People Who Live In Suburbs: Classy, Icky, or Dudes?

In re laurel's comments, I think we can probably all agree that homebuying is not a way out of poverty or a good idea for the very poor, and that there are more immediate concerns that need to be addressed in those cases.

not only that but pro-homebuying policy and planning don't exist in a vacuum, they negatively affect people who aren't beneficiaries

btw as a homeowner I am fine with doing away with all the baloney rental-market restrictions that Laurel and iatee point out. It pissed me off when I used to live in suburban Northern Virginia that the zoning restrictions limited apartment units to something like 7 floors, maximum.

yeah but the rent is too high thing has nothing to do with the economic advantages or disadvantages of buying a home, which is what we are talking about here. lets say that the rent on that apartment freezes right now and never changes, and i have a 30 year mortgage. even if my house drops to zero value, over that term i have $72000 more money than i would renting just in monthly base cost savings. this isnt a policy discussion at heart, it is a economic one, and whatever you think about policies, that savings is not arguable.

xposts

after inflation, you will be able to use that $72K to buy a one-way light rail ticket

nah man i live in the suburbs, obviously i have like 15 cars

Sure, jj, but this is also a policy discussion, it has never NOT been a policy discussion, and all these factors together are what makes housing what it is. Saying, "Well, a house is a better deal but only if all these other conditions are applied" is no better or worse than iatee saying, "Houses are not always the right solution, and if certain conditions were not applied for these reasons, it would be easier to see how we privilege home ownership in all these ways."

yeah your math doesn't allow for the possibility that rent can go down after you're locked in, doesn't incorporate the opportunity cost of that 300k or whatever thats being sunk in the property and doesnt incorporate property taxes. 'the savings' is not just 'arguable', it's completely location and timing dependent. there are plenty of people in america who made a decision to buy a house and did not find inarguable savings in their financial situation. I can help you find some examples of this rare, rare phenomenon.

the wider point that should be made is that there is no "one size fits all" housing policy that can or should be made; something that would be a fantastic idea in NYC is likely to be a terrible one in Minneapolis, and vice versa, because they are not in the same situation

xp: Someone with a balloon payment or a variable rate mortgage didn't actually lock in their mortgage payment for 15-30 years, you know, and as such would be spectacular point-missing counter-examples. Everyone here knows the wrong way to buy a house by now!

right, when policy leads to the 'savings' that can exist then yes, it is quite clearly a policy discussion xp

again I've never said 'nobody should own property' just that actively promoting via policy it generally hurts poor people.

and people who think that houses are money factories and not just a place to put cash that, historically, only keeps up w/ inflation don't understand that there's a huge opportunity cost w/ taking out a mortgage.

but this started as a discussion of "houses are bad investments" not "houses are only good investments sometimes because of terrible policy" you cant move the goalposts in the middle. xpost

and people who think that houses are money factories and not just a place to put cash that, historically, only keeps up w/ inflation don't understand that there's a huge opportunity cost w/ taking out a mortgage

perhaps you should find some people who are saying that and go argue with them

but this started as a discussion of "houses are bad investments" not "houses are only good investments sometimes because of terrible policy" you cant move the goalposts in the middle. xpost
--O_o-O_O-o_O (jjjusten)

no, this started w/ me saying 'houses arent really 'investments' to begin with' and our policy structure hurts people who can't buy when the price-to-rent ratio would suggest that it'd be a better financial decision.

also bad for job mobility, which matters more than ever.

These people's house is a money factory tbf:

https://www.youtube.com/watch?v=7oPuVAdGkk8

idk how i'd never read this before

http://en.wikipedia.org/wiki/Home_mortgage_interest_deduction

FHA + home mortgage interest deduction are pretty much the two major federal government programs left. The homebuyer incentives from 2 - 3 years ago were pretty awesome, too -- $8k tax refund assuming you live in the home for a set number of years, and some other similar programs after that expired.

I've mentioned elsewhere, probably upthread, that my area of my city qualifies for a local neighborhood improvement fund as well, where I can take a loan that would be at least partially forgivable for up to $10k or so in home repairs/improvements.

fwiw FHA loans are more strict now than they were a few years ago, and if you've heard of Fannie Mae (!) then you know who owns a lot of those mortgages. FHA is a one-time-only thing and the home has to meet a number of standards, but past that you're pretty much guaranteed a 5% down mortgage at a not-unreasonable rate.

I didn't do a FHA-style mortgage due to an accelerated purchase, but there are other ways to require a lower down payment.

xp: Someone with a balloon payment or a variable rate mortgage didn't actually lock in their mortgage payment for 15-30 years, you know, and as such would be spectacular point-missing counter-examples. Everyone here knows the wrong way to buy a house by now!

People may know the wrong way to buy a house, but it doesn't mean that they are suddenly going to have enough money to do it any other way. Even without questionable mortgage practices, putting little money down surely must put you at a disadvantage. For example, if you have to move and you can't sell your house for what you bought it for. Even in more simple terms, I believe in a big-city market, your mortgage is going to be more than your rent would be. This is going to stretch people financially.

Buying a house may well be a good thing to do if you have a lot of money to spare--other than that, I'm not sure what the point of the argument is. It's not even an option for so many people.

the size of your down payment and whether you have a variable rate mortgage have very little to do with one another

Yup. Basically, if you have a lower down payment you'll have to pay mortgage insurance (PMI) along with your mortgage, making it a slightly higher out of pocket cost. I believe FHA loans are exempt from PMI requirements. Variable rate mortgages are an instrument that people play with if they don't expect to live in a home more than the locked-in period, or if they feel they'll be able to refinance within that time period.

last thing then I'm done

my position
a. I don't care whether middle class or rich people buy or rent. there are reasons to do both and it depends on situation. it's not 'an investment' beyond being a place to put cash that historically keeps up w/ inflation.

you can make it an investment by actually investing in it. but it's not gonna get better just cause you lived in it, unless you're elvis.

if you want to speculate on land values, sure, go for it. if I had a ton of money I would buy an apartment in the bronx. that would not be an investment. it would be speculation about future land values in the bronx.

anyway just read robert shiller on this subject. there's prob not a more credible person in the world w/r/t long-term housing values.

b. the social and economic gains from an 'ownership society' are not strong enough that it should be promoted via policy. in fact, the current policy regime ends up being v. shitty for those not in the 'ownership society'. the answer is not to expand the ownership society - we actually tried this iirc - it's to make the renting society less shitty. there are super easy ways to do this unfortunately they often involve upper middle class people giving up shit, so they're not actually super easy.

c. single family houses, cars, sprawl etc are all mutually reenforcing. and homeownership is a more natural fit to single housing cause you dont have the building coordination problems that exist w/ owning a single condo/apt.

d. jobs are likely to continue trending away from long-term employment w/ one company and/or in one industry for much of america. mobility is gonna matter even more and the huge transaction costs that come w/ buying and selling property are bigger constraints to the poor than to the middle class and rich.

e. I don't hate you because you own property*. there are reasons to own property. our current system just really sucks for poor people from top to bottom.

*except jon/via/chi

anyway I wrote that all on my phone so I lost this game no doubt

*except jon/via/chi

lol and people wonder why I feel singled out by certain people around here

I was taught that if you couldn't put 20% down, you had no business buying. Is this wrong?

What really screwed over a lot of people in my age/locale was:

- Buying undersized/overpriced/overbuilt housing types like small suburban townhomes, condos, or other small new developments that are really only good for a single person or couple, not so much for kids or expansion
- Said homes are part of a homeowners association or townhome association that is underfunded or understaffed to the extent where monthly/yearly fees jump up considerably in the first few years
- Adjustable rate mortgages that are locked in for only five years

So you end up owning a townhome in an area that barely has enough money for landscaping repairs/trash removal/services, unable to sell it due to the fact there are five for sale in the same development, with your mortgage about to jump rates

VP, it really depends what market you're in! That is a good rule of thumb, but there are definite exceptions.

c. single family houses, cars, sprawl etc are all mutually reenforcing

This is the only real thing I'd differ with iatee on in that there are different types of single-family houses, and there are entire city neighborhoods full of smaller single-family homes in many areas that are in walkable neighborhoods and/or near public transit that would not become any more efficient if torn down and replaced with denser housing.

I was taught that if you couldn't put 20% down, you had no business buying. Is this wrong?

Like mh says, it depends. When we bought, we put down 5% on a place well below our budget limit (~$40K below our budget limit, actually), got a 30 year fixed rate mortgage, then refinanced after a year to get rid of PMI and to get a lower rate. We just recently refinanced again for 15 years at an even lower rate, plus through all of the various market fluctuations our place skyrocketed in value, then "crashed" down to a fair market value about $20-$25K more than what we spent on it; the amount we owe is ~$40K below what we paid for it, so even if we sold below what we paid for it, we have a sizable cushion before we walk away owing money.

Of the various money decisions we've made over the past 17 years, buying a condo within our budget in a decent, not overpriced but not dirt cheap neighborhood was easily the best one we made.

Having said that, living in Boston makes this a very different scenario from living in NYC, where I have heard horror stories about the amount of money you need to have upfront to get into a building co-op.

*except jon/via/chi

lol and people wonder why I feel singled out by certain people around here

― heated debate over derpy hooves (jon /via/ chi 2.0), Wednesday, July 11, 2012 2:36 PM (1 hour ago) Bookmark

i certainly don't wonder why people joke about your oversensitivity to such things the way iatee was clearly doing

I have mixed feelings about down payment requirements. I think it would make more sense to require a person to have a certain amount of savings left over after purchase, like enough to make x amount of monthly payments on the house at whatever LTV ratio you buy it at. I don't think taking a $200,000 loan on a $250,000 house is necessarily that much more risky than taking out a $200,000 loan on a $215,000 house though.

i certainly don't wonder why people joke about your oversensitivity to such things the way iatee was clearly doing

i'm not butthurt in the least (mostly because i have next to zero respect for iatee as a poster), i just find it interesting that of all the people that argue/engage with iatee he singles me out like that. also, i'm not so sure iatee was joking with that one.

he singles u out b/c u get crazy defensive, like when you say things like "i'm not so sure iatee was joking with that one"

Its not "crazy defensive" to suggest that I genuinely believe him based on other things he's said to me though.

jon /via/ chi 2.0 do you believe that iatee seriously, not jokingly, actually hates you, and only you, because you own property. that is something u think.

Ok, I guess I do need to clarify, I don't think iatee hates me because I own property. I think iatee hates me though, but I'm not sure what his reasons are.

tbf man, that is part of iatees argumentation schtick, i think that aero and i have both gotten similar stuff from him at one point or another

did you ever see the thread where iatee was talking about being a lawyer and owning beemers to that dude that showed up for a couple days? key to understanding his humor imo

See I thought that thread was pretty funny, but I don't really see much of that side of his "humor" in a thread like this.

Anyway, whatever, I only used the word "hate" because it was in his post in question. I don't know that he hates me, but I get the distinct vibe that he really doesn't like me.

maybe you just need a beemer

or a hummer

(sorry)

Ok, I guess I do need to clarify, I don't think iatee hates me because I own property. I think iatee hates me though, but I'm not sure what his reasons are.
--heated debate over derpy hooves (jon /via/ chi 2.0)

I think if someone expands this this thread they will find that time you told me you hope I get cancer

oh yeah haha i think he said "all of you" should die of cancer so i guess like, me, you, laurel?

incidence of cancer is generally higher in urban populations that rural populations fwiw

if I ever get cancer im gonna blame him

me too maybe? i'm kinda half on this team i guess

rural people have a higher incidence of being sucked into a combine tho

welcome to Team Cancer

lights cigarette

my general rule is that statements of hatred or wishes of getting cancer are only real if sent via registered USPS mail so ilx doesnt count