Why I never want to pay more than $250k for a house (sell, sale)
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1. It's too much. No arguments about location and cost of living will ever convince me that the amount of labor that sum represents is a fair amount of work for shelter. It just isn't, no amount of spin changes that. A fair price is one that is comparable to what it should actually take to build a house. If the price is inflated by zoning, permit costs, bureaucracy nonsense, or profiteering-level utility hookup costs, it's too much.
2. It's too much. In HCOL areas, it usually comes out better to rent and invest in the stock market. While some trade-off can be made for quality of life, there must be a reasonable line drawn. There is no reason that "enough is enough" should apply less to housing than to everything else in life we make decisions on.
3. I refuse to put myself in a situation where I have a debt I cannot pay if circumstances change. With high prices, unless I make a boatload of $$$, I would be very vulnerable to changes in the job market and housing markets. At reasonable price levels, I could pay it off or pay it down enough and refi to be able to move elsewhere and still pay my bills, even before/without selling it. Not so with super-expensive prices.
4. I expect that at some point our education system will be reformed for the better, so that all families have access to a decent education regardless of where they live. As a consequence, I expect that people won't be willing to pay such insane premiums just for a good school district. I refuse to bet 10 years of hard life's work on the singular proposition that such changes will not occur and I'd be able to easy sell for more than it was bought for.
5. I am only 29 and I'm already sick and tired of chasing money. An expensive house will force me to chase money even more.
6. I believe short sales and strategic default are immoral and don't want to risk having to go through it. In my family you always keep your word. You don't borrow money and then not pay it back - that is like shoplifting. Most loan contracts specify foreclosure as a remedy a lender has to deal with a breach of contract, not as an option within the contract. Think about it - if it were an option that still satisfies the contract, why would it ding your credit? If you break a cell phone contract, it doesn't ding your credit. Why? Because you didn't actually breach it, you exercised an option within it. This distinction, while very subtle, is nonetheless real. In fact, the word "credit" comes from the Latin "crēdere", meaning "trust". A ding of credit is not simply a customary practice - but has a deeper meaning behind it - it means you cannot be trusted.
If you still don't agree, I would point you to the following legal analysis which explores the legal and philosophical arguments in more detail:
Wake Forest Law Review "The Morality of Jingle Mail"
And your plan would not work in my area.
Here, it is cheaper to buy than to rent. My son bought a house 6 months out of college as the mortgage/etc. was half the cost of a two bedroom rental.
BTW... I am in a 4 BR 3.5bath home, with all the updates, and we would be THRILLED to get $250,000 upon selling.
Yes, housing is that inexpensive.
You seriously can't expect anyone to argue your points if you are saying that is your criteria and reasoning. The only thing I can say to you is that your view may change as you get older and things changes for you. Growing up and even when I was in College, I didn't even consider buying a house over $150K. Depending on where you ultimately end up working/living the majority of your life, that $250K is just a variable that would change and in most case change quite a bit.
Honestly, at 29, you are still young and if you no longer have the desire to chase money than you are probably happy with where you are financially and will be happy living that way for about 2/3 of the rest of your entire life.
My 500k house is larger and newer than the 290k house I recently sold. It's also 30 miles or so closer to work which in turn gives me at least 40 hours a month in free time that I didn't have before if not more. My only complaint is that I didn't make the move sooner
In many parts of the US there are just too many with more than sufficient resources to comfortably afford homes that double or quadruple the artificial ceiling the OP mentions. They are extremely well educated people with outstanding income and deep knowledge of how the country work, the OP -- not so much.
While I find it more than a little humorous that a 29 yr old would drive a stake in the ground so publicly, the real problem such a stand makes is not with others on the interwebs but for him/her in real life -- being so inflexible will limit their choices of a life partner, likely doom any children they might have to an inferior school and generally result in a needlessly difficult life. Sounds pretty harsh but their is solid data that shows folks in higher cost of living areas have greater career success themselves as well as kids that do exponentially better. Not to much the "immoral" defaults happen far more frequently in low income areas than those of more affluence -- OP will surrounding themselves with potential deadbeats that have far less to lose by default than those in more affluent areas.
And your plan would not work in my area.
Here, it is cheaper to buy than to rent. My son bought a house 6 months out of college as the mortgage/etc. was half the cost of a two bedroom rental.
BTW... I am in a 4 BR 3.5bath home, with all the updates, and we would be THRILLED to get $250,000 upon selling.
Yes, housing is that inexpensive.
If the houses there are less than $250k, how can you say my plan won't work in your area? I am a bit confused as to what you mean.
In many parts of the US there are just too many with more than sufficient resources to comfortably afford homes that double or quadruple the artificial ceiling the OP mentions. They are extremely well educated people with outstanding income and deep knowledge of how the country work, the OP -- not so much.
Just because others are willing to pay more doesn't make it a fair price....it just makes them willing to pay more.
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Originally Posted by chet everett
While I find it more than a little humorous that a 29 yr old would drive a stake in the ground so publicly, the real problem such a stand makes is not with others on the interwebs but for him/her in real life -- being so inflexible will limit their choices of a life partner
Better to limit it than to find the wrong one that forces me into a tough spot, increasing the risk of divorce and then leaving me unable to pay my bills.
The #1 cause of divorce in America is financial problems...
I thought about mentioning the whole "afford it on one income" thing. Based on my career trajectory, I don't expect to be making gobs and gobs of money. For those that do, obviously the picture can change.
Quote:
Originally Posted by chet everett
, likely doom any children they might have to an inferior school and generally result in a needlessly difficult life.
And when parents have to work 60-80hrs/week to pay their bills, you don't think kids have a tough
life?
Quote:
Originally Posted by chet everett
Sounds pretty harsh but their is solid data that shows folks in higher cost of living areas have greater career success themselves as well as kids that do exponentially better.
Which is the cause and which is the effect?
Quote:
Originally Posted by chet everett
Not to much the "immoral" defaults happen far more frequently in low income areas than those of more affluence -- OP will surrounding themselves with potential deadbeats that have far less to lose by default than those in more affluent areas.
Within a city....maybe. But between different metro areas not so much. You don't really think all non-rich neighborhoods in, for example, Arkansas are full of deadbeats, right? There are plenty of middle class areas with decent people and reasonable housing prices...if you get out of the insanity that is the HCOL areas on both coasts...
Quote:
Originally Posted by chet everett
Funny how facts contrast "manifesto" thinking...
Like the fact that money problems are the biggest cause of divorce in America, the fact that higher pay correlates with more hours and less sleep, that sleep deprivation tends to cause stress, and that stressed parents aren't good parents?
You can choose your facts to support either side - no matter what stance you take we humans are excellent at confirmation bias and skewed arguments. To go from facts to reasoning you need analysis.
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