As other states take on housing crunch, Mass. still stands pat

[bitesize]

Originally Posted by id77

Yes, but rent vs. any investment over 30 years is going to lose, because renting isn't investing at all. Owner occupied over 30 years + putting the difference in a rusty can in the back yard is going to beat renting. Heck, burning the difference in a fireplace is going to beat renting as you still have a home with a resale price at the end of it all. I don't know anyone who would seriously advocate someone rent their whole life, unless they're constantly moving from location to location, and even that raises its own questions about whether the person is doing it wrong.

How much to leverage vs. invest-as-you-go is a much different discussion, and I suspect mdovell is referring to that discussion. That's the discussion I was looking at originally, and there is math to show that going all-in on a mortgage vs a small mortgage + investing results in the latter winning almost every time. That is to say, leveraging just enough to own a home is a much smarter play than renting, but leveraging oneself to capacity to buy only homes will typically yield a smaller return after 30 years than stocks, unless the stars and moon align and the person buys the right properties in the right places and can make up the difference off of rental income.

To mdovell's point, there very much are people who make it rich on real estate. The effort involved and the risks taken to attain that wealth are higher than required to do similar in the stock market, but it's certainly possible.

Again I don't know why you keep talking about going all in on real estate. Nevertheless, "going all in" on a owner occupied multi-family and renting out the extra units and also investing would beat a small mortgage + investing. Also, in your example of keeping money in a bucket, renting + investing would greatly exceed owner occupied + keeping money in a bucket.

The reason your scenario you propose is dumb is because you create the arbitrary distinction between "small mortgage" and going all in. You have to keep all the variables constant. Otherwise I will say a "house-poor" person who owns a house that lasts 30 years vs. a not house-poor person who owns a cheaper 1 bedroom house for 15 years that eventually sells to buy a larger house 15 years later will be worse off than the person who was initially house poor with the larger home, since at 15 years a large chunk of gains will be eroded to transaction costs and in addition the larger house you buy 15 years later has now appreciated, further eroding gains.

[whippany5]

Originally Posted by Shrewsburried

To a degree, but if you cross shop comparable school districts, distance to critical job markets, and total COL (including prop taxes), the cost gap narrows considerably.

Well said. NH has very high property taxes, and if you work in MA you'll pay income tax too. We also have lots of user taxes- very expensive car registration, schools can be iffy, etc. It's a wash.

[yesmaybe]

Originally Posted by bitesize

It's obviously complicated, but in terms of rent vs. own over 30 years - I doubt anything beats owner occupied over 30 years + investing difference between the (increasing) rent. As a regular person you'll never be able to access as much leverage as a mortgage in your life over a 30 year period.

People move though, the % who actually lives in one place for 30 years can't be much. The average tenure has gone up I reckon but I think it was around 7 years not too long ago. Remember you lose 6% each time you sell.

[Shrewsburried]

Originally Posted by yesmaybe

People move though, the % who actually lives in one place for 30 years can't be much. The average tenure has gone up I reckon but I think it was around 7 years not too long ago. Remember you lose 6% each time you sell.

This is why you buy in a strong job market like eastern MA. I know plenty of ME, EEs, etc. who have been in the same house since the mid to late '80's, managed multiple job transitions, and now their COL is pennies (relative) in towns like Andover, Burlington, etc.

There a certain markets where renting in financially prudent, but if you're someone with good job density, buying will almost always win out in the long term as, at some point, you're only paying taxes/utilities/wear and tear. It's not a binary decision of mortgage vs. market equities ... one does need a place to live and, in many cases, also need a competent school district attended by kids who have two active parents.

[baysky]

Originally Posted by id77

The kind of city that's experiencing growth because it's attracting the educated and increasingly wealthy Millennial demographic? The San Franciscos, Seattles, Austins, and Bostons of the country thrive because they attract the Millennial tech and finance dorks.

We're on the verge of 2020 here. The more elite Millennials and GenXers are the ones calling the shots now. The Boomers just haven't realized it yet.

people have woken up to snots like you and are fighting back. Tell your elite Millenial friends to get ready

[BostonBornMassMade]

just to id77's point about " The San Franciscos, Seattles, Austins, and Bostons of the country thrive because they attract the Millennial tech and finance dorks."

Large segments of the population don't consider those areas thriving and aren't interested in living there. I dont think you and your friends need to "get ready" for people to 'fight back' lol. Its just what some consider desirable isn't really desirable OR thriving to a lot of people, if not most.

High home prices, a bifurcated economy, racial inequity, rigid class lines, certain restaurants/cuisines, traffic, homelessness etc. are major turnoffs for many people and they choose other cities. If driving is defined solely by economic output/home values/office space i think were being a bit disingenuous/naiive by not looking at the totality of a situation.

[mdovell]

The irony with SF is wasn't there a movie that just came out called "The last black man in san francisco".

There's a strong difference between saying "city xyz attracts millennials" and "city xyz attracts *only* millennials"

Tech is kinda a myth at this point. I can make an argument that nearly every job these days is a tech job. First we all used computers, all used the internet and all use smart phones, gps etc. I work with a guy who knows stats and works with GIS systems extensively. Is it a high tech job? I don't know but the software is easily $4,500 so you tell me.

Boomers are pretty much on their way out everywhere. It's 2020. The youngest boomer is 55. To be honest there isn't that much time left and every day 9,000 to 11,000 retire. That's the real reason why the economy came back. 365 days a year is 3,650,000 job openings. That is just for replacement not even counting new growth. Ten year period is 36.5 million easily enough to help the economy. Not sure if everyone knows this but in the public sector there are often restrictions for those that are retired if they try to come back. In Mass it's 960 hours or 18.5 a week. Then add in the drug abuse that is sapping away potential employees and the immigration crackdown and there's a labor shortage. We've done a 180 from 2008 folks.

As for buying vs renting some places you simply can't buy. Why? Because it's probably single family homes that are already taken. It's not like someone buys a house in midtown Manhattan. Just look for yourself Here's some major US cities and how they are zoned
https://www.nytimes.com/interactive/...ly-zoning.html

"Today the effect of single-family zoning is far-reaching: It is illegal on 75 percent of the residential land in many American cities to build anything other than a detached single-family home."

Let that sink in for a moment.

Personally I think the single family home isn't working anymore. The 100 or so year concept relied on too many variables.Highways, malls, box stores and now the internet are causing it to sway. Once self driving cars come in and 5G that will open up a serious amount of space in homes. Assessory dwelling units will expand significantly. So some elderly broke baby boomer with a huge house suddenly has a house for four families. All this takes is a few bylaw changes here and there and there little to stop it. Zoning is on a local level what "We're going to build a wall" is on the national level.