Was Anyone Else As Stupid As Us (and probably 1/2 of my neighbors)

[DLgal]

A lot of us live in places that are realistic I'm sorry you don't. If you want to live in one of the most expensive cities in the US then embrace it, but don't make excuses. Our mortgage is 5% of our income and we don't make half what you make.

I'll stay here, where we have lots of high paying jobs, excellent healthcare, diversity, plentiful and healthy food, entertainment options, parks and outdoor nature preserves, beaches, mountains, and excellent schools and social supports for people with disabilities. We have 2 disabled kids we need to consider long term. They are our priority. This is where they were born and consider home. I'm not risking their mental health and well being by moving them out of the area.

We will just keep renting. We have gone this long never owning a home and can keep being renters forever as far as I'm concerned.

I'm still allowed to complain about the price of houses and our inability to afford to buy one.

And we don't live in some big city. It's not like we are in NYC or San Francisco. We are in a "city" that is basically a suburban area. It's a city by definition, but not in anyone's opinion an actual city. AND, it's the entire REGION that is unaffordable, not just this city. Moving to another city in the county is pointless.

 

[Brian Noble]

our builder talked us into a 5-Year ARM, so we would have affordable payments. When our 5 years are up at 4.25% (in 2027), this loan will adjust to 8%, based on today's rates, which we actually can't afford. We could afford up to about 6% before we would be unable to afford the payments, based on my calculations.

Three thoughts.

First, you have a three-to-four-year window in which to catch a fixed rate you can afford and refinance. Given 30-year rates have been ranging between 5% and 7%, a current refi would be about 6.5%, and inflation is showing signs of slowing down, I think those are pretty good odds. Do you have a pre-payment penalty on the current loan? If not, that helps.

Second: are you looking at your current income, or considering what your future income will be? Most of us make a little more each year, and that will give you some extra headroom to make a higher payment work if you have to.

Third, if you absolutely had to, what could you cut? We have a lot of "fluff" in our budget that we could cut back on to free up some extra cash. I don't need to buy salmon once a week. We could turn off satellite radio in the cars and the various streaming services. We don't need to order estate-roasted whole bean coffee from Hawaii. We don't need to go on quite so many vacations, and we can also go to places that are less expensive. The good news is that this won't be forever, but just until you can get to either (a) a better income situation or (b) a better interest rate environment.

 

[Brian Noble]

We will just keep renting. We have gone this long never owning a home and can keep being renters forever as far as I'm concerned.

I just finished the Big Short; one of the principals in the book realized his home was worth much more than it should have been given rental rates, and sold it that day. Renting makes a lot of sense in a lot of places in the US.

Here's a better explanation than I can give.
https://www.thebalancemoney.com/usi...-to-decide-between-buying-and-renting-5117070

 

[midwestdee]

It's happening here too and our government looks the other way.

You are 100% correct. Many areas in the country nearly 1/3 of single family homes are now rentals. LLC’s started snatching up homes during the housing crash. If you hear on the news “ shortage of inventory “ for home buyers, that’s the reason. The companies that advertise to “buy your home & save you the hassle “ will make those properties rentals. The TV ads are heavily geared towards old geezers like me.

 

[DLgal]

I just finished the Big Short; one of the principals in the book realized his home was worth much more than it should have been given rental rates, and sold it that day. Renting makes a lot of sense in a lot of places in the US.

Here's a better explanation than I can give.
https://www.thebalancemoney.com/usi...-to-decide-between-buying-and-renting-5117070

Interesting! Thanks for sharing.

Our ratio is 25. Better to rent by a long shot!

 

[bcwife76]

I think China buying up your property is a problem your government needs to solve.

This is why, at least in BC, the provincial government has brought in the speculation tax. As homeowners we need to make a declaration every February that we LIVE in our house full time so that we don't have to pay this extra tax.

https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax

Better late than never I suppose but it's a massive problem here.

 

[bcwife76]

Or people move out of the city to tiny villages. I know this town because I have family there. You can get a 2,800 square foot house on 20 acres for c$280,000
https://www.point2homes.com/CA/Home-For-Sale/SK/Paddockwood/Paddockwood-Acreage/146259369.html

It's cheap because it's in Saskatchewan.....

 

[pigletto]

Or people move out of the city to tiny villages. I know this town because I have family there. You can get a 2,800 square foot house on 20 acres for c$280,000
https://www.point2homes.com/CA/Home-For-Sale/SK/Paddockwood/Paddockwood-Acreage/146259369.html

Where does anyone work in those villages? It’s not a large scale solution.

This is why, at least in BC, the provincial government has brought in the speculation tax. As homeowners we need to make a declaration every February that we LIVE in our house full time so that we don't have to pay this extra tax.

https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax

Better late than never I suppose but it's a massive problem here.

While participating in this thread today I read that over a third of all MP’s in our government own multiple properties, including our federal Minister of Housing. The MP for Vancouver Granville has made more than 5 million since 2005 buying and selling over 40 properties.
I guess there isn’t any hurry to fix it when they are profiting from it.

 

[bcwife76]

Where does anyone work in those villages? It’s not a large scale solution.

While participating in this thread today I read that over a third of all MP’s in our government own multiple properties, including our federal Minister of Housing. The MP for Vancouver Granville has made more than 5 million since 2005 buying and selling over 40 properties.
I guess there isn’t any hurry to fix it when they are profiting from it.

Ugh, seriously? Why am I even surprised about this?

 

[tvguy]

Where does anyone work in those villages? It’s not a large scale solution.

Stats indicate about half the population work in agriculture and agricultural support jobs. Another big industry is working in all the Resort areas around there.
As for my family members, 2 teachers and 1 providing medical services to First Nation peoples (so I guess public sector jobs would be the job heading)

 

[tvguy]

It's cheap because it's in Saskatchewan.....

Yup. And has many learned the past three years with remote work, you can move to the sticks and save a ton of money.

 

[tvguy]

Things were great in the US in 2006 as well.

.

Where does 2006 enter into this?

 

[bcwife76]

Yup. And has many learned the past three years with remote work, you can move to the sticks and save a ton of money.

All you need is a good internet connection and yep, get outta dodge. Not something for us mond you since my husbands job can't be done remotely

 

[tvguy]

All you need is a good internet connection and yep, get outta dodge. Not something for us mond you since my husbands job can't be done remotely

But likely are less expensive options in areas a little further out from the city center.

 

[DCLMP]

I'll stay here, where we have lots of high paying jobs, excellent healthcare, diversity, plentiful and healthy food, entertainment options, parks and outdoor nature preserves, beaches, mountains, and excellent schools and social supports for people with disabilities. We have 2 disabled kids we need to consider long term. They are our priority. This is where they were born and consider home. I'm not risking their mental health and well being by moving them out of the area.

We will just keep renting. We have gone this long never owning a home and can keep being renters forever as far as I'm concerned.

I'm still allowed to complain about the price of houses and our inability to afford to buy one.

And we don't live in some big city. It's not like we are in NYC or San Francisco. We are in a "city" that is basically a suburban area. It's a city by definition, but not in anyone's opinion an actual city. AND, it's the entire REGION that is unaffordable, not just this city. Moving to another city in the county is pointless.

I have all that stuff where I live too for half the cost. There are a lot of great areas to live around the country.
You can complain all you want. Just don’t expect people to care.

 

[DLgal]

I have all that stuff where I live too for half the cost. There are a lot of great areas to live around the country.
You can complain all you want. Just don’t expect people to care.

Where did I ask anyone to care?

 

[DCLMP]

There are definitely policies that are being adjusted due to "whining and complaining" in the US. Parking minimums, restrictions on types of housing, etc have contributed to the amount of homes available in certain areas. Homeowners are a large population of the voters and they have a vested interest in keeping the supply of homes low to protect their equity.

Housing is relatively straight forward regarding supply/demand and we have a supply crisis in some areas. Could people move to a place where there is more supply? Maybe, but there also might not be any jobs there (which is why there is no demand).


Things were great in the US in 2006 as well.

When things are unsustainable we should be addressing that before it's a crisis that craters the economy.


...and what kind of job prospects are there in that tiny village? What about entertainment? Health care? Schools?

There are a lot of factors that go into why people live where they live. I'd rather rent in a desirable area than own in some rural village. I say this as someone who relocated in 2016 for better job prospects along with lower cost of living also so I'm not afraid of moving.

I think it’s too late to save the economy. Housing will reset in time, but with it will come a lot of hardship. Everything is great before it’s not.

 

[starry_solo]

So, back to original question, I am sure there were people that did the same as the OP. I hope you can resolve your ARM soon

 

[barkley]

Homeowners are a large population of the voters and they have a vested interest in keeping the supply of homes low to protect their equity.

or a vested interest in simply being able to maintain a sustainable living environment due to natural resources. one major change in housing in my state was implemented because the demand for housing had developers buying up large swaths of rural land that were in close proximity to cities with jobs to build housing devolpments HOWEVER the need for water to those tracts of homes began to deplete the waters that fed existing rural homes such that it endangered their existance (and the future existance of the tract homes). legislation was implemented that mandated anyone who proposed to build to do environmental studies to determine water needs and it's impact-as a result much less building (cost primarily but also the reality of limited resources).

Yup. And has many learned the past three years with remote work, you can move to the sticks and save a ton of money.

All you need is a good internet connection and yep, get outta dodge

But likely are less expensive options in areas a little further out from the city center.

despite what the powers that be say about the availability of internet in rural areas it is not reality. topography, geology and population play a large part in what if any options rural homeowners have. i am less than 15 miles from the 2nd largest city in my state but b/c of the mountains and trees and abundance of rock we jokingly say that we grow in abundance-our internet options for years have been limited to either (1) an agonizingly slow landline phone company (that has not taken new customers in several years due to outdate/overloaded equipment and costs outweighing profits) or (2) cell phone data at horrific costs (and spotty at best due to weather esp. in winter months). we were on almost a 2 year waitlist and finally got starlink which has been a godsend but costly with upwards of $2000 in initial equipment and $120 per month for service. when covid hit and schools were shut down the reality of lack of internet became more apparant b/c distance learning had to be accomplished in some neighborhoods by having district staff drive and set up mobile hotspots for parents to drive their kids to in order to sit in their cars and do their classes.


living rural is the more expensive option in our area these days-remote work caused an explosion in the number of people who thought it was less expensive to live 'in the sticks' and as a result drove our housing prices through the roof and beyond-tripling values on existing homes, quadrupling and more for ready to build bare land. the large city near us saw large increases in prices but nothing compared to us-and they have much less expensive (and multiple competing options) for garbage, internet and other basic services in addition to NOT having the addtional expenses of road maintainance (not on the county's dollar here-it's on us).

 

[DL1WDW2]

This is why, at least in BC, the provincial government has brought in the speculation tax. As homeowners we need to make a declaration every February that we LIVE in our house full time so that we don't have to pay this extra tax.

https://www2.gov.bc.ca/gov/content/taxes/speculation-vacancy-tax

Better late than never I suppose but it's a massive problem here.

Imagine having that type of politics in Florida…