Reconsidering the wisdom of home ownership

[user removed]

During the boom the first house I built was appreciating at a rate of $500 a week. When sold the profit was tax free and paid for the house we live in now. Without house payments or car payments, we file a simple tax return and get the standard deductions and exemptions without any payments.

If it was my choice only I would build one more house, out in the boonies, completely off the grid, but the wife thinks living near a Wal Mart is one of lifes necessities. She has no ability to visualize the future.

regards
Mech

[Frank Lee]

Originally Posted by jamesqf

On the other hand, when something like that happens, you CAN fix it, instead of having your calls ignored by the landlord.

You can sure take it upon yourself to deal with something if the landlord doesn't do it right away. But when you own, you pretty much have to deal with things.

Landlords won't ignore such calls if they want to collect their full rent, on time.

[slowmover]

The single important thing to know about 21st century homeownerhip in the USA is that it's a suckers bet for 90% of Americans. Paid-for house or not. The housing bubble/crash shows that fewer Americans today own equity in their homes than during the Great Depression when there was no middle class in this country worthy of note. Said equity being the sole source of wealth for a middle class, we have arrived at that juncture again. Rich, or poor, with no one in between. Have any of you ever read up on the Gini Coefficient? Societal outcomes versus narrow income stratification?

This oncoming Third World status for the USA may be shadowed by so many living in single-family homes (appears prosperous), but where are the buyers? Real estate valuations are meaningless if one cannot sell. When opportunities are increasingly confined to fewer cities (megaregions) it may mean one needs to move just to keep up if one values opportunity for ones children or their children if not for ones self. For todays American children, en masse, will not achieve the same educational level or live as long as their parents generation. Much less will they move up in socio-economic status.

With the retirement of the post war baby boom and needing to sell, home prices will decline in real terms for at least two decades.

Toss in climate change just for a single wild card factor (of potentially many): care to stay in Phoenix when the water runs out, or the temps don't drop below 120F day or night for months (and electrical power is worse than simply unreliable?) Who'll buy? So if the jobs move elsewhere (not just chasing labor cost/tax advantage; now to distance themselves from disincentives), how will one follow if one owns a home?

Better to rent, overall. Ready to leave.

This is obvious to Wall Street: why else would they have overhauled the nations bankruptcy laws; are bidding for privatization of state and municipal tax collection, are already administering welfare benefits, and are bribing legislators to bring back debtors prison . . and achieving same? Matt Taibbi has an easily-digested series of articles for the ignorant on both the history of financial bubbles in this century, and more yet to come. (Or, if one had a better education, what Galbraith, Beard and others wrote of years ago in re '38, '93 and '29; this society bailing out bankers since Day One of the Republic).

With home equity gone, the only thing left is to put the screws to those still in homes, barely employed and fearful of losing even that.

So this should be obvious: Every cost associated with home ownership will rise. The extractive potential through taxes, insurance, utilities, etc, is the only thing left. The top 10% now account for 42% of domestic spending, and their tax breaks will continue to accrue. The "invisible" are unemployed, underemployed and homeless thus with no extractive potential worthy of notice. Only in private prisons and the military do their lives have value. Home ownership is the last low-hanging fruit.

And the internalized, self-imposed costs of homeowners on themselves, are the ones where one does not know whether to laugh or cry: HGTV and other forms of mass propaganda about the "importance" of granite kitchen countertops, et. al. Gee, the house won't sell, let me spend more money I don't really have on unnecessary accoutrements to entice a buyer to my suburban sprawl, cookie-cutter McMansion.

Good thing that the other highly popular TV shows are about job training in the new America: money to be made on the abandoned goods of others (storage unit auctions); in pawn shops; and on sifting trash for art to sell to the rich (pickers). Video games as education will suffice for the unamibitious/unintelligent as robots replace McDonalds jobs. Persons who will not ever be able to afford decent homes.

Anyone had a look at Abogo or Walkscore ? Expect that the latter-day "redlining" will incorporate this sort of analysis for dwelling valuations.

It won't be about location, location, location near the latest Bible-beater academy, or to suburban "better" taxpayer-supported daycare (the largest architectural firm responsible for Texas public & for-profit private prisons is also that for "public schools"; one can tell the one from the other by the presence of razor wire), since the ignorant progeny of the wilfully illiterate won't be able to tie their own shoes intellectually. Blue collar workers saw their jobs go to the fascists and communists. Now it's the turn of public employees to get the shaft. Last to go are the lawyers, doctors, engineers and other so-called professionals. If the job can be offshored, it will be.

Ones house value (and local tax bond packages), therefore, will be almost entirely about short major utility runs and transportation access. (Or Walmart). Reliability. In a few regions, favorably.

The smart money [!] will be in building Japanese-style capsule hotels near these "intersections". Transnational corporations no longer hire permanent American employees, only project-by-project, increasingly. The life of a temp: Cubicle at work, cubicle for home, and cubicle-ette to get around. And a final tiny cubicle in which to be disposed.

In the meantime flatly illegal mortgage foreclosures by the thousands continue. Millions tossed out already. The use of a gun to be dispossessed of ones' home by the bankers would not be one of difference in principle. Not when the courts and legislatures accede. The rule of law is over. Unemployment is now higher -- for longer -- than in the worst of the Great Depression. More prisoners in the US today than ever in Stalins gulags. And a civil war in Mexico worsening by the day.

With the nations wealth -- 54-cents of every Federal dollar -- thrown away in the expanding and futile wars of late Empire.

The only "home" worth owning hereon would be the one that is income-offsetting (in a serious manner) or income-producing. And only in the right geographical locations. Expect that barriers to achieving this will be strengthened and extended.

Another suckers bet is that Internet access & cell phones will remain reliable and affordable.

Thus crying about ones personal tax rates is as unintelligent as not looking to the outcomes of said taxation. Who benefits? And why? The future passed this country by already. We didn't build one. We financialized the tax base and gave our future away.

And whining about Services I Don't Use is the kind of infantile Ayn Rand claptrap excuse for "thinking" that underscores the past thirty years of decline. As if there were some difference between selfishness, per se, and virtuous selfishness that would bear scrutiny. This is right up there with believing we have a Federal budget "deficit" as a problem in and of itself. Or, nearly as comical as "the Debt". It misses the point entirely.

It matters little if I am "doing fine" if all else around me is falling down. The sheer weight of numbers predicts my fate, relative or worse.


.

[jamesqf]

Originally Posted by slowmover

Said equity being the sole source of wealth for a middle class...

But home equity is hardly the sole source of wealth. Plenty of us have 401K & IRA accounts, investments, and so on. I could easily pay off my mortgage any time (but would lose tax deduction & probable stock appreciation if I did).

Real estate valuations are meaningless if one cannot sell.

Why would I want to sell, barring some major personal disaster? Sure, if you're planning to be moving every few years, or more often, renting makes more sense in this market. But I own a house - and land, which is more important than the actual house - in order to make it a home: to have the trees & vines I've planted grow and bear fruit, to live in a place that is, as far as possible, the way I want it rather than a one-size-fit-all box owned by some landlord.

When opportunities are increasingly confined to fewer cities (megaregions) it may mean one needs to move...

Which is not the way the world is heading. There are increasing opportunities to live wherever you choose, and work remotely. In the last few years, I've worked on jobs for clients ranging from Silicon Valley to Switzerland, and done most of it without leaving home.

For todays American children, en masse, will not achieve the same educational level or live as long as their parents generation. Much less will they move up in socio-economic status.

Maybe not, but that will be their choice.

Ones house value (and local tax bond packages), therefore, will be almost entirely about short major utility runs and transportation access.

Solar PV is headed below $1/watt. With decent storage, who needs the utilities?

And whining about Services I Don't Use...

It's not whether or not I use those "services", it's whether those services ought to exist at all (with things like the War on Drugs), or be done by the government.

[Varn]

Wow I love posts exposing the advantages of rental. I have a duplex that I fill with renters who pay me 1050 a month on a house that is worth 100,000. I get 1% a month back. A good deal for them or me? You are the judge.

My last two houses cost me 56 for the first one in 1998 and 89 for the second in 2009 but included a farm. Both homes are pretty nice. The taxes on the first one I mentioned cost me 1900 a year in Hellinois and the second cost me 700 a year in Missouri.

Obviously I am getting bent over in Hellinois. Since Nov 2008, The tax structure is spreading to the nation at large.

My nearest neighbor is about a half mile away and if anything goes wrong at my place or his we are on the phone. Does the neighbor across the hall from you know your phone number?

Please don't own a house and keep the rental market strong. Maybe I can raise my rents to 600 and make 1200 a month.

[orange4boy]

My favourite are the people who vote for lower taxes not for their actual poor selves but for their imagined rich selves. If lower corporate taxes created so many jobs and such amazing prosperity, we should be swimming in jobs and money right now.

I don't think one person here mentioned the fact that business keeps getting more and more tax cuts on the bulls hit lie that tax cuts create jobs. Tax cuts may create jobs if thats what the company decides to do with the windfall. They could also choose between a million other things to do with the money like fund their favourite tax cutting politician or use the money to create jobs in china or buy a $4500 dollar umbrella stand. They may also donate money to a tea drinking group.

What are the big corporations doing with the all the wealth that all you made for them? They are sitting on their fat asses not investing it. So a big thanks for nothing goes out to all those big corporations we are all so proud of for making the world a better place... for them.

However, cut taxes to workers and the middle class and guess what? That money is mostly spent in the local economy which really does reliably create jobs.

[Frank Lee]

Much of the isht I'm complaining about are basically giveaways to business; successful profitable business that hardly needs yet another handout from the lower middle class. The business dangles "jobs" in front of the local yocal govt officials and these officials trip all over themselves to try to accomodate.

[Frank Lee]

Originally Posted by slowmover

The single important thing to know about 21st century homeownerhip in the USA is that it's a suckers bet for 90% of Americans. Paid-for house or not. The housing bubble/crash shows that fewer Americans today own equity in their homes than during the Great Depression when there was no middle class in this country worthy of note. Said equity being the sole source of wealth for a middle class, we have arrived at that juncture again. Rich, or poor, with no one in between. Have any of you ever read up on the Gini Coefficient? Societal outcomes versus narrow income stratification?

This oncoming Third World status for the USA may be shadowed by so many living in single-family homes (appears prosperous), but where are the buyers? Real estate valuations are meaningless if one cannot sell. When opportunities are increasingly confined to fewer cities (megaregions) it may mean one needs to move just to keep up if one values opportunity for ones children or their children if not for ones self. For todays American children, en masse, will not achieve the same educational level or live as long as their parents generation. Much less will they move up in socio-economic status.

With the retirement of the post war baby boom and needing to sell, home prices will decline in real terms for at least two decades.

Toss in climate change just for a single wild card factor (of potentially many): care to stay in Phoenix when the water runs out, or the temps don't drop below 120F day or night for months (and electrical power is worse than simply unreliable?) Who'll buy? So if the jobs move elsewhere (not just chasing labor cost/tax advantage; now to distance themselves from disincentives), how will one follow if one owns a home?

Better to rent, overall. Ready to leave.

This is obvious to Wall Street: why else would they have overhauled the nations bankruptcy laws; are bidding for privatization of state and municipal tax collection, are already administering welfare benefits, and are bribing legislators to bring back debtors prison . . and achieving same? Matt Taibbi has an easily-digested series of articles for the ignorant on both the history of financial bubbles in this century, and more yet to come. (Or, if one had a better education, what Galbraith, Beard and others wrote of years ago in re '38, '93 and '29; this society bailing out bankers since Day One of the Republic).

With home equity gone, the only thing left is to put the screws to those still in homes, barely employed and fearful of losing even that.

So this should be obvious: Every cost associated with home ownership will rise. The extractive potential through taxes, insurance, utilities, etc, is the only thing left. The top 10% now account for 42% of domestic spending, and their tax breaks will continue to accrue. The "invisible" are unemployed, underemployed and homeless thus with no extractive potential worthy of notice. Only in private prisons and the military do their lives have value. Home ownership is the last low-hanging fruit.

And the internalized, self-imposed costs of homeowners on themselves, are the ones where one does not know whether to laugh or cry: HGTV and other forms of mass propaganda about the "importance" of granite kitchen countertops, et. al. Gee, the house won't sell, let me spend more money I don't really have on unnecessary accoutrements to entice a buyer to my suburban sprawl, cookie-cutter McMansion.

Good thing that the other highly popular TV shows are about job training in the new America: money to be made on the abandoned goods of others (storage unit auctions); in pawn shops; and on sifting trash for art to sell to the rich (pickers). Video games as education will suffice for the unamibitious/unintelligent as robots replace McDonalds jobs. Persons who will not ever be able to afford decent homes.

Anyone had a look at Abogo or Walkscore ? Expect that the latter-day "redlining" will incorporate this sort of analysis for dwelling valuations.

It won't be about location, location, location near the latest Bible-beater academy, or to suburban "better" taxpayer-supported daycare (the largest architectural firm responsible for Texas public & for-profit private prisons is also that for "public schools"; one can tell the one from the other by the presence of razor wire), since the ignorant progeny of the wilfully illiterate won't be able to tie their own shoes intellectually. Blue collar workers saw their jobs go to the fascists and communists. Now it's the turn of public employees to get the shaft. Last to go are the lawyers, doctors, engineers and other so-called professionals. If the job can be offshored, it will be.

Ones house value (and local tax bond packages), therefore, will be almost entirely about short major utility runs and transportation access. (Or Walmart). Reliability. In a few regions, favorably.

The smart money [!] will be in building Japanese-style capsule hotels near these "intersections". Transnational corporations no longer hire permanent American employees, only project-by-project, increasingly. The life of a temp: Cubicle at work, cubicle for home, and cubicle-ette to get around. And a final tiny cubicle in which to be disposed.

In the meantime flatly illegal mortgage foreclosures by the thousands continue. Millions tossed out already. The use of a gun to be dispossessed of ones' home by the bankers would not be one of difference in principle. Not when the courts and legislatures accede. The rule of law is over. Unemployment is now higher -- for longer -- than in the worst of the Great Depression. More prisoners in the US today than ever in Stalins gulags. And a civil war in Mexico worsening by the day.

With the nations wealth -- 54-cents of every Federal dollar -- thrown away in the expanding and futile wars of late Empire.

The only "home" worth owning hereon would be the one that is income-offsetting (in a serious manner) or income-producing. And only in the right geographical locations. Expect that barriers to achieving this will be strengthened and extended.

Another suckers bet is that Internet access & cell phones will remain reliable and affordable.

Thus crying about ones personal tax rates is as unintelligent as not looking to the outcomes of said taxation. Who benefits? And why? The future passed this country by already. We didn't build one. We financialized the tax base and gave our future away.

And whining about Services I Don't Use is the kind of infantile Ayn Rand claptrap excuse for "thinking" that underscores the past thirty years of decline. As if there were some difference between selfishness, per se, and virtuous selfishness that would bear scrutiny. This is right up there with believing we have a Federal budget "deficit" as a problem in and of itself. Or, nearly as comical as "the Debt". It misses the point entirely.

It matters little if I am "doing fine" if all else around me is falling down. The sheer weight of numbers predicts my fate, relative or worse.


.

Gee, where was all that when I bought my house in my 20s?

I don't think home ownership itself is a sucker's bet; I think looking at the roof over your head as a piggy bank- the way seemingly everybody did in the last decades- is what really makes one a sucker.

Prices probably still need to decline- the bubble artificially pumped them up such that even today they are not back down to where they "should" be.

I have 100% equity in my home... sales price it's able to fetch may be down and may continue to be down for a long time BUT it's still higher than all I've paid into it, thus making those who tapped all their home equity- and renters who never had any- the suckers.

Yes, it is the "extractive potential" that I'm whining about, and how the homeowner becomes a rather helpless sitting duck.

Good point about the TV shows; my experience has been the opposite re: "upgrades" to increase curb appeal: I've redone things that could use redoing, sold the place, then the incoming female felt the need to make her mark by ripping everything apart- even the brand new stuff- and replacing it with stuff only a liiiiiitttttle bit different, and actually of lower quality! My current thinking is save the money and effort and offer a place as-is, dangle a "discounted" price because of that, and let the buyer knock themselves out on redos as that's what they're gonna do anyway.

Thus crying about ones personal tax rates is as unintelligent as not looking to the outcomes of said taxation.

And whining about Services I Don't Use is the kind of infantile Ayn Rand claptrap excuse for "thinking" that underscores the past thirty years of decline.

***** you. I don't see your better idea in there.

[Arragonis]

Originally Posted by Frank Lee

***** you. I don't see your better idea in there.

I'm struggling to see one here too.

[jamesqf]

Originally Posted by orange4boy

My favourite are the people who vote for lower taxes not for their actual poor selves but for their imagined rich selves. If lower corporate taxes created so many jobs and such amazing prosperity, we should be swimming in jobs and money right now.

You think? Me, I supported civil rights though I'm not black, I support gay rights though I'm a confirmed heterosexual, equal rights for women though I'm male... And I do this for the same reason that I'm against unreasonably high tax rates for the wealthy: because sometimes it ought to be about what's fair, not about me getting mine at the expense of someone else.