Houses are horseshit

So it’s 2007, my new job is going well. My sister recently bought a house. My brother is house shopping. I’m living in a studio apartment in Fargo for $375 a month. I decide to take the plunge as well into home ownership. 

I have few reasons.

The market has crashed already. Rates are low.

Not sure I want a house, but it seems like the grown up thing to do. I have a solid job. And I go through the First-time Homebuyers program that helps people like me get a house. You take a class and learn all the ins and outs of buying a home. I can see myself settling in for five years in Fargo. They say you have to do five years in a home to make it worth it. (which is horseshit, by the way)

After looking at more than a dozen homes, I find one in the upper end of my price range ay 103,900. It’ll be tight moneywise, but it’s a nice character home, big trees, perfect size for a single guy and a roommate.

Home ownership is part of what we are told to do when we grow up. You get a home. You fix it up. You have your own private place. You build a bit of equity as the housing market rises. I didn’t see how it was worth it at the time. I figured I would be better off staying in an apartment and stashing the money away into savings or into stocks. But the pressure to buy, to be something I’m not, to live up to the parent’s expectations, was too much. 

I’ve been reasonably happy with the house. But not enough to warrant the purchase.

So 4 years later, I’ve been paying 875 a month average. About 100 of that goes to principal, the rest to interest and insurance and taxes.  That’s $42,000 for four years. Only 26 more to go and I own it!

And that isn’t counting 300 a year for flood insurance, 500 for a new dishwasher, 170 a year for rotor rooter, 500 to get the tree trimmed, 500 a year for other fixit type things, and looming costs of painting and shingles. Add in the 50 a month for the city garbage, extra 60 a month in electricity and heating compared to an apartment, and you’ve got another 10,000 for a total of $52,000 in four years. That’s now more than half the cost of the home in four years.

For comparison, a similar two bedroom apartment in Fargo currently goes for 625 a month. No extra costs for garbage, sewer, fixing things, or homeowners insurance or property taxes. $30,000 assuming I overpaid for the last four years. Let’s add renter’s insurance at $200 for fun, and it’s still not up to $40,000. That’s assuming I moved out of the studio into nicer digs, which may not have happened.

So in four years, I spent an extra 12,000 to have a place I get to fix, mow, shovel, and deal with a racist neighbor from hell (neighbors from hell can be found in apartments and in neighborhoods. Fact!) If I stayed there until paid off on the 30 year plan, I’ll have spent over 300,000.

Well, how about getting that principal back upon selling, you ask? I’m now asking 106,500 with no takers after 3 months. That’s barely over 0.5 percent a year. How much will I gain at that price? Nothing. Not a dime. Although I’ve paid into principal, even an extra 100 bucks a month for the first two years, I don’t see anything. The real estate agents and banks take that. I’ll be lucky if I can pay off the 1000 I spent to spiff up the place with new paint and watersealant and landscaping.

So now I have the joy of paying for a place I can’t sell and don’t live in, while unemployed. I’m still trapped in Fargo.

I asked the loan manager at the bank if I could just pay the interest and insurance and taxes because of all this, just cut off the 120 or so in principal. No dice.

This whole home ownership just has no upside to me. Anyone I ever hear talk about their home is always complaining about how much work it is and what broke last week. A coworker had to spend 5000 out of pocket to fix his fence last summer.

I honestly don’t see it. The only way it would make sense to me is if you planned to stay in the same place for 15 years, and who can foresee that when jobs don’t often last that long?  I guess without people to buy into this whole system, banks wouldn't make money, so hey, we can all feel better about helping banks out, right? 

I guess I like the honesty of apartments as well. Yes you are helping someone else get rich, but they are providing a place to live that they fix if it breaks. It's a lot easier to leave an apartment than a house. And the owner isn't promising that you will one day make money off it it when you won't. ever. 

Rant over.

Anyone interested in buying a house? I've got the perfect one for you!