Crackhead Flips Off House

[Earlie Schwoyer]

Thisweek, I did my best to unpack the end of ownership as a national ambition. And many of you responded with beautiful testimonials about your regrets, fears, and experiences as past and future owners and renters. Here are your stories. As always, if you keep writing, I'll keep posting.

On paper, at least, my wife and I are perfect home-owner candidates: Married, taxable income hovering around $100K, parents of 2 children, owners of 2 dogs. We both hold master's degrees, she owns her own business, I work a unionized job. Our only debts are our mortgage, one car payment, and a loan from my father that carries no interest. Between that latter loan and an inheritance I received, we put down fully one-third of the cost on our 1,100 square-foot, three-bedroom home in San Jose, California.

We are tied to a place that is prohibitively expensive to live, requiring both of us to work instead of one parent staying home. Homes require constant upkeep and expense. Psychologically, young buyers like us fail to truly do the math on property taxes, homeowners insurance, flood insurance, earthquake insurance, plumbing, yardwork, general maintenance, drainage, so on and so forth. Young couples buy what we can afford, not what we will need: our home is too small now that we have added a second child.

To my friends and colleagues I say, "Think about where you want to be in fifteen, twenty years. Is it in that neighborhood? In this city? Will you have children? How many do you want or might be possible? Do you want pets? What do you want nearby? How does it factor into your costs now, and in twenty years when retirement and paying for college are no longer distant abstracts?

And with stagnating wages, high unemployment, and job mobility -- what if your company picks up shop and tells everyone it's time to move to North Carolina or lose your job? -- as daily concerns, the last fucking thing a young couple should be thinking about is buying a goddamn house.

I recently tallied up all invoices for repairs and updates since I bought the house in 1997. A few were optional, but for the most part not. As an investment my house is a disaster. If I had continued to rent and saved the money that has gone into mortgage, taxes, and upkeep, I would have quite a pile of cash. Now, with the economy as it is and will likely be for some time to come, my best self-defense is to carry no debt and save what I can. If inflation picks up a lot, then my savings are screwed. But, then, so will everyone's.

If you're thinking of buying a house, just remember that there is probably a sizable pile of bullshit in any justification or encouragement offered by the real estate industry and financial industry. Make sure that owning a house really does mesh with your values and what is truly important to your family. As a purely financial matter, buying a house is a largely ridiculous proposition. Maybe the economy will turn around and the equation will become more favorable, but be very mindful before you make that bet.

My husband and I are younger - 26 & 27 - and we bought almost three years ago. We don't have kids yet and the only other debt besides the mortgage is one car payment. At the time, I was working on the editorial side of a regional newspaper, which isn't the most stable job you can come by, so when we were looking at houses, we did not factor my income into the equation. We purposely allowed for the fact that I could lose my job at any time, and agreed not to spend (or even look) at houses that would make that situation uncomfortable.

What that means (aside from the benefit of being able to stop working when/if we decide to have kids) is that we still have enough disposable income to do the constant upkeep, save for improvements on the home, etc. That was all part of the budgeting process.

We don't plan on living here forever (maybe five more years at best), but because we bought at a time when the market was so bad and interest rates were so good (they're even better now - we're considering refinancing), that isn't a problem. We probably won't make gobs of money when we do sell, but due to some improvements we've made (and general improvement in the local economy), it's highly unlikely that we'll take a loss.

While I understand that this isn't a situation that would be available to everyone, it really does seem that similar forethought would still make home ownership a viable and desirable option. I understand that people my age want to be mobile and that they want to live by in large in expensive areas, but that doesn't mean that it's absolutely a bad idea for anyone to consider.

After renting for two years and dealing with all the crap renters go through, all while paying almost as much for about half the space, it really has worked out for us. My main point being, that for some people, thinking about buying absolutely makes sense, if you think it through enough.

Back in the early 70s we were living in San Jose. A friend of ours had just bought a new house in the Almaden Valley for $28,000. I thought he was crazy and would never be able to pay it off. Inflation ensured that he probably did. Deflation, on the other hand, is a different story.

The primary problem for today's young potential buyers is that job security no longer exists and mobility, as regards selling a house and moving to a new job market, has been greatly reduced. In the short term, in our economy, it is best not to be tied down to one place, unless that place is exceptional.

However, in the long term, one needs to think of the needs of retirement and its reduced income. Our permanent home in rural northern Minnesota is paid for. When we move back, we will have no regular monthly house expense (or city services) to budget for, meaning we will be able to live on much less.

At the same time, I can rent a home (especially if I want a yard for dogs or children) and not have to worry about moving. It's a win-win from that angle. As far as earning value on a home, well we all know how that goes these days...

I live in San Diego, which saw a huge bubble but also was one of the first areas to crash and it crashed hard as well. When I purchased, monthly payments to rents were at historical lows for the area. I agree that purchasing a house and depending on appreciation to make you money on the deal will more than likely end poorly for you. However, I would tell people to do the math and see if in their area if it makes sense.

I wish I had bought straight out of college. If I had swallowed my pride and moved into a double-wide, and then upgraded housing as I could afford something better, by now (10 years post graduation) I'd be living in a house that costs $50k more, that would be completely paid off, three towns away from the city I'm in now; and that is not even factoring in house values, that is purely what I would have saved between rent and interest on my current mortgage. And then at any point if I wanted to pull up stake and move somewhere else I could always just rent out my place until I could get the price I was looking for.

I'm 4 years in on my current mortgage, hopefully to be fully paid off in another 4. I'm throwing every spare penny at it. When my house is paid off I will be debt free and will be able to support my current life-style delivering newspapers.

I am 28. I could not imagine ever wanting to buy a house. I actually can't think of a single reason why I should. Not one. I find the idea repellant. The primary reason is that I value mobility above most other things, but even that to one side, I wouldn't want to make such a huge and expensive commitment.

I'm 29, single, and make over 50k a yr. in the 'would be buying if not for student loans' group. Not only are student loans a drag on credit, but they also pretty much negate any chance to save up a downpayment. Not complaining here-I took them out and I'm paying them, but it is something that older generations just don't get.

My dad asked recently about my rent ($900 a mo, about average for my Seattle neighborhood). He flipped. "you could buy for that!!!". Ok I said, are you going to send me a downpayment for a $200k condo? That's another important point: even with the burst bubble, home prices are still extremely high in cities where younger people want to live.

My wife and I bought in 2009, in a neighborhood where she'd lived for 10 years (and I'd lived for six) already. We knew exactly what we wanted and what we could afford: A 900 square foot 2BR condo in a very small association, under a half-mile from the subway. With taxes and insurance and condo fees, it comes out to slightly less than our previous rent & renters' insurance. Of course, there's always the inevitable furnace or roof replacement, but still. That's split 3 across the association and so I'm less concerned about it than if I had to pay for it all by myself.

As long as we don't move in the next 2-3 years it'll have paid off for us monetarily. And already, we have been happy to pay for the privilege of doing things like putting in the stove and sink we wanted.

I'm 29, my wife is 30. We have been in the process of buying a short sale since Thanksgiving of this year in Northern NJ, approx 40 miles from New York City. It's close to both of our jobs and where we grew up, in a great area with great schools and a great center of town. The biggest obstacle for purchasing power for us has been student loan debt (I have law school, she has undergraduate) and our incomes - combined, between 90 and 100k. No credit card debt, my car is paid off and hers is halfway there.

Why do we want to own? For the past year, some children roughly 6 years younger than us moved in to the apartment below us. They recently graduated college and wanted to continue that lifestyle - parties until 3 am on a Tuesday, slamming doors, etc. With the mobility of renting also comes the unpredictability - the landlord sells the building, raises rent, the town goes south. We also desperately want a yard for our dog and a driveway to do car repairs, place to store camping gear and our bikes. Then there's the simple fact that a mortgage, even with the disgustingly high property taxes in this state, still costs *less* than the average rent.

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