patrick.net

Posted for Patrick.net reader B.

Patrick --
Something I don't read about much is whether it's still a good idea to even
consider buying a house at all, at any price, ever.

Things have changed so much in the last 15 years or so. How many people have
real job security? Apart from federal employees, not that many people. Fifteen
years ago the economy was way more stable, you could pretty much bet on having
a job the next year so you could pay your mortgage.

Second, most existing houses were built for a world that no longer exists --a
world where energy was cheap (to heat and cool your house, to drive to and from
the house,etc), a world where the economy was almost always expanding, where
jobs were plentiful and well paid, for the most part. A world where property
taxes, repairs, insurance and utilities were usually reasonable. None of those
things are cheap anymore. Most houses are also poorly located too far from good
mass transit, shopping, jobs, etc, since city planning in most US cities has
been so poor. Not to mention that most US houses are at best of mediocre
construction quality, built with cheaper materials, requiring constant and
expensive maintenance.

Buying a house in an unstable economy with declining job prospects means that
it's unlikely you will be able to sell the house down the road in a few years
for what you paid, thus you won't be able to move to another area in case your
job evaporates and the local economy tanks. Federal loans can't prop up the
housing market forever, and the economy really no longer needs that many people
to function, with automation and outsourcing.

The single family home may be an artifact from an earlier time that served a
purpose for a time, but for the above reasons may just not work anymore for
most people. Times have changed, but people remain stuck in the thinking that
owning a house is wonderful, profitable, always a good idea, etc. Many houses
that sell for substantial amounts even now may be basically worthless in 10 or
15 more years, for the above reasons.

B.

#housing