Affordable Housing vs. Property Values, what to do?

December 27, 2002 5:40 AM

DC Suburbs slowly getting denser I've been a participant for the past 5 years in what is easily the 2nd-3rd most insane housing market in the US: Washington DC. Apartment occupancy is 99% in the desirable areas, and "affordable starter homes" (in finger quotes) are priced at $250-$350k. People with good jobs can barely afford this. So what happens to folks who are just getting their feet on the ground in the country? More the merrier. How do you strike a balance between providing affordable housing that is accessible to living-wage jobs without running out the existing neighbors?
posted by cpfeifer (50 comments total)

this is 2/3 the reason my wife and i moved away from boston, to upstate NY. we got an awesome house for way under 150 grand. my brain would just start to freeze up when i even thought about buying a house around beantown.
posted by chr1sb0y at 5:55 AM on December 27, 2002

I grew up in Fairfax County (northern VA) and now live in Boston - a comparable housing market. The benefit of the DC area is that there's still room for new construction and the area has done a better job of realizing that there's a need for local infrastructure (like roads). Yeah, I know traffic is awful in the DC area, but things like the Fairfax County Parkway were planned years in advance. The best we can do here in Boston is the Big Dig which is aiming at reducing traffic jams downtown from 10 hours a day to about 4 at the outset. Woohoo!

Anyway, housing is awful. Wretched little homes are well over $300k unless I want to live an hour outside of the city which is hard without the infrastructure. How do people keep affording these homes? It's beyond me. I'm starting to have to sadly accept that I may always have to rent, which I find depressing. Boston is one of the few areas where the rental market has softened a little while real estate continues to go up. The old adage that it's cheaper to buy than rent is no longer true in this area.
posted by warhol at 6:06 AM on December 27, 2002

How do people keep affording these homes?
Scary, scary credit. Owners - sell now. Renters - wait a bit to buy. Suspect the housing bubble will burst within a year and half.
posted by DenOfSizer at 6:18 AM on December 27, 2002 [1 favorite]

I've spoken with home builders in the D.C metro area and one possibly cheaper (money-wise) route to home ownership is building one yourself. Either act as the construction manager yourself or pay someone a fixed fee to do it for you. It will take a lot of your time and frustration probably, but will save you from paying profit to the home builder and other possible middlemen.

It will also help you to know that the house you are building has quality components and construction.
posted by jsonic at 6:19 AM on December 27, 2002

The old adage that it's cheaper to buy than rent is no longer true in this area.

It has become true in the Atlanta area as well. Even tracts of old company housing (2 BR houses built in the 40s and 50s) are going for $200K+ each, while new luxury apartments are renting for slightly less than the monthly payments on the aforementioned shacks.
posted by mischief at 6:19 AM on December 27, 2002

Just another symptom of a US immigration policy that is out of control. You can draw a direct line between population density and quality of life. The rising cost of housing is just one symptom. Suburban sprawl is another.
posted by Beholder at 6:25 AM on December 27, 2002

Hi, Beholder! What Native American tribe are you from?
posted by luser at 6:26 AM on December 27, 2002

route to home ownership is building one yourself

I'd love to. I just need the land and the only way to really do that around Boston is to first buy a home, demolish it, and go from there. But, you'll have already sunk a huge chunk of change for the house you just demolished, so you're not that far ahead. That's one of the advantages of the DC area - there's still available land, although it gets further out every passing day.
posted by warhol at 6:26 AM on December 27, 2002

The old adage that it's cheaper to buy than rent is no longer true in this area.

It might not be cheaper with respect to the monthly payment, but look where the money goes. With renting, you are basically paying someone elses mortgage. On the other hand, when you sell the house you bought, you will recoup the monthly payments you made and hopefully make a profit to offset the interest you paid.
posted by jsonic at 6:28 AM on December 27, 2002

The explosion in prices of relatively modest housing in relatively inconvenient locations in metro areas has everything to do with changing family and work structures.

It used to be that two-profesional-income families were rare, since moms (typically) kept working full time only when their husbands' incomes were inadequate. Most wives of professional men who kept up their own professional careers full-time when they had young children did so out of self-actualization and cultural objectives -- objectives which also correllated with a bias against suburban living and a preference for the cultural ghettos (your Georgetowns, Upper West Sides, and Cambridges).

Now that the two-professional-income family has become the metro middle class standard, with professional women continuing their careers into motherhood almost by default. This means that there is a vast supply of families where dad earns $90,000 and mom earns $70,000 -- and even after $1,600 a month post-tax for the nanny, there's still more than enough to pay the mortgage on a $500,000 house bought with 10% down; a budget which not so long ago only the much smaller cohort of lawyers and doctors making $130,000 a year could afford. ($130,000 gross on one income being about the equivalent of post-tax equivalent $160,000 gross less the post-tax costs of the added support services and nanny needed when there's two full-time-plus earners.)

From the standpoint of the real estate market and family structure choice, it's a vicious circle. 10 years ago, the proposition that it is impossible for a family to live a middle class life on a $90,000 a year salary would have been laughable -- now, if living that life includes a 4 bedroom house in a town with decent schools in a major metro area (at least on the Coasts and in Chicago), it is a proposition which is starting to become reasonable. Professional women had once could choose between two lifestyles (staying at home on a budget versus working on a less tight budget) are now losing that choice, the housing market is losing the flexibility to accomodate traditional families.
posted by MattD at 6:39 AM on December 27, 2002

Hi, Beholder! What Native American tribe are you from?

You made my point, and you don't even realize it. Suburbs are the new American reservation, where people are forced to move, because living in the city is too expensive.
posted by Beholder at 6:50 AM on December 27, 2002

This is some pretty heavy shit for this early in the morning! Jesus X. Christ people, lighten up! It's Friday, and a hundred years from now we'll all be dead and none of this will matter!
posted by LowDog at 7:17 AM on December 27, 2002

You made my point, and you don't even realize it.

Doh! I hate when I do that. I'm like putty in your hands.

There will always be places too expensive for you to live, and too dense for comfort. These places are in suburbs and they are in cities. Blaming immigration is foolish and smacks of pulling the ladder up once you're on board. If you don't like where you live, move someplace else, and prepare for the condemnation of those who got there before you and who consider you the cause of their density problems.
posted by luser at 7:20 AM on December 27, 2002

a hundred years from now we'll all be dead and none of this will matter!

This is true. But perhaps your grandchildren will ask you "What was it like living in the greater Boston-Atlanta metro area when you were a kid?" and you'll be able to look whistfully into the distance and start to tell your tale.
posted by cpfeifer at 7:26 AM on December 27, 2002

cpfeifer: You mean the BAMA (Boston-Atlanta Metropolitan Axis)?
posted by rusty at 7:38 AM on December 27, 2002

> Hi, Beholder! What Native American tribe are you from?

We have, of course, never heard any Native Americans blame their problems on later immigration...
posted by jfuller at 7:42 AM on December 27, 2002

rusty: you are correct. I think I first read this in the William Gibson novel 'Neuromancer'
posted by cpfeifer at 7:47 AM on December 27, 2002

DenOfSizer -
Owners - sell now. Renters - wait a bit to buy. Suspect the housing bubble will burst within a year and half.

What's your evidence for this?

I'm not saying there won't be a slowdown (the bubble 'bursting'), but I doubt this bit of unsubstantiated 'advice' is going to sway anybody in either direction without providing any actual information to back up your claims. The decision to buy a house is a pretty big one and I hope that anybody considering it will do their research.

Something to consider - while home prices are really high, interest rates are also really, really low, which allows people to buy a more expensive home then they would normally be able to afford.
posted by drobot at 8:01 AM on December 27, 2002

Apartment occupancy is 99% in the desirable areas, and "affordable starter homes" (in finger quotes) are priced at $250-$350k.

Welcome to Vancouver/Toronto/Calgary!
posted by monkeymike at 8:21 AM on December 27, 2002

as a real estate professional, i can tell you there is no simple reason or answer. it's not only DC, but most metropolitan areas. financial and market indices aside, one of the major contributing factors is the orobros of companys move to the workforce who move to the companys who move to the workforce. if a company made a dedicated attempt to move where the housing index isn't as high, the workforce would follow which in turn can have a ripple effect on the entire economy of smaller urban populaces. another contributing factor is the *need* for people to reside in certain urban areas, which escapes me entirely. nice places to visit, wouldn't want to live there. however DC is a place which requires a certain degree of talent and education in the workforce, and as sam kinesen (sp?) said "if you're hungry, move where the food is."
posted by jyoung at 8:44 AM on December 27, 2002

This means that there is a vast supply of families where dad earns $90,000 and mom earns $70,000

No offense, but where the hell are you living/working? My wife and I live in a metro area, we both have college degrees and work full time jobs, and our income combined doesn't approach $90k.

Personally, I think our situation illustrates the problem. We recently wanted to purchase our first home, and were completely frozen out of the market because of the $300k 'starter homes' in the area. It used to be that having a college degree and a few years in the workforce would mean you could get a well paying job. Now it means you can compete with high school kids for that job at Burger King. This economy sucks.
posted by rrtek at 10:00 AM on December 27, 2002

If you think D.C. is bad you should try to buy a house where I live. Santa Barbara has gone nuts. Fixer uppers are 500k if you can find one. A one bedroom condo in a crummy neighbor hood is 350k+.

In October of 2002 there was an average price of $827,191, median price of $ $641,250, 44 sales over 1 million for the area. This is insane. You can rent these same homes for 2 to 4k a month. It makes infinitly more sense to rent then to buy when you consider the 140,000 downpayment.
posted by MaddCutty at 10:10 AM on December 27, 2002

no matter how hard they try, the suburbs will never match the denseness of congress.
posted by quonsar at 10:47 AM on December 27, 2002

rrtek: I was referring to SF/LA/DC/Chi/NY/Bos ... which is what the original story was about. And while, of course, there are many hardworking people making lower salaries, there are vastly more families with $90/70 combined salaries than there used to be, just as there are plenty of people on next tier down (in age and career progression) with $45/35 combined salaries, when these used to be one income familes, at the upper and lower ends of the middle class respectively. This has enabled tremendous inflation in suburban prices, pushing the old $150K starter homes to $300K, and the old $300K well-established-middle-class-family-homes to $500K.
posted by MattD at 10:49 AM on December 27, 2002

For those looking to become house-poor in the US, here's 1000 words to the wise. Montana, Nevada and Maine all look pretty good.
posted by jfuller at 10:54 AM on December 27, 2002

Does anyone know of discussion websites that discuss issues like housing affordability, urban policy, etc? It's one of my favorite interests, but I havent been able to find many good resources outside of books.
posted by jare2003 at 11:23 AM on December 27, 2002

Hi, Beholder! What Native American tribe are you from?

Hey, they're immigrants too. They just got here first.
posted by Ty Webb at 11:39 AM on December 27, 2002

Great post. JYoung, and others who know the field, what is the (honest) likelihood we're all swirling in a big, fat real estate bubble that will pop someday soon? Reading this article and others like it, it seems a probability. (Here in Brooklyn, you can't get a house in my neighborhood for much less than $700,000. Meanwhile, my neighbors probably make a little more than the national average. And some friends tell me values could double in the next year or two.)
posted by boardman at 11:47 AM on December 27, 2002

You can draw a direct line between population density and quality of life.

no you can't. you can't even do what you probably thought you were claiming, which is to show a direct correlation. if quality of life were that simple then we'd have uniform population density as people, seeking to optimize their lives, dispersed uniformly. quality of life includes things like earning money and enjoying the richness of living in a vibrant community (although given your other comments i guess that last part only applies to some of us).
posted by andrew cooke at 12:04 PM on December 27, 2002

As for the real estate bubble bursting any time soon, I would say it depends on where you live. I work for an MLS property listing service in a mid to large city, and I can tell you that over the last year, prices have started dropping bigtime. Unfortunately, what's happening is that crazy sellers who think the market is still up overprice their home by about 100K, then wind up dropping the price about 50k when it doesn't sell. So the home is still selling overpriced. However, the rate of forclosures is rising rapidly (take THAT you tech-bubble riding overpaid know-nothing corporate employed homeowner) So maybe I'll just wait for a few more downsizings to force CEOs to move into an apartment and pick up something on the cheap.
posted by rrtek at 12:47 PM on December 27, 2002

You should try Cincinnati. There is next to nothing in the city area where I want to live. (I want to live in Cincinnati proper). What is available runs around $40,000. Do you want to live in a $40,000 house?

The rest of what's available is in the subburbs, places that have no sidewalks and no public transit system. These houses run $300,000-$500,000. (So I pay $500,000, which means I can't afford to own a car, not that I want one anyways, but of course, because I'm living in the subburbs, there are no busses.)

The rental market here is even worse. Large complexes are run down, small homes are either run by slum lords or completely overpriced. (Why no, I don't think I'd like a 1 bedroom, 350 square foot apartment for $800.)

Then couple that with the fact that I am a single person, with one income, and the way things have been lately, will probably be in that state for some time to come, I can't afford to live in any of these places.

I suppose I could move into an affordable washer/dryer box. It's a bit chilly in the winter, though.

Fact is, there is a distinct lack of affordable housing throughout the country, and especially in certain areas.

If I want to live in the city, take the bus, walk, bike, etc. I either have to live in the slums with crime, or pay $1200 for an apartment adjacent to the slums with crime. (Oh no, they never cross over that line between the slums and the luxury apartment downtown district.) Even the burroughs of Cincinnati are impossible to navigate, with limited public transit service.

Many areas like this are built around the cars that people love, and they won't give them up. They say in 20 years this city will be a complete parking lot, and it will take you 3 hours to get to work, a commute that should take 10 minutes. Way to plan ahead, folks.

We need more city / burrough mid-range housing for the real middle class, and a better system to navigate around the city.

Ever try to find a 1 bedroom house? It's near impossible in my area. And all of the subburban housing has 3-5 bedrooms. I don't need the extra space, and I don't want to pay to heat that extra space, which again would be a waste of our finite resources.

The trouble with the housing market isn't just the mentality of housing itself, but the mentality of transportation and living. Is it so bad f you have someone who is less that 2 acres from your house? How horrible would that be?
posted by benjh at 1:36 PM on December 27, 2002

Chicago's "bungalow belt" is full of small, 3-bedroom single-story houses with tiny bedrooms and small kitchens which cry out for retrofit into cute houses with 1 spacious bedroom, 1 study/den, and 1 modern, expanded kitchen. I bet Cincinnati has a bungalow belt along the same lines (almost every midwest city does.) Many neighborhoods have slid off the scale in terms of safety, but many have not.
posted by MattD at 1:59 PM on December 27, 2002

Hi, I live in DC. I have a fairly small one-bedroom on Capitol Hill for which I pay $800 a month. It seems pretty damned expensive to me, but I'm getting a deal, actually. People salivate when I tell them where I live and what I'm paying. The alternatives are living in a worn-to-hell group house with two or three other psychos and paying $50 (on the Hill) to $100 (in Adams Morgan or Cleveland Park) less, and living in a much less pleasant neighborhood; paying the same money to share housing in Dupont; or living in a Habitrail unit in Crytal City and paying about the same amount of money.

Houses here on the Hill, nevermind elsewhere in D.C., are insanely expensive. The house at the end of my block, an admittedly beautiful place with three bedrooms, a study and a small yard just went for a fairly average price. The place went on the market on a Monday at 500, and after a vicious five-day bidding war went for 900.

That's the main reason I'm not thinking about buying right now - I could never do it. Yes, I'm paying my landlord free money every month and yes, my monthly mortgage payment would be only a bit more than what I pay to rent, but first you have to come up with the down payment, and the canard about 'renting is paying someone else's mortgage' isn't exactly right. If I buy a house, I have the initial lump sum to pay off, and then I own my house? No, the bank owns my house, and they're my new landlord. Problem is, my new landlord doesn't pay for property taxes, homeowner's insurance, garbage collection, or anything else. If the pipes freeze or the roof caves in, the bank doesn't pay for it. I hate how much rent I'm paying, but when I look at friends of mine (most of whom make a ton more money than I do) who have recently bought their 'first house' - generally a two-bedroom in NoVA - and have locked themselves in there for the next ten or twenty years, I feel a lot less constricted. What am I missing out on? I sure feel like I'm missing something, but any time I ask a homeowner about it, they say 'equity'. I don't know what this is, exactly. I'd like it if someone could frame it in terms other than 'It'll be slightly easier to move your current mortgage into your next one'.

Bottom line, the housing situation in any major city these days is hell. Even worse for people like me; if I were to move to a place where I could afford to buy, like Montana or Alaska or something, I couldn't find a job in my field. It's the Yossarian real estate model, I suppose.
posted by GriffX at 7:03 PM on December 27, 2002

(applause)
posted by swerve at 8:18 PM on December 27, 2002

Guess it all depends on where you live. My parents are selling their 5,000 sq. ft. house for 275,000. They rent out a 3,600 sq. ft. house for 2,000 a month. And the salaries here sound about the same as salaries other people are making. But then again, you gotta live where the work is. It's just amazing to know there are people having to pay that much money for a place to call home. Amazing.
posted by Ron at 11:35 PM on December 27, 2002

I sure feel like I'm missing something, but any time I ask a homeowner about it, they say 'equity'. I don't know what this is, exactly.

My understanding is that the equity in your house is equivalent to the downpayment and however much principle you've paid down. Most banks (I think) will let you borrow against the equity you have in your house. In fact some recently have started just extending a line of credit equal to the amount of equity in your house (or even 150% of the equity. Yikes!). (Borrowing against this is probably a bad idea, but just pointing it out.)

Another major advantage is the tax deduction. You can deduct all of your mortgage interest, as well as the interest on any home equity loan. In the first few years, the bulk of your mortgage payments are interest, which is a large tax deduction. My husband and I saved thousands of dollars in taxes the first year we owned. (Previous rent and current mortgage were roughly equivalent.)

A third point, more personal and probably quintessentially American, there was a huge psychological difference to me between renting and owning. That is, owning feels much better to me. But of course everyone's mileage may vary.

For what it's worth, we own a 3-level townhouse outside the beltway in NoVA (about a mile from the Metro). Not outrageous but not cheap, and a much nicer place than the one we rented inside the Beltway for about the same amount of monthly outlay.
posted by Medley at 5:31 AM on December 28, 2002

Warhol: "The benefit of the DC area is that there's still room for new construction and the area has done a better job of realizing that there's a need for local infrastructure (like roads)."

You've got to be kidding. Yes, the DC area is growing and yes there is still land to be developed but one of our problems here is that building roads to that new construction isn't happening.

DC has the second most congested set of roads in the nation. And local and state governments refuse to build the roads to support it. Northern Virginia just voted down a tax increase to fund this type of infrastructure. It's the "push/pull between "growth" and "anti-growth" camps.

I live in a DC suburb near a Metro stop. Our local government is allowing developers to build huge McTownhouses near or literally on top of subway stops. They're using an outdated model that says it's good to build near a subway stop -- it encourages growth and ridership on the Metro.

Well, anyone who has ridden the Metro lately knows, we are being stuffed into cars already. The Metro is more than a success and they can't keep up with the growth.

Developers are being encouraged by local governments to build build build. I have witnessed this first hand in my neighborhood. Land swaps abound between governments and developers. Deals are being made at the expense of those who have lived and supported the community for years.
posted by Taken Outtacontext at 6:17 AM on December 28, 2002

Another way to look at equity is to think of it as the difference between what you still owe on the house and what you would get for it if you sold it. If you owe 50K on the house, but could sell it for 75K, you have about 25K in equity, which theoretically would go into your pocket if you sold the house. Banks will lend you money based on this. Equity is a soft number, naturally, since you can't know what you'd get for a house if you sold it without actually selling it, which is why houses are appraised to determine a value before a bank will give you a loan.

(And don't laugh at my housing prices -- I live in Maine.)
posted by JanetLand at 7:58 AM on December 28, 2002

Another major advantage is the tax deduction. You can deduct all of your mortgage interest, as well as the interest on any home equity loan. In the first few years, the bulk of your mortgage payments are interest, which is a large tax deduction.

Yah. Another way of saying this is that if you're in the *foo* tax bracket, the federal government pays *foo*% of your mortgage interest for you. The real pisser here is that if I buy a house and Rich Bastard buys the same house, the gubmint pays for more of his interest than mine.

A third point, more personal and probably quintessentially American, there was a huge psychological difference to me between renting and owning.

Not just psychological. Small matters like being able to have walls that aren't off-white, or get a dog without anyone else's #@$^ say-so, or anything else that most American landlords don't seem to let you do.
posted by ROU_Xenophobe at 9:17 AM on December 28, 2002

I don't know a lot about the history of the recent real estate market, suburban sprawl, or traffic congestion, but I have a sneaking suspicion that what's happening in places like DC and Boston and Atlanta and Cincinnati (!) is what's been happening (and there's no sign of it abating here) in the San Francisco Bay Area for at least the past 4 years. Yeah, one more thing to blame on California.
posted by blucevalo at 2:49 PM on December 28, 2002

My husband and I just moved from DC where we lived for the past 7 years. We started out near the city in an apartment, and that got to be too expensive. So we got a low down-payment loan and bought a condo in Reston, about 25 miles from the city.

It's impossible to live near your work if you have a two income family with different types of jobs. I got lucky and could work from home. So I drove my husband to the metro (about 15-20 min drive) where he got on to go downtown, then had to walk another 15 min or so to work. In the morning it took him about an hour and in the evening about 1.5 hours. Esp. after 9/11 we decided this is not what we wanted out of life. Yes, DC had the jobs, but the quality of life just wasn't there for us. Since almost all people have a two income family, everyone does their shopping at the same time. Which then makes shopping, and traffic, hell (traffic on local streets is worse on the weekends then during rush hour during the week!).

So we decided to leave because we felt it was not a place where we could "settle down." Buying a house was out of the question, even buying a townhouse was almost impossible. And we wanted something more than our condo. So we left. To Vermont. Now, the housing market in the Burlington area isn't as cheap as it would seem (housing shortage), but it's still great compared to DC. And the jobs aren't here (again, I'm really lucky where I could keep my job; now, what is my husband going to do?). But what people call traffic here is nothing, and quality of life is just so much better. I think that is what people need to weigh for themselves.

Anyway, DC (and other cities) is going to run into a huge problem when there's no affordable housing left, even in the suburban apartments. Where are all the lower paid people going to live? Every place needs cleaning crews, gas station employees, etc. And the new houses that are being built are not for the middle class. They are huge and start, if you're lucky, at 500k (that's just base price!). It's a sad, sad situation.
posted by evening at 6:05 AM on December 29, 2002

Remember not to look at the UK when you're coming up with urban planning solutions. It sounds like we're in the same boat as you guys.

The UK has pretty crappy public transport, although it's more widespread than in the US. Unfortunately, the price and quality of public transport has had the negative effect of forcing more people into their cars.

I moved from London to the rural North in 2000. I travel down to London every few weeks. In that time the traffic has become noticably worse. In just two years! Whereas before the roads were busy, now you have giant tailbacks from every single junction in the morning, rendering the inside lane useless.

Housing prices are even worse. We sold our 1500sqft 2-bed house in Surrey for $290k (I'll stick with US currency here). It only cost $110k in 1993!

Unfortunately salaries in the UK are not meeting property prices. Ever more and more 20/30-somethings are still living with their parents, and those that do move out are forced to share rented accomodation with several others.

It's all a bloody rat race.
posted by wackybrit at 5:47 PM on December 29, 2002

*reads above*

Holy cr*p! You can deduct mortgage interest payments against tax in the US? That's amazing, and certainly makes buying property a lot more affordable.

In the UK there's almost nothing you can deduct from your tax if you're a regular employed joe :-)
posted by wackybrit at 5:53 PM on December 29, 2002

Holy cr*p! You can deduct mortgage interest payments against tax in the US? That's amazing, and certainly makes buying property a lot more affordable.

Not against tax, but against taxable income, if I read you right.

If you pay $10000 a year in mortgage interest and are in the 28% tax bracket, you take $10000 off your taxable income, which is a net savings of $2800 to you, and economically equivalent to a housing subsidy of that amount. The thing wot pisses me off is that if a richer someone in the ~40% bracket also pays $10K in the same year, their effective subsidy is $4000.

You don't get to subtract your mortgage interest from your taxes owed, though, which is what your post looked like to me.
posted by ROU_Xenophobe at 8:37 PM on December 29, 2002

wackybrit - Holy cr*p! You can deduct mortgage interest payments against tax in the US?

No, you can't. You can deduct mortgage interest payments from your taxable income, not from your tax. That means you get back roughly 25-33%, not the 100% you'd get back if you could deduct it from your tax.
posted by NortonDC at 8:38 PM on December 29, 2002

Thank you (both!) for that answer. That's what I meant, but I said it incorrectly, but thanks anyway! The US would really be the land of opportunity if you could deduct things from taxes owed! ;-)
posted by wackybrit at 8:52 PM on December 29, 2002

"It makes infinitly more sense to rent then to buy when you consider the 140,000 downpayment."

Especially considering the entire sales price on my ten-year-old, 1600sf 3 bedroom 2 1/2 bath home on 1/4 acre was $123K.

Sheesh.

California isn't that special, people.
posted by mr_crash_davis at 9:19 PM on December 29, 2002

I bought my place 6 years ago come July (chicago bungalow if anyone cares) and I now have significantly more in equity than in my mortgage. I hope the prices do fall, fall hard even. I am happy that I am not losing money, but I would feel even better if my friends could afford to get places of their own. These days they just cannot, and the disparity is not something I feel good about.
posted by thirteen at 9:28 PM on December 29, 2002

The US would really be the land of opportunity if you could deduct things from taxes owed! ;-)

You can, for some things. Those are 'tax credits.'

There are a couple of different education ones; my last year or two of grad school I got to deduct a percentage of my tuition and fees from my tax bill directly, which saved me about $1000 (woulda been more, up to some limit, but I was only paying residency fees (ie, writing my dissertation))

There's also the Earned Income Tax Credit, which does complicated things I don't understand and is really fiddly about how much money you make and how many kids you have. It mostly reduces the tax load of poor-to-middle-class families, sometimes to negative amounts.

And a bunch of little tax credits that don't affect most people -- credits for buying more efficient appliances and stuff like that.
posted by ROU_Xenophobe at 11:32 PM on December 29, 2002

Small matters like being able to have walls that aren't off-white, or get a dog without anyone else's #@$^ say-so, or anything else that most American landlords don't seem to let you do.
posted by ROU_Xenophobe at 9:17 AM PST on December 28

It's the improvements you can make that you just can't find in the rental market and will never get the go ahead to make from your landlord that motivated me. Like 60A/220V service to the garage to run my welder/air/dust collection/cabinet saw.
posted by Mitheral at 1:49 PM on January 2, 2003