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The neighborhood where I grew up still has all the same people... the new kid on the block has been there 40 years... since 1969.
The man I bought my home from in 2005 had been there since 1955... 50 years... his taxes were $1200 per year and mine are around $9400... but that's another topic...
I always thought CA had lots of stable neighborhoods, but, maybe it's just the SF East Bay neighborhoods I know.
I bought a home in 1985 from the original owner... she and her husband bought it new in 1922... I've posted about it before because it was like going back in time... all 1922, bathroom, kitchen, even the kitchen stove and linoleum floor
The house I'm renting in Evergreen had the same owner from 1948 to 2008 - sixty years she lived there. She finally sold the house and moved to Washington to live out the rest of her days. In contrast, my parents' more upscale neighborhood has had a lot of turnover.. there are multiple houses on their court that are on sale for the second time in 5 years, distress and short sales..
My parents have lived in the same house they bought in 1970. My Grandmother in hers since 1962. My Aunt since 1978. My Uncle and other aunt since 1968. So not everyone moves every few years. That sort of brings up another point, and that would be if you're married to someone who moves every few years for job related reasons... then it makes no sense for you to buy a house- period. I am almost certain that these "mobile warriors" with kiddies in tow who bought in say- 2006 and now have to move again are up *&@! creek without a paddle and if they sell, will lose significant money in the process.
The neighborhood where I grew up still has all the same people... the new kid on the block has been there 40 years... since 1969.
The man I bought my home from in 2005 had been there since 1955... 50 years... his taxes were $1200 per year and mine are around $9400... but that's another topic...
I always thought CA had lots of stable neighborhoods, but, maybe it's just the SF East Bay neighborhoods I know.
I bought a home in 1985 from the original owner... she and her husband bought it new in 1922... I've posted about it before because it was like going back in time... all 1922, bathroom, kitchen, even the kitchen stove and linoleum floor
Of course it still happens, but for the most part couples do move from one home to another. I think, I read, the average family will own 5 homes in their life. I can't swear to that as I do not know where I read it. Our daughter and son in law (the oldest) have been in the same house for 22 years, but before that owned 3 houses. When they retire they will move from Dallas to Ar. Our younger daughter has owned 3 homes.
What you say is true, but kind of sad. I definitely know people who jump from one house to another. My parents have friends who are in their 50's and are still moving to different houses. These people will probably never be able to retire. I guess what's important to me is community. Everyone where my parents live helps each other out and everyone knows one another. That and when you stay in a house long-term, you make it yours. My folks have 4 decks, a sunroom, and a greenhouse off their house.
I think people now would rather move to some cookie-cutter neighborhood and just live there and when the time comes- they move to another one almost the same.
I guess I just don't understand the point of actually owning a home until you plan on being somewhere permanent. Looking at it from a financial perspective, let's say that you decide to rent the supposed 4 out of the 5 houses you'll live in your lifetime. Here in the bay area, even now, rent is around 50% of what the mortgage is. Let's say you put the savings you would have from renting into a retirement fund. Over the last 100 years, over ups and downs, stocks tend to get 7% median annual returns. Homes tend to appreciate roughly anywhere from 4%-6%. So clearly stocks outperform real estate. Plus unlike Real Estate, stocks and investments will start doubling in value at a more rapid rate the longer you have them. So in reality, the mobile family who rents and invests will likely be much better off than the family who buys, sells, and buys again. Just something to think about.
In any regard- whatever house I buy will be IT. No musical houses for me.
In any regard- whatever house I buy will be IT. No musical houses for me.
Then make sure it is a one-story house. One of the leading motivators for older folks to move is to get rid of stairs. As someone who owns a three story home with over 50 steps to get from the house to the garage, I understand this motivation perfectly. Having moved here at age 40 we will have about 30 good years here before it is time to move on.
What you say is true, but kind of sad. I definitely know people who jump from one house to another. My parents have friends who are in their 50's and are still moving to different houses. These people will probably never be able to retire. I guess what's important to me is community. Everyone where my parents live helps each other out and everyone knows one another. That and when you stay in a house long-term, you make it yours. My folks have 4 decks, a sunroom, and a greenhouse off their house.
I think people now would rather move to some cookie-cutter neighborhood and just live there and when the time comes- they move to another one almost the same.
I guess I just don't understand the point of actually owning a home until you plan on being somewhere permanent. Looking at it from a financial perspective, let's say that you decide to rent the supposed 4 out of the 5 houses you'll live in your lifetime. Here in the bay area, even now, rent is around 50% of what the mortgage is. Let's say you put the savings you would have from renting into a retirement fund. Over the last 100 years, over ups and downs, stocks tend to get 7% median annual returns. Homes tend to appreciate roughly anywhere from 4%-6%. So clearly stocks outperform real estate. Plus unlike Real Estate, stocks and investments will start doubling in value at a more rapid rate the longer you have them. So in reality, the mobile family who rents and invests will likely be much better off than the family who buys, sells, and buys again. Just something to think about.
In any regard- whatever house I buy will be IT. No musical houses for me.
For you, staying in the home you buy is very important and that is a great way to look at things, but for many, this isn't the case and to say someone can not retire because they move too often makes no sense. Your reasoning about stocks versus homes shows what you are saying makes little sense, plus even if homes only appreciate 6% a year (which btw,depending, isn't a true figure) that appreciation is on the price of the home, but the original investment is probably only 10 to 20%. Based on that, you invest 20% in a $200,000 home, your investment will appreciate at 6% on 200,000, but you have only invested $40,000.,00.
Let me just say how much I hate the term "starter home." I don't think anyone on this thread has used that term yet, but there is a huge emphasis today on people moving from one place to the next, buying for short-term needs and figuring that they'll move on when they need to. For a time there home values were going up so rapidly that buying a home was a sure-thing investment in the short-term, but given the situation now it's much riskier. We're starting to look into buying in the near-future, and we're planning on being there for the long-term. No starter home for us; moving is a major expense and hassle, and once we're settled I want to put down some permanent (or at least long-term) roots. I still think that there are some major regional variations on this; when you're talking about living somewhere where you can buy a house for less than $200,000 (large enough to fit a family, and in a safe neighborhood with acceptable schools) it's a different situation than it is in many parts of CA. I have family in other states who bought houses within a year of graduating from college; while that may happen for some lucky young people in the Bay Area, it's not the reality for most.
I'd consider buying a place and not renting first if I, like a previous poster noted, had the financial backing of my company, otherwise I personally would always rent first, even if it meant sticking our stuff in storage for six months and living in a temporary short-term apartment (and yes, we have a child - not ideal, I know, but to me better than making the wrong decision, as our working assumption is going to be that we're not moving for many, many years. Realtors can be wonderful, but they can only do so much). To each his own, I know, but I do think that for many people moving to the Bay Area they may need to reevaluate any assumptions from wherever they lived previously. Things just don't work the same in San Francisco as they do in many places, at least not for most people.
Let me just say how much I hate the term "starter home." I don't think anyone on this thread has used that term yet, but there is a huge emphasis today on people moving from one place to the next, buying for short-term needs and figuring that they'll move on when they need to. For a time there home values were going up so rapidly that buying a home was a sure-thing investment in the short-term, but given the situation now it's much riskier. We're starting to look into buying in the near-future, and we're planning on being there for the long-term. No starter home for us; moving is a major expense and hassle, and once we're settled I want to put down some permanent (or at least long-term) roots. I still think that there are some major regional variations on this; when you're talking about living somewhere where you can buy a house for less than $200,000 (large enough to fit a family, and in a safe neighborhood with acceptable schools) it's a different situation than it is in many parts of CA. I have family in other states who bought houses within a year of graduating from college; while that may happen for some lucky young people in the Bay Area, it's not the reality for most.
I'd consider buying a place and not renting first if I, like a previous poster noted, had the financial backing of my company, otherwise I personally would always rent first, even if it meant sticking our stuff in storage for six months and living in a temporary short-term apartment (and yes, we have a child - not ideal, I know, but to me better than making the wrong decision, as our working assumption is going to be that we're not moving for many, many years. Realtors can be wonderful, but they can only do so much). To each his own, I know, but I do think that for many people moving to the Bay Area they may need to reevaluate any assumptions from wherever they lived previously. Things just don't work the same in San Francisco as they do in many places, at least not for most people.
Don't overlook the moving expenses associated with renting and being subject to someone else's time table... Renters move much more that owners..
Also, best laid plans are subject to change... schools and neighborhoods change... children move away from home and the parents often follow to be closer to the grandchildren...
Some of us did buy in the Bay Area right after college or in college... we bought what we could afford at the time... it's hard to quantify the feeling of owning something for the first time in your life... other than to say it is very satisfying
I agree that owning is something many people want to do, and don't disagree that buying a place can be satisfying (and a good investment); I just think that for many people they would be better off renting for a short time (even just a short-term six month lease) when moving to a brand new city, rather than buying immediately upon arrival.
I've been thinking about this lately, and have decided that my friends and family tend to fit into two categories (to varying degrees):
(1) people who put the house first (house above neighborhood), and (2) those who put location first. My sister-in-law, for example, doesn't really care what neighborhood she lives in, as long as it meets some basic parameters about level of safety, schools, and general commute time. To her, the specifics of the house are the top priority. She probably could successfully move somewhere else and find the right place by working through a realtor. I'm more of a location person; I'll compromise on the house (within reason) to find the right neighborhood, and when it comes to that neighborhood I'm far more picky than is my sister-in-law. Because neighborhood - and not those general things like safety, schools, etc. - is the top priority, and because it's tough to really articulate the ins and outs of my particular tastes to someone who has a different outlook - I find it important to rent before buying in a new location. In an ideal world you get to find the perfect house in the perfect neighborhood (and at the perfect price), of course!
Home ownership is encouraged by the government so that they can tax your property and have something to seize if you get out of line. They fear free people that can't be easily controlled. Does that sound extreme? Think about it.
In any case, at the moment it makes more sense to rent than buy. The real estate collapse is far from over.
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