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Old 11-29-2015, 07:10 AM   #41
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Agree. Amazed at how low some of these costs are. Good for you. No plans on moving either though.
I think a few people move because it's cheaper to live in the next town or state. I had a friend who moved out of the area only to realize later that he would like to move back to the old neighborhood but can't afford it. Some move to wherever they want because they can afford it. Most, I think, have acclimated to their surrounding and say, "This is a pretty good place to spend the rest of my life." Got my friends, weather I like, view of the mountains or beaches, etc... "I'll visit other places, but this is home to me."

Instead of moving to a new place, why not have a new attitude. Jane Fonda was asked how she stays so youthful (other than physical stuff) to which she answered, "I keep being curious..."
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Old 11-29-2015, 08:09 AM   #42
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I
Instead of moving to a new place, why not have a new attitude.
In our case, we wanted to get out of the McMansion with the pool. DH has a balance problem and had had a previous subdural hematoma after a fall down the stairs and we wanted most of the living to be on one level. The old place was way too big to keep clean without a lot of work, and I wanted to get into a smaller place before all the Baby Boomers in the neighborhood realized their McMansions were too big for them and the market got flooded.

It became clear as we put the house on the market and looked at places to buy that my idea of being able to buy a new place with just the equity in our old place was a fantasy unless we significantly lowered our expectations. We realized, though, that the logistical reasons we wanted to buy another place were real. I'm happy to say we found a great house about 15 miles from the old one, a bit smaller, less trouble to keep clean, on two floors instead of 3. The staircase to the lower level is wide, open to natural light and has a landing in the middle- much safer for DH.

Anyway- to get back to the OP- our monthly expenses are about $1500. That's $700 for the mortgage, $450 for utilities (including $130 for cable), $360 property taxes and the rest property insurance, HOA and lawn care (chemicals only- I mow it). That excludes $400/month I accrue for repairs and maintenance. Expenses are down about $400/month from the old place.
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Old 11-29-2015, 10:34 AM   #43
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Wow, before I retired in 2007, I was renting a decent 650-700 square foot one bedroom apartment in a great location in downtown San Jose and I was paying "only" $1000/month -- it was already getting under market rent by then. I left that place a couple of months after retiring. But rents exploded after I left.
Back then I was renting a very small studio near Good Sam for $700/mon. Rent had actually dropped slightly for a few years, but then they regularly pegged the 8% per year limit after 2008.

I remember wandering around the houses near my apartment seeing reminders of growing up in Chicagoland. Houses there are the same age, size, and lot density, so the neighborhood has the same look and feel, only here they're built of wood instead of brick and don't have basements. Cost is a huge difference, Zillow says the house I grew up in is a hair over 100K while a basically identical home in south San Jose sells for ten times that. An old friend of my Dad's once told me how he and my Dad both purchased their first homes in the same year and for the same price, only his was in Palo Alto, so he got 20x the appreciation.
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Old 11-29-2015, 11:30 AM   #44
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After seeing some of the low housing cost figures it makes me reevaluate our location but only for a brief moment as DW will not consider relocation due to close proximity to family and friends.
+1

It's pricey here in the Chicago suburbs. My RE taxes alone, on a very modest six room ranch, exceed what many say their total housing costs are........ Sigh.....

But DW (and I to a lesser extent) are anchored to grand kids, kids, extended family, friends and the entertainment and cultural attractions. I wouldn't mind moving to a location with top notch natural beauty and superb outdoor recreational opportunities, especially fishing and paddling. And with those attractions not just "nearby." For example, if we moved someplace to enjoy easy access to great fishing, I'd want to live on the water not just with easy access from a nearby location.

IOW, the only places we'd be interested in moving to might also be expensive places to live. So, here we are!
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Old 11-29-2015, 11:46 AM   #45
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+1
IOW, the only places we'd be interested in moving to might also be expensive places to live. So, here we are!
Agree. Places that are desireable tend to be expensive. At least relating to purchase prices. Also, places near high paying jobs as well. Compromises are usually required. But different strokes for different folks so there is room for lots of different approaches I think.

Incidentally our home in Canmore Alberta would appeal to you, I think. Outstanding, world class fishing, hiking, skiing, scenery. As you would expect, not cheap.
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Old 11-29-2015, 11:57 AM   #46
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IOW, the only places we'd be interested in moving to might also be expensive places to live. So, here we are!
I agree. Other than living close to family and friends which is high on DW's priority list we live 30 minutes drive from Boston and Providence with all they offer from dining options, sports teams and cultural events. We also live 45 minutes away from some of the most beautiful beaches of Cape Cod which is important to DW. Since we value these amenities and lifestyle and we can afford the housing cost we may downsize our current residence in the next couple of years but we will stay in the area for sure.
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Old 11-29-2015, 12:07 PM   #47
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Agree. Places that are desireable tend to be expensive.
Especially at our age where putting in years of sweat equity isn't an option. If and when we move, we'll be looking for a close-to-turn key situation. And that usually means paying a premium.

Getting old and running out of time and energy isn't cheap!
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Old 11-29-2015, 12:13 PM   #48
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... Most, I think, have acclimated to their surrounding and say, "This is a pretty good place to spend the rest of my life." Got my friends, weather I like, view of the mountains or beaches, etc... "I'll visit other places, but this is home to me."...
Yes, that's my attitude now. If we happen to stumble across a big sack falling off an armored truck, I will again think seriously about getting my own waterfront property in the Puget Sound (see my screen name). But even then, I would use it only for summer escapes from the brutal heat of the Southwest. Right now, it is so darn nice with sunny and clear blue sky, low of 40F and high of 60F.

Just finished off my onion soup, and will go out to the yard to do some more gardening. There are people suffering the weather in other places now, so what is bad with where I am? Comes the summer in 6 more months, I will be again on the road, or retreating to my high-country place.

Life is still good, although the past dream of having my boat tied in the back to go crabbing each day for dinner is now impossible.
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Old 11-29-2015, 12:31 PM   #49
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We've pretty much ruled out moving from where we are (Michigan), for many of the reasons others have cited (friends and family here, close to many recreational opportunities, etc.). Plus, we're basically done with major upgrades to the house, yard, garden, pond, etc, and I don't want to start over with all that stuff in a new place. Taxes are relatively modest in our rural location, also. The only drawback for me are the winters - I love it here from spring through fall, but I've grown tired of the winters. So, the solution for us is to go south for a few of the coldest months (we rent a house on the water in south Texas). That works well for us.......when we get back home, spring is on the way, and I am looking forward to all of the things I enjoy doing as it starts to warm up.
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Old 11-29-2015, 01:15 PM   #50
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1100 SqFT "apartment" - Don't know how to figure opportunity costs directly, so I would estimate it this way:

Paradise Rent: $2600/mo (We own, but our bldg. is right in this rent range.)
Prairie apt. Rent: $ 600/mo
HOA dues: $ 600/mo (with hot/cold water/trash/cable/Bldg. insurance
RE Taxes: $ 100/mo
Elec: $ 80/mo
Personal INs. $ 15/mo
INternet $ 60/mo
Phone(s) $ 60/mo

Total/mo $ 4115 (Round it to $4000/mo)

I know this isn't a contest, but I'm guessing that's close to a record among our players on this thread. The good news: We could move to the Prairie and it would be $750/mo. (incl. phone/internet/cable, with all utilities). So why paradise? Come on over and see. Of course, YMMV as my mom hated it.
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Old 11-29-2015, 03:51 PM   #51
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1100 SqFT "apartment" - Don't know how to figure opportunity costs directly, so I would estimate it this way:

Paradise Rent: $2600/mo (We own, but our bldg. is right in this rent range.)
Prairie apt. Rent: $ 600/mo
HOA dues: $ 600/mo (with hot/cold water/trash/cable/Bldg. insurance
RE Taxes: $ 100/mo
Elec: $ 80/mo
Personal INs. $ 15/mo
INternet $ 60/mo
Phone(s) $ 60/mo

Total/mo $ 4115 (Round it to $4000/mo)

I know this isn't a contest, but I'm guessing that's close to a record among our players on this thread. The good news: We could move to the Prairie and it would be $750/mo. (incl. phone/internet/cable, with all utilities). So why paradise? Come on over and see. Of course, YMMV as my mom hated it.
I assure you that isn't even close to a record. Also agree it isn't a contest.
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Old 11-29-2015, 04:51 PM   #52
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It would be more interesting for me if the opportunity cost of the housing was included in the numbers reported here. For example, using 4% with $500K of equity would add $20K to the annual housing cost.

Just want to see how outrageous my $27K/year of rent is compared to others.
I do not believe opportunity cost is a factor, the value of the housing is invested in an asset class - Real Estate which is actually one of the better performing asset classes out there right now. There are also other values in owning a home for legal reasons on asset protection purposes.

My Costs:
Property Taxes $1,800 yr
Insurance 900 yr
Utilities 2,700 yr
Internet/TV 960 yr
H2o 1,200 yr
Trash 240 yr

Total $7,800 $650/mo

OP did not include Maintenance so neither did I, I budget $4,000 annually for all maintenance and deduct any of those funds that are remaining from maintenance not yet incurred in my portfolio from the short term cash investments. That would put the total with maintenance at $983/mo
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Old 11-29-2015, 05:23 PM   #53
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I do not believe opportunity cost is a factor, the value of the housing is invested in an asset class - Real Estate which is actually one of the better performing asset classes out there right now. There are also other values in owning a home for legal reasons on asset protection purposes.
That's all well and good until I need to liquidate several hundred kilobux of my portfolio to pay for the house........

When folks say "why rent when you can buy a house or condo and just pay RE taxes and maintenance" and they never talk about how the cost of the house or condo gets covered, I wonder what they're thinking..... I guess if opportunity cost is not a factor, no one should ever rent.

There are lots of good, valid reasons for owning a home and I'm a long time home owner. But there is an opportunity cost. It might be large. It might be small. It might even be negative (a gain). But there is an opportunity cost.
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Old 11-29-2015, 06:34 PM   #54
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There are lots of good, valid reasons for owning a home and I'm a long time home owner. But there is an opportunity cost. It might be large. It might be small. It might even be negative (a gain). But there is an opportunity cost.
Yes.

Since I bought the 2nd home in 2005, the S&P index has doubled if one includes dividends. Does the home double in value? Heck, if I were to sell it now, I would be taking a loss of perhaps 20%.

Still no regrets though.
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Old 11-29-2015, 08:59 PM   #55
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Yes.

Since I bought the 2nd home in 2005, the S&P index has doubled if one includes dividends. Does the home double in value? Heck, if I were to sell it now, I would be taking a loss of perhaps 20%.

Still no regrets though.
But what if it were reversed and as in the 1970's with housing prices soaring and the stock market falling, does that then mean there is not an opportunity cost? the median house was worth $17,000 at the start of the 70's and $47,200 by the end of the 1970's. Total real return for the S&P500 was -1.4%. Using logic of markets investing in stocks instead of housing in the 70's resulted in opportunity costs.

therefore to me, these are strictly portfolio investment decisions, they are investments in real assets, the fact they are viewed by their owners with a sense of pride does not make them less of an investment.

https://www.census.gov/hhes/www/hous...ic/values.html

S&P 500: Total and Inflation-Adjusted Historical Returns
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Old 11-29-2015, 09:34 PM   #56
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But what if it were reversed and as in the 1970's with housing prices soaring and the stock market falling, does that then mean there is not an opportunity cost? the median house was worth $17,000 at the start of the 70's and $47,200 by the end of the 1970's. Total real return for the S&P500 was -1.4%. Using logic of markets investing in stocks instead of housing in the 70's resulted in opportunity costs.

therefore to me, these are strictly portfolio investment decisions, they are investments in real assets, the fact they are viewed by their owners with a sense of pride does not make them less of an investment.

https://www.census.gov/hhes/www/hous...ic/values.html

S&P 500: Total and Inflation-Adjusted Historical Returns
Because a house is an investment, it has an opportuniyt cost.
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Old 11-29-2015, 09:48 PM   #57
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I read somewhere that in the long run house prices only keep up with inflation, hot markets excepted. So, houses are not great investments.

I did not expect to make money from my homes, and if I get out what I put into them, it is fair. The operating expenses such as maintenance, utilities, tax, and insurance are the costs to use and enjoy them, hence sunk costs. Houses are still better than other personal properties because they generally hold their value, compared to cars, boats, RVs, and airplanes.
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Old 11-29-2015, 10:23 PM   #58
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I read somewhere that in the long run house prices only keep up with inflation, hot markets excepted. So, houses are not great investments.

I did not expect to make money from my homes, and if I get out what I put into them, it is fair. The operating expenses such as maintenance, utilities, tax, and insurance are the costs to use and enjoy them, hence sunk costs. Houses are still better than other personal properties because they generally hold their value, compared to cars, boats, RVs, and airplanes.
Ever own a house in proximity of central Detroit?
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Old 11-29-2015, 11:08 PM   #59
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One like dis?

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Old 11-29-2015, 11:19 PM   #60
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One like dis?

Yeah, like those...holding value?
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