People Outliving Their Means

ed243421 said:

dankind said:

PJ_Soul said:

Well, my parents paid off their house in full and now the bank doesn't own shit. Yes, it took them 30 years. But now it's theirs. So assuming you intend to actually pay off the entire thing, I think it's good. Plus, even if you don't and sell it, and assuming the housing market goes up and up, then you're good too. The problem comes when you either can't even pay it off, or when the market crashes and can't even sell it for what you bought it for. But for everyone I know, because of where I live, they are all going to make out like bandits if the market doesn't crash. If they bought a house for $300K 8 years ago, it is worth at least $800K+ now. It's crazy. The only problem is that if they sell now, sure, they made a ton of money, but they can't upgrade their home at all because all the other homes increased in value in the same crazy fucking way. Best to just stay put... which I guess makes it all completely moot, lol.
There is definitely something to be said for renting. It's not just the interest on the mortgage, but you never have to pay all that money for maintenance and shit (not to mention all the time you save for the same reason). However, assuming the market does not crash, renting provides you with zero security in retirement, and that's kind of scary.... although in a lot of cases, the old folks who own their homes that went up so much in value now find that they can't even pay the property taxes that skyrocket with every annual assessment. It's terrible. I rent, and given the housing market I just described here, I am never going to own.... and I just have to pray that my pension, the Canada Pension Plan, old age security, and whatever my parents have left to leave me will keep a roof over my head when I'm old. 

We sold our place in Brooklyn for $250K more than we paid for it--and we only lived in that co-op for three years! Stupid! And a place just sold in the building for nearly $375K more than we paid for ours!

And as for the "stay put" thing. No thanks! I'll move somewhere else and rent.

I hate my state commonwealth and paying taxes to a state government that has done everything it can to oppose the will of its voters. I hate my old-as-fuck house. I hate my dumb-as-fuck Masshole neighbors. I hate their giant white heads and their ugly white faces and their atrocious fucking accents.

It's getting to the point at which I don't give a fuck anymore if my family wants to come with me. If it leads to divorce. Fine. 

I am mine. Goddamn it!

Plus, I'll probably get alimony.

Hey now, it’s not that white!

dankind said:

ed243421 said:

dankind said:

PJ_Soul said:

Well, my parents paid off their house in full and now the bank doesn't own shit. Yes, it took them 30 years. But now it's theirs. So assuming you intend to actually pay off the entire thing, I think it's good. Plus, even if you don't and sell it, and assuming the housing market goes up and up, then you're good too. The problem comes when you either can't even pay it off, or when the market crashes and can't even sell it for what you bought it for. But for everyone I know, because of where I live, they are all going to make out like bandits if the market doesn't crash. If they bought a house for $300K 8 years ago, it is worth at least $800K+ now. It's crazy. The only problem is that if they sell now, sure, they made a ton of money, but they can't upgrade their home at all because all the other homes increased in value in the same crazy fucking way. Best to just stay put... which I guess makes it all completely moot, lol.
There is definitely something to be said for renting. It's not just the interest on the mortgage, but you never have to pay all that money for maintenance and shit (not to mention all the time you save for the same reason). However, assuming the market does not crash, renting provides you with zero security in retirement, and that's kind of scary.... although in a lot of cases, the old folks who own their homes that went up so much in value now find that they can't even pay the property taxes that skyrocket with every annual assessment. It's terrible. I rent, and given the housing market I just described here, I am never going to own.... and I just have to pray that my pension, the Canada Pension Plan, old age security, and whatever my parents have left to leave me will keep a roof over my head when I'm old. 

We sold our place in Brooklyn for $250K more than we paid for it--and we only lived in that co-op for three years! Stupid! And a place just sold in the building for nearly $375K more than we paid for ours!

And as for the "stay put" thing. No thanks! I'll move somewhere else and rent.

I hate my state commonwealth and paying taxes to a state government that has done everything it can to oppose the will of its voters. I hate my old-as-fuck house. I hate my dumb-as-fuck Masshole neighbors. I hate their giant white heads and their ugly white faces and their atrocious fucking accents.

It's getting to the point at which I don't give a fuck anymore if my family wants to come with me. If it leads to divorce. Fine. 

I am mine. Goddamn it!

Plus, I'll probably get alimony.

Hey now, it’s not that white!

Shut the fuck up, cracker! Even your goddamn hair is white, Masshole!

dankind said:

bbiggs said:

To further comment on housing prices and affordability, things are going to change as interest rates rise in the U.S.  Its already beginning.  Affordability diminishes, demand tapers and this insane rate of appreciation slows down or reverses course.  I’ve been in the mortgage business for 17 years and have seen it first hand before (like most of us).  The difference today from 2008 is that the people buying homes now can afford them.  It’s the inevitable spike in interest rates and inflation, that’s been overdue since our government started printing money 10 years ago, that will derail this train. 

I understood none of this.

dankind said:

bbiggs said:

dankind said:

bbiggs said:

To further comment on housing prices and affordability, things are going to change as interest rates rise in the U.S.  Its already beginning.  Affordability diminishes, demand tapers and this insane rate of appreciation slows down or reverses course.  I’ve been in the mortgage business for 17 years and have seen it first hand before (like most of us).  The difference today from 2008 is that the people buying homes now can afford them.  It’s the inevitable spike in interest rates and inflation, that’s been overdue since our government started printing money 10 years ago, that will derail this train. 

I understood none of this.

I was never any good in English class.  

And I skipped economics to go get stoned in a ditch.

PJ_Soul said:

bbiggs said:

PJ_Soul said:

We have the same deal - rising interest rates with rising house prices... but the result is that first-time buyers can't crack into the market anymore, so they're fucked. Many younger people are moving away so they can afford to have families. Meanwhile, that hole they should be filling is being filled by foreign buyers, which is also terrible for the overall economy. An empty home tax has also been initiated, but the rich people, largely foreigners who just bought property here as an investment (buy for $500K, sell for $1.5M), don't care about those extra taxes. Pretty soon this will just be a city where nobody can find workers because the workers can't afford to live here, businesses will shut down, big companies don't want to come here because their workers can't afford to live here, public transit will struggle to find drivers and shit ... and so on... I am not looking forward to seeing what the end results are going to be, but it won't be good. At this point, a market crash would be the best thing for the city, which is ridiculous.

Unreal. If I didn’t know you were in Canada I’d swear you were talking about many parts of the US.  What city are you in? 

Vancouver, BC. Yup, we've got an honest to god crisis on our hands at this point. The government is attempting to kind of confront it, but it's all wussy shit that has no long term impact whatsoever. The problem just keeps getting worse by the month, literally. Get this - my friend's property was valued at $650,000K in Sept 2016 (bought for $280K in about 2007). By January 2017, only 4 months later, it was valued at over $800K. My parent's place (built for about $32K in 1971), was assessed at $850K in 2016. The 2017 assessment was $1.3M. My sister and her (rich) husband bought their place for about $2.3M about 4 years ago... For 2017 it was assessed at $7.6M for fuck's sake. Obviously having property values go up that dramatically that quickly is a prelude to disaster for everyone besides the rich.... not good for them either, if they can't even find employees to help them stay rich. The average price of a home in Vancouver proper is now well over $1M, and it's not much lower across the entire Metro Vancouver area. It's nuts. Even 7 year old townhouses way the fuck out in the burbs are going for $600K, and the problem is even starting to grow in the interior, like in Kelowna, and over on the Island in Victoria. Even if the market has a huge correction at this point, say goes down 20% or something... everything is still completely unaffordable, as average salaries have been almost totally stagnant for years. The correction would have to be more like 60% before people could reasonably afford shit again, and obviously that would signal a MASSIVE economic crash. It's just nuts. I can't believe anyone allowed this to happen. Did our leaders in BC ever drop the ball big time.

dankind said:

bbiggs said:

PJ_Soul said:

bbiggs said:

PJ_Soul said:

We have the same deal - rising interest rates with rising house prices... but the result is that first-time buyers can't crack into the market anymore, so they're fucked. Many younger people are moving away so they can afford to have families. Meanwhile, that hole they should be filling is being filled by foreign buyers, which is also terrible for the overall economy. An empty home tax has also been initiated, but the rich people, largely foreigners who just bought property here as an investment (buy for $500K, sell for $1.5M), don't care about those extra taxes. Pretty soon this will just be a city where nobody can find workers because the workers can't afford to live here, businesses will shut down, big companies don't want to come here because their workers can't afford to live here, public transit will struggle to find drivers and shit ... and so on... I am not looking forward to seeing what the end results are going to be, but it won't be good. At this point, a market crash would be the best thing for the city, which is ridiculous.

Unreal. If I didn’t know you were in Canada I’d swear you were talking about many parts of the US.  What city are you in? 

Vancouver, BC. Yup, we've got an honest to god crisis on our hands at this point. The government is attempting to kind of confront it, but it's all wussy shit that has no long term impact whatsoever. The problem just keeps getting worse by the month, literally. Get this - my friend's property was valued at $650,000K in Sept 2016 (bought for $280K in about 2007). By January 2017, only 4 months later, it was valued at over $800K. My parent's place (built for about $32K in 1971), was assessed at $850K in 2016. The 2017 assessment was $1.3M. My sister and her (rich) husband bought their place for about $2.3M about 4 years ago... For 2017 it was assessed at $7.6M for fuck's sake. Obviously having property values go up that dramatically that quickly is a prelude to disaster for everyone besides the rich.... not good for them either, if they can't even find employees to help them stay rich. The average price of a home in Vancouver proper is now well over $1M, and it's not much lower across the entire Metro Vancouver area. It's nuts. Even 7 year old townhouses way the fuck out in the burbs are going for $600K, and the problem is even starting to grow in the interior, like in Kelowna, and over on the Island in Victoria. Even if the market has a huge correction at this point, say goes down 20% or something... everything is still completely unaffordable, as average salaries have been almost totally stagnant for years. The correction would have to be more like 60% before people could reasonably afford shit again, and obviously that would signal a MASSIVE economic crash. It's just nuts. I can't believe anyone allowed this to happen. Did our leaders in BC ever drop the ball big time.

Scary shit. I may live in a bubble but I didn’t know parts of Canada were as f’d up as the U.S.  I was thinking of moving there to ditch this shit hole...now where do I go? 

We were considering a nice coastal farm on Cape Breton in November 2016. It had multiple structures (I think two houses, a barn, a studio and a workshop), ~20 acres (including beach, pasture for livestock, plots for farming/gardening and forest), and it was less than C$400K.

bflynn1 said:

I live in a low cost of living state so I avoid a lot of the problems some of you are describing. If I did buy a home I  would definitely intend to pay it off but I'm probably going to end up inheriting two as it is. Another thing I waffle back and forth about is having kids. If I don't have kids I can see just continuing to rent. 

bflynn1 said:

I live in a low cost of living state so I avoid a lot of the problems some of you are describing. If I did buy a home I  would definitely intend to pay it off but I'm probably going to end up inheriting two as it is. Another thing I waffle back and forth about is having kids. If I don't have kids I can see just continuing to rent. 

PJ_Soul said:

bflynn1 said:

I live in a low cost of living state so I avoid a lot of the problems some of you are describing. If I did buy a home I  would definitely intend to pay it off but I'm probably going to end up inheriting two as it is. Another thing I waffle back and forth about is having kids. If I don't have kids I can see just continuing to rent. 

Yeah, kids are definitely a huge factor, both when it comes to renting vs owning, as well as debt load. Kids are so damn expensive!!! I don't have any for a few very good reasons, but not being able to afford them at all where I am is one of those reasons. If I did have a kid, I'd feel extremely unstable if I kept renting, since you can be evicted at any time, really. All they have to do is sell the building and you're fucked. I think I'd want a home that is guaranteed to be permanent if I had children.