This. people are clinging to the notion that we’re still Post-WWII America, where unskilled manufacturing jobs are plentiful and well paying, and everyone should be out on their own and working right after high school. And be married homeowners with a kid on the way by age 22.
welp, the country ain’t been that way in a long time and will most likely never go back. Leave it to Beaver re-runs are not documentaries.
The reason you could do that was that no one else wanted to, much. If everyone did, then the cost of buying a mobile home would skyrocket. There aren’t that many around. And, around here, people who live in mobile home parks are getting squeezed as the owners of the property want to sell it out from under them.
Renting works great when you will be moving soon, or can rent a place nearer to work than you can buy one, like in a city. Buying works great too. I’ve done both.
About 10 years ago the industry was very big on getting as many people as possible to buy. How did that work out? And the point in the OP is that people pay 50% of their income on rent, probably not on luxury brownstones. That has little to do with the poor people are rich people with bad habits crap.
I have to say this is one of the best things I’ve read on the dope in a long time.
You might have a small uptick in price, but there would be no reason to think the market wouldn’t increase supply and reach a relatively similar equilibrium. For example, a regular bicycle would cost $5,000 by the logic that views all shifts in demand in isolation.
But the situation is obviously different with housing because of the finite nature of land, so the problem would really end up being land to park your home on would skyrocket; unless more land became available through zoning changes to allow for mobile home living.
One of the most interesting things going on in housing and architecture is the Tiny House Movement. It’s pretty fringe, but it has grown tremendously in the last 3 years; they spend a lot of time working on zoning reform.
To the OP’s point, I do wish there was some sort of subsidized rental housing a person just out of college could get into. Maybe say a 2 years only rental to help out those who are just getting started. We have section 8 for poor families, why not some sort of section 8 with just tiny studio apartments to help out those just out of college?
That’s one other reason why the mobile home thing isn’t a great option for everyone. It’s very rarely economical and sometimes not even possible to actually move a so-called mobile home. If the lot gets sold you’re usually out whatever you invested in the thing and may even be on the hook for having it demolished.
So a mobile home is always a bit of a gamble, particularly the in-town parks that someone buying one as a starter house would probably be interested in.
300-250k? We have a word for that around here (NYC area). We call that a “Down payment”. The simple fact is that in NYC and nearby Hoboken/Jersey City, young people typically rent for several reasons:
Not to get into a debate on minimum wage, but the general economic theory goes that if you raise the minimum wage, you can end up with several unintended consequences. One is the elimination of jobs for many low-wage employees in low-margin businesses. The other is inflation due to a combination of increased demand for the products low-income people purchase and from increased labor costs being passed on to the customer.
You see a similar effect with rent stabilization. Sure it’s great if you’re one of the lucky ones with a rent stabilized apartment. But speaking as a landlord, rent stabilization makes purchasing an investment property less attractive and discourages developers from developing much needed new properties, ultimately having a negative effect. It extreme cases, if I can’t rent or sell the property for a profit, I might just walk away from it, leaving your neighborhood with an abandoned building.
Also, what’s the resale value on a used mobile home?
People often talk about rent payments as “money down the drain”, but the fact is, that interest payments (not the whole part of your mortgage, but just the proportion that goes straight into the bank’s pockets) are just the same. The question of whether to rent or buy can totally shift depending on where the rent/house price balance is in your neighborhood.
In my home town, the nice-but-not-extraordinary house we’re currently renting is probably worth, I’d guess, about a million dollars (yeah, it’s that sort of city…). Our rent is about $35k a year. Mortgage interest rates are about 5% - which makes $50k to the bank each year just for interest and then the repayment money on top of that.
If I got a million dollar legacy tomorrow, I’d probably be slightly better off sticking it all in a term deposit at about 4% and using the profit to pay my rent, rather than using it to buy a similarly-priced house, paying no rent or mortgage but also getting no interest on the money.
Plus job security is gone. Even if you buy a home there is no telling if the company you work for won’t close up or fire you/lay you off in 4 years. The days when people had reliable jobs is over for most of us and we all know we may have to change neighborhoods, cities or even countries just to tread water.
I’ve looked into condos, I only come out ahead by $100-200/month by buying over renting. So far, it isn’t worth it. As far as home ownership pretty much everything that isn’t principal is money down the drain. Interest payments, taxes, maintenance, HOA/Condo fees, etc. are all money down the drain. In some cases the principal is a small % of what you pay each month.
Does this mean that the starting salary at NASA is not enough for rent for a decent apartment?
if each person is paying $1000 or so a month for a room in the mansion, then that would make up a significant chunk of their net income. However I have no idea what engineers in silicon valley make.
The house that I’m trying to purchase isn’t going to put me ahead. If you ignore the ginormous amount that I’m putting down as a downpayment (plus closing costs), my mortgage+taxes+insurance are going to be about the same as my current rent.
Everyone keeps telling me it will be worth it financially, but I’m totally agnostic about it. I’ll believe it when I see it, but right now I’m like “whatever”. Like, I took a walk over to the property today and checked out the big-ass trees that will be “mine”. They are the kind of trees I’d normally drool over because they are beautiful. But I can already do the math in my head. I’m going to have to pay out the nose to keep those bad boys trimmed, especially the humongo one that is towering right over the house. Guess what I’ll be worrying about every time there’s a major storm? I’ve never had to worry about stuff like that as a renter.
I’m buying because I’m open to new experiences and challenges, and I’m curious how my life would be different as a homeowner. I am SO not buying because I think it will save me money, at least right away. Everyone makes homeownership sound like the bees knees, so I’m game for trying it out. But I keep telling myself, if it doesn’t work out and I become unhappy over this decision, I’ll go back to renting. I’ll let you know how it works out.
I’m looking to buy right now, and if you think it’s easy to buy, think again.
We have up to $400k and are willing to each have up to an hour commute (one must be by metro). We are willing to look at houses that need some work (unfinished basements, ugly kitchen, etc.) as long as they are something you could reasonably live in. We would like a reasonable elementary school score (as in, not “2”) and we aren’t looking at middle or high school scores. And we would like to have a driveway, if possible.
Today we looked at a house that was illegally divided into three separate units, a house with torn out ducts and electrical work, a house with the Beltway 10 feet from the door, and a house we can’t afford. We had listed 6 other houses to look at on Thursday, but they had all been sold by Saturday AM.
We liked the house we can’t afford, FWIW.
not to mention that in some areas there’s a real stigma attached to living in a trailer park.
There’s really one thing wrong with that. Once your home is paid off, it’s yours. All you have to pay are the taxes and the insurance if you choose to have it. If you’re on a fixed income, that would be a real blessing verses having to continue paying ever climbing rent payments.
I never really looked into houses because I don’t want to do all the maintenance. I wonder if there are services where you just pay some handyman a flat $100/month and he fixes up your house as needed. That could be a working business model. If that guy got 20 homes he would have 2k a month in income and all he’d have to do is fix up whatever breaks whenever it breaks. Granted, you’d still have to pay for supplies and all but that sounds much more efficient to me than me trying to fix that shit. Plus I hate mowing lawns, however when robotic lawnmowers start becoming cheap that may not be a problem.
I looked at condos but even if the mortgage were paid off I’d still pay several hundred a month in fees, taxes, insurance and maintenance. I only pay a couple hundred more than that in rent, so even if a cheap condo were paid off I’d still only come out ahead by a few hundred.
my rent has gone up exactly twice in 11 years. meanwhile, property values have dropped so much over the last half decade where the house my folks bought is worth about as much (in real dollars) as it was when they bought it in 1988. this “real estate will always increase in value” mindset is a load of horseshit and has to go.
Lets not forget all the people who bought before the crash, who bought a home for 900k and now can’t get 500k for it.
I looked at the apartment complex I lived in with my brother during college about a decade ago. Rent has gone up $40 there.
True, but is it possible you’re missing Morgenstern’s main point, which would still be the same if you crossed out the words “ever climbing”?
Enough to afford $1k/mo (I’m sure they’re making $100k+). There are possibly some really shitty 1-bed apts within a hour drive of NASA Ames. But really you’re looking at $2k for something decent and not a terrible commute.
The other advantage is that big homes come with lots of amenities. I’ve been to the Rainbow Mansion for a party; it’s really nice, as you might expect. Lots of backyard space for parties and such; extra rooms; and so on. Much nicer than even that $2k apartment, though you have to share the space.
Owning a home has been very good to me. I’m much better off than my colleagues that rent. But I was lucky enough to have a big chunk of cash for a down payment.