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Show HN: Should I Get a House? a better rent vs. buy calculator

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Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#251

Post by WarOnPrivacy »

cperciva wrote: post #124
WarOnPrivacy wrote: post #98

In 2021, the buy vs rent decision is a little like Should I buy a whale ranch on Mars or Venus? I suggest that the decision whether to rent a house might want to take into account that each rental ad is getting hundreds of applicants, each day - with few new ads showing up. ref: https://www.militarytimes.com/pay-benefits/mil-money/2021/07... ref: https://www.amisun.com/2021/06/27/once-in-a-generation-housi... ref: ht…

Buying isn't any better with sales going to all-cash buyers who are paying way above and beyond market. If that's the price houses are selling for, that is the market price.

> If that's the price houses are selling for, that is the market price.

I'll rephrase it this way. Cash buyers are paying way above and beyond what the house was listed for.

Likewise prospective renters are offering rents above what is advertised.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#252

Post by jandrewrogers »

duped wrote: post #90
waylandsmithers wrote: post #43

One piece of millenial defeatism I hear a lot is "Ugh, I'll never be able to afford a 20% down payment, home ownership is impossible" I'm not sure where this myth came from, but as a millenial who went through the buying process in 2012 and again in 2016, I remember both times the lender just asked how much we wanted to put down. We could have gone as low as 3%, or maybe even lower. Yes, you have to pay PMI (private…

I mean this is the definition of a strawman argument. Whether it's 10 or 20% down payment is not that significant. Even 5% is un-affordable. The median sale price of a home was $347,000 last month (0). 5% down on that is $17,350, accounting for closing costs you're going to need around $24,000 in cash to purchase a home. Which isn't all that much money, except if you consider that it's more than 1/3rd of the median f…

The median household savings account balance is not relevant to this discussion. Savings accounts are an anachronism, most people don’t have them regardless of how much money they have. By that standard of “savings”, I am flat broke.

The median household in the US has >$12,000 in cash that can be saved per year after all ordinary expenses, not even just necessary expenses, per government survey data. So your $24,000 is an easily achievable two years of savings for the median household.

That’s a pretty low bar.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#253

Post by WarOnPrivacy »

freeone3000 wrote: post #177
andrewmcwatters wrote: post #167

Earlier quoted context omitted.

Guess you’re not familiar with the concept of scarcity and outlier buyers.

A majority, or even a large minority, of sales cannot be above market price, by definition. If there are enough cash buyers that it's being difficult to buy at a given price, the market price is clearly somewhere above it.

You seem to be leveraging specific terminology in order to obscure the larger point - that buyers & renters are making substantially higher offers than homeowners are looking for. It is unclear how that helps move this discussion along.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#254

Post by JMTQp8lwXL »

hnhousingthrow wrote: post #188

These calculators don't reflect the reality/absurdity of the current economy. Anecdotal, but I bought a house in eastern California last year for $600k, now Zillow says it's worth $835k. Also, I'll unlikely ever be able to afford a house in the Bay Area, even though I make $220k/year at a company there. Still don't know what I'll do if my employer makes us return to the SF office in a few months. Relatedly, a ~70 yea…

If you had a significant other with a similar upper middle class wage, e.g., $220k * 2 = $440k you could probably swing it with more breathing room. You are wise to avoid the burden, in the chance you technically qualify for the mortgage but barely so in the Bay Area (e.g., leaving you house poor). The fact that home affordability requires a HH income in the top 2-3% is, to put it mildly, highly concerning.

It makes the trend of many millennials not trying (a bit of nihilism) seem reasonable. Why aspire for great career success and an above median income, when you can't get much for it? A better life, at that point, is likely to optimize for cheap hobbies and leave the high-pay work stress behind. Honestly, it sounds like a fairly rational decision.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#255

Post by BeetleB »

throwaway0a5e wrote: post #231
dragonwriter wrote: post #230

Earlier quoted context omitted.

> Move the decimal one place to the right if you're DIYing. I’m not sure of this is a mistake or commentary on the cost of not doing it right the first time.

Meant to say left. In my experience you can screw things up several times over before you come close to the cost of paying someone else.

Would not recommend if it's plumbing related. That's one of those things where a screw up could cost a lot more than calling a plumber in the first case.

Not to mention going days without water because no plumber is available.

Not an experience I want to repeat.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#256

Post by Element_ »

anonAndOn wrote: post #196
hnhousingthrow wrote: post #188

These calculators don't reflect the reality/absurdity of the current economy. Anecdotal, but I bought a house in eastern California last year for $600k, now Zillow says it's worth $835k. Also, I'll unlikely ever be able to afford a house in the Bay Area, even though I make $220k/year at a company there. Still don't know what I'll do if my employer makes us return to the SF office in a few months. Relatedly, a ~70 yea…

I submit the housing market of Phoenix, Arizona as an example of peak bubble. There are numerous houses on the market today that were previously sold... ~30 days ago. This feels more ludicrous than the speculative housing bubble of '07.

A co-worker from southern California just went to Arizona and purchased 4 homes as investments. He deemed them good value compared to current California market and was basically able to buy 4 units vs 1 around LA for the same price.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#257

Post by ngai_aku »

wil421 wrote: post #195
duped wrote: post #90

Earlier quoted context omitted.

I mean this is the definition of a strawman argument. Whether it's 10 or 20% down payment is not that significant. Even 5% is un-affordable. The median sale price of a home was $347,000 last month (0). 5% down on that is $17,350, accounting for closing costs you're going to need around $24,000 in cash to purchase a home. Which isn't all that much money, except if you consider that it's more than 1/3rd of the median f…

Who pays closing costs when you are buying a house for the first time?

In this market, the buyer is on the hook for what might have otherwise been the seller's expense.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#258

Post by ransom1538 »

smileysteve wrote: post #122
waylandsmithers wrote: post #43

One piece of millenial defeatism I hear a lot is "Ugh, I'll never be able to afford a 20% down payment, home ownership is impossible" I'm not sure where this myth came from, but as a millenial who went through the buying process in 2012 and again in 2016, I remember both times the lender just asked how much we wanted to put down. We could have gone as low as 3%, or maybe even lower. Yes, you have to pay PMI (private…

But if you go with 3% down, add pmi to your monthly payment and it's going to be tough to be in the same ballpark as a rental. Example: 377k home, 3% down is a $1461 payment; the $673 of equity you build each month is offset by $300 of pmi (not tax deductible). To sell will cost 6% (~24k if it appreciates to 400k). The likelihood of this being > rent of a equivalent home or leaving you underwater in 3 years is high.

"To sell will cost 6%"

I just sold a house a week ago without an agent. You can list on MLS for $45 and pay a flat fee to a broker in your neighborhood for ~1-2k. If you are selling do not pay agents. The market is red hot - they wont do anything except call you in 48hrs with offers. The title company does all the important paperwork anyway.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#259

Post by nodesocket »

hnhousingthrow wrote: post #188

These calculators don't reflect the reality/absurdity of the current economy. Anecdotal, but I bought a house in eastern California last year for $600k, now Zillow says it's worth $835k. Also, I'll unlikely ever be able to afford a house in the Bay Area, even though I make $220k/year at a company there. Still don't know what I'll do if my employer makes us return to the SF office in a few months. Relatedly, a ~70 yea…

Similarly, I bought last Sept in Nashville, TN and Zillow says my house is up 13.5% already. The Nashville housing market is especially ridiculous, it's one of the hottest in the US.

> Relatedly, a ~70 year old woman bagged my groceries today and I doubt she's doing it for fun. Seems the accelerating wealth inequality is destroying our society/communities if it hasn't already.

Let's not forget about the error in extending unemployment and benefits that the current administration passed. We should all hope and petition that a 4th stimulus check does NOT go out (inflation). The fact of the matter is, these policies are keeping a lot of the lower income workers out of the job market because they are still making more off unemployment than going back to the workforce. I estimate, this imbalance in the market will correct in September when these benefits end.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#260

Post by ransom1538 »

alach11 wrote: post #2

My wife wants to buy a house, but I'm unable to make life decisions without trying to minmax them. I wasn't satisfied with existing rent vs. buy calculators, so I decided to build my own! I'm not a developer, so I apologize if it's a little rough looking... Some things it takes into account: - The actual rate of return on your down payment and extra costs of a house - Inflation - Itemized deductions on your taxes - T…

The home only expenses (down payment, home owners, etc) when you chose rent should be converted to a standard rate of return of VOO (index of SP 500) for the 15 years. THIS would be the greatest calculator ever built ever.
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