First house for a young man

[edavid]

in the US, an HOA full of picky people can be a very good thing for protecting the value of your property.

Yes, that's the story realtor's tell, but the reality is different. Most people are only suckered into an HOA once. When they move they will  try very hard never to be in an HOA again. HOA's take away your freedoms and limit what you can do (e.g. prevent you from parking in your driveway, or hanging washing out to dry, or erecting a TV antenna). Restrictive covenants like that can only devalue a property, never increase the value of it.

Why would OP want to do any of those things, or want the neighbors to be able to do any of those things?  They all make the neighborhood look trashy.

[IanB]

Why would OP want to do any of those things, or want the neighbors to be able to do any of those things?  They all make the neighborhood look trashy.

Because your driveway is your property. Parking a car on it is normal. Everyone does it.

Because tumble driers are wasteful of energy and damage clothes. (Every time you remove lint from the lint filter, your clothes got a bit thinner, a bit more threadbare.)

Because you might want to watch TV without being forced to pay for cable?

When people care more about their neighbors and less about getting on with their own lives, you know you are living in America.

[WastelandTek]

Why would OP want to do any of those things, or want the neighbors to be able to do any of those things?  They all make the neighborhood look trashy.

found the guy I don't want to be in an HOA with

[gildasd]

in the US, an HOA full of picky people can be a very good thing for protecting the value of your property.

Yes, that's the story realtor's tell, but the reality is different. Most people are only suckered into an HOA once. When they move they will  try very hard never to be in an HOA again. HOA's take away your freedoms and limit what you can do (e.g. prevent you from parking in your driveway, or hanging washing out to dry, or erecting a TV antenna). Restrictive covenants like that can only devalue a property, never increase the value of it.

Why would OP want to do any of those things, or want the neighbors to be able to do any of those things?  They all make the neighborhood look trashy.

Stuff people do even in richest neighbourhoods here.
Only elected government does rules, not private liberty sucking HOA.
Weird things that are considered trashy...
For me, a place where all the houses and yards are uniform reeks of lower income working class just able to comply with the minimas.

[nctnico]

Yes, that's the story realtor's tell, but the reality is different. Most people are only suckered into an HOA once. When they move they will  try very hard never to be in an HOA again. HOA's take away your freedoms and limit what you can do (e.g. prevent you from parking in your driveway, or hanging washing out to dry, or erecting a TV antenna). Restrictive covenants like that can only devalue a property, never increase the value of it.

For densely packed townhouses, without HOA neighbor wars will never stop AFAIK.

In the NL it isn't a problem. Technically my home is part of a building with 12 or so (didn't count exactly) other homes but (as usual) there is no HOA. Practically I only have to deal with 2 neighbours. If you stay reasonable everything can be worked out. I also assume each town has zoning rules and rules which say what is acceptable or not (like repairing cars on the street).

[tszaboo]

I would not buy a townhouse or in a neighborhood ruled over by a "homeowenrs association". Ive heard a great many horror stories about them. Also, the quality and integrity (or lack of it) of local government varies a lot from town to town.

A real house here would be 300k+, still with HOA. Unless you build a house in a remote place, or buy a house built decades ago, you simply don't have non HOA managed houses, let along townhouses.
My primary goal is to get a house that doesn't need much of my attention, rather than a house I need to work on it every quarter, if not month.

Then put the money in an investment fund with a good spread of risks and rent a home. With HOA you will be worse off then renting. HOA is what we would call 'a trap for young players'.

The park I was looking at is not a rental park -- the construction company doesn't own houses and rent them. They sell them all, to actual buyers.
I am estimated to spend $180/mo on HOA fees ($100/mo plus $240/qt), plus $1.9k property tax, $3k utility and $1k on repairing and insurance that's $8.1k. My rent is $6.7k, so by owning a house, as long as I can rent only 1 bedroom, I still save more money.
In fact, even if I along live in it, by conserving energy and water, I can still break even.

So you want to invest 300K of your own money to save what? Few K a year? What is the ROI of that, 60-80 years?
If you rent out a room. IDK about you, but I dont want to live with someone in a subrent, not for a long time anyway.
If you want to rent out places, make a limited liability company (so you dont play with your own reserve) and buy a bunch of places and grab as much loan as you can. And buy a house with mortgage. Ask anyone who ever invested in real estate about your plan.

[rstofer]

The price question comes down to whether or not we are in another 'bubble'.  Sure, prices are going up but they're coming off some pretty ridiculous lows.  In many areas, the prices are still 30% or more below the 'frothy' highs.

In the days of the real bubble, everybody bought a house with the intent to sell it later for more.  But not much later because they had ARM loans with increasing interest rates.  As much as the buyers were greedy, the banks were worse!

The "greater fool theory" didn't hold up and there were no buyers and the loans were getting more expensive and people just couldn't afford the house.  Had they been realistic, they couldn't afford it in the first place.  Then the government doubled down and cancelled the taxes on the 'gains' of the short sales.  This allowed everybody to just walk away without owing tax on the mortgage amount minus the short sale price.  Since there was no penalty, a lot of people walked away.

The idea of Freddy Mac and Fanny Mae making risky loans started under Reagan and later spread through the entire banking industry and we all know how that worked out.

We are still seeing ARM loans and these simply shouldn't be allowed.  Even Greenspan made comments about the risk of these loans.

In the end, there's only so much dirt and we're not making any more (except China and Singapore).  Owning a piece of it is generally a good thing.  For one thing, you build wealth (equity) at a far better rate than you can get on most low risk investments.  In '86, I bought a small house for about $80k.  In 2003 I sold it for $290k so I made a decent return.  In 2006 it was offered back to me for $130k so timing is everything.  The point is, I had a place to live for 17 years, no HOA, virtually no maintenance and I made a few bucks out of the deal.

So, look at buying the more expensive house but try to make sure prices haven't topped out.  I live in California and prices never top out - well, hardly ever.

I didn't play with the numbers but would the house be self-supporting if you had to leave the area and selling wasn't an option?  It's one thing to take a paper loss, that is, losing theoretical equity but it's quite another to lose real money!

[rstofer]

Incidentally, I just checked on Zillow (real estate prices) and that house I bought for $80k in '86, sold for $290k in 2003, got offered back for $130k in 2006 (or so) is now estimated at $360k.

It's a tiny house at just 952 square feet with 3 bedrooms and 1-1/2 baths.  It's 50 miles from Silicon Valley and the commute is UGLY.  It wasn't bad back in '86 but I sure wouldn't want to drive it today.

No HOA, no amenities except a small park a block away.  But the prices in Silicon Valley are even more insane so that pushes up prices in neighboring areas.  If 50 miles can be considered a 'neighboring area'.

What do I know?  When I moved to Silicon Valley in '76, I thought $50k for a house in Milpitas was insane!  Now even the tract houses are more than $900k.

https://www.zillow.com/milpitas-ca/houses/

Palo Alto is a little closer to the action:

https://www.zillow.com/homes/palo-alto-ca_rb/

Some of these are ordinary tract homes - nothing special.  Some aren't much larger than the crackerbox I had.

Check out this duplex:

https://www.zillow.com/homes/for_sale/Palo-Alto-CA/pmf,pf_pt/house_type/2099372804_zpid/26374_rid/globalrelevanceex_sort/37.538043,-121.857262,37.225407,-122.413445_rect/10_zm/

Like every market, there are 'corrections' but if the owner can just hold on, everything will work out ok.  It may take several years but real estate will recover in most areas.  Particularly areas with education, technology or industry.

[rstofer]

What would happen in this world if suddenly, we all started caring about one another's countries, and trying to improve the quality of life for each other, as well as ourselves?

It's a zero-sum game!  One person's gain is another person's loss.  Assets in one hand, liabilities in the other.
Only the best and brightest win!

[tszaboo]

What would happen in this world if suddenly, we all started caring about one another's countries, and trying to improve the quality of life for each other, as well as ourselves?

It's a zero-sum game!  One person's gain is another person's loss.  Assets in one hand, liabilities in the other.
Only the best and brightest win!

No its not.

See, if wealthy individuals would stop the over-consumption, we would all be happier.
I'll go, get my pitchfork.

[cdev]

This is an old debate but I have a fairly large amount of research that I cite which shows that altruism is a successful strategy for societies and individuals living within them.

Also, is it smart to raise people the way it seems many wealthy people have been, to ignore others rights?  https://www.researchgate.net/publication/222699672


Quote from: rstofer on Today at 09:38:07

It's a zero-sum game!  One person's gain is another person's loss.  Assets in one hand, liabilities in the other.
Only the best and brightest win!

[rstofer]

Then we all gravitate toward mediocrity. 

I didn't spend 6 years in college just to make parity with someone flipping hamburgers.  They got to mess around while I was working my butt off but now it's my turn!  And I get to mess around at a much higher level.

This whole idea of 'equality' attempts to create equal outcomes without equal effort.  It's not going to work!  It's been tried, it failed!  People want to be rewarded for their efforts and they want to feel that reward in their lifestyle.

[NiHaoMike]

Yes, that's the story realtor's tell, but the reality is different. Most people are only suckered into an HOA once. When they move they will  try very hard never to be in an HOA again. HOA's take away your freedoms and limit what you can do (e.g. prevent you from parking in your driveway, or hanging washing out to dry, or erecting a TV antenna). Restrictive covenants like that can only devalue a property, never increase the value of it.

In the US, FCC prohibits HOAs (or anyone else) from preventing the installation of a TV antenna.
https://www.fcc.gov/media/over-air-reception-devices-rule
The bigger issue is that there rarely seems to be anything worth watching on traditional TV. But it's a big deal for amateur radio operators since a TV antenna can be used for VHF/UHF amateur service. (HF is a different story but there exist workarounds for that, too.)

I have found a drying rack to be a better alternative to a clothesline. Namely in that being indoors, it is not affected much by weather.

[vodka]

Incidentally, I just checked on Zillow (real estate prices) and that house I bought for $80k in '86, sold for $290k in 2003, got offered back for $130k in 2006 (or so) is now estimated at $360k.

It's a tiny house at just 952 square feet with 3 bedrooms and 1-1/2 baths.  It's 50 miles from Silicon Valley and the commute is UGLY.  It wasn't bad back in '86 but I sure wouldn't want to drive it today.

No HOA, no amenities except a small park a block away.  But the prices in Silicon Valley are even more insane so that pushes up prices in neighboring areas.  If 50 miles can be considered a 'neighboring area'.

What do I know?  When I moved to Silicon Valley in '76, I thought $50k for a house in Milpitas was insane!  Now even the tract houses are more than $900k.

https://www.zillow.com/milpitas-ca/houses/

Palo Alto is a little closer to the action:

https://www.zillow.com/homes/palo-alto-ca_rb/

Some of these are ordinary tract homes - nothing special.  Some aren't much larger than the crackerbox I had.

Check out this duplex:

https://www.zillow.com/homes/for_sale/Palo-Alto-CA/pmf,pf_pt/house_type/2099372804_zpid/26374_rid/globalrelevanceex_sort/37.538043,-121.857262,37.225407,-122.413445_rect/10_zm/

Like every market, there are 'corrections' but if the owner can just hold on, everything will work out ok.  It may take several years but real estate will recover in most areas.  Particularly areas with education, technology or industry.

it might be worse;

Barcelona Neighbornhood Born  https://www.idealista.com/inmueble/36349379/
 58 meter per square = 624 feet per square  Price :649.000€

Tarragona Arrabasada Valley https://www.idealista.com/inmueble/36797301/
44 meter per square = 473.7 feet per square  Price :149.000€

[rstofer]

in the US, an HOA full of picky people can be a very good thing for protecting the value of your property.

Yes, that's the story realtor's tell, but the reality is different. Most people are only suckered into an HOA once. When they move they will  try very hard never to be in an HOA again. HOA's take away your freedoms and limit what you can do (e.g. prevent you from parking in your driveway, or hanging washing out to dry, or erecting a TV antenna). Restrictive covenants like that can only devalue a property, never increase the value of it.

HOAs tend to be run like a dictatorship!  There are a handful of busybodies that want to control every aspect of the association and everybody else is a peon.  I would definitely tend to avoid any HOA. 

Our last HOA was the opposite.  If it didn't concern the roog, paint or grounds, they pretty much stayed out of things.  It wasn't too bad.  But still, if you replaced the roof and the material wasn't approved by the board, they placed a lien against the property for a replacement roof when the house was sold.  They wanted 50 year Presidential roofs and nothing else!  And we couldn't park boats in the driveway - bummer!

There is talk about starting some kind of association where we live now but since that association isn't part of the CC&Rs (Covenants, Conditions and Restrictions) tied to the title at the time of sale, they wouldn't have any authority.  I don't sense a lot of people want to sign up.  Everybody has their own property and there are some beautiful homes here.  It works well even without an HOA.  But, out here, everybody has their own well, they use septic tanks, there is no city water, sewers or storm drains.  We're pretty much on our own.  Nice...

And we have a dedicated Deputy Sheriff.  Somebody around the corner must have some juice!  It's certainly not us...

[cdev]

This is why we had the 2008 crash. A stupid decision made by the Clinton Administration (but it must be emphasized that this deregulatory agenda is the common point for both US "parties" and its totally ill-considered.)

In 1998 it was Clinton who was pushing his deregulatory services agenda, to "reform" the Glass-Steagall Act - which kept investment firms and banks separate. 

They claimed that the Glass-Steagall Act which had prevented speculators from being able to tap the US Treasury to cover their gambling debts, violated their new general agreement on trade in services.. 

This WTO services agreement.. which almost nobody knows about, has been responsible for so many problems.

But they obviously did so well from the 2008 crash.. at the taxpayers expense.

that now the GOP is making the same mistake again. (see attached)

This is why I suspect we'll see another bubble, soon. The wolves are running the henhouse.

Watch out you don't get trapped like so many others.

Of course, people still need places to live, and the place you yourself live is far more likely to be a good investment.

but its not unlikely we'll see wild fluctuations in values again, I think. Soon.

One could almost guarantee it with Trump and in fact his candidacy seems to have been a not so subtle message to some that the green light to speculators to steal the country again.

So that the common people's pensions and medicare can be stolen to pay back the banks that caused the problem.

Trump is well known in the US for having finagled his wealth by highly leveraged investments.. i.e. speculation.

The world needs to tax financial transactions so that there is a cost to speculation high enough to discourage it.

Also entities that engage in speculation should be required to carry insurance to indemnify others and society. That will remove the incentive for schemers to use their power to take over the country and use it as part of their huge Ponzi scheme.

The tax on financial speculation should go to pay for assets, like education for our best students, and PUBLIC infrastructure that no GATS or TISA or other evil trade agreement can force the privatization of - In other words, unstealable assets.

Who cares about sucking up to the capitalists.

 If that discourages international investors from moving their money around like quicksilver, so be it!

That will be more than made up for by sensible, intelligent people who will then find a refuge from the madness in America.

[rstofer]

It actually started with Reagan having Fanny Mae and Freddie Mac write substandard loans in impoverished neighborhoods.  The idea was that homeowners would be more invested in their neighborhoods and tensions would decline.

Everything else just piled on.  For many years, only Savings and Loans could write mortgages.  Once banks got permission, everything fell apart.

I did hear that Fanny Mae and Freddie Mac were back in the business of writing 'liar loans' but I don't think the banks are back in that game.  Nobody on the planet would buy that kind of bond again.

Once they started write "no doc" or "liar" loans, people could get over extended in a heartbeat!

[cdev]

NINA loans. "No income, no assets"

NINA loans should not be written.

Growth is not a given, we're seeing deindustrialization now.

We wont see growth if their war on the middle class continues.

Sure, credit is tight when money is tight, because people are protected from crooks.. thats the way it should be.

What happens in austerity?

Since the wealthy have inevitably flown the coop with all the money its the people, especially the weakest who never had much of anything who lose their hopes for a better day in the future, who lose everything.

If anybody here has gone through official "austerity" in your country, (not Americans and Brits who are having it forced on them via stealth) I'd love to hear what it was like.

Blueskull, you'll do fine, just don't rush into things. No deal is too good to spend some time evaluating.

[Towger]

Blueskull, you must be sorry you started this thread.  It appears half the posters did not read your original posts re not being able to borrow.  My vote is for the three bedroom still stands.  Just do your research, better may turn up soon.  When I was young I made the mistake of not buying early, despite having more than enough money in the bank.  Your buying power gets erroded with time.  Property is recovering again, better to get in the game early, than the top of the boom bust cycle.

[cdev]

Towger, what about deflation?

[Towger]

Towger, what about deflation?

Hits the money in your account more than property. 

[rstofer]

Towger, what about deflation?

As I pointed out in my story about my old house, don't worry about it.  Sooner or later, prices recover.  Maybe not to the stupid levels but, at least in California, they have done just that.

It's all too easy to sit back and say assets are overpriced while watching them continue to rise.  Then, when they inevitably fall say something like "Told you so!".  But the thing is, there is a lot of money to be made riding the trend.

What can you say about and $80k house rising to $360k in 31 years (plus providing shelter and a mortgage deduction).  I'm not going to do the math but that seems like a pretty good return.  Yes, it will go down again.  But it will never go back to $100k and, even if it did, just hang on!  As bad as the ride was in the 2006-2010 timeframe, things have recovered nicely.

Many locales are banning most of the new construction in favor of in-fill projects in the inner cities.  By law (stupid as it is), new construction around  here is essentially stopped while we wait for inner city projects that will never be built because they just don't pencil out.  But what happens when supply is limited?  Right, prices rise!  Cool...

Builders are in the business of building but they aren't stupid enough to get involved in some of the "feel good" projects.

It's a shame the OP can't get a mortgage.  I'm not sure I would want all my assets in one place.  I would go asking around.  He has income, he has enough for a huge down payment, he has enough left over to make the payments for a very long time.  I would at least test the waters.  And stay away from ARM loans!

[nctnico]

I'm wondering what exactly you mean with ARM loans? Are those so they change the interest rate every year? If yes they may not be so bad. Over here you can get mortgages where the rate changes every year. Sure there will be good years and bad years but overall the interest rate is lower than longer term fixed rates. What I did in the past few years is wait for the interest rates to drop before committing to a longer term interest rate (which is pretty sweet if I may say so). I expect the interest rates won't stay as low as they currently are for very long; I expect to see a rise somewhere in 2017/2018.

[jpanhalt]

Let's hope the entire US doesn't follow Europe's lead down the economic toilet.

[tronde]

Let's hope the entire US doesn't follow Europe's lead down the economic toilet.

I would be more than happy if you kept the toilet your side of the fence...