patrick.net

Owning has been a big load off my mind.

I know the bank isn't going to come to me next year and say, my rent is going up, or they sold the place, or inform me to let Realtors in to view the place to potential buyers. If something breaks, I don't have to fight with a landlord to get it fixed. Only to have him installing the cheapest shittiest replacement that he could find, that is ugly as hell and cheap as shit.

Bought in 2007 for just over $700k Paid a bit over $4k/mo in ITI (interest only loan)

Found out my neighbor was renting a similar house for just under $2k/mo. Realized I was paying way, WAY too much!

Short sold in 2011 for $530k eating 5% DP but did not get stuck with fed and state tax bills for the $150k in forgiven debt. That would have been at least $70k out of pocket loss on top of the lost 5%.

OUCH!

Now renting a larger, nicer house for just under $2.5k/mo.

As you say YMMV.

Bought in 2009, ~$3K PITI. Later refinanced to ~$2400. Probably cheaper than renting.

CaptainShuddup says

If something breaks, I don't have to fight with a landlord to get it fixed. Only to have him installing the cheapest shittiest replacement that he could find, that is ugly as hell and cheap as shit.

But now every little creaking or dripping noise worries me. Could it be a leak?

Instead of dealing with a landlord, I have to deal with the plumber/contractor. Definitely more stressful than renting.

I agree it's more stressful, but overall I'm glad I did it. If I could go back, I may have gotten something smaller. It's a lot of work to maintain a big house.

So, I bought a short sale in 2012, 8 year old complete rebuild, beautiful house, just shy of 3000 sq ft. I got pretty lucky, threw out a lowball offer in the middle of winter and the bank accepted it. It didn't hurt that I let the RE agent double dip. My mortgage is less than $1800 a month @ 3.5%.

Granted I live in BFE, but it's a beautiful and quiet place (most of silicon valley is a shithole imo). But, it takes a special kind of person to live up here; I grew up here and my family is here, so I'm used to it.

I work in Campbell, so my commute is not too bad.

CrazyMan says

Granted I live in BFE, but it's a beautiful and quiet place (most of silicon valley is a shithole imo). But, it takes a special kind of person to live up here; I grew up here and my family is here, so I'm used to it.

I know it's beautiful up there. How are the roads?

Roads are fine tbh. I drive Bear Creek everyday in a TT and you just get used to it. It's nothing.

Highway 9 is less windy and if you need to get to Cupertino or Saratoga it's usually faster.

They both have a reputation for getting closed for a short time if there's mud slides, but it's pretty rare. If it does happen, I just work from home that day anyway :)

I love it up there. As a matter of fact, I'm going home now :) Have a good weekend!

CrazyMan says

I agree it's more stressful, but overall I'm glad I did it. If I could go back, I may have gotten something smaller. It's a lot of work to maintain a big house.

So, I bought a short sale in 2012, 8 year old complete rebuild, beautiful house, just shy of 3000 sq ft. I got pretty lucky, threw out a lowball offer in the middle of winter and the bank accepted it. It didn't hurt that I let the RE agent double dip. My mortgage is less than $1800 a month @ 3.5%.

Granted I live in BFE, but it's a beautiful and quiet place (most of silicon valley is a shithole imo). But, it takes a special kind of person to live up here; I grew up here and my family is here, so I'm used to it.

I work in Campbell, so my commute is not too bad.

How long is that commute?

LA is crazy. I've never had a mortgage payment over $1000 for a decent house.

At least you admitted luck and timing. Otherwise this is a dumb post. Whichever idiot you sold to in 2008 is on patricia.net telling a very different story. Everyone who bought in 1999 is attempting rape when they put their house on the market today. Confuckinggrats for being old enough to buy then. And everyone who either bought a CA house or AAPL in the last few years is orgasmimg every 5 minutes and showing the world. Your 2 experiences occurred in 2 of the greatest run ups in home values EVER. If you think this is normal and your home is going to continue skyrocketing in value you are out of your mind.

Howdy There says

LA is crazy. I've never had a mortgage payment over $1000 for a decent house.

House made of cardboard maybe. Or in Compton

JH says

At least you admitted luck and timing. Otherwise this is a dumb post. Whichever idiot you sold to in 2008 is on patricia.net telling a very different story.

Uh, they sold our place 3 months ago for $699,000. Which other story on patricia.net are they telling? How they traded up for a better place? Any other "dumb post" predictions?

JH says

Confuckinggrats for being old enough to buy then.

You seem pretty bitter. Like you said, I attributed this to LUCK. Twice. I'm not here crowing about being so smart in timing the market.

I'm GenX, dude. Like a lot of us, we have been on the short end of the stick on a lot of things. We really enjoyed things like being latchkey kids,recessions, AIDS, tremendous debt handed to us, and other goodies. Would you like to make another assertion without knowing anything about me?

The point of the post is that your house is not always a terrible investment. It depends on a lot of factors. One of the factors in my case is I bought in a highly desirable place, with good schools, and near the ocean. If I had bought in the Inland Empire, it likely would not have turned out so well.

Even if my home did not rise one penny, in my case I still would be better off than renting in this area. You did read this part, right?

Make another prediction for me. What will $4K/month in rent look like in 27 years when my mortgage is paid off? At 1% annual increases, it is $5200. (When was the last time rent increased by 1%/year?) At 2%, $6827. Meanwhile, everyone who buys and gets a 30 yr mortgage is tied to the same monthly for a long time.

My take is that if you are comfortable paying for something you like to live in for at least 5-7 years, it is possibly a good idea to buy.

JH says

At least you admitted luck and timing.

Luck comes to those who take chances wisely. Do not discard it as a possible sign of ingenuity.

On the other hand, the housing market in the past 15 years has been scary. It is not unreasonable for someone to abstain.

Peter P says

On the other hand, the housing market in the past 15 years has been scary. It is not unreasonable for someone to abstain.

I agree 100%. I'm not sure I would buy now in our area considering where prices are. In other areas, maybe. Each situation is unique, so saying everyone should buy or rent isn't right.

As another poster said, YMMV.

New Renter says

How long is that commute?

It's 35 minutes door to door for me, 45/50 minutes on Friday nights coming home. It takes basically 20 minutes to get from downtown BC to Lexington Reservoir (a little quicker if you're rolling).

CrazyMan says

New Renter says

How long is that commute?

It's 35 minutes door to door for me, 45/50 minutes on Friday nights coming home. It takes basically 20 minutes to get from downtown BC to Lexington Reservoir (a little quicker if you're rolling).

20 min? You must drive like a crazyman!

lol not really, though I do know the road like the back of my hand.

I drove my Tacoma each day for a while and I must admit it's not that pleasant. You definitely want to do it in a small car.

Waitingtobuy says

Uh, they sold our place 3 months ago for $699,000. Which other story on patricia.net are they telling? How they traded up for a better place? Any other "dumb post" predictions?

Shouldnothavewaiteduntil2008tobuy says

We bought for $620k and sold after six years for $699k, making a 2% annual profit on our house. This did not line up with the stories our friends had told us of how they doubled their home values in six years from 2000 to 2006. Well, at least we weren't throwing money away on rent!!! We had build solid equity in this home. Our friends who bought in 2000 were able to put 20% down (approx $70k). Well, since our wages were not much better in 2008, we also managed to put $70k down, or 10%. That made our monthly payment $5k, which was about $1k more than renters were paying at the time in this LA beach community, and it would have only been $4k if we had 20% down. But hey, we were DONE throwing money away on rent!!

Well, the 2% profit was disappointing, but the real kicker was when we looked under the hood. When we looked at all the costs associated with this purchase that was going to make us instantly rich and help us move up, we found some troubling numbers:
-$15k buyer closing costs in 2008
-$40k seller realtor fees in 2014
-$40k (1%) maintenance costs over 6 years
+$40k principle pay down

Reality is that we netted an annual profit of 0.6%, measly in comparison to our friends who made 20%/yr. And this is ONLY because we paid down principle...otherwise it's a loss.

Just think...if we had taken that $70k downpayment, and the extra $1k per month and pumped it all into AAPL stock over the past 6 years, the dp would be worth $550k and the extra $1k would be $200k. Now THAT is profit. I'm going to tell all my friends about my luck, jump into AAPL now, and expect to become filthy rich in 6 years. Well, once I get my hands on $70k again, that is.

Peace out y'all...time to pull the slot machine lever again!!