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Capitulation: I will Never Own


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2013 May 28, 7:49am   9,478 views  29 comments

by exfatguy   ➕follow (0)   💰tip ($0.10 in tips)  

I like renting, but would like to own one day, but it's moot. Prices will never come down to levels where I can realistically afford them. Just when I think the bubble is ending and a path to normalcy begins, another bubble comes in and starts anew.

I'm completely off-phase. Everyone else has hundreds of thousands of dollars and they don't mind buying old houses sight unseen. I can't compete with that. There are too many of them and only one of me.

So to Real Estate: you win.

#housing

Comments 1 - 29 of 29   

1   HEY YOU   2013 May 28, 12:39pm  

Just remember,every bubble can burst.Seems I remember something happening a short time ago(2006?) when house prices only increase. One never knows how bad it can be when the next bubble burst. As a buyer you can always hope for a cataclysm as sellers & investors hope prices only increase. I can see into the future about 3 seconds.

2   Dan8267   2013 May 28, 2:01pm  

Solution: Rent and save/invest until you retire and then move to a nice, cheap place outside the U.S. and live like a king without worrying about outliving your money.

That's the up side, and it's not too bad.

3   ad   2013 May 28, 4:41pm  

Dan8267 says

Solution: Rent and save/invest until you retire and then move to a nice, cheap place outside the U.S. and live like a king without worrying about outliving your money.

That's the up side, and it's not too bad.

You can move to an area like the Florida panhandle that has a very low cost of living.

4   drew_eckhardt   2013 May 28, 5:11pm  

adarmiento says

You can move to an area like the Florida panhandle that has a very low cost of living.

The Florida panhandle does not have a very low cost of living (especially for old people forced to retire before they qualify for Medicare) with things like

1) Socialized medicine for everyone plus better plans that would run a 60 year old $125/month

2) Live-in maids that work for $200/month (US federal minimum wage is $1160 before you add in FICA/Medicare/FUTA)

3) 2-bedroom houses on an acre of (not swamp) land starting at $100K with $50-$150/month utility bills to run the air conditioning and $150 property tax bills

Costa Rica does.

5   mmmarvel   2013 May 28, 10:26pm  

Ummm, I don't like that word "NEVER". Can't tell you the number of things that were 'never' going to happen to me or that I was 'never' going to do that have happened or that I did do. Right now, I just aquired a poodle, I'm pretty sure that I said I'd 'never' own one. Turns out to be one pretty dang smart dog, and in being smart is one of the better/best dogs that I've ever owned. And THAT is just the most recent example of the word/vow 'never' hitting me in the butt as I pass through life.

6   mmmarvel   2013 May 28, 10:31pm  

drew_eckhardt says

The Florida panhandle does not have a very low cost of living (especially for
old people forced to retire before they qualify for Medicare) with things
like

Um, I don't even live in CA (thank God) but those prices that you quoted sounded cheap to me - and I thought I WAS living in a place where the living was cheap.

7   exfatguy   2013 May 29, 4:50am  

It will take me too long to save for a down payment, if it's even possible, and I'll still get beat out by an all-cash.

The only thing I'm doing now is paying off bills so I can have zero debt. Perhaps that is the freedom I'm ultimately seeking.

Who knows, but as for housing, that's apparently not in it for me.

8   sjenner   2013 May 29, 5:52am  

Same here at least not in the RBA or vicinity. I'd rather save half and buy in Sacramento, drive or fly once or twice a week and bank the cash for retirement, trips or toys. Let the rich Chindians fight over scraps and overbid and overpay with their wheelbarrows of cash.

9   FortWayne   2013 May 29, 6:34am  

You should consider living in another city. I've made my peace long ago that I will never live in Beverly Hills or Hollywood Hills and I'm happy.

No need to stress over things you can't have. "Real Estate" will only win if you spend your life slaving away to pay for it.

10   exfatguy   2013 May 29, 6:42am  

FortWayne says

You should consider living in another city. I've made my peace long ago that I will never live in Beverly Hills or Hollywood Hills and I'm happy.

No need to stress over things you can't have. "Real Estate" will only win if you spend your life slaving away to pay for it.

"Sorry, you can't buy one of these small, 50 year old tract homes originally purchased by a bus driver. There are too many millionaires ahead of you in line."

;)

11   drew_eckhardt   2013 May 29, 7:26am  

sjenner says

Same here at least not in the RBA or vicinity. I'd rather save half and buy in Sacramento, drive or fly once or twice a week and bank the cash for retirement, trips or toys. Let the rich Chindians fight over scraps and overbid and overpay with their wheelbarrows of cash.

I bought myself a nice double wide in Sunnyvale from which everything between San Jose and Redwood City would be a good bicycle commute.

No common walls, 3 bedrooms with 2 bathrooms, 1990s construction with double pane windows and central heat/air, 400 square foot secluded deck where the least private sides have a 6' fence, room for all the plants (there's the miniature conifer garden, 38 palm trees, cactus collection, and flowers people grow in fly-over country), and the nicest carpet I've ever walked on (we upgraded, and while we wouldn't get the money back out the price tag divided by even a few years isn't interesting compared to the alternatives) .

$1500/month total cost of ownership with slot rent, chattel loan, insurance with flood + earthquake, and property tax ($450/year). Kept our equity from selling in 2005-2006 (because the required 20% down on $100K is just $20K) for kids in their odyssey years and emergencies.

That beats the nearby alternatives of $650K + HOA fees for a town house, $500K+ for a 1950s ranch, $2500 to rent such a house, $2000-$3000 to rent a nearby 2 bedroom apartment, or living in my car commuting.

Apart from the overwhelming temptation to tell my wife "Hold muh beer and watch this!" it's great.

With plenty of professionally landscaped mini-yards and BMW+Mercedes driving residents it seems other people are economizing that way too.

There also isn't enough shop space, although the Techshops are only 15 minutes away, open to midnight 7 days a week, and let me use toys like CNC mills which wouldn't fit my budget so that's a wash.

12   SiO2   2013 May 29, 7:49am  

exfatguy says

FortWayne says

You should consider living in another city. I've made my peace long ago that I will never live in Beverly Hills or Hollywood Hills and I'm happy.

No need to stress over things you can't have. "Real Estate" will only win if you spend your life slaving away to pay for it.

"Sorry, you can't buy one of these small, 50 year old tract homes originally purchased by a bus driver. There are too many millionaires ahead of you in line."

;)

One can go to Detroit and purchase a house formerly owned by a millionaire (in constant dollars). Definitely, the economy is different in SFBA (and Detroit) now than it was in 1950.

13   Heraclitusstudent   2013 May 29, 8:09am  

It's kind of like a 38 year old woman thinks there are no good men left: She worries about her biological clock while grimacing over her available choices.
But the problem is really a combination of her high expectations and her low and fading attractiveness.

Let's face it, if we have a normal job with a $180K salary and no stocks worth millions, we don't deserve a nice house in the SF peninsula. Considering everyone wants to live there, this is now reserved to Facebook employees who cashed out and corporate executives.

We can still live in Pleasanton or Hayward or plenty of other nice places.

What people need most is to let go.

14   dublin hillz   2013 May 29, 8:12am  

Heraclitusstudent says

We can still live in Pleasanton or Hayward or plenty of other nice places.

Pleasanton is better than 70% of peninsula.....hayward not so much lol

15   mmmarvel   2013 May 30, 10:43pm  

Heraclitusstudent says

Considering everyone wants to live there,

Not EVERYONE! I don't live there and have zero desire to live there ... course I'm the only ONE who doesn't want to live there - not.

16   gulpher   2013 May 31, 2:23am  

Heraclitusstudent says

But the problem is really a combination of her high expectations and her low and fading attractiveness.

Haha, well said. They'll jump all over you now..

17   FunTime   2013 Jun 3, 2:12am  

Maybe you win?

18   evilmonkeyboy   2013 Jun 4, 1:22am  

mmmarvel says

Heraclitusstudent says

Considering everyone wants to live there,

Not EVERYONE! I don't live there and have zero desire to live there ... course I'm the only ONE who doesn't want to live there - not.

I live in the BA and I don't want to live here. I'm just putting in my time making good money and renting. Rent is high, mortgages are outrages, and traffic sucks.

19   mell   2013 Jun 4, 2:18am  

The things you own end up owning you. Don't buy things you don't need with money you don't have to impress people you don't like ;)

20   Heraclitusstudent   2013 Jun 4, 4:38am  

donjumpsuit says

I choose to split a master bedroom with my girlfriend.

Yes she pays rent.

In other words: sell your body and give up privacy.
That's always a solution...

21   New Renter   2013 Jun 4, 5:40am  

donjumpsuit says

I live in the Bay Area.

I agree with exfatguy.

However, I will not so easily be defeated.

I will not buy into high demand, I will not spend during booms.

I will not "move to a cheaper area".

I will not "consider an apartment".

I will however, use high cost of housing to 'mine' cost of living salary and bank it.

I choose to live in a house, in a nice area, with a nice yard.

I choose to rent.

I choose to split a master bedroom with my girlfriend.

Yes she pays rent.

I choose to rent out the other two rooms to roomates.

They are really never home, but pay rent on time.

I choose to earn a salary that supports a housing cost around $2-3k/mo.

My housing cost is $600/mo.

Do the math.

Any chance you could convince your girlfriend to share that bedroom with yet another (female) roommate? That would bring your rent down even further.

22   New Renter   2013 Jun 4, 5:45am  

Heraclitusstudent says

Let's face it, if we have a normal job with a $180K salary and no stocks worth millions, we don't deserve a nice house in the SF peninsula. Considering everyone wants to live there, this is now reserved to Facebook employees who cashed out and corporate executives.

We can still live in Pleasanton or Hayward or plenty of other nice places.

What people need most is to let go.

I don't know what your line of work is but in mine $180k is about double the typical mid career salary.

23   Heraclitusstudent   2013 Jun 4, 9:51am  

New Renter says

I don't know what your line of work is but in mine $180k is about double the typical mid career salary.

Yes, it is a high - but not exceptional - wage. Millions of households in the US have this kind of revenue. Couples with 2 good jobs often get $300K or more together (lawyers, physicians, tech jobs, etc...). What do they do with this money? They compete for houses in the best locations.

What I meant is people who get something like $180K think they deserve something very nice. They tend to underestimate how many more are before them in the pecking order.

24   Rin   2013 Jun 4, 10:47am  

New Renter says

I don't know what your line of work is but in mine $180k is about double the typical mid career salary.

This is what they don't tell STEM grads; ppl in careers like tax consulting/tax law, earn from $150K to $400K. Really, when careers start to touch the 'big money', you see all kinds of salaries in that $250K to $600K zone.

Until a few years ago, I'd thought that $120K was a big deal. Then I'd discovered that if a prop trader earned less than $200K, he was considered a failure in his field.

25   drew_eckhardt   2013 Jun 4, 11:43am  

Rin says

New Renter says

I don't know what your line of work is but in mine $180k is about double the typical mid career salary.

This is what they don't tell STEM grads; ppl in careers like tax consulting/tax law, earn from $150K to $400K.

Just like good software engineers in the middle of their careers, although AFAIK much over $200K generally requires working at big companies with mature products which involves trade-offs many of us are unwilling to make.

Obviously many don't do that well; although on the other side of the fence some law school graduates are working for $15 an hour.

26   New Renter   2013 Jun 4, 1:47pm  

Rin says

New Renter says

I don't know what your line of work is but in mine $180k is about double the typical mid career salary.

This is what they don't tell STEM grads; ppl in careers like tax consulting/tax law, earn from $150K to $400K. Really, when careers start to touch the 'big money', you see all kinds of salaries in that $250K to $600K zone.

Until a few years ago, I'd thought that $120K was a big deal. Then I'd discovered that if a prop trader earned less than $200K, he was considered a failure in his field.

No they don't. I'd guess only the kids of the big money players get that info as well as the mentoring on how to succeed. Telling STEM grads where the money is one thing - how to succeed at getting it is another.

27   New Renter   2013 Jun 4, 1:51pm  

drew_eckhardt says

Obviously many don't do that well; although on the other side of the fence some law school graduates are working for $15 an hour.

Jeez, at least those guys get SOMETHING from their alma mater. Upon graduation I was kicked to the curb with no help whatsoever from my school. My advisor after some arm twisting did give me a contact which went nowhere. That has not stopped the alumni center from begging for money though.

28   inflection point   2013 Jun 4, 1:55pm  

donjumpsuit

I split the rent with my wife too. However I think what I am saving on rent is offset by her other expeditures. At least you can compartmentalize some of those extra expenses with a girlfriend.

29   New Renter   2013 Jun 4, 2:25pm  

donjumpsuit says

I choose to keep my anus for special people, like ones who share my bedroom and pay rent.

Ahhh. Well then your options for a potential 3rd master bedroommate just doubled!

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