Where did this five year window to live in a house come from?

[Alex_angel]

I keep on reading on how people want to change homes every five years etc… Last year I spoke to a broker who was dying to convince me that a 7 year ARM was my best option and his reasoning is that in 5 years I will want to move anyways so I won’t have to worry about the reset.

Now growing up I lived in the same house for 20 years and my folks are still living in it. Who makes the biggest purchase of their lives, sets up their family, gets the kids in school with the intention of leaving in 5 years? Is there some mentality that the realtors want you to have because they need people to continously sell or else they won’t have a steady income. When I buy a house it will be for the long term. I want my son to start in a school and move up from elementry with his friends to middle school and eventually high school. Unless I have 5 more kids I don’t see why I would need to “upgrade” my home from anything larger than 3000 sqft.

[Ex-SD]

It’s propaganda to generate more commissions. They think that if enough of them say this to enough people (over & over), it will become something that people will accept as normal. Unless your need more room and can’t enlarge your present home or the neighborhood turns very bad……or you change jobs and your commute starts beating you to death, stay in that home and pay off the mortgage. There is no better feeling than having NO mortgage (despite what all the other people who want you to invest their money with them will tell you).

[patientlywaiting]

I think there truth to that.
The stats do indicate that were are much more mobile society and that households move on average once every 5 years. Jobs are no longer guaranteed and people often need to move for professional reasons.

Buyers who buy in a down market need to consider their future job prospects before buying. If they sell as the market continues to decline, they’ll loose a huge amount because of depreciation and transactions costs (plus all the years of ownership premium they paid and won’t recover. That premium is real money since it’s savings they would otherwise have).

[(former)FormerSanDiegan]

I don’t know about RE propaganda/brainwashing or what the statistics are for our mobile society, but in our case, we have moved into a different house, on average every 5 years since our first home purchase.
… and although some cases were moving up (neighborhood) none of the houses exceeded 2000 square feet.

[luxuryglow]

I personally think it’s the psychology. People, the ones i know at least, changes priorities constantly…and home buying,moving etc…is an obvious indication.

[Diego Mamani]

A friend of mine and I bought houses at about the same time in 2001. He bought in Dallas, and I bought in the O.C. We both got 30-year fixed rate mortgages. In 2004 my friend’s employer relocated him to NYC, and in 2005 I sold to relocate to northern L.A. county.

We both threw lots of money down the drain by not having signed up for 5-yr or 7-yr ARMs. True, my house doubled in value, but I could have saved serious $$ with an ARM. People do move more often than in the past.

A 30-yr fixed mortgage is a superior product, but we pay more for it (in the same way that a Camry costs more than a Corolla b/c it’s a better car).

[PadreBrian]

Yep. In today’s high tech job market you projects change all the time, you go where your specialty is needed. There’s no such thing as “a job for life” anymore. For example you are a genetic engineer that specializes in X…and there only a few in the country that can do x…when one project is finished company A doesn’t need X any more they need Z. You find a company that needs X. oops, that’s in Portland.

I do say that flippers for the last few years have been feeding of the engineers in San Diego, adding fuel to the fire.

[Bugs]

A lot of people like to cast the ARMs as being evil and anyone who used one as being stupid. I think the ARMs have their place and I can see how it would work out for some buyers during some markets.

If climbing the property ladder or leaving your options open to job transfers are part of your priorities then planning ahead is just that – looking forward. You might have better things to do with the cash during the interim.

But if the reason for using the ARM is because you couldn’t afford the purchase and you are fantasizing about values continuing to increase into perpetuity then the ARM was a horrible mistake and you’re an idiot.

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