[lbo-talk] Homeownership Makes You Fat and Unhappy

Jordan Hayes jmhayes at j-o-r-d-a-n.com
Thu Dec 11 14:46:00 PST 2008



>> Can't you say that about any financial transaction that plays out
>> over time?

Ok, this time with a little less snark. The problem with comparing a house to, say, a bond, is that a house/transaction is unique: there is literally no house like any other. Even if you squint, and even in a neighborhood governed by CC&Rs that state that everyone has to use the same color paint, you can find all kinds of differences that can lead to an impact on the price. Is it on the corner? Does it have a nice tree in the back? Does it have a jackass who lives next door? Did someone's uncle "renovate" in the past without a permit? Does the soil make for a patchy lawn? And on. The next thing that makes it hard to compare is the very first thing that happens in the transaction: how much did you pay? Was the seller motivated? Was your broker a good negotiator? Did you shop for (and are qualified for) a good mortgage? Did you have a down payment, or did you have to borrow it and pay PMI? Along the way there's lots of random variables: did you sell before the roof needed replacing? Did you sell before the bottom dropped out of the market?

Show me someone who can prove that "buying is a waste of money" and I'll show you someone who "made a killing by getting in early" ... can you adjust your expectations/happiness/lifestyle to {rent, buy} and make it work better than the alternative? Most likely.

Final score: 1-to-1.

/jordan



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