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A Growing Problem in Real Estate: Too Many Too Big Houses

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Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#231

Post by brightball »

hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

I agree and disagree.

On the one hand, yes, you're right that the repair expenses can be a big deal. If you don't want anything but the basics for the technology in your home, sometimes a home warranty can be a good option too but experiences vary significantly.

On the flip side though, after my 15 year mortgage is up I'm not going to pay another dime outside of maintenance on this thing. On a 30 year, you'll still pay a fortune over the life of the loan which makes the renting argument a lot closer.

It also depends on the phase of your life. Personally, I can't imagine having kids and dogs without a yard. If I didn't have kids or hadn't found an area where I really wanted to settle down, renting would make perfect sense.

At the point that you find somewhere to spend the rest of your life, become a part of the community, get involved, make local friends, raise a family...home ownership makes a lot more sense.

I'm a firm believer in outsourcing repetitive work. I've had a yard company since the first 2 months in my first house because the time trade off for me was more than worth it. You also will eventually learn your way around finding good and reliable contractors for the important things (plumbing, electrical, general repairs). Word of mouth is hugely important there.

A lot of this stuff is pretty easy to learn too. I was pretty proud of myself the first time I disassembled a toilet to fix it. The more you learn, the less you need to call for help for small stuff.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#232

Post by almost_usual »

newsoul2019 wrote: post #139
hn_throwaway_99 wrote: post #93

One of the trends that I can only hope continues is getting rid of this idea that home ownership (especially single family home ownership) is the American dream. I live in and own a detached single family home (was a compromise with my spouse) and to be honest, I hate it. I hate having to take care of the yard, to deal with unreliable tradespeople when things break, to deal with the huge expense of minor home repairs…

Am I the only one who has always seen renting as a temporary arrangement only? If you don't own something, somewhere, doesn't that mean the same as being homeless? Not trying to offend anyone. Genuinely wondering, are there people who really don't want to own real estate ever in their lives?

In SF you probably have more freedom as a renter than property owner.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#233

Post by [deleted] »

rifung wrote: post #224
newsoul2019 wrote: post #139

Earlier quoted context omitted.

Am I the only one who has always seen renting as a temporary arrangement only? If you don't own something, somewhere, doesn't that mean the same as being homeless? Not trying to offend anyone. Genuinely wondering, are there people who really don't want to own real estate ever in their lives?

I do see renting as a temporary arrangement only in the sense that at any point it's possible I will be forced to move out. However, after doing the math I think I will rent for my entire life since it makes much more sense financially (much to my surprise)

[deleted]

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#234

Post by ijpoijpoihpiuoh »

pjc50 wrote: post #5

This is not only "first world problems", but 1% first world problems. Well, maybe 5%: given > For their retirement in a suburb of Asheville, N.C., Ben and Valentina Bethell spent about $3.5 million in 2009 to build their dream home: a roughly 7,500-square-foot, European-style house with a commanding view of the Blue Ridge Mountains. Put $3.5m into https://dqydj.com/net-worth-percentile-calculator-united-sta... and yo…

While 700 square meters is indeed absurd for any family, 150 square meters seems a bit limiting. There are reasonable use-cases for houses larger than that. A living room, a kitchen, three bedrooms and an office will be hard to eke out of that much space.

The justification is pretty idiotic: https://www.telegraph.co.uk/news/2018/11/13/mega-homes-banne...

50% higher than the average? OK, but what if you have above average needs? (Four kids, live in grandparents, etc.) There are plenty of "real people" who derive legitimate benefit from more than 150 square meters.

Ah well. My city has its share of idiot housing policies, but at least this isn't one of them. We are buying a 300 square meter house in a few days, and it feels like it'll be just about right for our needs.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#235

Post by JustSomeNobody »

alkonaut wrote: post #28
pjc50 wrote: post #5

This is not only "first world problems", but 1% first world problems. Well, maybe 5%: given > For their retirement in a suburb of Asheville, N.C., Ben and Valentina Bethell spent about $3.5 million in 2009 to build their dream home: a roughly 7,500-square-foot, European-style house with a commanding view of the Blue Ridge Mountains. Put $3.5m into https://dqydj.com/net-worth-percentile-calculator-united-sta... and yo…

I don't get why you'd want to build an enormous house for your retirement ? If anything, I long for the day my kids leave and I can move to a "simpler" place where I don't need to worry about, or pay for, maintainnig a detatched house. What does a rich older couple do in 7500sq ft/700sq m? I'd run out of ideas for rooms after about 200 sq m, and then I'm left to clean the remaining 500 sq m. anyway...

Exactly! The goal would be to find a newish small house that you could buy. I would not want to clean/maintain a house that big when I am retired and should be working on my relaxation techniques.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#236

Post by greedo »

C1sc0cat wrote: post #126
SketchySeaBeast wrote: post #105

Earlier quoted context omitted.

I'm right there beside you - I'm coming on two years of home ownership, and I'm not terribly enjoying it. I love the neighbourhood, but I just don't think I'm cut out for home ownership. I've had more problems in 2 years of home ownership than I had in a decade of renting. It's cost a ton more money. Is it an investment? Possibly, but I've sunk a fair bit into it as well. I now wake up on Saturday mornings with a lis…

Are these problems that would have shown up on a survey, I assume that like in the UK you did due diligence on the property first.

Information asymmetry between buyers and sellers is pretty high. Most home "inspectors" rely upon referrals from agents, so they tend to provide favorable inspections. And their agreements usually indemnify them against recourse. Many buyers don't realize this and think that their stamp of approval is valid.

You can always try to find someone you can relatively trust to do an inspection but a good contractor can be just as hard to find, and finding one willing to take a day out of his busy schedule to checkout the home you're interested in can be difficult.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#237

Post by asark »

ip26 wrote: post #152
LarryDarrell wrote: post #118

Earlier quoted context omitted.

When I call the super they drag their feet, do a half-assed job, take a dump in my bathroom, and then I get a rent increase for "improvements" they've made to the property. I used to own a 1000 sq ft cape cod that was built in 1942. I fixed everything myself and since it was small, nothing could really get out of hand. I believe most of the pain involved in home owning lately has come from bigger houses with more com…

Even worse, they make them bigger for the same price by cutting quality.

And walls. "Open concept" might look great in photos and provide good "wow" factor, and it's definitely cheaper to build, but it's also a great way to make a lot of square footage feel small when you live in it. Contrast smaller, older houses with lots of smaller rooms, which can often feel as big as much larger, newer houses.

Unfortunately, at least in our market, there's not much built in the last 20 years where the builders favored actual rooms instead of just one giant open public space. If you're lucky the basement's finished so maybe you get two of those.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#238

Post by Silhouette »

C1sc0cat wrote: post #126
SketchySeaBeast wrote: post #105

Earlier quoted context omitted.

I'm right there beside you - I'm coming on two years of home ownership, and I'm not terribly enjoying it. I love the neighbourhood, but I just don't think I'm cut out for home ownership. I've had more problems in 2 years of home ownership than I had in a decade of renting. It's cost a ton more money. Is it an investment? Possibly, but I've sunk a fair bit into it as well. I now wake up on Saturday mornings with a lis…

Are these problems that would have shown up on a survey, I assume that like in the UK you did due diligence on the property first.

Due diligence will only go so far, though. Last time we bought, our surveyor was clear that there were parts of the property they would not be able to inspect, and obviously they could not give any assessment of the state of those parts. For example, they weren't allowed to move the seller's furniture to check underneath or behind it, and naturally there would be structures and services that couldn't be inspected without taking floors up or the like. We have since identified several significant defects that were missed as a result of those limitations, but there is nothing either we or our surveyor could realistically have done to anticipate them given there were no visible warning signs in accessible areas.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#239

Post by saltminer »

radcon wrote: post #222
cblum wrote: post #208

Earlier quoted context omitted.

>housing security There is no such thing unless your home is paid off. If you have a mortgage and are hit by a catastrophic life event that leaves you without a job and depleted of your emergency fund, your home is gone.

> If you have a mortgage and are hit by a catastrophic life event that leaves you without a job and depleted of your emergency fund, your home is gone. That risk exists regardless of whether you rent or own. The risks he mentioned are unique to rentals. It's very common for leases to essentially say "We can kick you out if we feel like it," no justification necessary. Even if the lease stipulates some justification,…

The mortgage might be more secure, but an HOA can turn your life upside down if it's run by power-hungry busybodies and they can destroy the property values of the whole neighborhood while they're at it.

Re: A Growing Problem in Real Estate: Too Many Too Big Houses

#240

Post by almost_usual »

scarface74 wrote: post #183
nostrademons wrote: post #177

Earlier quoted context omitted.

> Also, a house is a great inflation hedge. Rent goes up with the market. The mortgage stays the same. Property taxes and insurance can go up. It's actually even better than that: if inflation goes up, you pay back the mortgage with cheaper dollars than you bought it with. If you're expecting higher inflation in the future (and it hasn't yet been priced into interest rates) a house is a great purchase. The flip side…

But you have to live somewhere. The eviction process is a lot faster than the foreclosure process. A landlord is incentivize to evict you as fast as possible. The bank does not want your house - especially during a recession where the value is dropping and then they become responsible for insurance and upkeep. Anecdotally when my parents bought their house in 1978, the $600 a month they were paying on their mortgage…

The eviction process varies quite a bit by municipality. Evicting someone in San Francisco is _much_ harder than evicting someone in another city. I would much rather rent in SF than own a home.
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