--Hot summer with global warming (no moisture in anything)
--Drought for years in California (tinder)
--House in the urban/brush/wild zone probably because--it's pretty and they want seclusion--but---lots of fuel nearby that's dry and uncut.
--Building site at the top of a ridge (for the views--but flames propagate up hills)
--That house isn't going to last out the full duration of its mortgage, most likely

You never know. Today, these kids in a neighborhood with a 40%+ poverty rate steal some Nikes, tomorrow they sell you mortgage-backed securities or run a gulag for the Chicago PD. It's a slippery slope, boyos.

[author flagged as a spammer - redacted]

The reason for cash payment is: No mortgage means you escape Federal laws when a mortgage is involved in which the "beneficial owner"---the actual owner---has to be revealed to the bank.
lol

Money laundering.

Your video, Family of Five Downsize to a Tiny House without a Mortgage, has made it into the Top 15 New Videos listing. Congratulations on your achievement. For your contribution you have been awarded 1 Power Point.

Educated younger people want to be where the action is, meaning places where they can advance quickly in a career they are passionate about while having a high take-home pay. They also want what their parent's generation had, which was often a home in the suburbs or at least a condo or townhouse they owned outright, to comfortably start a family.

The two things are mostly incompatible, because the work they are passionate about is typically around the cities and their parent's generation is still occupying any and all affordable dwellings in the area, including the surrounding suburbs. This wouldn't be a problem except property owners feel an incentive to actively prevent new developments which might lower their home price plus make the area more crowded/disrupted. This is partly a result of the sprawl in areas like Silicon Valley reaching its physical boundaries, so the price of land just keeps increasing to these crazy numbers like '$2mil median home sale in 2016'.

These young people can afford to rent in these areas, so they see how comfortable it is, but don't see how they could own there without a windfall of money. So they are kind of stuck hoping to make it big, but in reality just putting off either buying property where they can't follow the career they want or choosing to follow their career but watching their rent increase. This isn't a new problem, its just become more exaggerated in the last decade, and is pushing a lot of younger people to not have kids and to carry a lot of anxiety about their place in the world.

There are a lot of potential ways forward, like massively increasing government investment in transportation infrastructure to move people more efficiently by bus/train/etc., and massively scaling up internet speeds to make telecommuting more commonplace.

Anyhow, its really just younger people wanting what their parent's had, struggling really hard towards it, settling for much less, and complaining a bit to each other about it. Its just a newer problem for Americans (and places like Australia as well), where there very recently was all this space, and now its all old people's investment properties, available for rent at 400% what their mortgage is.

LOL, East Palo Alto. I volunteered at the Boys and Girls Club there for a year when I lived in Mountain View. Two cops got shot and East Palo Alto had the highest murder rate ever that year. It's utterly insane how on one side of the 101 you have these multi-million dollar mansions and Stanford University and on the other side you have gangland.

Meanwhile, back on topic, when I moved to Mountain View in 2002 my rent was $800 a month for a studio apartment. The rent went up by $100 a year every year until I finally called it quits in 2007 when they wanted to charge me $1300 a month. I gave up ever actually being able to own a home in the Bay Area (let alone rent) and left in 2009.

In Japan now, and things aren't quite as bad as the Bay Area, but we've been house hunting recently and we're shocked at the disparity between what we want versus what we can actually afford, even with both us being full-time professionals. I know that 2nd place he goes to is supposed to be a joke but it's not that far off from the truth, at least as far as our experiences go. While the places we've been shown by the real estate agent are certainly habitable, they aren't particularly nice. So we're going to have to decide whether we want to live someplace not so great with the advantage being the mortgage will be paid off by the time we retire or just rent in a place we're comfortable with and wind up having to really budget hard after retirement since rent will consume a sizable portion of our pensions/social security.

Dunno. Rent here is just as exorbitant as house prices. And yeah, the deposit is usually the major block for new buyers - if you can afford to rent where you want to buy chances are you can afford the mortgage repayments. If you don't have the bank of mum and dad backing you, goooooood fucking luck.

Yeah, this is way to short to cover the topic.

Freedom / choice is worth considering but people need to treat home buying as an investment because it is often the biggest single investment they ever make. Buy low and sell high. Putting that out of your mind because you're planning to never sell is a huge mistake. You would think that other countries would have learnt the lessons of the US, but housing markets in places like Canada, Australia, big Chinese cities are just waiting to pop. The mantra of 'house prices always rise' continues.

The most obvious measure broadly is price to median incomes. Here in Sydney (and some of the other Australian capitals) it's at eye watering levels. Buying a house here right now is basically banking on preferential tax treatment (in our case, called negative gearing), restricted supply continuing forever (the main driver of house prices by the way), and heroic increases in income to forestall the inevitability of prices simply becoming unaffordable.

It's gotten to the point here where lenders are asking home buyers (who want a loan to value ratio of over 80%!) to pay so-called lender's mortgage insurance (LMI) which adds a substantial amount to their loan and guarantees the bank (not the home buyer) if the borrower defaults. The insurance company who issued the insurance contract then goes after the defaulted home buyer to recoup the payout to the bank:

http://www.macrobusiness.com.au/2016/09/7-30-report-lenders-mortgage-insurance/

From what I understand there is still plenty of reasonably priced property in the US (in some cities) but even there you have plenty of places that have become ridiculously overpriced.

Locally, it is generally cheaper to buy than rent... you need the deposit and all that of course, but the per month costs, even after insurance, property taxes and mortgage still end up cheaper. Now other expenses such as upkeep, utilities and the like may go up, but given you can get into a super nice home in a good school district and good neighborhood, for well under $150k (under $100k and even under $50k for less good areas) and rent is still in the $450-500 for smaller apartments... ownership appears to be the better idea. More space, for less money. When I had a house, I went from a small one bedroom apartment to a 3 bedroom house, 2 stories, walk up attic, basement (minor leaks)... saved a bundle per month, though gas ended up being ultra high, and job changes caused me to lose it eventually. Still, it was per month cheaper.

Heck, I know somebody, not local, but in Pittsburgh who moved from an apartment to owning a condo, and even after mortgage, association fees and utilities, it all comes out cheaper than her rent was alone before utilities, and the places are the same size (if not a bit bigger at the condo)... and that is still in the much coveted North Allegheny school district . Obviously homes and the like there are much more expensive than where I live, but still, seems cheaper to own than to buy for equal square feet even out there.

Adam really does ruin everything - in this case, it's his credibility.

There are many reasons home ownership is better than renting - not the least being that you have far more flexibility in your lifestyle than a renter would. And while you are paying off a mortgage (which, in part, is subsidized by the mortgage deduction on your income tax) you are building equity and paying off the bank with progressively "inflated" dollars over the life of the mortgage (that's why they charge "interest"). The rents go up with the inflation, the mortgage payment doesn't (unless you are fool enough to buy into an adjustable rate mortgage). In the end, if you are careful and smart about when and where you buy, the home is nominally worth more than you paid (in inflated dollars - and possibly in constant dollars) and that value can be recovered if and when necessary. Renting, you walk away with a bunch of receipts...

Of course, if you are lazy and irresponsible in when and where you buy and how you maintain the home, then you could again walk away with nothing...

eh, kinda, sorta, maybe, could be true depending on your circumstances...

It's a pretty short treatment of a very complex topic.

Buying a home has a lot of positives.
Financially, while you might not be building equity in the first few years, eventually, you ARE building equity. Don't buy a home unless you can afford to pay the damn thing off.

There's also a big difference between rents and mortgages. Rents go up over time and mortgages (depending on the structure) generally go down (either on a reducing mortgage or as a function of your income).

Also, mortgages stop when you've paid them off. Rent doesn't. If you're renting when you retire, well, have fun paying the same rent (or more!) until you die.

Also, if you get that dream job in Hawaii... you can actually SELL your house. Or even better, rent it out.

That doesn't even cover the intangibles like the fact that you can do whatever you want to the house. Don't like that wall? Knock it down. No asking a landlord! *

Also, no property inspections and while the bank can kick you out if you don't pay... that's the ONLY reason they can kick you out, unlike renting where you can be evicted for "damaging the property", "being a disturbance" or "because the landlord doesn't like you".

All that said, there are plenty of reasons not to buy, and they are highly dependent on your income, ambitions and the local property market.

Just don't ever buy anything where your mortgage is more than 30% of your take home pay.


* you should really ask an engineer and your local government in case your house falls over and/or you need building consent.

Occupy has been doing it with mortgages for years.

Plus, we owe most of that money to ourselves.

So it's not like going to a bank to raise your limit. It's more like, you've borrowed money from your retirement fund and your kid's college fund while times are hard and you'll pay it back when your economic situation improves. Because basically, when things are tough, everyone dips into their savings to pay their mortgage and utilities. If you don't, try to explain that to your mortgage company while they're foreclosing on your house.

Another entry in our series "Prison is For Plebs":

http://www.bloomberg.com/news/articles/2016-04-11/goldman-to-pay-5-1-billion-to-settle-u-s-mortgage-bond-probe

Edit: That's less than their net earnings in '06 alone, nobody gets his/her anus stretched on a daily basis, everyone gets to keep all the bonuses that were based around fraud, aaaaaand.... >50% of this penalty is tax deductible again. So yeah... a job well done by Schneiderman and his band of merry men.