Random Thoughts - Part III The Search for Spark (No Politics)

[Kaotic Lazagna]

Not sure if it's been said already (too lazy to read previous posts), but remember that two major insurance companies will no longer provide new policies for houses, so if you get a house, you might possibly have to go with a company you don't know or don't like.



Also, getting bigger headaches now with learning Japanese since I guess I'm at the point (according to what I'm using) where I need to learn Kanji and Katakana in addition to practicing Hiragana.

[Spuds]

Originally Posted by spike021

west coast, best coast!

I dunno, I think I'm too much of a California boi

East Coast, ... beast coast...?

[humfrz]

Originally Posted by spike021

On that note, I'm constantly hearing people say "only techies can afford to buy a home in the Bay Area!" I really want to at least get a condo/townhome so I can start using my monthly cost as an investment.

Just spent the past half hour browsing Redfin and I have no idea how anybody can afford these places :\. I'm a "techie" and can't afford _anything_.

Maybe I really should move to a landlocked state and work remotely :|. I've looked at Colorado a bit, just because I went there to get Haru and I know his siblings are still there, and I know one mutual friend who moved there to work as an SWE remotely simply because he could actually buy a sizable house for his family to grow in there.

Hi ya, spike021,

You may wish to rethink your plan for buying a house at this time.

I recall back in the day, about 1970, when I was about your age, I bought my first house, in San Jose, CA. Yep, it was brand new and I paid $22,000 for it. I put $1 in for earnest money, and nothing down on the GI bill, and acquired a VA loan at a very low interest rate.

Today, that very same house is valued at $1,293,000.

(why didn't I just keep that house and rent it out and sell it now) -

Back then, the price I paid was about twice my annual income. Today, even before I retired, I couldn't afford to buy back that same house.

So, today, buying a house in California, just ain't the "investment" it once was.

Now, you being single, I suggest you hold off on a house purchase, until if and when your family status changes. Then, either marry a woman with a good, solid income or a rich widow before you buy a house.

[soundman98]

i was the last on my block to pay under $200,000 for a house. i was at $150k. now they're going for $300k.

i couldn't afford to live here if i had to pay those prices.

[NoHaveMSG]

Originally Posted by spike021

I think I remember chatting with you about that.

honestly I don't love the idea of leaving california, there are a lot of things I like being able to do that wouldn't be so easy elsewhere. But that's why it costs so much.

I was browsing more Redfin/Zillow a bit ago and I may have to do something like moving to Walnut Creek or someplace else in the Tri-Valley, I think? Dublin?

This way I'm still around the Bay but in a more affordable area. Just on a quick browse I'm seeing condos/townhomes for on average 150-200k less there, which is more doable. Just not my favorite area, but as my parents said to me before sometimes the starter home is in a less desirable area .

My current lease is up in March next year so I'm not in a rush but the next 6 months or so will probably consist of more casual browsing and wishful thinking that interest rates will drop.

I wouldn't buy anything unless you feel it is a good enough deal, interest rates will always come down. Think of all the people that paid too much the last couple years at super low rates, no refinancing into a better payment for them

There is a house close to mine that is for sale. Extremely outdated inside and out, one shed, one out building that is dirt floor. 1036sqft, 10k+ sqft loot. 450K.

[86-75309]

30 years ago my ex-wife and I bought a brick bungalow in a pretty nice suburb of Chicago with excellent commuter rail service to the loop. We paid $160K for a tiny fixer-upper. Over 10 years we did a bit of fixing up and eventually sold it for about $240K.
The people we sold it to then sold it a few years later for around $360K to someone who bulldozed the house and built a brand new oversized monstrosity on the postage-stamp sized lot. The current Zillow Zestimate for that address is just shy of $1M, which is about average for that neighborhood now. There's no way I could ever afford to live there now.

[Spuds]

I bought my first house in 2015, standard raised ranch, 3 bed, 2 bath, ~2k square feet, with .3 acres, a half decent shed, and a view of the little valley below for $176k. Commute was about 40 minutes each way. Sold in early 2020 for $210k. Probably worth $250k at least by now.

Current house is 4k square feet on an acre, worth about $450k at the moment. Commute when I go in is about 20 minutes.

What's that about best coast again?


Edit, lol apparently Zillow now says my house is over $500k. Still cheaper than California.

[humfrz]

Originally Posted by NoHaveMSG

..............
There is a house close to mine that is for sale. Extremely outdated inside and out, one shed, one out building that is dirt floor. 1036sqft, 10k+ sqft loot. 450K.

ahhhhhh.........but the view -

[humfrz]

Originally Posted by spike021

On that note, I'm constantly hearing people say "only techies can afford to buy a home in the Bay Area!" I really want to at least get a condo/townhome so I can start using my monthly cost as an investment.

Just spent the past half hour browsing Redfin and I have no idea how anybody can afford these places :\. I'm a "techie" and can't afford _anything_.

Maybe I really should move to a landlocked state and work remotely :|. I've looked at Colorado a bit, just because I went there to get Haru and I know his siblings are still there, and I know one mutual friend who moved there to work as an SWE remotely simply because he could actually buy a sizable house for his family to grow in there.

Here is some food for thought, I scraped off the Internet.

(sorry - it's a long read))

"When you own a home, you get an opportunity to build equity in that property. And unlike the money you pay as a renter, as you pay off your mortgage loan, you get closer to owning a potentially valuable asset outright.
But there are a lot of misconceptions about homeownership that may be driving some people to purchase a home when that's not the right move for them. Here are a few things people tend to get wrong about owning a home.

1. It's a more financially sound choice than renting,

You'll often hear that renting a home is akin to throwing money away because you're not getting anything out of it in return. In reality, there's nothing wrong with spending money on rent because it satisfies a need -- putting a roof over your head.
When you buy food and consume it, you're not getting any financial value out of it. But you're doing something important -- keeping yourself nourished.
More: Check out our picks for the best mortgage lenders
To put it another way, there are some costs in life that are pure expenses and not investments. And it's okay if housing is one of them.
Besides, by renting a home, you're off the hook as far as things like maintenance and repairs go. That could result in a world of savings and free up cash you can use for other purposes, like buying stocks and growing wealth that way.

2. It's a great investment

If you're going to buy a home, don't think of it as an investment. Think of it as an expense.
You might end up making money on the sale of your home if your property appreciates in value, you sell at the right time, and you don't end up having to sink a ton of cash into that home along the way. But you're by no means guaranteed to turn a profit when the time comes to sell your home. And it's important to understand that before buying a place of your own.
What's more, just because you're able to sell your home at a price that's higher than what you paid for it does not mean you're ending up with a profit. Let's say you bought your home for $300,000 and are able to sell it for $500,000 after 20 years. But what if, between property taxes, maintenance, and repairs, you spent $250,000 on homeownership costs over those 20 years? When you add up all of the numbers, you're not looking at a profit at all.

3. It gives you the option to make your own rules

Some people like the idea of owning a home rather than renting one because doing so means not having to follow a landlord's rules. But if you buy a home that's part of a homeowners association, or HOA, you may be disappointed to learn that you don't, in fact, get to call all of the shots.
Some HOAs can be extremely restrictive, dictating what color your shutters must be and what type of shrubs you're allowed to have in your front yard. And it's not unheard of for HOAs to ban certain dog breeds, or to prohibit property owners from running a business from home.
Now you might think, "Well fine, I'll just avoid a home in an HOA." But that may not be so easy. More than 53% of owner-occupied households in America are part of an HOA. And more than 82% of newly built homes in 2021 were part of an HOA community.
This isn't to say that it's impossible to find a home that doesn't force you to join an HOA. But it's getting increasingly difficult.

Homeownership can be a rewarding experience. But don't fall victim to the above misconceptions if it's something you're interested in. Instead, understand that you may not make money on your home and you may not get to set your own rules as expected. And if you decide that renting makes more sense for you, know that there's absolutely nothing wrong with that.

ol humfrz has spoke -

[Spuds]

Originally Posted by humfrz

Here is some food for thought, I scraped off the Internet.

(sorry - it's a long read))

"When you own a home, you get an opportunity to build equity in that property. And unlike the money you pay as a renter, as you pay off your mortgage loan, you get closer to owning a potentially valuable asset outright.
But there are a lot of misconceptions about homeownership that may be driving some people to purchase a home when that's not the right move for them. Here are a few things people tend to get wrong about owning a home.

1. It's a more financially sound choice than renting,

You'll often hear that renting a home is akin to throwing money away because you're not getting anything out of it in return. In reality, there's nothing wrong with spending money on rent because it satisfies a need -- putting a roof over your head.
When you buy food and consume it, you're not getting any financial value out of it. But you're doing something important -- keeping yourself nourished.
More: Check out our picks for the best mortgage lenders
To put it another way, there are some costs in life that are pure expenses and not investments. And it's okay if housing is one of them.
Besides, by renting a home, you're off the hook as far as things like maintenance and repairs go. That could result in a world of savings and free up cash you can use for other purposes, like buying stocks and growing wealth that way.

2. It's a great investment

If you're going to buy a home, don't think of it as an investment. Think of it as an expense.
You might end up making money on the sale of your home if your property appreciates in value, you sell at the right time, and you don't end up having to sink a ton of cash into that home along the way. But you're by no means guaranteed to turn a profit when the time comes to sell your home. And it's important to understand that before buying a place of your own.
What's more, just because you're able to sell your home at a price that's higher than what you paid for it does not mean you're ending up with a profit. Let's say you bought your home for $300,000 and are able to sell it for $500,000 after 20 years. But what if, between property taxes, maintenance, and repairs, you spent $250,000 on homeownership costs over those 20 years? When you add up all of the numbers, you're not looking at a profit at all.

3. It gives you the option to make your own rules

Some people like the idea of owning a home rather than renting one because doing so means not having to follow a landlord's rules. But if you buy a home that's part of a homeowners association, or HOA, you may be disappointed to learn that you don't, in fact, get to call all of the shots.
Some HOAs can be extremely restrictive, dictating what color your shutters must be and what type of shrubs you're allowed to have in your front yard. And it's not unheard of for HOAs to ban certain dog breeds, or to prohibit property owners from running a business from home.
Now you might think, "Well fine, I'll just avoid a home in an HOA." But that may not be so easy. More than 53% of owner-occupied households in America are part of an HOA. And more than 82% of newly built homes in 2021 were part of an HOA community.
This isn't to say that it's impossible to find a home that doesn't force you to join an HOA. But it's getting increasingly difficult.

Homeownership can be a rewarding experience. But don't fall victim to the above misconceptions if it's something you're interested in. Instead, understand that you may not make money on your home and you may not get to set your own rules as expected. And if you decide that renting makes more sense for you, know that there's absolutely nothing wrong with that.

ol humfrz has spoke -

Ok bot.

[cjd]

Our first home sold at a loss - had we paid rent it would have been a bit cheaper. That's taking property tax, maintenance and upkeep, interest, and the actual lower sale price into account. It was in better shape when we left than when we bought it, too. It was paid off so we were socking away the amount we'd paid as mortgage so had a nice down payment handy when we moved. It helped build credit and was nice to be able to paint colors we liked and install a home theater... But those things cost us when it was time to sell so ... Worth it?

Current house theoretically is 40% higher value now vs when we bought it (9years here now). New roof, two new HVAC units, leaky pipes (all waste side ), property tax, and interest etc. all eat that away. The good news at the moment is it roughly cancels out... But that's theoretical value and moving sucks. Also we're on track to pay off the mortgage next year. Property tax means well never stop paying... Windows need replacing, repairs need to be made, kitchen and bath both need attention.
The big thing is that having a house paid off can do magic with respect to savings assuming you save what you used to owe monthly. Really though, that's just front loading expenses. That seems good looking ahead to retiring, but...

[Spuds]

Originally Posted by humfrz

Here is some food for thought, I scraped off the Internet.

(sorry - it's a long read))

"When you own a home, you get an opportunity to build equity in that property. And unlike the money you pay as a renter, as you pay off your mortgage loan, you get closer to owning a potentially valuable asset outright.
But there are a lot of misconceptions about homeownership that may be driving some people to purchase a home when that's not the right move for them. Here are a few things people tend to get wrong about owning a home.

1. It's a more financially sound choice than renting,

You'll often hear that renting a home is akin to throwing money away because you're not getting anything out of it in return. In reality, there's nothing wrong with spending money on rent because it satisfies a need -- putting a roof over your head.
When you buy food and consume it, you're not getting any financial value out of it. But you're doing something important -- keeping yourself nourished.
More: Check out our picks for the best mortgage lenders
To put it another way, there are some costs in life that are pure expenses and not investments. And it's okay if housing is one of them.
Besides, by renting a home, you're off the hook as far as things like maintenance and repairs go. That could result in a world of savings and free up cash you can use for other purposes, like buying stocks and growing wealth that way.

2. It's a great investment

If you're going to buy a home, don't think of it as an investment. Think of it as an expense.
You might end up making money on the sale of your home if your property appreciates in value, you sell at the right time, and you don't end up having to sink a ton of cash into that home along the way. But you're by no means guaranteed to turn a profit when the time comes to sell your home. And it's important to understand that before buying a place of your own.
What's more, just because you're able to sell your home at a price that's higher than what you paid for it does not mean you're ending up with a profit. Let's say you bought your home for $300,000 and are able to sell it for $500,000 after 20 years. But what if, between property taxes, maintenance, and repairs, you spent $250,000 on homeownership costs over those 20 years? When you add up all of the numbers, you're not looking at a profit at all.

3. It gives you the option to make your own rules

Some people like the idea of owning a home rather than renting one because doing so means not having to follow a landlord's rules. But if you buy a home that's part of a homeowners association, or HOA, you may be disappointed to learn that you don't, in fact, get to call all of the shots.
Some HOAs can be extremely restrictive, dictating what color your shutters must be and what type of shrubs you're allowed to have in your front yard. And it's not unheard of for HOAs to ban certain dog breeds, or to prohibit property owners from running a business from home.
Now you might think, "Well fine, I'll just avoid a home in an HOA." But that may not be so easy. More than 53% of owner-occupied households in America are part of an HOA. And more than 82% of newly built homes in 2021 were part of an HOA community.
This isn't to say that it's impossible to find a home that doesn't force you to join an HOA. But it's getting increasingly difficult.

Homeownership can be a rewarding experience. But don't fall victim to the above misconceptions if it's something you're interested in. Instead, understand that you may not make money on your home and you may not get to set your own rules as expected. And if you decide that renting makes more sense for you, know that there's absolutely nothing wrong with that.

ol humfrz has spoke -

Also, all of that is just someone making half-assed justifications for renting to get clicks. There are sooo many things wrong with those statements.

Some real thoughts to consider.

1. You don't actually need to make a profit on your owned home to profit from it. You just need to lose less money overall than you would have spent renting. You are always going to have living expenses.

2. Owning a home outright (no loans or leans) when you retire reduces retirement costs because you no longer have to pay rent or mortgage. It also is a large chunk of wealth that can be leveraged to cover expenses.

3. Housing prices typically rise and fall together. Home values are fairly consistent relative to other homes. This means that once you own your home you can essentially trade it in for another. There is a greater cost and effort to do this than moving from a rented home though.

4. While rent will typically increase over time, your payments into a mortgage are locked in with a fixed API loan. The inevitable forces of inflation works in the owners favor, while renters will have their rent increased over time.

5. People must occupy physical space and there's only so much of that to go around. There is a real limit on supply of living space in areas people want to live. This means that over a typical 30 year mortgage the inevitable forces of supply and demand will trend towards increasing the value of housing.

[Dadhawk]

Originally Posted by Spuds

2. Owning a home outright (no loans or leans) when you retire reduces retirement costs because you no longer have to pay rent or mortgage. It also is a large chunk of wealth that can be leveraged to cover expenses.

Not just when you retire. We have been mortgage free for almost 10 years. Knowing that I could quit my job, take on making much less money and still continue to live in my existing 4 bedroom home makes life decisions a lot easier. Property taxes, insurance and upkeep and all.

[Sapphireho]

Bay area is crazy.

The neighbors I grew up with across the street from my mom's house just sold. They bought it new in 1957 for about $12k. The father died years ago. The mom just died a couple months ago at 96. The kids, same age as me and my older brother, listed the house for $1.6m. First day they got an offer for $1.8m.