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Maybe Americans aren't dumb enough to keep buying houses?

184 点作者 spottiness大约 14 年前

30 条评论

bmccormack大约 14 年前
Five years ago, I thought about buying a home, and everyone around me was saying "You HAVE to buy a home. Don't THROW AWAY YOUR MONEY by renting. Houses NEVER lose value."<p>While it's obvious that this flawed logic existed five years ago before the bubble burst, I'm surprised at how much of it still remains. I'm surprised that consumers are still trying to play numbers games to justify purchasing homes, but perhaps as the OP suggests, the supply of buyers is less than before. If you want to buy a home for lifestyle reasons, great, but make sure that's clear; there are so many people who are stuck in their homes without a job because they thought they were clever at math.<p>When my wife and I were figuring out what to do with our lives, we decided to put my finding a good job above owning a home. Because of this, I was able to accept a job in NYC and move from the suburbs of Atlanta without worrying about selling a home in a horrible real estate market.<p>We'll consider buying a home after I feel more rooted in the tech industry, but for now, we appreciate the flexibility that renting affords.
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drp大约 14 年前
It's really difficult to make general statements about the wisdom of buying versus renting across an entire country with extremely diverse local real estate markets. We made an up-to-date heat map of US rent ratios here: <a href="http://hotpads.com/search/rent-ratio-heat-maps" rel="nofollow">http://hotpads.com/search/rent-ratio-heat-maps</a> that demonstrates how some markets, even at the state level, are still tilted toward the buyer while others favor renters.
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tatsuke95大约 14 年前
There are a few defensive home owners in this thread who seem to be missing the point:<p>The main problem is that the general public sees renting as throwing money away, and that owning a home is unconditionally "better".<p>I'll make the assumption that this community has higher-than-average financial literacy, and hence there are people who have made the right decision with respect to rent/buy. However, I don't think this is true in general, and often times the rent/buy choice is much, MUCH closer than people assume.
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ahi大约 14 年前
The rent vs buy index is misleading. I used to live in Ann Arbor where rent is mediocre, but home prices are ridiculous. On paper the ratio still looks pretty good because the median rental property is downtown while the median home for sale is in the suburban neighborhoods. I was on the board of a downtown housing cooperative and the ROI on properties in the downtown area was nonexistent. I moved 5 miles to the east to rough around the edges Ypsilanti and the situation was completely reversed. You can have a house downtown paid off with 5 years of rent payments. Further out you go into the surrounding farmland, the lower rent becomes and the higher sale prices get.
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jdvolz大约 14 年前
Can we just all agree that owning a business is the real American dream and whatever you choose to do (rent or buy) after that has significantly less affect on your situation than owning your own business?<p>I would certainly rather own a business that generates whatever my rent or mortgage would be, than to own a house that costs me that mortgage.
jbail大约 14 年前
Referencing Zillow is the first indication you have no clue about the real estate market.<p>Two examples: The house I live in has a carriage house behind it. It's zoned as a rental, has a kitchen, bathroom, bedroom and about 800 sq ft of studio type space with about a 15 ft ceiling. Does this information appear on my Zillow page? Nope. Zillow has no way to enter that type of information and its valuation is missing this very crucial bit of info.<p>Secondly, where I used to live (in the mountains above Boulder), there was a house for sale next door. It was on one acre and was a modified single wide trailer. Zillow said it was worth $350,000. They said the property I was living on next to it (5 acres, a main house twice the size of our neighbor and a detached cabin) was worth $420,000. Seemed way off to me. Well, the house next door went for sale and sold for $149,000.<p>After that, I don't trust Zillow at all. They have a lot of work to do before someone could take any statistics they provide seriously.
angstrom大约 14 年前
Perspectives obviously vary by market and circumstance. In mine I'm fine with renting. I tend to stick around the 1700/mo range in NYC. For that, I don't have to own a car or the maintenance and depreciation associated with it. I still pay transit, but it is significantly less than the cost I paid in Ohio to drive 40-60 miles to work.<p>My income mirrors my actual worth. I've seen people shortchanged because companies know that person is chained to a mortgage. I'm not paying maintenance, insurance, or front loaded interest on a home. (Tax deductible not that impressive)<p>After rent is subtracted from my net pay I still have enough to turn around and invest in a diverse array of investment options. A home is a savings account with a maintenance fee. Viewing it as anything else IMHO is wishful thinking. An apartment is that same service fee condensed. Remember, in my situation both the house and a car have costs I don't have to worry about.<p>Having freed myself of those problems I have much more spare time, more investment options, and flexibility. I'm perfectly ok with not having a lawn, neighbors degrading property values, or surprise expenses. To other people those negatives are perfectly acceptable, they cite the lack of space, public transit, and neighbors as negatives. I don't mind any of them.
pingswept大约 14 年前
I think it's interesting to compare Greenspun's attitude to Mike Rowe's recent Senate testimony about the lack of skilled workers in the trades in the US. Greenspun thinks that going to Home Depot and pulling weeds clutters the mind and prevents us from writing novels and building empires. Mike Rowe wishes that we weren't a nation of people who just left a check on the counter for the plumber.<p>I rented for years, and not being able to fix stuff when it broke (without losing the investment when we moved) drove me crazy. I feel a strong desire to maintain my own home, even though I know I'd do better financially hiring cheap labor to do the work while I go make money faster building an empire.
ck2大约 14 年前
Wrong, Americans aren't dumb enough to buy houses until prices drop to pre-bubble prices.<p>Prices are still kinda crazy and unjustified compared to 2005.<p>Also, the average person can probably not get credit anymore and the wealthy desire only so many 2nd homes.
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mdasen大约 14 年前
One of the things that he's critically missed is that it's unfair to only compare the price of buying vs. the price of renting <i>today</i>. When you purchase a house, your mortgage is set for the term of the mortgage. Rent is usually only set for a year at a time and does go up.<p>The NY Times buy vs. rent calculator in the article that he links, uses 3% as a baseline rent increase per year. So, after 5 years, a $1500 rent could be expected to cost $1740. That's not too impressive if you assume it's a place worth $375k and at his 2% taxes and maintenance price, you'd have $625 in costs in addition to the mortgage - well over the $240 that the rent had risen. However, after 15 years, that theoretical rent would have risen to $2300 and eclipsed the cost of taxes and maintenance. Now, as home values rise, taxes would rise with it, but then you own something that you can sell for more money and have made a good investment so it isn't a good argument to say, "well, one's home could go up in value a lot every year which would mean more taxes."<p>It depends on what you're buying a property for. Frankly, the NY Times calculator (<a href="http://www.nytimes.com/interactive/business/buy-rent-calculator.html" rel="nofollow">http://www.nytimes.com/interactive/business/buy-rent-calcula...</a>) is going to be a lot better than my crude calculations. However, if you're buying a property to stay in for a good while, it can be a better idea to buy. The costs of selling don't matter that much when you've stayed in a place for a long time. It also depends on your market. I've priced things out in the Boston area against rent (more urban than Greenspun), and it really depends on how long you're going to stay in that place. Most of the cities here offer you a homestead exemption on your property taxes if you live there and it's usually around 200k - meaning that if you buy a place for $400k to live in rather than rent, you're actually only paying half the property tax rate. The towns tend not to have that exemption. So, if you want to be in one place for a decade, the calculator shows that buying can be a nice option.<p>Buying a house isn't something to go in for like buying an iPhone and getting a two-year cell phone contract. It requires a careful look at the costs and that you're relatively settled in life. It isn't a panacea of money, but it can be cheaper and can be stabilizing. While it isn't everyone, there are people who really like an area, have a job that won't see them have to move, and would stay in that house for 20-30 years.<p>--<p>Plus, if you look at Trulia's rent-vs-buy index (<a href="http://trulia.movity.com/rentvsbuy/" rel="nofollow">http://trulia.movity.com/rentvsbuy/</a>), you'll see that Greenspun has cherry-picked the worst cities to buy to do his calculations. Trulia notes that in 36 out of its 50 cities studied, it is "much less expensive to buy than rent". That includes real cities like Chicago, Wahsington DC, San Diego, Minneapolis, Philadelphia, and Atlanta. He's used a buy-to-rent ratio of 30:1, but the average for the 50 cities shown is 14.22. So, we live in the Boston area and buying here is an expensive proposition that might not make sense. However, there are many places that have much more favorable ownership conditions. If you're in a market where the buy-to-rent ratio is below 15:1, the NY Times calculator will show you how favorable buying is. And, frankly, that's most of the country. Where Greenspun and I live seems to be the exception, not the rule and his calculations are based on data that doesn't apply to most people. It applies to him and it applies to me based on where we live, but it probably isn't something that one should generalize to the country.
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RealGeek大约 14 年前
The real property inflation is in New Delhi and Mumbai, India. Real estate in Delhi is more expensive than New York. A house built on a 500 yards lot will set you back $6 million. Moreover, the real estate prices are growing @ 50% every year and high as 100% in some areas.<p>Compared to that, I would say houses in America are affordable. I hope India's real estate bubble gets burst.
carsongross大约 14 年前
If you play around with the rent vs. buy calculator at the NY Times for a while, you will come to two conclusions:<p>1) The rent vs. buy decision is almost entirely based on your expectation of future house price changes versus rental prices changes. Everything else is around the edges.<p>2) Regardless of your opinion on the first question, you should never buy a house when you think there is a significant chance you will leave in less than five years.<p>I think housing will go down another 20-40% from here (causing widespread bank failures and eventually the dissolution of the Federal Reserve) and rents will be stable to down due to the deflationary pressures we are facing. Therefore, I will not buy a house.<p>YMMV.
pstack大约 14 年前
I'm glad I bought a house, because paying $1,100/mo (including tax and insurance) for a 3,000sqft home with a yard where I can mostly do what I want and have control over my living environment and get a tax break on about half of that monthly payment sure beats the $1,200/mo I was paying for a 1,000sqft apartment in which I had been robbed of $30,000 during a home invasion where the person had a key (maintenance crew, surely, who had access to the keys) and let themselves in while I was sleeping.<p>The rent/own ratio may be different in San Francisco (where I've lived) and New York, but there's a lot of other country out there that exists besides those two and Seattle. There's Portland, Denver, Chicago. Plenty of places. I live in a fairly expensive city (on par with Portland, where I lived most of my life). Still, my house didn't cost a lot more than the mount I'd already paid in rent during my adult life. I did the math and I have paid about $170,000 in rent. That includes apartments I've lived in in Portland, San Francisco and Denver since 1999 and is not adjusted for inflation. It includes the 400sqft hellhole in San Jose that I paid $1,200/mo for in 2000 and the 400sqft studio and 585 sqft 1bdrm in Portland, and the 1,000sqft 2 bdrm in Denver. The house I bought last year was only $25,000 more than that. Even if my home loses a ton of value (and it probably has and will), at least at the end of paying $200k into it, I'll have something worth <i>something</i>, versus what I have after about thirteen years of renting for $170,000 . . . which is <i>nothing</i>.<p>The real problem with the home market is that it's being artificially buoyed, to keep current home owners happy at the expense of houses dropping even more in price, so someone can reasonably eventually buy a home even if they're making an average income. After all, isn't that how the market is supposed to work? Stuff drops in price, other people get an opportunity to own that stuff who previously may have been priced out of participation.<p>Also, the article states that someone who just bought a house and lost 10% due to decrease in value plus commissions when selling is unlikely to enter the market again any time soon. Well, why are you buying a house just to sell it a few years later?<p>I bought my house so I could live in it. I would like it to increase in value, eventually, too. I'm not counting on it, but it would be nice. If it doesn't, at least I have a home to live in and will eventually own it (because I didn't buy the maximum house that my credit score and loanability would have allowed).<p>I don't know a lot about the housing market and I'm not an economist, but I do know that I'm glad I bought a house last year (with a rate under 5%) and wish I would have done so many years ago, instead of putting it off for a decade. (On the other hand, if I had done it a decade earlier, I probably would have taken a big hit over the last few years, so whatever).<p>Also, the other nice thing is that I'll be paying the same amount (except for tax changes) for the next 15-30 years that it takes me to pay off the house. In my apartment, I'd gone from paying $900 to $1,200/mo in only four years for the same unit. Oh, and I don't have people stomping on the floor above me 24x7, so I can't sleep. And I don't have to allow someone from the maintenance/leasing office come into my home nearly any time they want with a 24hr notice. And I can (and did) run ethernet in the walls. And I can (and did) setup my home theater and run it at 50% power instead of having neighbors complain when I ran it at 5%, before. And when I have a guest that stays for more than three days per year, total, I don't have to register them with the leasing office. And I know my neighbors and they have lived here for a couple decades and are friendly and helpful. I never even <i>saw</i> the neighbors at my apartment.<p>So, yeah. I guess I'm dumb enough.
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dangrossman大约 14 年前
You have to pay something to have a place to live. If you rent a little townhome for $1700/month for just 5 years, that's over $100k gone with nothing tangible in return. Even if your house will depreciate $50k between buying and selling it, are you worse off than renting?
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bluekite2000大约 14 年前
Relevant:<a href="http://www.khanacademy.org/video/renting-vs--buying-a-home?playlist=Finance" rel="nofollow">http://www.khanacademy.org/video/renting-vs--buying-a-home?p...</a>
wanderr大约 14 年前
In my area at least, buying makes a lot of sense. Prices are at an all-time low, but rent hasn't gone down at all. The same type of house renting for $900/month can be had with a mortgage of $350/month. As long as you are comfortable with renting the place out when you want to move, it's had to imagine why buying would be 'stupid' right now.
supercanuck大约 14 年前
Its interesting to me and a testament to how the topic of housing impacts the psyche of Americans that even on Hacker News the emotional arguments take on a stronger conviction than the logical ones.
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nemik大约 14 年前
This thread reminds of those articles about how people without children are happier. Then a bunch of parents post how giving birth was the best decision they made.
ams6110大约 14 年前
A bit off topic, but what justifies paying a realtor 5-6 percent in real estate commission anymore? Actually last time I talked to an agent about listing a property they quoted 7.5% but obviously that's negotiable.<p>Before the internet, realtors were the gatekeepers of "for sale" property information. But that's all online now. What do they really do to justify such a large cut on the transaction?<p>The times I have bought and sold a house with a realtor they actually did very little. They helped prepare the offer (using boilerplate that can be easily found online now, or you can pay a real-estate attorney a couple of hundred to prepare one) and introduced me to a couple of lenders, then showed up at the closing to get their check.
djacobs大约 14 年前
<i><a href="http://www.nytimes.com/2011/05/11/business/economy/11leonhardt.html" rel="nofollow">http://www.nytimes.com/2011/05/11/business/economy/11leonhar...</a> has some data on the price-to-rent ratio in various markets.</i><p>From a grammar perspective, I think this sentence is interesting. It is literally the first time I've ever seen a URL as the subject and first word of a sentence.<p>Of course, this violates everything I know about a) link sharing [0] and b) good writing, but it's interesting nonetheless.<p>[0] <a href="http://www.goodusability.co.uk/2009/01/dont-say-click-here-on-link-text/" rel="nofollow">http://www.goodusability.co.uk/2009/01/dont-say-click-here-o...</a>
jleyank大约 14 年前
Decades of personal experience shows that unless you can switch jobs without moving owning a house is a good way to lose money. It can also act as an anchor, preventing or delaying job changes that should be made.
dirtyaura大约 14 年前
Khan Academy has a great series on renting vs buying<p>Part 1 <a href="http://www.khanacademy.org/#/v/renting-vs--buying-a-home?p=Finance" rel="nofollow">http://www.khanacademy.org/#/v/renting-vs--buying-a-home?p=F...</a><p>Part 2 <a href="http://www.khanacademy.org/#/v/renting-vs--buying-a-home--part-2?p=Finance" rel="nofollow">http://www.khanacademy.org/#/v/renting-vs--buying-a-home--pa...</a><p>Detailed analysis <a href="http://www.khanacademy.org/#/v/renting-vs--buying--detailed-analysis?p=Finance" rel="nofollow">http://www.khanacademy.org/#/v/renting-vs--buying--detailed-...</a>
visava大约 14 年前
<a href="http://patrick.net/housing/crash3.html" rel="nofollow">http://patrick.net/housing/crash3.html</a> Analysis to help you decide whether to buy or rent.
tt大约 14 年前
I'm surprised no one has mentioned the Case-Shiller index chart showing home value fluctuation over the past 100+ years: <a href="http://www.ritholtz.com/blog/wp-content/uploads/2011/04/2011-Case-SHiller-updated.png" rel="nofollow">http://www.ritholtz.com/blog/wp-content/uploads/2011/04/2011...</a><p>It's pretty telling what you should do regarding buy or rent (beyond the NYT calculator).
adharmad大约 14 年前
I have always wondered how the housing/renting market would be if mortgages were not tax deductible (or rents were also tax deductible).
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raintrees大约 14 年前
Well, if true, this is good news for cash flowing investment real estate purchases, on both sides...<p>Property Owners may have a better chance at returns, if they are able to raise rents to match inflation. And Property Managers (people to buffer the owner from the tenants) are typically charging 10% of rent. There is income to be made...
gopi大约 14 年前
If you think US rent-vs-own ratios is expensive than you have to check other countries. Every country from the developed western europe/canada/australia to the developing india/china to the thirdworld african countries have worst rent-vs-own ratio than US, yet the prices are still appreciating there.
jodrellblank大约 14 年前
tl;dr: author feeling unhappy, unexcited and trapped, fears becoming boring, blames house ownership.<p><i>More and more Americans will be conditioned to the idea that home ownership is a waste of time and money, not to mention the inflexibility that it imposes on a person [..] That would barely pay for property tax, maintenance (winters are harsh), and landscaping (weeds are aggressive). [..] Another advantage for renters is that they can free their minds from the clutter that prevents homeowners from doing or thinking anything interesting. [..] The rest of us go to Home Depot every few days and pull weeds. [..] They withdraw themselves from the market of potential buyers, at least for 10 years or so until they forget what wounds they suffered and how boring they were when they owned.</i>
code_duck大约 14 年前
Why not? Americans, like most humans, are dumb enough to keep doing a long list of stupid things that would exceed a reasonable comment length if listed here. Usually the only time they stop a stupid activity is when it's impossible to continue.
nhangen大约 14 年前
Those of you renting and hating on home ownership should ask yourself where you'd live if someone hadn't bought a home and allowed you to rent it from them.
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