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Bill Dog's Journal: home ownership is an anachronism 13

Journal by Bill Dog

If I had kids I would tell them not to do as their parents and their grandparents have done. Don't buy a home, rent. And don't accumulate lots of junk, as you'll likely be moving for almost every new job. Which'll be every 1-3 years or so.

Besides, stay longer than that and you've stagnated, and just hurt yourself and your future chances. And this goes for not just tech workers. If a major component of the value of the American worker in the future is going to be in knowing their employer's business, then after a couple of years you already know it. There is no more to be gained by staying longer. Your tech or HR or accounting or whatever skills are ubiquitous and commoditized, so after a few raises they'll be looking to get rid of you anyways. They want the fresh thinking and new ideas of an outsider, better ones that have come along since you joined the organization, and you want to keep moving to expose yourself to different ideas and ways of doing things. Because you need to keep being that new guy with industry experience and knowledge but that will bring lessons learned from competitors and other businesses, to stay hirable.

In the recent past in our time we've been going in the opposite direction on home ownership. Instead of trying to expand it by encouraging borderline people to do something stupid and give it a try, we should've been doing the opposite. I bought modest and before the spiking, just out of sheer luck, but while my mortgage payment is reasonable, it's costing me significant money potentially because I've not been looking for work outside my metropolitan area. That's a hidden cost of putting down roots, that I didn't think of when I bought. My dad just told me all of sudden, after my career was plenty established and had been renting for 5+ years and had some money saved up, "hey son, stop throwing your money away on renting, you need to buy a place". But I'm "throwing my money away" right now, maybe, in a way. Little did we know. But the next generation should know.

The next generation should know that home ownership is only for the rich. It was a fine idea for the middle class when most could take out a simple fixed-rate 30-year mortgage, and always keep the principal going in a southward direction, and always have it paid off by retirement age. But there's just too many people, so home prices will never come back down to the reasonable level they were when I bought. There's more workers for fewer jobs, so pay will go down and time between jobs will go up.

A home is just a giant immovable ball-and-chain that's ridiculously unaffordable anyways. It'll take 10-15 years for a middle class person of the next generation just to pay off their car loans, as mandated fuel economy and safety regulations demand more and more expensive technology and more of it on each car, and buying power is strangled by inflation of the currency and taxation to pay off collective debt and the two previous generations' retirement benefits. And a working couple typically needs two of them at any given time, so the automobile will replace the home as one's big purchases in life and become the new reason for long-term debt for people. Besides, what bank will want to loan more than 50% of an asset's value on an asset that's essentially stuck somewhere. What good is repossessing something planted into the ground, when it's in a depressed area. Mobility is the key to value, for people and things, in the future.

So I'd tell my children if I had them, buy extended warranties on your vehicles, keep them meticulously maintained (like extended warranties typically require), as they will be your biggest money sinks, and your lifeline towards chances, albeit diminishing, of making a living. And watch out about that car insurance thing, where as the asset ages, even though you're basically paying the same in premiums, the protection you're buying goes down every year. It sucks that you'll put the fruits of your life's laboring into a depreciating asset instead of an appreciating one, but you're just going to have to adapt. They'll prolly be some new gap kinda policies then to cover this. Kids, buy that, and look on the bright side -- your children prolly won't even be able to own their vehicles -- they'll be renting their transportation like you'll be renting your living spaces.

So the choice for most will be an apartment. By then there'll prolly be furniture designed for a generation that's always on the move. Dresser drawers with built-in retractable nylon covers that you can just, uh, un-retract (?) and zip up in the middle and take the whole drawer out, and load it into the truck. Then lift the bureau itself, and slide the lever on the back which drops the rollers that fall and click into place, and off it goes. Most everything will be self-containable and movable. Bookcases will have a gate that you can pull down over them, like store fronts when they're closed for the night. Something like that would then likely have a self-propelled mechanism in it like a vacuum cleaner or lawn mower, and power-assisted deployment of the rollers, so you would then just guide it along as you moved it out the door. Of course everything being bundlable and movable is going to mean additional security concerns, that will have to be addressed.

A growing choice might be a camper or motorhome or whatever. I.e. some may decide to trade the inconvenience of having to pack and unpack all the time with the inconvenience of having to empty tanks and such all the time. But maybe by then trailer parks will rent out space for fixed and non-fixed trailers -- they could have all the built-ins on one side, and the roamers on the other. And it might not be so much a trade-off in size of living space, or amenities, as with growing demand for cheaper housing for more people, apartments will have to get smaller and more modest.

Finally, this new mobile outlook in the populace will be more amenable to more evacuation-happy authorities. In successive fire seasons around here they've gone more and more overboard in mandatory evacuation of huger swaths of the county. As living density increases, larger numbers will be potentially affected by any given single natural or man-made disaster. Everyone will be expected to be able to move to (or rather towards, as is what is more often the case) safety with little notice.

Don't expect trucks/SUV's/station wagons to ever die out. Unless to support the new vagabond society we're all issued a govt. U-Haul small trailer, like we're given trash and recycling receptacles for curb side emptying. Maybe everyone will be putting around in tiny little EV's, half of them at any given time pulling a small box with a unique D.O.T. identification number on it. To replace the postal address. Hmm, I guess then mail will have to go completely electronic. Then I'll finally be able to auto-trash that damn Pennysaver magazinelet that litters my snailmailbox every week.

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home ownership is an anachronism

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  • There's a huge elephant in the room but it's being propped up by so many little toothpicks its hard to figure out what'll give first. At some point, the baby boomers WILL dump massive amounts of housing on the market, but...

    • Lending is restricted to the point where the markets just don't move
    • Human nature is to hold out and hope prices come back up
    • Grandma and Grandpa's nest egg house is no longer an empty nest, their homeless kids are coming home to roost
    • Grandpa isn't ready to retire and/or can't afford to r
    • My big dream- just have to convince the wife- is to buy that $15,900 houseboat and retire to a life wandering on the water. It's got a shallow enough draft that I could move it just about anywhere- but it's sturdy enough to take the ocean as long as I avoid storms.

    • The entire loanshark banking creating poof "credit" then "taxes" system is the flawed "trickle down" theory of economics. Works swell for the top 1% and paid off politicians then hired on government workers, for everyone else it is a life long economic serfdom experience. And people go way out of their way to get entrenched into that system, they work on improving their "credit score", whereas if they just thought about it, it is a long term debt score. Why the heck do people want to go out of their way to

      • by Bill Dog (726542)

        On your credit score point, the problem is that we are a nation with a consumption-based economy. We don't build enough and sell enough to other nations, so supposedly it is consumer spending that is responsible for 2/3rds of our economy. Maybe that's a fluid number, but our manufacturing and exporting is not increasing, so maintaining and expanding the American consumers' buying frenzy was needed to keep the system, for everyone's good, from going where it is now, stagnant.

        And once people have been trained

    • by Bill Dog (726542)

      Voter registration, and jury duty -- both our democracy and justice systems are designed for relatively permanent residences, and don't fit the model of the new America 2.0. Guess we'll just all have to be microchipped like dogs, with GPS and RFID and UPC!

  • Whine, whine, whine.

    Seriously, I don't know if it is just urban living or what, but your perspective on home ownership is quite narrow. You live in hell, er, I mean California. What isn't expensive there?

    5 years back we bought 12 acres, built a house, and commuted 25 minutes to and from work. We are setup in between two cities with viable jobs with a less than 40 minute drive worst case, though right now we both work from home. We never did the Dave Ramsey thing of cutting up the credit cards or other e

    • put in my 40 hours by working 6:30-2:30 so I can get the boy off the bus, will have 4 weeks vacation next year, and do a job I enjoy.

      How unamerican. It's people like you that helped create only minor economic growth this year. Hope you're happy!
    • by Bill Dog (726542)

      No urban living here -- I hate city downtowns and typically only ever venture into one when I have to for jury duty. I'm happy for you that whereever you are is so undeveloped, but here a 25-40 minute commute one-way means you're a suburbanite.

  • It's the maintenance and location that is the problem of why young people should now rent forever instead of buying; it just isn't competitive not to move on a global scale.

    But the law of Supply and Demand says that housing prices will continue to fall for quite some time. There are currently 27 empty houses for every homeless person in America- until we find a way (renting, subsidized housing, falling prices, institutionalization, whatever) to house that last "homeless" person (at least for a lack of mone

    • by Bill Dog (726542)

      But what banks have paid for those homes is strong resistance to the falling of prices. Supply and Demand assumes a market of eager participants. But consumer confidence is in the craphole (and rightly so), and banks have houses that are already worth way less than they paid for them. And banks are flush with cash, so their natural tendency is to hold out for a price closer to breaking even.

      Maybe some group or groups like Habitat for Humanity could persuade some rich philanthropists to cut deals with the ba

      • But what banks have paid for those homes is strong resistance to the falling of prices. Supply and Demand assumes a market of eager participants.

        Not necessarily; nothing in economics insures you will make a profit on every transaction.

        But consumer confidence is in the craphole (and rightly so), and banks have houses that are already worth way less than they paid for them. And banks are flush with cash, so their natural tendency is to hold out for a price closer to breaking even.

  • by chill (34294)

    Did you get an early edition? Check out the September 6th issue of Time.

    http://www.time.com/time/covers/0,16641,20100906,00.html [time.com]

    • by Bill Dog (726542)

      Heh, thanks, that is coincidental, but not really since many people would be reaching the same conclusion given the times and trends, just with different reasons for it. And it looks like Time's "reasoning" [time.com] is going to be an utter mess when it comes out: Aside from misattributing the evil of lax lending standards to it, and aside from mentioning the greater difficulty of finding a job, TFAuthor's only other supposed downsides to homeownership mentioned in that preview at least are the Leftist bugaboos of ur

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