Why when and who should buy a house?

[irondoc]

I’ve been reading this forum for a couple of years, and recently interjected into a discussion on the near-term prospects for additional drops in housing pricing. I have long been intrigued by the apparent “anti-house buying” sentiment of many posters in these forums.

So here are some questions for the critics of home buying:

Do you think there is any good reason to buy a home versus renting?

If renting is the universally “better” solution, who should be owning the dwellings that are being rented?

Is there a “prime” time in life to purchase a home?

Rank the importance of the following factors for choosing a home:
A – cost
B – location (schools)
C – location (proximity to work)

I’ll provide some of my color on these topics later, but am curious to see what some of you think.

Irondoc

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[UCGal]

Here’s my opinions… take them for what they’re worth (not much.)

If you are buying long term, as a place to live, and the house fits your family needs, and the mortgage, taxes, insurance, maintenance do not put financial stress on your family… then why not.

If you are buying as an investment, with the need for the property to increase in value… If the house is temporary – too small, wrong location, or somehow not suited for your long term needs… then it’s not a good time to buy a house.

My personal take – long term historical perspective (ignoring the last 2 decades) housing was a break even proposition. You did not get the gains that you could get in other investments. People bought so they could have a permanent home, that they could personalize, that they could pay off and live in mortgage free in their retirement. Also, taking a longer rear view perspective, a significant part of our population rented. Anectdotally, my maternal grandparents NEVER owned… they were lifelong renters, despite being comfortably middle to upper middle class. There was no stigma, they lived in nice neighborhoods, my mother was not harmed growing up in a rental.

If you’re buying for shelter, or to fix your costs, long term AND you stay within your means, then it’s a great time to buy.

If you’re like a coworker of mine – who’s actively shopping for a townhome, convinced that they’ll make enough off this purchase that in 5 years they’ll be able to buy a big house… in total denial that the market could be flat or go down… in total denial that they’d have to pay transaction costs to sell in 5 years so even in a flat market could come out worse off… Knowing that purchasing the townhouse will be more expensive, monthly than renting the same townhouse…. For this coworker, I don’t think it’s a good time to buy.

[sdrealtor]

And yet if the townhouse is large enough to house your co-workers family, interest rates skyrocket and inflation soars in 5 years (rents along with it) it may well turn out to have been a good time for them to buy. Soooo many variables out there.

[sdrealtor]

And yet if the townhouse is large enough to house your co-workers family, interest rates skyrocket and inflation soars in 5 years (rents along with it) it may well turn out to have been a good time for them to buy. Soooo many variables out there.

[sdrealtor]

And yet if the townhouse is large enough to house your co-workers family, interest rates skyrocket and inflation soars in 5 years (rents along with it) it may well turn out to have been a good time for them to buy. Soooo many variables out there.

[sdrealtor]

And yet if the townhouse is large enough to house your co-workers family, interest rates skyrocket and inflation soars in 5 years (rents along with it) it may well turn out to have been a good time for them to buy. Soooo many variables out there.

[sdrealtor]

And yet if the townhouse is large enough to house your co-workers family, interest rates skyrocket and inflation soars in 5 years (rents along with it) it may well turn out to have been a good time for them to buy. Soooo many variables out there.

[SD Realtor]

Yeah I agree with the two previous posts in a big way. For sure there are alot of ifs out there but if rates are gonna be sky high someday than there is no doubt in my mind that borrowing money at 4.5% will be looked back on as a GOLDEN opportunity unless you have a big big cashpile.

As far as your A,B,C in ranking the factors of choosing a home I guess I choose none of them. I would choose the home I love the most IFF (if and only if) I can afford it and am secure in my income to pay for it (job security). I think that the ABC you put forward all will roll into how much I love it.

Think of the home as a woman, do you love her for her looks, personality, and other fetching features? Isnt it all kind of a blend of all of those things? So maybe the ABCs of the home you mentioned all roll into that as well as the neighborhood, the lot, the traffic on the street, other needs that may be important to YOU but maybe not others.

For alot of people the universal renting solution is best for THEM. It works, they love it, they are okay with landlords, and notowing the home. To each his own!

[SD Realtor]

Yeah I agree with the two previous posts in a big way. For sure there are alot of ifs out there but if rates are gonna be sky high someday than there is no doubt in my mind that borrowing money at 4.5% will be looked back on as a GOLDEN opportunity unless you have a big big cashpile.

As far as your A,B,C in ranking the factors of choosing a home I guess I choose none of them. I would choose the home I love the most IFF (if and only if) I can afford it and am secure in my income to pay for it (job security). I think that the ABC you put forward all will roll into how much I love it.

Think of the home as a woman, do you love her for her looks, personality, and other fetching features? Isnt it all kind of a blend of all of those things? So maybe the ABCs of the home you mentioned all roll into that as well as the neighborhood, the lot, the traffic on the street, other needs that may be important to YOU but maybe not others.

For alot of people the universal renting solution is best for THEM. It works, they love it, they are okay with landlords, and notowing the home. To each his own!

[SD Realtor]

Yeah I agree with the two previous posts in a big way. For sure there are alot of ifs out there but if rates are gonna be sky high someday than there is no doubt in my mind that borrowing money at 4.5% will be looked back on as a GOLDEN opportunity unless you have a big big cashpile.

As far as your A,B,C in ranking the factors of choosing a home I guess I choose none of them. I would choose the home I love the most IFF (if and only if) I can afford it and am secure in my income to pay for it (job security). I think that the ABC you put forward all will roll into how much I love it.

Think of the home as a woman, do you love her for her looks, personality, and other fetching features? Isnt it all kind of a blend of all of those things? So maybe the ABCs of the home you mentioned all roll into that as well as the neighborhood, the lot, the traffic on the street, other needs that may be important to YOU but maybe not others.

For alot of people the universal renting solution is best for THEM. It works, they love it, they are okay with landlords, and notowing the home. To each his own!

[SD Realtor]

Yeah I agree with the two previous posts in a big way. For sure there are alot of ifs out there but if rates are gonna be sky high someday than there is no doubt in my mind that borrowing money at 4.5% will be looked back on as a GOLDEN opportunity unless you have a big big cashpile.

As far as your A,B,C in ranking the factors of choosing a home I guess I choose none of them. I would choose the home I love the most IFF (if and only if) I can afford it and am secure in my income to pay for it (job security). I think that the ABC you put forward all will roll into how much I love it.

Think of the home as a woman, do you love her for her looks, personality, and other fetching features? Isnt it all kind of a blend of all of those things? So maybe the ABCs of the home you mentioned all roll into that as well as the neighborhood, the lot, the traffic on the street, other needs that may be important to YOU but maybe not others.

For alot of people the universal renting solution is best for THEM. It works, they love it, they are okay with landlords, and notowing the home. To each his own!

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