House-hunting, in my experience is a great deal like dating. The first weekend, you're like a twelve-year-old at a Leonardo DiCaprio movie. As you walk out of the theater, you imagine yourself bumping into a three-bedroom luxury condo who desperately needs directions to the same place you happen to be going. You fantasize about his walk-in closets, integrated stereo system, and a lifetime of jacuzzi baths. But by the time you get out of the parking lot, it's dawned on you that you will never get to meet Leo, let alone marry him. You resolve to be more practical next time.
Then you go to Junior High and develop an enormous crush on the most popular boy in school. He has a recently renovated kitchen and huge bay windows, but when he ditches you at the local Taco Bell to ollie with his friends, you realize he lacks sufficient storage space and has a tiny backyard. You resolve to be more practical next time.
After college, you decide to go out with a nice guy. Eventually you find one who has some cosmetic damage and an antiquated floor plan, but with care and attention you can fix those, and you're in love with his Southern exposure. You make an offer, he accepts, and you start planning your life together. But sometime during escrow, you discover he's an aspiring musician who quit his job so you could support him. You call off the engagement, heartbroken, wondering if there really is such a thing as a man who can commit. You resolve to be more practical next time.
In theory, someday a tall, dark, and handsome professional with boyish charm comes along and sweeps you off your feet. But practically speaking, that never happens.
After awhile your biological clock starts to tick and you settle for the best available option under the circumstances. You're not sure how long you'll stick with him and you're already eying a number of costly upgrades. You set up a one-sided pre-nup so you can get all your money back out and take the kids when you run off with his handsome older brother. And all along you're asking yourself how much you're willing to pay to steal him from the other house-hunting tarts.
In Which I Don't Actually Buy a House...
3 Comments
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I think you're actually pretty fortunate that things worked out the way they did. The housing market, particularly in the Bay Area, is likely headed for a painful and prolonged crash. This from the article:
According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.
Sure, paying rent sucks. But with sky-high prices, you could simply put your money into bonds and easily pay rent with plenty left over. Plus, there's better growth investments too like Peet's.
nod for the post by the way.
Docta V has a valid point in the general sense; however, I think that this particular home purchase is motivated by a need to use money for real estate purposes within a certain time frame. The tax liability of not doing so is a lot worse than the risk of the real estate bubble bursting. Interesting article, all the same.