A Growing Problem in Real Estate: Too Many Too Big Houses • Hacker News Board

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

#241

Post by malvosenior » Thu, Jun 20, 2019, 6:44 PM UTC

Balgair wrote: post #207

malvosenior wrote: post #201

Earlier quoted context omitted.

Don't you also lose a lot of the deposit money you put down on the old apartment and the services that went along with it though? Not to mention that moving is more than a weekend of shuttling around possessions (if you don't own much), you also have to change your address with everyone, sign up for new utilities... I always burn a lot of money and time when moving.

> Don't you also lose a lot of the deposit money you put down on the old apartment and the services that went along with it though? Wait, what? It's a deposit, you get it back at the end of the lease. Like, granted, if you have a lot of damage to the carpets, sure, you're gonna be out $80 for the cleaning of them. But I've always gotten it back in full after a month or so. For me, moving is litterally a weekend (mayb…

In my experience I lose hundreds on my deposit every time (with very little actual wear to validate that loss). I've only ever rented in major cities though, so maybe it's less aggressively slum-lordy elsewhere.

If you do have more possessions than you can move yourself, or your moving long distances, you end up spending a ton of money. Movers usually cost me 5-10k and I didn't even have a lot of stuff (2bd apartment worth of possessions). Ditto if you need your car(s) moved.

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

#242

Post by alistairSH » Thu, Jun 20, 2019, 6:46 PM UTC

snissn wrote: post #125

alistairSH wrote: post #85

Earlier quoted context omitted.

Right there with you. We sold our 1800sqft single-family for a 1500sqft townhome shortly after the kid flew the nest. And we still have two bedrooms that are seldom used (one is a guest room, used 3-4x/year, the other is an office used never, except by the dog).

awww.. what kind of job does the dog have?

CFO.

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

#243

Post by imgabe » Thu, Jun 20, 2019, 6:47 PM UTC

maxsilver wrote: post #98

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 also hate maintaining a detached single family home with a yard. I also hate being responsible for the fixes. But that situation is still far better than renting. When we rented, we were subjected to eviction at any time, for nearly any reason, for basically no notice (60 days, which in the US is effectively zero notice). Your subjected to every whim the crazy wildly-irrational housing market throws at you (we've h…

I know landlord-tenant laws vary a lot, but how could you be subject to random evictions with only 60-day notice? Most places I've lived, you sign a one year lease. The landlord can't evict you while the lease is in effect as long as you are abiding by the terms of the lease.

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

#244

Post by mti27 » Thu, Jun 20, 2019, 6:48 PM UTC

Frost1x wrote: post #162

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…

Home and property ownership are deeply tied to some of your fundamental rights given as a citizen in the US. Many freedoms granted to you can be superceded once property is owned by other private entities because they require a spatial context. Take gun ownership or something less controversial: a grill. If you own the home, you can grill to your heart's content. If you rent, there's likely all sorts of rights you fo…

> ... and using a grill is often explicitly banned ...

Don't know if it is still the case, but last time I was in an apartment (early 2000s) there were also limitations for Internet and Television. DirecTV was popular at the time, I was the first to put a dish in a bucket on the balcony. The apartment managers said I had to take it down and use Comcast. Fortunately, when presented with a printout of the FCC rules they reneged and dishes started popping up all over the complex... Which didn't do great things for the brochure :)

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

#245

Post by zaccus » Thu, Jun 20, 2019, 6:48 PM UTC

newsoul2019 wrote: post #189

stale2002 wrote: post #156

Earlier quoted context omitted.

No? It give me freedom to rent. At any point that I feel like it, I can pick up and move. Whether it is to a place across the street or on the other side of the country. I wouldn't have nearly that much freedom if I had the misfortune of owning my own place.

Do you see this as a temporary or permanent situation in your life? What is your "end game" so to speak?

Nothing is permanent. The end game is death.

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

#246

Post by cestith » Thu, Jun 20, 2019, 6:49 PM UTC

A huge demographic is aging out of real estate ownership. There are far fewer Gen Xers than Boomers. Even if Millennials had the same economy the Boomers had, they're a full generation behind the Boomer's retirement curve.

So, yeah, there aren't as many people producing demand for these houses even before considering different tastes in living style. It's a bad investment to put your life's savings in something with a plan to resell it to a less interested market. Either retire into it and get the use out of it or don't put your money there.

The market is just correcting in a quite foreseeable way.

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

#247

Post by nybble41 » Thu, Jun 20, 2019, 6:50 PM UTC

thorwasdfasdf wrote: post #203

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…

One way to think about it is the Spread between the cost of owning vs the cost of renting. For example, in SF, the spread is very small and hence favors the renter. Here's an example: In SF, your cost of ownership is roughly 2% per year (1.4% property taxes, 0.5% for Earthquake Insurance, 0.3% for repairs and depreciation and HOA), which comes to a total of 2.2%. The average Rent for an equivalent house is roughly 3%…

In a high-demand area like SF you're probably seeing an appreciation in the value of the owned property equal or greater than whatever you would be likely to earn from other investments.

According to Trulia[1] the median sale price for two-bedroom homes increased from $1.010M five years ago to $1.407M today, which corresponds to an annual return of about 6.8%. Assuming that trend continues, the actual spread would be more like -4.3% for ownership (2.5% cost minus 6.8% appreciation) vs. 3% for renting, or 7.3% altogether in favor of ownership. You'd only come out ahead by renting if you can find an investment returning more than 7.3% per year.

[1] https://www.trulia.com/real_estate/San_Francisco-California/...

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

#248

Post by orpep90nxkfo » Thu, Jun 20, 2019, 6:50 PM UTC

rayiner wrote: post #191

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…

So don’t buy a house with a big yard, etc.? We’ve got a house in a waterfront area that was laid out in the 1920s. Back when Americans were still free and there were no zoning codes. The houses are detached, but the lots are tiny (less than 3,000 square feet). No yard to take care of, close to neighbors, etc. And because people own rather than rent, you’re not getting a new set of neighbors every year.

Lol building codes sure are the epitome of authoritarian state behaviors that’s for sure

In the 1920s when the world was better for us first world white guys.

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

#249

Post by souprock » Thu, Jun 20, 2019, 6:52 PM UTC

showerst wrote: post #174

dfischer wrote: post #166

Earlier quoted context omitted.

Why would they be more desirable?

(I hope i'm reading your hypothetical right) in a world where I don't have to venture out to go to work, and don't have to live in a set place to chase an industry, I'd put more value on being in a nice climate, close to fun things to do, and near other people that have 'interesting' established communities (walkable culture, food, know your neighbors, all the standard millennial trend stuff). I'm assuming a situatio…

Moving to flyover country is more than affordability. It's also a matter of culture. Some people want stand-your-ground, constitutional carry, and lethal defense of property. Some people want to be surrounded by a particular religious group.

Affordability is also more than just being able to buy a place to live. People want land. This can mean being able to hunt in the yard, own a private pond, or walk around without seeing any sign of the existence of other humans on Earth. Technically, there is some amount of money that would let you do that kind of thing in San Francisco. It would start with funding political campaigns, leading to a massive eminent domain wipe-out of the existing city... but this is not realistic. In a practical sense, getting the space is not a matter of affordability. You can't have that space for any realistic cost.

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

#250

Post by rifung » Thu, Jun 20, 2019, 6:53 PM UTC

brightball wrote: post #231

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 p…

> 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.

If you can assume historical returns, renting is a financially superior choice. Well, assuming my math was correct. Both are big assumptions admittedly.

The reason is that when you buy, while you are effectively saving by having your money go towards your home, over the long term on average home prices don't increase.

On the other hand if you invest that down payment, it will compound.

Note that the result is not the same if you buy a place with cash and rent it out to others, because in this case you can reinvest your returns. However if you buy a place to live in, for most people they need a mortgage and their theoretical savings can not be reinvested.

Or in other words, O(c^n) is a superset of O(n) for c > 1.