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How Many Years of Life Does That House Cost?

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Re: How Many Years of Life Does That House Cost?

#31

Post by steven777400 »

AustinG08 wrote: post #21
autokad wrote: post #9

Earlier quoted context omitted.

how many years will it take to pay off your mortgage? thats done for you, about 15 or 30. how does other factors like food/transportation/taxes factor in? though not always, but they tend to go hand in hand no? the cost of real estate is factored into much of what we buy / spend money.

It is honestly worth your while to pay off your mortgage as soon as humanly possible.

This is an oversimplification. The average household has several kinds of debt, and generally debt should be paid down in descending order of interest rate.

More significantly, investment income opportunities need to have their interest rate (or equivalent) assessed. For example, in the past 12 months, the DIA has risen 18%. Thus, if 12 months ago I had money to spare, it would have been better to put the money into DIA rather than make an extra principal payment on the mortgage, unless my mortgage is 18% or more.

With the exception of bonds and CDs, it's not possible to know the investment growth in advance, so that creates some risk of course.

Re: How Many Years of Life Does That House Cost?

#32

Post by sbenitoj »

zaroth wrote: post #27
sbenitoj wrote: post #23

This is an awesome site, visually depicting how unaffordable housing has become in so many parts of the US. It's truly amazing how much the Fed (with perpetually low interest rates) and local restrictions on building (making it more expensive or impossible to build) have increased the cost of home ownership over the past 60 years. Anyone who's seriously considering purchasing a home should read The Housing Trap by Pa…

That's funny, my takeaway was that the vast majority of the US has incredibly affordable housing. But I suppose if your call center employees simply must be living in downtown S.F. the answer must be that we just need lax zoning and higher density!

Ha, well in non-major cities you're right, but all the major cities cost an arm and a leg for the most part!

Re: How Many Years of Life Does That House Cost?

#33

Post by bluedino »

FLUX-YOU wrote: post #26
pjc50 wrote: post #16

Earlier quoted context omitted.

Do you want to have pets? Do you want to redecorate to your own taste? Can you even find anywhere to rent? Not everywhere has a liquid rental market. Moving only once every 10 years sounds great. Renting means maybe having to move on notice as short as one month. Back when I was renting I moved about every 3 years, although that was also house-sharing with other young professionals. Rent is usually more expensive tha…

> also, obviously, after 20 years you have no more payments. You have maintenance. And if something bad happens with the foundation, that's very expensive to fix. Unless you just plan to die and have the house demolished and the property sold (which is honestly preferable in some cases of inheritance). I had to pay $25k to have supports installed in the crawlspace and other mitigation to avoid foundation work. I migh…

Don't forget the roof that needs replacing every 15 or 20 years. Appliances. Furnace. Plumbing. Septic tank. Water lines on your property. Tree removal. Re-decorating and re-modeling. Replacing windows.

Re: How Many Years of Life Does That House Cost?

#34

Post by jpatokal »

sillysaurus3 wrote: post #20

This is really cool. Can anyone guess which frameworks power this article? I'd love to try to put together something similar. I wonder if the code is on github somewhere?

Ha. It's powered by ArcGIS, the Oracle of the mapping world, meaning it's all proprietary, locked down and expensive.

If you want freer alternatives, check out CartoDB, Mapbox and QGIS.

Re: How Many Years of Life Does That House Cost?

#35

Post by rifung »

pjc50 wrote: post #16
magic_beans wrote: post #8

Is it really necessary to own a home if your mortgage is going to be 20 years long? I get that renting is like throwing money in a hole, but people are so much more nomadic these days. What's the big deal in moving once every 10 years once rent gets unbearable?

Do you want to have pets? Do you want to redecorate to your own taste? Can you even find anywhere to rent? Not everywhere has a liquid rental market. Moving only once every 10 years sounds great. Renting means maybe having to move on notice as short as one month. Back when I was renting I moved about every 3 years, although that was also house-sharing with other young professionals. Rent is usually more expensive tha…

> Do you want to have pets?

At least in the competitive housing markets of San Jose and Seattle this is not much of an issue as every apartment I've visited allows pets and most even have accommodations for them as perks. I suppose there are limits though so maybe if you wanted to have 4 dogs that might not be allowed

Re: How Many Years of Life Does That House Cost?

#37

Post by pjc50 »

sokoloff wrote: post #19
pjc50 wrote: post #10

Earlier quoted context omitted.

> bought a house big enough for a family to live comfortably that I could reasonably afford in my late 20s. Well, we'd all love to do that, but where? (That was a rhetorical question, I personally moved to Edinburgh and bought an affordable family house in my late 30s) I remember a website tracking London affordability that pointed out that in some years price appreciation made it literally impossible to save for a h…

Even if house values (or even 20% deposits) are going up faster than incomes, you can still save towards a house. Imagine a $1MM house, with a $200K minimum deposit, $135K of household income. If that house goes up by 5% per year ($50K, $10K deposit), your income never goes up , and you save 8% or more of your income towards a down payment, you are still making headway towards the down payment. If you save 15-20% of…

Ah, here we go: https://www.theguardian.com/business/2017/may/01/smaller-dep...

"The average length of time for a single first-time buyer to save a 15% deposit in the fourth quarter of 2016 was a whole year longer than in the fourth quarter of 2015"

http://colresearch.typepad.com/colresearch/2017/03/trends-in...

It probably is doable, but at median incomes of £29k most people are barely keeping up with the rent in London and making zero savings.

Re: How Many Years of Life Does That House Cost?

#38

Post by culturalzero »

zaroth wrote: post #27
sbenitoj wrote: post #23

This is an awesome site, visually depicting how unaffordable housing has become in so many parts of the US. It's truly amazing how much the Fed (with perpetually low interest rates) and local restrictions on building (making it more expensive or impossible to build) have increased the cost of home ownership over the past 60 years. Anyone who's seriously considering purchasing a home should read The Housing Trap by Pa…

That's funny, my takeaway was that the vast majority of the US has incredibly affordable housing. But I suppose if your call center employees simply must be living in downtown S.F. the answer must be that we just need lax zoning and higher density!

You clearly don't know what it's like to live on minimum wage right now. It's extremely difficult to live anywhere even close to the Bay area on minimum wage, which let's be real, a call center employee would be on. Public transportation options get figured in there too. I'm very fortunate to have a good job now, but it wasn't all that long ago I was scraping by on near minimum wage.

Re: How Many Years of Life Does That House Cost?

#39

Post by sbenitoj »

magic_beans wrote: post #8

Is it really necessary to own a home if your mortgage is going to be 20 years long? I get that renting is like throwing money in a hole, but people are so much more nomadic these days. What's the big deal in moving once every 10 years once rent gets unbearable?

Rent is NOT throwing money away, it is HIGHLY dependent on where you're living. There are MANY sunk one-time costs you have to pay when buying a home, including:

--realtor commission (averages 6% of home price, or approximately 1.5 years of 30 year mortgage payments)

--title fees (frequently 1% of purchase price)

--other legal and bank fees

The NYT has a buy vs rent calculator that helps make decisions like these:

https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal...

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