. Even if it bottoms, I don't think it will take off like a rocket. I think recent increase in prices is artificial, akin to a dead cat bounce.

BG

holy zombie thread...

hrhjuliet says

Of course I don't like the Bay Area, lots of people don't, but a lot of people are stuck here for the very reasons I gave. It is a hard choice. I'm afraid of regrets, but I'm also afraid of making the wrong choice and buying if the market is still going down.

How's the housing market in your area between Feb and now? Up, down or sideways? If so, by how much?