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home ownership is an anachronism

Bill Dog (726542) writes | more than 3 years ago

Databases 13

If I had kids I would tell them not to do as their parents and their grandparents have done. Don't buy a home, rent. And don't accumulate lots of junk, as you'll likely be moving for almost every new job. Which'll be every 1-3 years or so.

If I had kids I would tell them not to do as their parents and their grandparents have done. Don't buy a home, rent. And don't accumulate lots of junk, as you'll likely be moving for almost every new job. Which'll be every 1-3 years or so.

Besides, stay longer than that and you've stagnated, and just hurt yourself and your future chances. And this goes for not just tech workers. If a major component of the value of the American worker in the future is going to be in knowing their employer's business, then after a couple of years you already know it. There is no more to be gained by staying longer. Your tech or HR or accounting or whatever skills are ubiquitous and commoditized, so after a few raises they'll be looking to get rid of you anyways. They want the fresh thinking and new ideas of an outsider, better ones that have come along since you joined the organization, and you want to keep moving to expose yourself to different ideas and ways of doing things. Because you need to keep being that new guy with industry experience and knowledge but that will bring lessons learned from competitors and other businesses, to stay hirable.

In the recent past in our time we've been going in the opposite direction on home ownership. Instead of trying to expand it by encouraging borderline people to do something stupid and give it a try, we should've been doing the opposite. I bought modest and before the spiking, just out of sheer luck, but while my mortgage payment is reasonable, it's costing me significant money potentially because I've not been looking for work outside my metropolitan area. That's a hidden cost of putting down roots, that I didn't think of when I bought. My dad just told me all of sudden, after my career was plenty established and had been renting for 5+ years and had some money saved up, "hey son, stop throwing your money away on renting, you need to buy a place". But I'm "throwing my money away" right now, maybe, in a way. Little did we know. But the next generation should know.

The next generation should know that home ownership is only for the rich. It was a fine idea for the middle class when most could take out a simple fixed-rate 30-year mortgage, and always keep the principal going in a southward direction, and always have it paid off by retirement age. But there's just too many people, so home prices will never come back down to the reasonable level they were when I bought. There's more workers for fewer jobs, so pay will go down and time between jobs will go up.

A home is just a giant immovable ball-and-chain that's ridiculously unaffordable anyways. It'll take 10-15 years for a middle class person of the next generation just to pay off their car loans, as mandated fuel economy and safety regulations demand more and more expensive technology and more of it on each car, and buying power is strangled by inflation of the currency and taxation to pay off collective debt and the two previous generations' retirement benefits. And a working couple typically needs two of them at any given time, so the automobile will replace the home as one's big purchases in life and become the new reason for long-term debt for people. Besides, what bank will want to loan more than 50% of an asset's value on an asset that's essentially stuck somewhere. What good is repossessing something planted into the ground, when it's in a depressed area. Mobility is the key to value, for people and things, in the future.

So I'd tell my children if I had them, buy extended warranties on your vehicles, keep them meticulously maintained (like extended warranties typically require), as they will be your biggest money sinks, and your lifeline towards chances, albeit diminishing, of making a living. And watch out about that car insurance thing, where as the asset ages, even though you're basically paying the same in premiums, the protection you're buying goes down every year. It sucks that you'll put the fruits of your life's laboring into a depreciating asset instead of an appreciating one, but you're just going to have to adapt. They'll prolly be some new gap kinda policies then to cover this. Kids, buy that, and look on the bright side -- your children prolly won't even be able to own their vehicles -- they'll be renting their transportation like you'll be renting your living spaces.

So the choice for most will be an apartment. By then there'll prolly be furniture designed for a generation that's always on the move. Dresser drawers with built-in retractable nylon covers that you can just, uh, un-retract (?) and zip up in the middle and take the whole drawer out, and load it into the truck. Then lift the bureau itself, and slide the lever on the back which drops the rollers that fall and click into place, and off it goes. Most everything will be self-containable and movable. Bookcases will have a gate that you can pull down over them, like store fronts when they're closed for the night. Something like that would then likely have a self-propelled mechanism in it like a vacuum cleaner or lawn mower, and power-assisted deployment of the rollers, so you would then just guide it along as you moved it out the door. Of course everything being bundlable and movable is going to mean additional security concerns, that will have to be addressed.

A growing choice might be a camper or motorhome or whatever. I.e. some may decide to trade the inconvenience of having to pack and unpack all the time with the inconvenience of having to empty tanks and such all the time. But maybe by then trailer parks will rent out space for fixed and non-fixed trailers -- they could have all the built-ins on one side, and the roamers on the other. And it might not be so much a trade-off in size of living space, or amenities, as with growing demand for cheaper housing for more people, apartments will have to get smaller and more modest.

Finally, this new mobile outlook in the populace will be more amenable to more evacuation-happy authorities. In successive fire seasons around here they've gone more and more overboard in mandatory evacuation of huger swaths of the county. As living density increases, larger numbers will be potentially affected by any given single natural or man-made disaster. Everyone will be expected to be able to move to (or rather towards, as is what is more often the case) safety with little notice.

Don't expect trucks/SUV's/station wagons to ever die out. Unless to support the new vagabond society we're all issued a govt. U-Haul small trailer, like we're given trash and recycling receptacles for curb side emptying. Maybe everyone will be putting around in tiny little EV's, half of them at any given time pulling a small box with a unique D.O.T. identification number on it. To replace the postal address. Hmm, I guess then mail will have to go completely electronic. Then I'll finally be able to auto-trash that damn Pennysaver magazinelet that litters my snailmailbox every week.

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13 comments

Home prices have yet to finish crashing (1)

Qzukk (229616) | more than 3 years ago | (#33365798)

There's a huge elephant in the room but it's being propped up by so many little toothpicks its hard to figure out what'll give first. At some point, the baby boomers WILL dump massive amounts of housing on the market, but...

  • Lending is restricted to the point where the markets just don't move
  • Human nature is to hold out and hope prices come back up
  • Grandma and Grandpa's nest egg house is no longer an empty nest, their homeless kids are coming home to roost
  • Grandpa isn't ready to retire and/or can't afford to retire
  • The government is trying its damnedest to stop it, which feeds into the human nature point as everyone thinks if they hold out long enough the government will save them

Of course, the fact that it's now basically impossible to extract equity from a house with a loan will be putting pressure on the older crowd with no real income to sell. Setting aside the old people, foreclosures will continue as more and more people become retroactively "financially irresponsible" by having bought a house they could no longer afford without a job.

Home ownership will probably never recover despite a price drop for other reasons: as you point out, if you're going to be in another state in 3 years why get a 30 year loan? If you can't afford to start a family, why get a house in the first place? For living arrangements, RV parks already service the wandering crowd, they'll just need to expand and prepare for "long term" residents. Voting registration is going to be the real victim. We already have the government automatically de-registering people after a foreclosure, even if they haven't actually gone anywhere. How are they going to verify residency when you live in a van with no mailing address and no permanent location? Neil Stephenson's "Common Economic Protocol" springs to mind: I'm a Texan, therefore the laws and privileges of Texas apply to me. Even if I've been living out of a van in Michigan for the last two years. Deciding how it's determined that I'm a Texan is left as an exercise to the reader (IIRC Diamond Age suggested that the "nations" had unique sets of nanotech mites that would identify the person as belonging to them).

Doom and gloom aside, I have to say I wish I had furniture that awesome when I was in college. Some of that stuff does exist in one form or another. There are plenty of stackable "storage cubes" that are designed to be arranged into dressers or end tables but can be moved piece by piece, and dare I say it... Ikea furniture can be made as flat as it was when it came from the store.

Re:Home prices have yet to finish crashing (1)

Marxist Hacker 42 (638312) | more than 3 years ago | (#33369370)

My big dream- just have to convince the wife- is to buy that $15,900 houseboat and retire to a life wandering on the water. It's got a shallow enough draft that I could move it just about anywhere- but it's sturdy enough to take the ocean as long as I avoid storms.

trickle down (1)

zogger (617870) | more than 3 years ago | (#33370566)

The entire loanshark banking creating poof "credit" then "taxes" system is the flawed "trickle down" theory of economics. Works swell for the top 1% and paid off politicians then hired on government workers, for everyone else it is a life long economic serfdom experience. And people go way out of their way to get entrenched into that system, they work on improving their "credit score", whereas if they just thought about it, it is a long term debt score. Why the heck do people want to go out of their way to go into debt forever??

Why more progessives don't understand this yet is beyond me, they stay fixated on keeping that system completely intact, then just wanting to tax everything more. That's just plain illogical nutz...in meat space I have yet to meet a democrat or "progressive" who understands this *at all*, they just can't conceive of anything but increasing income taxes on everyone and expanding government more. That's their solution to everything.

As to mortgages..30 years only if you go through a bank, which is not absolutely required.. The nation is awash in owner financed homes now, and you can negotiate more there, with the added benefit you aren't contributing to this fiat currency/credit bubble mess and no "new debt" is being created, just transferred on time payments. The money supply isn't being overly inflated with owner financed or owner built/restored (sweat equity).

With that said, I lived four years and change in my RV... it was OK. You get used to it quickly. Those things are cheap now, used. The only furniture you need is folding lawn furniture for sitting outside, all the rest is built in.

Oh, boomers dropping housing..I doubt it, a paid off house with just taxes and maintenance is cheap compared to anything else, and the older you get the more you want security and some way to drop expenses. Plus it would be psychologically hard and stressful to go back to renting when you have been a home owner for so long.

I think a better alternative is to go back to the most common way humans lived for millenia, the multi generational home/farm stead. With many adults working, stuff gets a lot more affordable, especially if the property itself makes an income.

You always have a job, and a place to live, if you farm, or market garden, always, even if it is just a side job. Cuts down on the worry factor.

The generations right before me went through the great depression, renters and city people suffered a lot more than rural people with the tight money supply and jobs, etc. It was only in the limited dust bowl areas where it got bad enough for people to want to move. The ones who managed to stay put on the multi generational farms rode it out.

Re:trickle down (1)

Bill Dog (726542) | more than 3 years ago | (#33375518)

On your credit score point, the problem is that we are a nation with a consumption-based economy. We don't build enough and sell enough to other nations, so supposedly it is consumer spending that is responsible for 2/3rds of our economy. Maybe that's a fluid number, but our manufacturing and exporting is not increasing, so maintaining and expanding the American consumers' buying frenzy was needed to keep the system, for everyone's good, from going where it is now, stagnant.

And once people have been trained to spend all they make towards a life they're told they should want, the only way to grow the economy to provide more jobs and cars and housing etc. for a growing population, is to then further program people to spend beyond their means. And that requires credit. And to maximize the peoples' purchasing extent with credit, they need to be thinking about their credit scores. As lower scores means higher interest paid to the banks, which reduces then the maximal amount that can be used towards the purchase of goods and services to keep the economy going.

And nowadays, and prolly moreso going forward as more and more intrusion into our private affairs becomes accepted as the norm, your credit score can be a factor in whether you get a given job or not.

On Progressives, there are some of these on the Right, who aren't for increasing taxes, but adding to the debt as long as the economy grows in proportion (the percent of GDP crap). They're "progressive" in that they like their counterparts on the Left want to make "progress" away from autonomy and towards more central planning. I.e. they like the system but just think that they have the answers on how it can be improved, and that this should constantly be attempted.

As to the Left, they of course don't like the system. One theory is that they're trying to take it over to slowly transform it into something completely different. I.e. where communists' original idea of revolution to overturn capitalism had failed to come to fruition, now they've switched to doing it via an evolutionary approach.

Another theory is that they're trying to take over the system to drive it into the ground, so they then have an excuse to rebuild it (as something completey different). The Progressive Leftist idea of not letting "a good crisis go to waste" certainly gives some legs to this latter theory.

I think it's both, and they switch back and forth -- creeping so slowly as to not arouse attention, then at certain opportune times suddenly stand up and run to gain as much ground as quickly as possible, and then slinker back down to creeping under the radar for a while after scaring the pants off people with their last darting move. This last communist scare of these last couple and maybe next couple of years will eventually fade from memories like the previous ones did, and they'll be able to try it again soon enough, after everyone goes back to sleep and the last tea party minded person finally dozes off as well, fooling themself that maybe the threat is somehow really over this time.

You make some other good points, but I just think they're no longer possible, going forward, for the masses.

Re:Home prices have yet to finish crashing (1)

Bill Dog (726542) | more than 3 years ago | (#33378184)

Voter registration, and jury duty -- both our democracy and justice systems are designed for relatively permanent residences, and don't fit the model of the new America 2.0. Guess we'll just all have to be microchipped like dogs, with GPS and RFID and UPC!

Urbanites, what a silly lot. (1)

FroMan (111520) | more than 3 years ago | (#33369248)

Whine, whine, whine.

Seriously, I don't know if it is just urban living or what, but your perspective on home ownership is quite narrow. You live in hell, er, I mean California. What isn't expensive there?

5 years back we bought 12 acres, built a house, and commuted 25 minutes to and from work. We are setup in between two cities with viable jobs with a less than 40 minute drive worst case, though right now we both work from home. We never did the Dave Ramsey thing of cutting up the credit cards or other extremes, but the guy is right about debt. Don't do it (minus for a home). We've bought good used cars for the 9 years we've been married at a 1/4 the cost of new for two years old and paid cash for each. It is very doable to settle down, buy a house, and pay cash for everything outside the metropolises on the coasts.

Especially if you settle down with a wife and have some kids, you'll find your priorities change. A job becomes #2 and your family becomes #1. Staying on the cutting edge of pay rates isn't worth it. Family time and flexibility becomes the currency you deal in. By changing jobs every couple years I could probably be making 50-100% more than I am now. By staying at the same place I work from home, put in my 40 hours by working 6:30-2:30 so I can get the boy off the bus, will have 4 weeks vacation next year, and do a job I enjoy.

Re:Urbanites, what a silly lot. (1)

Captain Splendid (673276) | more than 3 years ago | (#33372570)

put in my 40 hours by working 6:30-2:30 so I can get the boy off the bus, will have 4 weeks vacation next year, and do a job I enjoy.

How unamerican. It's people like you that helped create only minor economic growth this year. Hope you're happy!

Re:Urbanites, what a silly lot. (1)

Bill Dog (726542) | more than 3 years ago | (#33378164)

No urban living here -- I hate city downtowns and typically only ever venture into one when I have to for jury duty. I'm happy for you that whereever you are is so undeveloped, but here a 25-40 minute commute one-way means you're a suburbanite.

Agreed except for the law of supply and demand (1)

Marxist Hacker 42 (638312) | more than 3 years ago | (#33369346)

It's the maintenance and location that is the problem of why young people should now rent forever instead of buying; it just isn't competitive not to move on a global scale.

But the law of Supply and Demand says that housing prices will continue to fall for quite some time. There are currently 27 empty houses for every homeless person in America- until we find a way (renting, subsidized housing, falling prices, institutionalization, whatever) to house that last "homeless" person (at least for a lack of money).

Re:Agreed except for the law of supply and demand (1)

Bill Dog (726542) | more than 3 years ago | (#33374750)

But what banks have paid for those homes is strong resistance to the falling of prices. Supply and Demand assumes a market of eager participants. But consumer confidence is in the craphole (and rightly so), and banks have houses that are already worth way less than they paid for them. And banks are flush with cash, so their natural tendency is to hold out for a price closer to breaking even.

Maybe some group or groups like Habitat for Humanity could persuade some rich philanthropists to cut deals with the banks, for charity, to sell or write off some of the huge mansions erected late in the expansion phase, and then convert them to multi-family dwellings.

And not for ownership, as layoffs are actually continuing in America (accelerated last month), and a lost job just means it goes back to foreclosure.

Re:Agreed except for the law of supply and demand (1)

Marxist Hacker 42 (638312) | more than 3 years ago | (#33384964)

But what banks have paid for those homes is strong resistance to the falling of prices. Supply and Demand assumes a market of eager participants.
 
Not necessarily; nothing in economics insures you will make a profit on every transaction.
 
  But consumer confidence is in the craphole (and rightly so), and banks have houses that are already worth way less than they paid for them. And banks are flush with cash, so their natural tendency is to hold out for a price closer to breaking even.
 
But they won't be able to do that forever- and consumer confidence is so low that there are only two ways out- reduce inventory or cut price. And with 27 houses for every homeless person in the United States- it will probably be both.
 
I expect *average* housing price to fall below $50k within the next decade. There is only one real way to avoid this- and that's for the fed to produce enough M0 money to cause hyperinflation to counter the deflationary spiral we're falling into. They're already doing this to some extent (we've gone, in the last two years, from M0 money being 1/13th the GDP to 1/6th, partially through loan writeoffs and repayments, and partially to actually expanding the M0 money supply to $1.9 trillion) but the FED is too conservative to actually go to the M0=GDP money supply, which is the level of inflation that would be needed for those banks to get back the money they invested in the bubble.

Time (1)

chill (34294) | more than 3 years ago | (#33418170)

Did you get an early edition? Check out the September 6th issue of Time.

http://www.time.com/time/covers/0,16641,20100906,00.html [time.com]

Re:Time (1)

Bill Dog (726542) | more than 3 years ago | (#33422290)

Heh, thanks, that is coincidental, but not really since many people would be reaching the same conclusion given the times and trends, just with different reasons for it. And it looks like Time's "reasoning" [time.com] is going to be an utter mess when it comes out: Aside from misattributing the evil of lax lending standards to it, and aside from mentioning the greater difficulty of finding a job, TFAuthor's only other supposed downsides to homeownership mentioned in that preview at least are the Leftist bugaboos of urban sprawl and energy consumption.

Basically, in earlier times, buying a home, responsibly, was the path to an eventual large degree of financial independence. And a way to build personal wealth. Both of which the Left wants to discourage people from. So what had been traditionally rightly made out to be a wise goal to shoot for for those who could afford it, she derides as a "fetish".

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