The Renter's Manifesto

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Priced_Out_IT_Guy_IHB

Priced_Out_IT_Guy_IHB

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<p class="MsoNormal">Looking back at 2007, I can see that over the course of the year I've had my fair share of bitterness and resentment towards the Southland housing market. In fact, I'd say that I've felt priced out and estranged for the last few years as I sought the American dream to buy a home, and through hard work, own it outright some day. In the past I have posted about how housing appreciation always outpaced my fast-growing IT salary, and the ensuing desperation and despair I felt.





I know that I do not stand alone in having dodged the compulsory slogans to "buy now or be priced out forever" and that I stood steadfast against the wave of peer pressure to "buy buy buy", "buy because everyone is doing it", or "buy now to start your adult life." Looking back I am surprised that I did not fold under the pressure and believe the fallacies spawned by the Great Real Estate Bubble.





During the bubble, homes became a focal point of energy in the wrong way. The home became a centerpiece for one's self in the physical and material sense. It is my opinion that many people who bought during the bubble judged their affluence, self-worth and self-image to some extent by their home. Extravagance dominated the landscape and the local mindset. Granite, stainless steel, travertine, whirl pool baths, fountains, luxury cars, mosaics, leather, flat screen TVs, square footage, gourmet: the more the better.





In the face of such heightened consumerism and materialism, if was difficult for even high wage earners to establish themselves and get one foot into the door without placing the other into the grave.





However, going into 2008, I believe my feelings toward home ownership in the Southland to be changing. Although I still greatly desire to own my own home one day, this experience has opened my eyes.





First of all, I don't see a home as being the focal point of my life anymore. The purpose of a home to me is to have a safe and enjoyable place to live; a place to rest and relax, to rejuvenate, to entertain and welcome; a place to converse, to eat and cook; a place to raise children, a place to grow; a place to love your family members and significant others; a place to have arguments and resolve them. It's a place to store your books, your briefcase, your beer, and your underwear. It's a place to take a shower, wake up, and sleep. But most importantly, the home to me is a place to have peace and quiet from the outside world; a heaven from the trials and tribulations of the day; a refuge for peace of mind.





I have come to find that there are positive alternatives to not owning a home, including continuing to rent my simple, quiet apartment or upgrading to rent a single family house with a garage for storing the bigger toys and little rug-rats if and when the time comes. Although I will not build equity there are less headaches involved in renting, and that frees up my time to do more of what I really want. It makes life a little simpler for me during the years prior to ownership, and I'll still have time to save my down payment and then some. I'm not tied down to any one place and I don't have to worry about being fined by the HOA for leaving my trash barrels out for longer than 24 hours after trash pickup.





But best of all, I don't have to carry around the bitterness, stress and resentment from being priced out of the market. Coming to terms with my predicament has been an exercise in self-understanding and patience.





If this seems like the self-rationalization of a lunatic, then by all means let me know. I'm open to your constructive thoughts and opinions. In the meanwhile I will be starting 2008 with a positive new mindset and looking forward to all that is to come.





Disclaimer: This does not preclude me from I injecting a few witty, sarcastic comments about the RE market from here on out!








</p>
 
You go POITG!<p>




And maybe you are "building equity" by saving money which is a result of renting instead of owing. How much equity do you think those who bought in the last few years, are building?
 
<p>I agree with your statement completely. After having my house in Florida, doing craploads of work on it only to sell it for a massive loss really kinda ruined 2007 for me. I am still dealing with the F'ing debt and resentment of where I should be financially and where I am, though at least Bush passed the forgivenness law which saves me about $10,000 I would have owed. When I got here to Cali, it wasn't so much that I want to buy a house immediately, its more that if I wanted to buy a house, I could. After having a huge number of discussions with all kinds of people (of course who own houses) about Californa RE, it just pisses me off how elite many of them feel. When trying to explain how we are in for a huge correction and how its really not fair that educated, hard working people making over six figures should really be able to afford something, they usually respond with the "California Real Estate will always go up". Its like in the last 5 years, the complete paradigm of housing valuations permanently shifted to where average joes got rich and the doors were permanently closed to everyone else. Though alot of people are getting hurt, like I did, this whole thing really needs to come crashing down to restore some normalcy to the whole country and knock down some of California's Paris Hilton Wannabe self image. Seeing in my company how all the technicians and secretarys drive nice cars and have houses with pools while all sub age 32 PHd Chemists and Engineers drive beaters and rent shows how far we are out of whack.</p>

<p>So will I ever buy a house in California?, I don't know... It may take some time for this whole thing to shake out and by then I still may not have enough cash with high rents and a kid on the way. All I know is I will welcome a giant recession as a way to get houses and people's images back to where they should be...</p>

<p> </p>
 
<p>I agree, we as a people are eating our seed corn in the sense of both human capital, and assets capital.</p>

<p>Tuition rates in particular are completely ridiculous.</p>

<p>Nevertheless, I think that young people have a start at the top attitude that, particularly now, just isn't gonna fly.</p>

<p>If a secy or a tech are older, and started small and worked their way up, why shouldn't they have a nice house? As I posted elsewhere, even tho the hub and I make good money together, we couldn't afford to buy our own house, even with half down, even considering prices have gone down somewhere between 10% and 30% on the space coast. (And I think it will only go down another 5 to 10% here, as it was never as overbuilt as Miami or SW Florida. Doesn't matter we don't intend to sell for at least 5 years, and maybe not then either.)</p>

<p>On the other hand, when we bought our house in 81 in Miami, it prompty went down 10%. We never thought to walk; we liked the house, could afford it, stretching just a bit, and had put 21% down, so were never underwater. The development halted, and was finally completed 5 or 6 years later. The final result was the development was more interesting, as it had more different looking types of houses. Then, after Andrew, it became more interesting looking, as people could add the details of their dreams, from a really fancy front door, to an extra room, or a changed roofline, or wonderful landscaping.</p>

<p>Then we bought a house 5 miles south of the space center of people who had built the house pretty nicely (a brick fireplace to die for) and then for 17 years did nothing to update it. They had really bad taste as to fixtures and finishes, so I got to redecorate an entire house for the second time in 5 years. And we got it cheap because it was ugly inside. That's the way I like 'em cheap and ugly, but very functional in layout. And physically strong. I am now decorated out, even tho after 10 years, it could use some updating again.</p>

<p>Luck has a lot to do with it. Don't take it personally. And I think you posted (I might be wrong) that you were in SW Florida which is especially awful, so you were extra unlucky.</p>
 
<p>liz, </p>

<p>I was actually right in your neck of the woods. 1090 Molaki Dr, Merritt Island, FL. Bought for 222K, sold for 170K after about 11 months on the market....Doh! And I agree that techs and secretarys can do whatever they want, but even our young techs who did not go to college but began working right out of HS have houses and 100% of the engineers and chemists (about 20 of us) under the age of 32 are not homeowners in Cali. In my case, my rent is higher than my tech who is 34 with two kids, a 2600 sq ft house, and drives a 2006 350Z convertible compared to my 1995 nissan with a bad transmission and exhaust leaks :(. In Florida it was even worse, I was paying like $1800 a month for my house while some of the guys at work had mortgages for bigger houses in Melbourne and Port St. John for less than 50K. When a consultant at my company heard what I was paying for my mortgage, he was like " Do you live in a Mansion!?" Yea, not quite bro. Will I get myself back to where I want and have nice things, of course. For me the biggest pain is that I freaking hate working and had always wanted to take time off or go contract. For a while anyway, that dream is on hold until I finish paying off debt. I figure by buying instead of renting, I am about 60K below where I would have been if I kept renting... </p>
 
<p>Wow. I'm on Chase Hammock, north of the Barge Canal.</p>

<p>Molaki, Molaki, I'll look it up on the map. When did you buy? We bought at the end of 96. </p>

<p>Is that in or near Diana Shores?</p>

<p>Gosh, I guess my house is worth less than what I thought. But I'm not selling anyway.</p>

<p>Small world; 6 degrees of separation and all. You almost certainly are making more money where you are.</p>
 
<p>Dang it IT Guy, your new attitude has ruined my Rat Study, I was using you to see whether or not it would be possible to buy at least a small Condo in Irvine after 5 years of living on instant Noodles, staying home watching non-premium Channels on TV every Saturday night whilst wearing Costco and Walmart Designer Clothes, now I guess I'm gonna have to wait for someone else to come along to IHB who has aspirations of achieving the American dream in Irvine </p>

<p>But seriously, I do like your new attitude better, you're only young once, now is the time to have fun, Travel and generaly do stuff you wish you had when you're too old to do it...</p>
 
<p>POITG, </p>

<p> Don't get me started. I own quite alot in real estate and they bring in a decent amount of money. Unfortunately it does not make sense to buy, it hasn't made sense to buy from 2003 to now. I'm worth a decent amount, I make slighly over six figures (alone, wife not included) and It will be still quite a while before I own a house. </p>

<p>The young engineers also have a start at the top attitude. They always wonder why I drive a economy car instead of a nice car. Then you explain that instead of buying a 40-50-60k car, you can buy a piece of property which will actually be worthwhile.... A car will depreciate from day one unless it is a collectors car. They also get jealous of the people that do have nice things. I say that they earned it and or they pay for it... one way or another, they pay for it.</p>

<p>As a engineer also, you ALWAYS need to take a step back and look at the solution objectively. Does it make sense? As you can reason, it doesn't and hasn't for a long while. This is quite out of my hands, while I can buy, its not the most effective use of my hard earned cash, and i'm stingy! </p>

<p>Well good luck and don't work too hard.</p>

<p>-bix</p>
 
From my own observation, engineers tend to over analyze everything that can lead them to nowhere socially and financially; and not to mention not being at peace along the way (aka going crazy).
 
<p>I just don't understand the car envy thing. Buy a good piece of jewelry and it will still be worth something in 30 years. Likewise art, antiques, really good quality clothing (probably not to be had anymore, but I have friends now are using hand me downs from 20 years ago, unto the next generation). Even really good quality pots and pans. I've agonized over every piece I ever bought at the Coconut Grove art show, and still have it all, and still enjoy all of it. I don't know whether it is or will be saleable for what I bought it for, but I still have it, it's still beautiful to me, and I still enjoy it. Cars are all gone from those years.</p>

<p>Houses do need a lot of maintenance, but the house I was brought up in, and my 84 year old mother was born in is still there, albeit very much worse for wear.</p>

<p>Of course you don't want a car that will leave you stranded by the highway, and will get you comfortably from here to there, but really.</p>

<p>Priced out and screw r e should make a journal and write down every cent they spend and see where it is going. I personally don't do this because I was raised by people who had endured the Great Depression, and some of it rubbed off I was once accused by a boss of being the cheapest person he'd ever met (because i didn't spend all my money on great clothes), and I said you never met my grandmother.</p>

<p>My house doesn't have any of the things listed in the first post except lots of square footage, but I think it's pretty. We'll probably break down and buy a couple of expensive flat screen tvs next fall just before we have to.</p>

<p>My house on the space coast is nice, but the tiny rental (room) I sleep in in Miami, well it's tiny and cheap, and I've been with this landlord for 8 or so years and I pay (blush) $369 a month. And that's for everything.</p>
 
<p>Please don't think I am a car guy or have car envy, its more of an observation about expendable income from paying much less for a mortgage than me wanting a BMW. The wife drives the Altima and my next car will undoubtedly be a small used SUV that will carry a surfboard and bike and have good MPG. Unless those expensive cars or gucci glasses or whatever can make beer appear out of the air or perform sexual favors, they are not worth the money.... As far as budgeting, I am trying to balance paying off the debt while still having some life and starting some savings. I am pretty socially and financially akward but Ill try my best....</p>

<p> </p>
 
<p>I think we all have to figure out what works for us. Whether it's owning, renting, or living with parents. Whether it's driving a luxury car, a family sedan, or the bus. Society changes all the time. We can't based our expectations on how things were in the past.</p>

<p>So many of my friends, who are in their late 20's, wonder why they don't own yet. </p>

<p>Well, it just happens that we graduated college and started working at the wrong time in the real estate cycle.</p>

<p>That's all.</p>
 
"So they're not distressed at all. Maybe 3 years from now."





Okay, so they aren't distressed at the moment, because they can borrow money to pay the money that the borrowed (wtf??). Who cares? There are plenty of people out there with teaser rates for another 1-2 years too. The point is that over the next 1-5 years there are going to be a massive number of underwater debt slaves that are going to need to sell/walkaway.








Also, I doubt that there are many people around with 100k+ in the bank from cash-out refis etc (they've spent it all on crap). If they haven't already taken it out then its unlikely they will be able to now since their equity is rather quickly being destroyed by declining property values and the lack of functioning debt markets.









 
hs_teacher,



My cousins are all 4-10 years older than me (ages 30-36) and they bought during the late 90s and early 2000s and built up a tremendous amounts of equity. If I were just a few years older I could be in a nice 2,500 sq ft home right now instead of my 850 sq ft apartment with perhaps only a $400 higher monthly payment.



But as it stands, I'm 26, and have a lot left to do in the remainder of my twenties, so if you'll pardon me I'm going to get started. :-)
 
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