This post is brought to you by Ryan. I had a weekend of yoga teacher training so I haven’t had a chance to write a post yet. I will give a recap on my yoga weekend on Wednesday’s post, but for now, enjoy Ryan’s post about home buying that will not be popular with real estate agents 🙂
Back in 2006, I was fresh out of college and beginning my career and I really wanted a house. I thought this was the logical next step most people take since some of my friends and colleagues were buying houses (little did I know, the average age for a first time buyer is around 32 years old). But when I started looking around, I found houses to be utterly unaffordable for me. This was frustrating given that I had a college degree and “real” job…if I couldn’t afford a house, then who could?!
Looking back, I am thankful that houses were unaffordable for me at that point (recall that 2006 was the peak of the housing bubble) because I likely would’ve ended up buying a townhouse: my “starter” home. Townhouses were some of the hardest hit during the collapse, dropping almost 50% from the peak. I knew many people who bought townhouses between 2005-2007 then moved into a single family home a few years later and were stuck renting out their townhouse for years later because they were so underwater.
When Lindsay and I started looking for houses in 2008, we had a new strategy. We wanted to buy something that we could live in forever and “grow into” as our family grew and in a location that we loved. We had simple requirements, 3 bedrooms on one level, 2 bathrooms and a good location near the city center. We ended up finding a nice house that met these requirements in Minneapolis that we could afford and bought in the summer of 2008.
Now over 10 years later, we are still in the same house and don’t plan to move for the foreseeable future. We love our location, have just enough space to support our two kids and large dog, and have a very affordable mortgage payment that will be paid off by age 48. Occasionally we lament wanting a few hundred more square feet or taller ceilings but the benefits outweigh the costs of staying put for us at this point. Plus, given we love our location, getting a slightly bigger house in the same location would likely cost more than double what we paid for our house.
I’m not against people moving or upgrading houses but I do think that every home purchase should be viewed as a long term commitment. Here are three benefits of living in the in the same house forever (note: I’m using the term forever loosely here to indicate a long period of time like more than 20 years).
- Selling your house and moving is expensive and stressful. I remember when we first moved into our current house we had an epic moving day that involved getting stuff from two separate apartments as well as a few items from Lindsay’s grandparent’s house in a one day extravaganza. After that day, I vowed to never move again (at least without hiring help). I’ve never sold a home but it’s hard for me to imagine how much work it would be to prepare the house to sell and move stuff at least once (or twice if you can’t immediately find a new house once your house sells). Also, the realtor fees are generally at least 5% so if you’re selling a $400,000 house, it’ll cost you at least $20,000 just in realtor fees. You could pay for a decent kitchen upgrade for that cost.
- You will likely own your house quicker if you don’t move. It seems like when most people move, they buy a more expensive home and extend their mortgage term out another 30 years. I’m a fan of owning my house as quickly as possible so if you’re shortening to a 15 year or paying all cash, this may not apply. Also, your mortgage payment will fixed so if your incomes increase, your mortgage will become more and more afforable.
- You won’t have to “downsize” when the kids leave the house. When we didn’t have kids, our house felt huge! Now with two kids and a large dog, it sometimes feels tight, but manageable. I know a lot of people downsize once their kids move out because they have too much house but if you enjoy your location, never moving will eliminate the need to downsize.
If you’re thinking about selling to upgrade, I strongly suggest that you think long and hard about why. List what you like and dislike about your current home and think of ways you can further enjoy what you like and potentially improve your dislikes in your current home. Remodeling can be much cheaper than moving.
How long have you lived in your house and do you ever plan to move?
