December 04, 2007

Are they days of "home anchorship" and crushing mortgages over given today's global workforce needs and the economics of "owning" vs. renting?


Just asking.

I would imagine many of us bubble sitters will buy a house again, when the price is right and when we can rent it out for positive cash flow should we need to.

But if you're 20 to 45 and you want to compete and get ahead in the global workforce, you need to be mobile. The days of living and working in one city, one state, one country or for one company for the rest of your life are pretty much over.

So are the days of "home anchorship" over? Especially with rents being a fraction of "ownership" costs?

Professionals (real ones, not fake jobs like "realtor") who are mobile and open to relocation will be in demand. Those who are anchored to a city or a house they can't sell are going to have trouble competing.

Also, with national borders disappearing, the idea of geo-arbitrage taking off, and many people being able to work from anywhere on the planet thanks to the internet and mobile phones, isn't even the basic idea of "home anchorship" so last-century?

Thoughts?

86 comments:

Anonymous said...

http://www.gold-eagle.com
/editorials_05/schiff113007.html

Anonymous said...

Some habits are hard to break. I know for my husband and I we have had to move around for his job for the last 20 years. But we find that in order to get the major jobs in major markets employers don't want to see you having changed jobs every 3 years on average. Even though they like all the experience, they know that they might not be able to keep you in the corporate political bullsh*t, because moving is an option for you. Read Babbit and you will see that Corporations like home ownership. They love the chains around your feet that anchor you to their job so they can treat you any way they want to and pay you what they want to.

Happy Homeowner in the Stix said...

Uh...no.

Because thanks to the internet, many people (like me) can live somewhere they can afford and work from home. I don't need to move from job to job, and pay all the costs associated with packing things up and hittin' the road. You forget that those costs, especially for a family, can be substantial.

Of course, your mileage may vary.....but it hardly speaks the end of homeownership.

Homeownership is not, and never has been, for everyone.....just like renting is not always a suitable option. Globalization is pretty much a wash in this case.

Anonymous said...

I knew this was happening over 10 years ago - and definitely, YES the person who is mobile is at an advantage when it comes to getting jobs and earning top dollar?

But what price does one pay?

You have to think about what it does to your family and especially your kids. By uprooting them every couple of years (even every 5 years) you are ensuring that they will never form the kind of permanent friendships which will mean so much later in life.

As an example, My father moved to Canada over 30 years ago with his immediate family (myself included). When he passed away, he was buried back in the "old" country where over 100 people went to the funeral procession alone.

My fondest memory is of an old man (who played with my father in the street where they used to live when they were kids) who was crying his eyes out when he passed the open casket. He might not have seen my father for over a decade - but he was still sad to see him go.

My advice...

FUCK the corporation, FUCK the money, FUCK the greed.

You have one life, and the only thing you'll be able to take with you is the friendships you make along the way. Everything else stays behind... and is therefore worthless.

You might think that you're sacrificing your kids future by not going for the big job... and maybe you are. But that's only the immediate future. In the end, you'll be saving their souls which is alot more important.

IB

PS - sorry for swearing, but I specifically didn't change the lettering because I feel so strongly about it.

ET no phone home said...

I change locations about ever 7 years so buying a home was never really high up on my list. I like the change of scenery that a move brings (especially an international one).

I might have done well had I purchased a house in California and sold it at the top while I was living there but the chance to move to Europe came up and I chose to do that. Besides I would have probably fallen into the trap of home ownership and then not have wanted to sell it when the gettin' was good thus risking not only the invested equity but also suffering the drop in price. (That's just me guessing what would have happened). Something about homeowner associations never sat right with me. If I want to let the grass grow or have artichokes or herbs growing in my front yard, I don't like Suzanne (who is also a realtor strangely enough) telling me it isn't permitted.

I had 5 chickens in a solid fenced in back yard and was told by the town that that wasn't allowed (no sir, you can't be too self-sufficient these days, smacks of homegrown terrorism) but having 3 dogs that howl and bark all night long from the neighbor's yard is ok. (Nothing wrong with dogs mind you but what harm does a few chickens do? It's not like I had a rooster and the hens went into a coop every night with a door on it.)

Renting is expensive here but so is owning and since I will be moving again in about 2 years. I don't feel the need to get into and then out of a home.

Anonymous said...

I can travel/move and so can my husband. BUT we are not moving anywhere. We have our son in one of the best private schools in the country. He is working a grade level ahead and is in the 99% in math and reading. Moving is not an option. His education will make the world a better place and one thing they can't take away from you is - your education.

I curious to read other responses.

ROM said...

From what I've seen no one really cares where you live as long as it's a major city and you're willing to travel. Sure the political people all try to find an excuse to live near the home office, but they're the type who will buy houses and won't relocate to BFE.

Anonymous said...

KEEFER,

You are 1/2 right. It is a global economy. But the notion of moving to a job is so 20th century. In the past 12 months I have worked for clients in New Jersey, California, Canada and Denmark.

I didn't have to move. I made a few trips to the offices and worked 75% from home.

Whether I rent or own is irrelevant in my situation. I could live in a tent and as long as I have access to a phone and the internet I am good to go.

Andy in San Diego said...

Are the days of home anchorship over? Uh, no. Didn't you hear? Suzanne researched it.

Anonymous said...

Keith, this is one of the best assessments of being able to make it in today's time that I have seen yet. Being mobile and not anchored to a huge mortgage that you cannot leave is the key. Mobile, that should be the new word and trend for the next decade!
August Redmoon
Alaska

Anonymous said...

Keith, I think you're right on.
It took me 7 months to sell my house after moving cross country for a job. I rented when I arrived at my new location. The old house sat vacant with nary a buyer in sight. My neighbors did not like living next to a dark empty house.
Moreover, had I not had the extra income to afford it, I would have lost the house. Seven months of double payments was enough to scare me silly. I thought to myself, "why do I ever want to put myself in this postion again?" Jobs come and go. I could be laid off at any time. But you can be rest assured the mortgage payments will keep on coming.
Sure, I'd like to own the house I'm living in, but the price has to fall about 30% for me even to consider buying it. Then, I check myself and think - OK, homeownership is good, but mobility is better. As a renter, I have the freedom to pick up and go without being chained down to a mortgage. It's a really nice feeling. So I don't know if I'll ever buy again - ever.

Scared straight in Vegas

Daphne64 said...

People tend to stay put if conditions where they are are tolerable. There are these factors called friends and family.

It's difficult to develop a new set of friends in a new location, and, well if anyone knows how to start up a new extended family elsewhere I'd be interested in hearing about it.

Anonymous said...

It is still a small percentage of the workforce that needs to be truely mobile where they typically must move when changing jobs. Positions like executive managment but then those jobs pay extremely well and usually have relocation benefits that take care of selling and buying your house.

Yogsoggoth said...

So we should all become migrant workers living in company homes, shopping at the company store, and never set roots in one spot. Should be great for raising kids. A world where the land is controlled by 1% of the population and we all pay them a monthly tithe.

Sounds great!

Anonymous said...

Because thanks to the internet, many people (like me) can live somewhere they can afford and work from home.

A tiny % of employees are allowed to work from home 100% of the time. Most employers want you in the office for some weird reason. I would love to work from home and it probably wouldn't affect my work at all, but my manager is an old codger baby boomer who wants to be able to see people type away at their computer.

Anonymous said...

Home Ownership can be an Albatross around your neck. As you get older, you discover that you no longer need or care for the same things you once did. If your Children are grown (and out of the house!) a certain wanderlust takes over your mind, tired of the same old thing you have been anchored to for the last 25 years.
The problem is that in today's high priced housing and a lack of savings on behalf of a majority of middle class workers, you may not be able to make that change even if you desire it.
This idea I now believe is part of the intended destruction of the middle class. We are in the final rounds now. It started in the mid-seventies after the refusal to continue the Vietnam conflict. A slow economic squeeze was placed on the "normal" American middle class individual.
This is how it began. The women's movement advocated independence for women. They degraded motherhood and urged them to get jobs on their own. Divorce was made easy, Church and morals became a non-issue in people's lives.
Education became more and more controlled and directed by government and middle class people were steered certain ways that they advocated in the form of grants and loans. That College degree then began to lose it's value it once had before Vietnam. Public schools were destroyed in inner cities intentionally. Budgets for these places were reduced and there was no equality of opportunity as the tax and earning crowd moved to the suburbs to get away from city life. Suburban schools received everything, but the populace was heavily taxed for that privilege. So much so that they cannot stay if incomes come up short or they get old, or a spouse dies unexpectedly.
Then in the 80's the earning power of men was stagnated to the point that both men and women now had to work to maintain a lifestyle that was once suited to only the male working with women staying at home and raising children. Laws were amended to force you to deal with other lifestyles, incorporation of mentally deranged and half way houses in every neighborhood abounded with good intentions but often caused areas to become tense. Property crime increased as the building of low income housing was forced into every area. Now you can have a situation where one side of the street is paying $400 K for a home and the other side is a set of apartments where people pay minimum amounts to live. The old were steered to "Over 55" communities. Temporary boxes to rob you of your cash until you die. Nursing facilities added to the drama. Laws allowed them to wipe out inheritances in the name of continued care. Leaving relations demoralized and without hope for future change.
Some prospered! Greed became infused into the middle class mindset. No longer tolerant of cities and small spaces, Suburban living became the new norm with lots of travel time to work.
Then in the 90's the "good times" were upon us in the sense of spending. Credit increased, values increased but rights began to disappear, especially the easy volunteerism of the National Guard, who now became just another wing of an active army fighting in Iraq. Greater control was achieved with laws that forbade freedoms of speech, religion, and other ideas were constantly being brought to bear. Anti-Christmas decorations of manger scenes. Jesus was chased from displays and the Old Testament was banned from Government buildings. Soon you had to be careful of every word, or you would be fired from your job.
Now, the final battle. Property. The middle class was encouraged to "move up" in an enviorment of easy credit. Why stay in that suburban house? You can move up to a McMansion by selling that old wooden shack to some other fool for $250,000, use your equity and buy a $500,000 house! Low interest! Wow!....but suddenly, the run slowed. The rules changed. Corruption was everywhere. Irresponsible credit helped to ruin even newly built neighborhoods. Immigration took over certain cities and small towns to handle menial tasks. The middle class, after all, can't work as a cook, sewer, cleaner, etc. because those jobs go to illegals now. So, you are now an apartment gypsy. Moving from place to place and job to job. You don't own anything. What you have needs to be in a storage USA facility most of the time. You stay an average of 5 years in one place and move on. Soon this too will end. VERY SOON. In a few months, no more job. You will then discover you own nothing and have nothing. You have been duped out of ownership and it all belongs to big pooled networks of feudal types of "Barons" who will seek a return to the middle ages. An uneducated class of peasants, dirty and unwashed staying and working on land owned by another in exchange for survival rations.
The only way to avoid it is revolution. It may or may not work and National Socialism may be the result with a strong anti=foreign or anti-immigrant attitude. Watch out! It's coming soon.

Anonymous said...

Keith,

FYI: The 1st post in every message thread is STILL tangled up with the text above it. Your fault? Or the blog software?

Anonymous said...

>> You have one life, and the only thing you'll be able to take with you is the friendships you make along the way. Everything else stays behind... and is therefore worthless.

I know a guy who was buried with/in his car. You CAN take it with you!

veritas_faust said...

I have moved 4 times (across state lines) in the past 7 years. From L.A. to Atlanta, then to New Orleans, then Miami now Portland, OR. Now I am relatively happy and my wife has a great job as a university professor, but she is far from being offered tenure, so if they don't...away we go!

I feel like a gypsy at times, but I can't imagine living any other way. When opportunities dry up I just pack up and move on. The grass IS greener if you know where to look. Working for myself makes it easier, and we don't have children but if we did, they pack up too.

Sure I would like to buy a house when prices return to normal. Until then I have rented some of the most kick ass places in all those cities...for a LOT less then owning. There is always a great deal or somebody looking to fade on a price if you ask around.

Anonymous said...

Anonymous said...
I can travel/move and so can my husband. BUT we are not moving anywhere. We have our son in one of the best private schools in the country. He is working a grade level ahead and is in the 99% in math and reading. Moving is not an option. His education will make the world a better place and one thing they can't take away from you is - your education.

I curious to read other responses.

December 04, 2007 4:06 PM


==================

WTF? So there is only 1 school in the world where you kid can get an education and therefore you cannot move from there until the kid is 18 and graduated.

This is by far the stupidest thing I have read in a long time.

Anonymous said...

when rents are comparable to a mortgage payment people will buy- if for no other reason than investment- if the home cashflows it will obviously sell as a rental-
the thing alot of you seem to forget is that MOST Americans that can get a mortgage DO - very very few people in this country will choose renting over having a mortgage when raising a family- you all concentrate on the financial aspect of home ownership- imo you are missing more than half the equation - the EMOTION aspect - especially if you are raising kids
"renting" when you have a family has a negative stigma - right or wrong it does-

sam said...

Moving around frequently clearly isn't for everyone.

There is a significant group of people who move frequently anyway AND buy. These people have been hardcoded to think ownership is always better and that renting is for poor people. They are 1-2 steps up from flippers and will increasingly look like fools.

For example, when I sold my place (Feb '06), parents of graduates students (with at best a 4 year time horizon) were some of the most active buyers in the market, which was a major metro area. Even parents of undergraduates (3 year horizon) were buying. This was unheard of 10 years ago.

The idea that it's worth the hassle and expense to buy a property for 3-4 years when, as is the case in the current market, renting is cheaper is pretty stupid. Another group of speculative buyers knocked out of the market.

I wonder whether many of the parents who gave their kids the great "gift" of an overleveraged overpriced house for college will now pressure them to stay in the house and pay the mortgage, reducing their options in life, income, and most likely happieness...

Anonymous said...

But what price does one pay?

I couldn't agree more...but if you want to be honest

EVERY ACT OF PROGRESS SINCE WE CAME DOWN FROM THE TREES HAS SERVED TO UNDERMINE RELATIONSHIPS, FAMILY, AND THE SOULFULNESS OF LIFE....

THIS IS WHAT CORPORATIONS WANT...EVERYONE BUYING THINGS TO FILL THEIR EMPTYNESS. LIVING SOLO AND FAR FROM FAMILY CREATES THE NEED FOR HOTELS, LONG DISTANCE, TV/ENTERTAINMENT, THE LIST GOES ON AND ON....

TO SAY HUMANS HAVE PROGRESSED AT ALL IS TO LOOK AT ONLY 1/2 THE EQUATION OF LIFE.

Anonymous said...

>> ...anchored to a huge mortgage that you cannot leave...

That doesn't appear to be a problem today ie. foreclosures, bankruptcies. You can leave anytime you want - just pack your shit and leave the keys on the kitchen counter.

Anonymous said...

Most places don't allow telecommuting....so whatever.

sam said...

Systemic problem- it's China's fault for lending us the money!

First step to recovery is to admit you have a problem.

America, let's admit we have a problem with overconsumption and cheap debt. Don't let it get to the point where we're selling our body on the street looking for 1 more hit.

Blaming "them" for what is clearly our own problem is useless. Like a ho blaming her John for her ho'ing.

The 2 culprits- stupid people and greedy people came from both campes- lenders and borrowers. In both camps, these guys were mostly American, with some foreigners playing the part of bagholder investors.

Anonymous said...

Agree that buying a house now doesn't make sense from the standpoint of globalization or rental cost differential

But I'm not moving no matter what someone pays me

Anonymous said...

We're wearin' out the f word, dontcha think?

FredE said...

A LOT of things are going to have to change for labor mobility. For example, expecting a long period of stable residency for new renters, expecting a long period of employment with individual companies for new hires, laws that place movement restrictions on families and others, border controls, etc.

keith said...

IF (big IF) you want to get ahead professionally and survive in a global workplace you're going to have to relocate.

IF you don't and that's not important to you, then you won't.

I'm against relocating personally - especially to a town I wouldn't want to live in. There's no amount of money someone could pay me to live in Detroit for example.

And I'm NOT for being loyal to a company. I am for being loyal to yourself.

But I'm sure for renting right now instead of "buying", and I'm for telecommuting, and I'm for geo-arbitrage, and I highly recommend living where you want to live. Life is too short to live in Detroit.

Bob Reno said...

While I agree with those who say we should be able to work from home, the reality (as others have pointed out) is that most businesses still want to see your ugly mug from time-to-time. But, in an economy that is going to be "rebounding" for quite a few years the flexibility to move about for opportunities will be king.
I think the next phase in the evolution is corporate ownership of homes. Corporations can spread the risk of falling markets over years or decades and can (or should) be able to write off the losses. They will partner with furniture renters and service providers (lawn, housekeeping, etc) to offer new employees a complete package of services for a set monthly fee. When you quit or move on, they plug a new family into the house and keep going. And I'm not talking about one or two houses like many corporations own for executives: I'm talking THOUSANDS of houses . . . entire subdivisions that are owned by one or more corporate entities and rented out. And when you drive by them, you won't be able to tell the difference from homedebtors.
Wouldn't it make sense now for one of Phoenix's or Las Vegas' big employeers to to scoop up all those empty homes for pennies on the dollar?

Anonymous said...


"renting" when you have a family has a negative stigma - right or wrong it does-


I better get into lifetime bondage to the bankers because I don't want that stigma. BAAAH BAAAH

feddy said...

this is another argument some of my coworkers have (dc, fed govt). since once you're a fed, always a fed, you dont become too mobile. there is some truth to this, however, my agency even is going the way of telecommuting with come of my coworkers moving to michigan, wisconsin, and flying in every 2-3 weeks. so, no, dc is not different

bubbleglum said...

My anchor is paid for, I have no debt and I grow most of my food right at home. People who move every year and depend on a grocery store for survival may be in deep sh#t in a short time.

pwnd said...

Have a friend who moved from CA to AZ about 2.5 years ago. He *just* accepted a great job back in CA and has to start in a week (no relo package).

He also just signed a lease on a place near his new job. So here's the rub; he now has to sell his place in AZ (~30miles north of phoenix). He only recently discovered on zillow.com that his house is worth $40K less than he thought, and "he'd be lucky to break-even after transaction costs." He's a good friend, but I warned him not to buy and he didn't listen.

Now I get to hear the story 1st hand as he tries desparately to sell his SSB (stucco-sh!t-box) in the desert. He's so damn lucky to be getting out while he still has a chance, but I imagine he will have to pay a short sale penalty to leave. If he does "break-even" I'll be amazed.

He is CHEAP as Fu@K so paying rent in CA, and his mortgage in AZ will drive him up the wall.

Where's the damn popcorn?!?

wc said...

I have seriously thought of never buying again. But if it became more affordable to do so than to rent then I might consider it. Though I like not having the worries that go along with home ownership. I'll stay where I am until the kids are out of school - no use uprooting them for no good reason - I'm feeling a bit fed up with NY

Anonymous said...

From my perspective, being mobile has greatly improved my chances of landing more lucrative jobs. Furthermore, by choosing to rent, I can set my location far closer to my company's head office which I would otherwise not be able to achieve had I wanted to buy a property. (Due to the outrageous housing prices in my area; Silicon Valley)

One counter-point to the individuals claiming that they can "work from home". With all respect, certain positions are not as portable whereby one can function well in a remote environment. Sure, if you are a software engineer, that's fine. But other jobs require a much more hands on approach. Furthermore, if you ever hope to attain a higher status in the company and receive better raises and promotions, being remote is a severe detriment. Nothing can beat face time with managers and high level VPs. Not only does that give you far better name recognition, it also gives you better job security. Whom do you think the company will lay off first? The individual working at the head office or the guy working remotely from some far off location? Consolidation is a killer in these times.

I recently took over a position that was previously being held by someone working remotely. The company was looking to consolidate and the first victims were those working remotely or unwilling to relocate to other offices. Those that were anchored to an area due to their house, family, etc. got the axe.

It's a shitty deal, don't get me wrong. But these are the things that happens when the economy goes sour and excess needs to be removed.

So personally, not only does being mobile assist my career, it provides peace of mind.

BOLD GUY said...

Keith,
you are right on this. I am in healthcare and by being mobile I can command high enough salary, so my wife does not have to work if she does not want to.
As far as the kids, money can buy a great education anywhere. By experiencing life in different places of the US/different countries kids may become more open minded, more tolerant and learn different languages which is a big plus. Friendships can still grow and develop when you move.

Anonymous said...

We need to go back to the days of 20% downpayments that weren't themselves borrowed, 30yr fixed rate mtg., mortgages no bigger than 2 (maybe 2.5) times income, no mtg interest deductions, no cap gain exclusion, no Fannie or Freddie or "securitization". Ironically, houses would be more affordable - by definition.

Look how far we've moved from those days. Back in 1959, my folks bought a 3br 1ba for 11,500 making 500/mo as an army sgt. I don't know how they scraped up the down payment, but the 30yr mtg. was less than 100/mo. My sister still lives in the house and about a yr ago figured it was worth about 575k. She and her husband added a BR, a bath and a garage 20 yrs ago. Her property taxes are 9,000/yr. Little Silver, NJ.

Anonymous said...

Moving is not an option. His education will make the world a better place and one thing they can't take away from you is - your education.

I curious to read other responses.

Well my response is this - your child doesn't have to go to a Private (Elementary & Secondary) school to get the best education.

My youngest just Graduated from Public High School. He attended Public schools all his life. We also have moved several times during his school years.

He now reads at Princeton........

Frank@Scottsdale-Sucks.com said...

Here's how renting vs. "buying" has helped me personally:

#1. If I'd "bought" in Phoenix/Scottsdale I'd be stuck there now, unable to give the house away. And we all know how much I hated the place and wanted to move. So, even though that doesn't affect my career/business, I'd be very unhappy and THAT would affect my ability to make money.

#2. If I were "smart" (according to realtors and FBs) I would've taken all the money I had in savings and "bought" a house back in 2003. But, instead I took all that money and started my business and now I'm financially free and no longer work and can do whatever the hell I want.

the second one is what's scary ... so many people gave up their dreams by sinking their life savings into a house, instead of something that would create income and set them free, and they're hating life for it now. If I'd have "bought" a house in Phoenix I'd not only be stuck there but I'd still be wasting my life working for someone else and to me that's unacceptable.

Anonymous said...

The lifestyle you champion is ok for young, single workers, but not for families.

There is nothing wrong with being a migrant worker - going where the wages are high for your particular line of work and not having any roots put down in any particular place, but eventually that gets old.

At some point you will want the stability of being part of the "landed class" (not the 125% LTV FB's we talk about here), and own the companies that the migrant workers work for.

Permafrost said...

Nah... Staying put is good for family, friends and the like.

Plus, most metropolitan areas have lots of good jobs on offer.

Peter T said...

Homeownership rates are low for low-income households, increase for middle class, and decrease again for the rich. Maybe being bound to one place is not so great after all.

Switzerland is one of the more competitive and richer economies in Europe and has one of the lowest homeownership ratios in Europe. Germany is similar but less extreme (slightly poorer and more homeowners).

Fundamentals are important, but the media wants to have plausible explanations even for bubble increases and bust decreases that have little to do with fundamentals.
- When house prices increased, the media wanted arguments why it happened: the boomers are in their prime housebuying years, they are not making anymore land, blabla ...
- When house prices will decrease in the next years, the media will publish opposite arguments: boomers must sell, staying in one place is so yesteryear, blabla

Anonymous said...

I dunno. Right now we're renting because the prices are still silly high, I won't pay more a month in a mortgage than I do for rent, period.

On the other hand, in a house, so long as it's the same monthly cost (yes including taxes & insurance) had it's upside. I do enjoy decorating and renovating which every landlord I know frowns upon. I like to garden but hate to put the money into my landlord's yard. I love having pets, which most landlords don't allow. Hell, most of them still frown on children.

And while my husband's job doesn't require mobility, and I can use my teaching credential anywhere anyway, as long as the monthly cost was competitive with rents in the area odds are I could rent a house out if we did need to move.

So I suppose it just depends on what's important to you, all costs being equal If all costs are not equal, just rent.

ohhhmyyyyy said...

"Life is too short to live in Detroit."

Home is where the heart is! I happen to like detroit but if that means you're poor, that's another story.

I know several people who live there-- rich from autoworker pensions, who love it. The next generation is f**ked though. They have to find a new way to make a living.

Anonymous said...

I firmly believe in mobility for one reason only and that is self preservation.

If you are young and looking to further a career and you don't mind dealing with relocating then you definately should rent. Especially, in a falling housing market.

For me, I am probably more concerned with the onslaught of natural disasters we continue to see such as the current flooding in the northwest and northeast. Not to mention the "big one" that will one day hit the west coast (where I live).

For me renting a home and being able to relocate is much more important that owning a home and dealing with the time and expense (ie.. the big repair that is coming!) that comes with owning.

Anonymous said...

you all concentrate on the financial aspect of home ownership- imo you are missing more than half the equation - the EMOTION aspect - especially if you are raising kids
"renting" when you have a family has a negative stigma - right or wrong it does-

December 04, 2007 5:58 PM

-------------------------------------

Valid point. But as the housing downturn goes on and on for years - and it will be years - that attitude will change as well.

Used to be once upon a time considered a stigma to declare bankruptcy. Now people do it and boast about it. Used to be a stigma to be an unwed mother, now it is celebrated as a triumph of feminism.

Attitudes on what is and is not "proper" change often and quickly. This whole you are buying a home not a house is nothing more than NAR propaganda. Whether you buy or rent what you are doing is putting a roof over your head. That roof can be a palace or a shack and you can have both by buying or renting. Your kids will not turn out any better or worse because you rent or own.

Mammoth said...

Keith,
I like the term, "Home Anchorship."

It has a nice 'thud' to it.

Mammoth said...

"...having 3 dogs that howl and bark all night long from the neighbor's yard is ok."
-----------
Tired of listening to this all night when you're trying to sleep?Try lobbing a few D-Con filled hot dogs over the fence one evening. This works!

And here's another neighborly tip: Got problems with those pesky neighbors parking their huge pickups or SUV's in front of your humble abode?

Politely asking them to move their vehicles doesn't work? Then try http://www.palmaautoboot.com/ .

Anonymous said...

anon 4:06 said
"I curious to read other responses"
----------------------------

Okay, here's a response for you: Why don't you learn how to write!

"I AM curious to read other responses!"

anon said...

>> We have our son in one of the best private schools in the country. He is working a grade level ahead and is in the 99% in math and reading.

Woot! My honor student can kick your honor student's ass!

Anonymous said...

Corporations are noticing this trend and they will only underwrite the fat cats in terms of a relo package that includes purchase of your current home. Middle management and starting positions will go to those who can move w/o the need for a home purchase as part of the relo.

Telecommuting and work at home will only address the problem partially.

Years ago people actually swapped homes and assumed each other's mortgage and making of the differences in loans and equity. It will come back as another partial solution.

Renting is the way to go for the next few years as long as it suits your needs.

Anonymous said...

WTF? So there is only 1 school in the world where you kid can get an education and therefore you cannot move from there until the kid is 18 and graduated.


apparently, children at other schools are all idiots or something and his/her child is special, just like a house in phoenix

Frank@Scottsdale-Sucks.com said...

I think the bottom line here is that for some people, owning makes sense (assuming you actually either own outright or have a legitimate fixed mortgage, AND bought pre-2002), and for many other people, renting makes sense.

For me, renting makes sense, because I'm paying half of what it would cost to buy the same house. All the funny math in the world (the only kind realtors know) will not defeat that argument.

Anyone who says "you should own for your family" who pays double what they could renting is derelict in their duty to do what's best for the family. Pissing away the kids' college money to say "I own?" You are unfit to be a parent.

Anyway, renting and owning both have their positives and negatives. However, on a board like this, insecure and emotionally charged FBs will flip out and rant and rave and flame renters anytime the subject comes up.

And that's why I love when you post stuff like this, Keith :-) Endless amusement!

PS - When I say legit mortgage I'm referring to 15-year fixed. A 30-year fixed costs you so much in interest over the life of the loan that you might as well rent.

Anonymous said...

WTF? So there is only 1 school in the world where you kid can get an education and therefore you cannot move from there until the kid is 18 and graduated.

This is by far the stupidest thing I have read in a long time.
----------------------------------

Some people are very fixated on their kids primary/secondary education. Which is fine, there are worse things to be fixated on.

Personally, I think higher education is far more important but to be successful in college you need good solid primary/secondary and set performance expectations that are appropriate for the kid taking into account their personalities and capabilities. College is where it is at, when was the last time you listed your primary/secondary schools on your resume? Give kids some time to be kids.

Anonymous said...

Because thanks to the internet, many people (like me) can live somewhere they can afford and work from home.

Hmmmm, so pretty soon an Indian, Chinese, or Eastern European will be doing your job for much less. Enjoy while you can. And nope, no job is safe, so don't even try to convince yourself here on the thread.

Anonymous said...

Funny how some people here say that workers don't need to be mobile. It totally goes against the facts. I've moved about 7 times between 4 countries...so far. At my wife's previous 2 companies, there were people moving in and out from all over the place, including consultants from several countries.

If you say that within your industry you don't need to move, I've gotten news for you: Your job is obsolete and you don't know it yet. The same thing goes if you don't speak an extra language. Sure, you can get by with depressed wages, or are a genius in your field that can stay put no matter what. However, career wise your plan is flawed and you'll regret.

I suggest that you take a course of Career Management to face the facts and the future.

Frank@Scottsdale-Sucks.com said...

Funny how some people here say that workers don't need to be mobile. It totally goes against the facts. I've moved about 7 times between 4 countries...so far. At my wife's previous 2 companies, there were people moving in and out from all over the place, including consultants from several countries.

People who say that are generally older and don't understand today's business world and workforce mobility requirements. They are the same people who believe you can still work for a big company for 20 years and get a pension.

Stuck in So Pa said...

"keith said...


And I'm NOT for being loyal to a company. I am for being loyal to yourself."
--------------------------
Loyalty to any one company gets you NADA!
My daddy worked for a major corp. for 47 years, but at age 63 he made a major blunder at work and they decided to get rid of him. The blunder? Like I said, he turned 63! This was in 1970, six years before "vested rights." They did everything but hire a hit man to take him out to get him to quit. He held on though, and I remember his first pension check after he retired was higher than his weekly paycheck! His untouched stock options alone gave me a huge windfall when he passed away.
I didn't get into the permanent adult work force until the early seventies, but I remember a lot of individual scenarios involving older, approaching retirement workers that didn't play out so nicely.

The same sh!t goes on today, except that age discrimination has become much more sophisticated.

Loyalty to ANY company? HELL NO!

Screw the bastards before they screw you!

Happy Homeowner in the Stix said...

Hmmmm, so pretty soon an Indian, Chinese, or Eastern European will be doing your job for much less. Enjoy while you can. And nope, no job is safe, so don't even try to convince yourself here on the thread.

One is doing my old job. My new job is to correct his and his coworkers mistakes. Zdorovye, baby!

Anonymous said...

'I curious to read other responses.'

Well he did not get his smarts from you; pretentious Bitch.

Burn Baby Burn

Anonymous said...

"...you all concentrate on the financial aspect of home ownership- imo you are missing more than half the equation - the EMOTION aspect - especially if you are raising kids
"renting" when you have a family has a negative stigma - right or wrong it does-..."

---------------------

Then that is a market inefficiency that can be exploited by those savvy enough to rent for less (possibly a LOT less) than the cost of "owning" a comparable residence.

Joe said...

Moving a lot gets really old. I like coming back to my same old boring house every night, it's awesome.

Anonymous said...

Moving around from city to city sounds sexier than it is.

The majority of people's map is the "village" defined by where they shop, work, see movies, walk the dog, send kids to school, etc. - a subset of a city. Sure, we can fly somewhere on vacation, but globalism is for corporations.

And who are these people renting out their homes? I don't see a whole lot up for rent, and in many neighborhoods, people are anchored (established) and don't think about renting.

dutchman said...

I was a homedebtor in three different houses in Portland, Oregon, while the kids were growing up. That took 30 years. The last ten of the 30 years, I ran my business from my home. I had clients in Oregon, Washington, Alaska, California, and Georgia. Never was asked to move anywhere, but traveled some. Five years ago, at age 54 and retired, and after dropping youngest child off at college, I left dreary/angry/weird Portland spouseless -- but with dog -- and anchored myself for the first time -- and in a beautiful rural area of the Northeast -- nearly 3,000 miles away. Life is good, the house is paid for (got twice the house and property for half the proceeds received from the little Portland house), and I love my property and house and everything around it. I've developed a new community of friends and have maintained my old friendships, as well. I have West Coast visitors quite often. My kids are now doing the corporate shuffle (living in four different states) and come visit me at the "country house," as they call it. In my case, the "home anchorship" became important to me for the first time AFTER I was finished with the rat race. There is no way I would want a paid-off house in Portland. Here, I'm proud to own it and it gives me a sense of security. You must remember that there is a huge segment of society that is still fairly young and active and no longer working. Priorities change as you get older.

Anonymous said...

Why should owning and renting be mutually exclusive?

Given todays economic uncertainties, it makes sense to have a home base for family stability and security and rent for mobility and opportunity.

I like a home base in a rural area next to a small town and within easy driving distance of a major city. It is safer, cheaper and we have we have the means to survive pretty much on own own, if we stay healthy.

kochevnik said...

Another thing to consider - as things get much tougher (the New Depression) more and more people are going to find that they have no choice but to pull up roots if they want to continue eating.

The average person moves 11 times in their life - I did a count and I got to over 40 moves in my life and I gave up - and that was 12 years ago.

Ues, it's nice to have a group of friends and family around - but life is about change - 50 years ago your friends all stayed in the hometown and no one moved away - unless they were very talented or very weird. Doesn't work like that any more - went the way of the drive-in.

I'm a hired gun and I get good money for it. I know the regular 9-5ers I temporarily replace are pretty unhappy people and make way less money - but they have a HOUSE - hahahaha. In addition to the money I get the choice of working when I want to - and for who I want to. Every time I quit a job my blood pressure drops 20 points. Right now I'm doing nada - puttering around and watching my kids grow up. I feel like a very lucky person and the trade-off of losing touch with surly relatives is a kind of a bonus.

One man's pudding is another's poison.

Anonymous said...

People desperately want to believe that "a man's home is his castle", and that they are kings of their own little domain.

Bad news: if you are working for salary, you are a serf. Period. Your livelihood is at the sufferance of your employer, and you will be better off simply accepting that and moving when you change jobs.

But people don't want to admit that, so they spend thousands of dollars and hundreds of hours a month stuck in a car in rush hour traffic just so they can pretend to rule their own kingdom for one or two drowsy hours before having to fall asleep so they can do it all again.

Anonymous said...

You must remember that there is a huge segment of society that is still fairly young and active and no longer working. Priorities change as you get older.

Hmmm, very few people in this bankrupt society can retire SECURELY at 50 like you did. Congrats! But your story left many important details out, such as:

1. Is your current house a shack in the boonies?
2. Have you retired with excellent health insurance?
3. It seems that your wife would have the right of half of what you owned after divorce, including the proceeds from those homes.
4. Do you have enough money for home care if you become debilitated (god forbid) as a senile? A live-in nurse is a lot of money.

What I've noticed is that a lot of Americans are forced to "live down" and kicked out of the workforce because of age/obsolete skills/outsourcing, while saying that they've become "detached".

Actually, the system is forcing them to have a lower standard of living, such as living in the boonies, inferior house, not much vacation, divorce, no good health insurance. That's a lot different than "choosing" to cut down.

Once you study Risk Management & Insurance at college, with access to tons of real life data, the world reveals itself as a very risky, tricky, and sneaky place to live in.

Anonymous said...

That doesn't appear to be a problem today ie. foreclosures, bankruptcies. You can leave anytime you want - just pack your shit and leave the keys on the kitchen counter.

Good luck trying to get a lease, good job, affordable car insurance, etc, when you credit is shot for 10 years.
Enjoy your new rotten credit and all the extra expense that comes with it.
Amazing...doesn't anyone plan ahead in this country anymore?

Anonymous said...

Home Ownership can be an Albatross around your neck. As you get older, you discover that you no longer need or care for the same things you once did.

Welcome to the new form of government, Corporate Fascism, brought to you by the secret societies. Enjoy.

Anonymous said...

Moving is not an option. His education will make the world a better place and one thing they can't take away from you is - your education.

Bush went to the best private schools, including Yale and Harvard.
I rest my case.

Anonymous said...

Joe said:Moving a lot gets really old. I like coming back to my same old boring house every night, it's awesome.

No wonder people call you Boring Joe

Anonymous said...

I think the next phase in the evolution is corporate ownership of homes. Corporations can spread the risk of falling markets over years or decades and can (or should) be able to write off the losses. They will partner with furniture renters and service providers (lawn, housekeeping, etc) to offer new employees a complete package of services for a set monthly fee. When you quit or move on, they plug a new family into the house and keep going. And I'm not talking about one or two houses like many corporations own for executives: I'm talking THOUSANDS of houses . . . entire subdivisions that are owned by one or more corporate entities and rented out. And when you drive by them, you won't be able to tell the difference from homedebtors.
~~~~

A medical group or hospital, can't remember which, is doing this in Miami already. They offer low housing for employees. It's an incentive to get people to move. Indentured servants, probably. What else can they do with all those condo's/houses?

Quentin Daniel said...

You are right so far as it goes ... people anchored to a home can't move to another city for a job. I think the trend will be virtual offices but not because a potential employee can't sell his house. Rather, for many more important reasons such as the cost of energy in commuting, the cost of maintaining office space, etc.

I work for a company that is virtual - no office to which workers report every day, make almost $200K/year. Work from home or if I have to, travel to customers sites. But WHERE I live is 100% irrelevant so even if I were anchored to my house (which I am not), it would make no difference.

Cow_tipping said...

Yes and no.
I own an anchor in Charlotte NC. 3 months ago, I accepted an opportunity in Houston TX and moved. Ergo, 1400 bucks of house payments, 100+ of other BS on a house we now dont even live in. AKA boat anchor.
However I have a fall back place till it sells, if I were to be laid off I'd move back.
I know its a small consolation but I can easily move back and find myself some employment back there. I also will be more mobile possibly because I can still live there and do 90% travel type job If I have to for the next 3-4 years. Charlotte is a Godd Hub American and USair I believe.
Cool.
Cow_tipping.

Anonymous said...

"I think the next phase in the evolution is corporate ownership of homes. Corporations can spread the risk of falling markets over years or decade"

Talk about taking sharecropping to the next level. We already shop in their store with their money cards...and now we have to live in their houses. We better start thinking their way and not say anything about the environment or the way they are killing people. Keep You Mouth Shut.

Anonymous said...

"- imo you are missing more than half the equation - the EMOTION aspect - especially if you are raising kids
"renting" when you have a family has a negative stigma - right or wrong it does-

December 04, 2007 5:58 PM"

Why? Because you say it has a stigma? Why? Because TV says it has a stigma? Teach your children that they are who they are because of what they know and what they can do. They are not who they are because of what they have and what the other person doesn't have. Teach your children that love and quality time is worth more than all the three car garages in the world. Don't compare yourself with others it is not wise. How do you know if your children know something...by a grade? How do you know if a child is worth something, by the house he was raised in? So you keep telling your child to get better grades so that when they grow up they can get into a college; and then you tell them that when they pass college they can get a job; and when they do that you tell them that they can get married; and when they do that you tell they they can buy a house (I mean rent it from the bank...oh but you don't tell them that). And now they have a house they can have kids with your blessing and you won't look down on them. You won't call them white trash because they rent their house from the bank.

GROW UP. We don't live in your generation anymore. We are worth more than other perple's oppinion and tv's perception.

sam said...

Renting doesn't have such a stigma with $1M in a well diversified portfolio.

Better the kids to learn not to make stupid judgements on incomplete information than watch mommy and daddy argue over the mortgage payment and credit card bills.

Tyrone said...

Great article:
There's No Shame in Renting, Home Prices Will Fall

People were still buying into the idea that a home is the best investment an American can make. They were so confident in their beliefs that they were willing to finance their dreams with preposterous mortgage products like interest-only loans and option ARMs. The desire to keep up with the Joneses was so strong that some went as far as to lie about their incomes and their ability to afford the required monthly loan payments. In short, they committed mortgage fraud just so they could buy their homes.

As you can see from the graph, affordability problems first began in 1997 and have since culminated in the biggest price bubble in U.S. history. The home prices we see now are not sustainable. They are built upon an artificial foundation instead of upon the traditional fundamentals that have always ruled the housing market.
...

Anonymous said...

Geez, I wonder if he really got a promotion or just an excuse to get out fast from the cancer loan and then dump the baby on her parents:

Market slowdown may leave Hollywood couple paying double

South Florida Business Journal -
Gaya and Lynn Gustafson are praparing a move to North Carolina – but haven’t sold their Hollywood condo yet.

Gaya and Lynn Gustafson love their two-bedroom condo in Hollywood. The young couple can walk to Young Circle, bike to the beach and hang out with the other building tenants, all of whom they knew intimately.

Then, Lynn got a promotion in Charlotte, N.C.

"We have to move by Dec. 1, and the condo is on the market, but we've had no offers yet," said Gaya Gustafson, perched on the couch in the couple's red-walled, picture-windowed living room.

In the past two months, she said, several buyers have looked, but none have committed. Some are more interested in renting - an option the condo association doesn't allow - while others want to wait for condo prices to drop further. Still others are more interested in buying foreclosed properties.

"The building is great and it's a good location and people will see that," Lynn Gustafson said. "It may just take a while to turn around."

But that is something they don't have. Gaya Gustafson is five months pregnant, and they want to be settled in North Carolina by the time the baby arrives. Her husband doesn't think he can push back his start date and he doesn't want to jeopardize the career opportunity.


http://tinyurl.com/ytwqp4

dutchman said...

"Is your current house a shack in the boonies?"

No, it is a nice four-bedroom, two-bath brick cape cod on a half-acre just outside a medium-sized town. It is 20 minutes from the state capitol and 2-3 hours from two major metropolitan areas.

"Have you retired with excellent health insurance."

Yes, I am a Vietnam combat vet with some service-connected disabilities that entitle me to free VA medical care. While VA healthcare is not the most common form of healthcare, many thousands of vets are treated by the VA. There are excellent VA medical facilities in my area. However, I wouldn't recommend signing up for combat duty with the idea you might get free medical care some day. It is not a good trade-off.

"It seems your wife would have the right to half of what you owned after divorce, including the proceeds from these houses."

Excuse me, but I never said I had a wife at the time I sold my last house. And I could be a widower. I don't quite comprehend how a divorce agreement would have anything to do with "home anchorship," or even how it would be anyone's business. I will say I was a single dad for over a decade and did a good job at it.

"Do you have enough money for home care if you become debilitated as a senile. A live-in nurse is a lot of money."

Well, at only 58 I don't feel quite ready for that yet, although I suppose it could happen to anybody at any time at any age. Fortunately, my medical benefits cover this type of an emergency.

The point of my original post was that we all have different circumstances and interests. I would not want to be chained to a paid-off house in my former Portland, Oregon. But here, I am proud to own my home and with the cost of living so much more affordable, I am not concerned at all with the cost of home ownership. I rented several apartments, and a house, in my 20s, and never gave it a second thought. But we evolve. Today I would be extremely uncomfortable living in someone else's house.

youthiswastedontheyoung said...

some anonymous poster said "GROW UP. We don't live in your generation anymore. "

What is up with this generational-warfare claptrap? Sweetcakes, you're not gonna be young forever and sooner than you think some snot-nosed brat is gonna be throwing those words in YOUR face. You'll understand then (hopefully) how ignorant they sound.

Anonymous said...

Folks, the American dream is over for those w/o parental resources (a.k.a. big windfall).

Today, one can only effectively afford either a midwestern (Des Moines, Omaha, etc) or rust belt (Buffalo, Erie, etc) type of abode but at the same time, be able to live anywhere in the country, renting, to be able to be near the so-called headquarters, field offices, customers, etc in the white collar world.

Sorry to say it but those long term telecommuting jobs will see their work end up in Romania or Argentina; that's almost guaranteed. The only white collar work left will expect you to jump through all kinds of hoops to maintain one's position. That's a type of roving management (w/ tech) consultant but for all kinds of operations, not just glamourous strategy work for a McKinsey.

So if you buy that rural retreat out by Bangor Maine, be prepared to make payments while traveling the nation for work. That way, you have your retirement pad all paid for but have lived the rest of your working days in apartments. This will, in a sense, give you a place to fall back once the paychecks stop coming in and then you can use your retirement funds to simply pay the taxes and maint.

Anonymous said...

"Sorry to say it but those long term telecommuting jobs will see their work end up in Romania or Argentina; that's almost guaranteed."

Pure telecommuting ends this decade. It was mainly an internet phenomena which had its primary life cycle from 1995 till perhaps 2010.

The reason for its growth was to placate upwardly mobile professionals who wanted free time for soccer moming, less commuting time on the highways, extracurriculars [ like exercising w/o taking a shower ], or working in one's pajamas.

Today, those types of jobs will find their ways to any emerging country so the remaining professionals will have to put in some face time to keep their jobs. And in this case, the face time will involve actual interfacing work with the clients, partners, juniors, etc. In other words, those jobs will be both, hard-to-find and hard to keep so telecommuting options will be limited to perhaps twice a month or when perhaps the worker is on the road servicing a field office in a separate location. In other words, it'll be like in the great depression when anyone with a job didn't everything to keep it.