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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?

#71

Post by FLUX-YOU »

sliverstorm wrote: post #44
bluedino wrote: post #33

Earlier quoted context omitted.

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.

It's not like you avoid these expenses by renting. They're just rolled into your rent. You get to avoid thinking about them, of course. Although there is an economies-of-scale advantage to maintenance on multi-family dwellings.

The property group takes on risk if something like a roof needs replacing unless they just keep a lot of cash sitting around for just such a thing. They may also have access to better loans but I have no idea for sure.

I don't want to keep a pile of cash around waiting for housing emergencies (personal emergencies are a different thing), and I certainly don't want to sell stocks to fix a roof if my roof fails during a recession.

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

#72

Post by cableshaft »

sliverstorm wrote: post #44
bluedino wrote: post #33

Earlier quoted context omitted.

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.

It's not like you avoid these expenses by renting. They're just rolled into your rent. You get to avoid thinking about them, of course. Although there is an economies-of-scale advantage to maintenance on multi-family dwellings.

Yeah, it's basically like insurance. You're not hit with a sudden $10k+ bill, you just have a rent that has ~$100 a month factored in for maintenance costs.

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

#73

Post by fnovd »

xvolter wrote: post #45

The data was very interesting, but there wasn't anything meaningful mentioned that came out of the data, other than possibly where you should look to move to if you have flexibility. I personally bought a house in my early twenties. At the time it was roughly 2.5x my income. I've been there a few years and went through some changes to my employment, I now earn more making it easier. Over the course of ownership, in t…

>A house at $250k at a 3.5% interest rate would cost you $72k in interest on a 15-year mortgage or $154k in interest on a 30-year mortgage. At that point, it is worth sending additional payments (especially early on in the mortgage) to save on interest.

I would argue that it's not necessarily a smart idea to pay extra just to avoid interest. $154k looks like a lot, and it is, but it's still just paying interest at 3.5%. On average, you'll do better to put that money into investments. Additionally, the ~$1k you're paying every month is a lot less in year 20 than it was in year 1 due to inflation. Your mortgage payments, inflation adjusted, are actually going down every year.

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

#74

Post by brightball »

zaroth wrote: post #42
sbenitoj wrote: post #32

Earlier quoted context omitted.

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

Well the only way to drive down price is to either increase supply or decrease demand. So make cities shitier and denser. Is this a case where a small increase in supply would decrease the price significantly? I doubt it. So, is there some reason we (as a nation) need to double population density of our largest cities? With the huge advances we are likely to see in autonomous zero-emission delivery infrastructure and…

Because I keep seeing articles pop up over the last few years trying to convince me that suburbs are basically evil incarnate for some reason. It gets to the point where it feels like a political platform.

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

#75

Post by pjc50 »

xvolter wrote: post #45

The data was very interesting, but there wasn't anything meaningful mentioned that came out of the data, other than possibly where you should look to move to if you have flexibility. I personally bought a house in my early twenties. At the time it was roughly 2.5x my income. I've been there a few years and went through some changes to my employment, I now earn more making it easier. Over the course of ownership, in t…

> At the time it was roughly 2.5x my income.

The median of the map in this article. A nice sensible multiple. However there are plenty of areas where the multiple is more like 10x.

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

#76

Post by mapster »

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?

you can create a somewhat similar experience with mapbox api

https://www.mapbox.com/mapbox-gl-js/example/scroll-fly-to/

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

#77

Post by dv_dt »

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…

I cant help but notice in the OP visualization, the houston area is cheap - a year of work, and reputed to have little regulation - like zoning regs for flood watersheds, or regulatory oversight over chemicals stored in warehouses...

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

#79

Post by sokoloff »

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…

> after 20 years you have no more payments.

You have no more principal and interest payments. You still have property taxes (~$1000/mo for me) and most will pay insurance (~$300/mo) and you'll have on-going maintenance; I think it's wise to ballpark the last at 1% of the house market value.

I'm a two-time homeowner and it absolutely fits my family life situation very well, but it's a common fallacy that housing costs go to zero when the mortgage is paid off.

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

#80

Post by jankotek »

lpolovets wrote: post #18

I liked the visualization and data, but I don't think it makes sense to compare home prices to wages w/o considering alternatives to home ownership. Home prices don't exit in a vacuum. That is, if a home is 10x the median salary, you can't really say "well, if I didn't buy a home I could work 10 years less." That's because the alternative to buying is renting, which is also expensive. So sure, a mortgage in SF is $6k…

There are more alternatives: work remotely, live in cubicle under table, live in a car...
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