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Old 04-24-2013, 08:04 AM   #41
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I think one of the big factors that is impacting home ownership today, is that many younger workers in their late 20s/early 30s are still emcumbered with substantial college debt making it difficult for them to obtain and carry a mortgage. Also, jobs, post big recession, are not paying what they used to, so these factors seem to me to be negatively impacting the american dream.

Having lived in several apartments when I was in my 20s, including 2 condos, I would never want to go back to that vs a home, but we all must do what we have to do to get by.
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Old 04-24-2013, 08:14 AM   #42
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Interestingly, I have never worked for an employer who did not openly encourage homeownership as a way to keep employees servile and docile. The bigger the mortgage, the more you depend on that paycheck.
'servile and docile'? Do you really believe employers consciously and deliberately work that angle? Just asking, not challenging.
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Old 04-24-2013, 10:28 AM   #43
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'servile and docile'? Do you really believe employers consciously and deliberately work that angle? Just asking, not challenging.
I would just say that I suspect all else being equal, they would rather have an employee who is more desperate to get (and keep) the job. You can more easily make them work longer hours, slash their pay and benefits, make them accept lousy working conditions -- and their "BS bucket" is a lot larger.

(Obviously this has its limits -- employers don't usually want folks who are so desperate or on the edge of bankruptcy that they feel they need to resort to stealing from the company, taking bribes and that sort of thing. But short of that? Financial dependence leads to a greater sense of "indentured servitude" than being an employee who is FI.)
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Old 04-24-2013, 10:30 AM   #44
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We own our home free and clear. It is such a nice feeling. We designed and built it ourselves with energy-efficiency in mind - on 10 acres in an oak forest. It is 1300 sq. ft., one story, and we will be able to age in place. The electric bill is, at the most $60.00 per month. The quiet and beauty is priceless to me; I like to make art and write, and I experience a wealth of inspiration. Of course, that is just us...to each his own.
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Old 04-24-2013, 10:39 AM   #45
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'servile and docile'? Do you really believe employers consciously and deliberately work that angle? Just asking, not challenging.
I have seen cases were loyalty to management is valued over competence. But, then again, this Megacorp ran out of cash-flow.

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Old 04-24-2013, 11:45 AM   #46
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Just as an aside, MY American dream has never included having to move around the country all the time. (I am capitalizing MY, to emphasize that I can only speak for myself.) I have never had a genuine desire to spend my life packing and unpacking, having utilities unhooked and hooked up to the new place, making insurance claims on all the broken stuff, and all the other hassles of moving. I have moved 28 times, mostly with no choice about it, so I know whereof I speak.

Also, if I am staying in the same community for decades, renting an apartment is not in MY American dream because one can only stay in an apartment at the whim of the landlord. If he decides to convert the apartment into condos, for example, the renters have to leave or buy. Or, if he decides to double the rent, one either has to move or pay up.

Even if I own my own home, MY American dream is to pay it off. I don't like mortgage companies. I don't want to be told I must hassle with the insurance company to overinsure my home because of how much is still owed, or endure the multitude of other hassles I have had in sharing ownership with them.

So yes, MY American dream (mine only) has included owning my own, paid off home. This is part of the "emotional benefits" of paying off one's home, that people refer to sometimes.

Sometimes I can hardly believe that I am living MY American dream! Just yesterday I was talking to Frank about that. We are so lucky to live in this country, where dreams really can come true.
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Old 04-24-2013, 05:46 PM   #47
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......Having lived in several apartments when I was in my 20s,,, I would never want to go back to that vs a home...
Interestingly I was just thinking back to buying my 1st home back in my 20's. At the time DW & I lived in a very nice appt complex with pools, tennis courts, etc. But I HAD to have a house. It was a new place & I spent almost all my free time on it (detailing, landscaping, etc.). When we were transferred after 4 yrs (no "cadillac" employer support) we were sweating bullets to get it sold. We rented at the next location. Bought a house in our present spot, but now looking at big upkeep expenses (new furnace & AC past 2 yrs, bath & kitchen need remodel/updates, plus typical stuff like tree & plumbing work, etc.). We're in a stable area and could prob sell for well more than we paid, BUT doubt we would be better off vs renting & investing the difference over the yrs. Very personal decision with no clear right or wrong answer in most areas of the country.
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Old 04-24-2013, 06:00 PM   #48
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I think that the longer you stay in one place, the more reasonable owning is as a financial proposition. Other than that, this is a lifestyle decision more than anything.
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Old 04-24-2013, 07:16 PM   #49
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A snip from a prior post that argues for ownership:
Quote:
Current medicaid law allows for payment of nursing home expenses under certain conditions. If you understand those conditions, you could save hundreds of thousands of dollars for yourself, your spouse, or your estate... (your kids).

Here are the things you should know about:

Current nursing home costs average from $75,000 to $90,000/yr. A friend on Long Island is currently paying over $135,000/yr. for just basic care.

The state (medicaid) does not automatically pay for this.

You should understand "exclusions".

Know that the "look back period" is now 5 years.

...........................................
As long as a married couple have assets, if one spouse should have to go into a nursing home, the couple's assets will be used to pay for the medical care until the assets go below a certain level, at which time, the state medicaid program will pay for the nursing home care. The asset level varies by state.
............................................

Here's an example that happened to friend, that points up the importance of planning ahead. Bob retired with his wife May, to Florida from Maine. He sold his Maine house for $280,000 and planned to use this as his nest egg during his retirement. He bought a mobile home..(downsized)for $35,000. Shortly after retiring, May began a long slide into Alzheimers, and after three years has to go into a nursing home. (at the time $65,000/yr.) She lived there for 5 years before passing away. Because Bob and May had assets from the sale of their house, medicaid would not pay, and The nest egg was gone.
..............................................
Now, here's what happens....
1. In counting assets, Bob is allowed certain exclusions. In General, the exclusions in his case, were... His house @ $35,000, His car $20,000, Cash (then, $40,000) and some smaller amounts like burial plot and non cash life insurance.
2. The logical thing to have done would be to give away the money in the nest egg, so the state wouldn't take it. That's where the lookback comes in. If he had given away the money to his kids, the state would not have taken the money... but... to prevent this from happening, the state will "look back" five years and deny medicaid payment,if this 'gift" transaction had taken place.

As it happened, May died, an Bob had nothing but his Social Security left to live on.
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Old 04-24-2013, 08:03 PM   #50
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I think that the longer you stay in one place, the more reasonable owning is as a financial proposition. Other than that, this is a lifestyle decision more than anything.
I agree, and that is how I decided to buy- because I am not going anywhere, and because I guess that both rents and purchase prices will increase where I am. I am not at all interested in capital gain from the place, just in price protection. But speaking as one who has been a homeowner and also a renter for a fair number of years of each, there are more non-monetary costs to owning than we often figure. Some of these like grass, painting, etc. can be hired out, but overall I believe it is usually cheaper to get these services as part of a rental fee than going and finding them oneself. It is certainly a lot less effort, and less time wasted on things that to some of us don't often qualify as fun. I bill my pleasure account $1000 for one visit to Home Depot, surely a branch of Purgatory.

My former wife and I felt that we needed house and yard to raise kids, but I see lots of families growing in the townhouses to one side of me, and in the apartments down the street. No yards don't seem to be a problem, there are parks all over easily walked to, and fewer families today will let their young kids play out in the yard alone anyway, due to crime concerns. Parents are likely very close to their work, and some of the women seem to be home all day so there must be some cash freed up this way. I thought when the kids got a little older they would likely leave, but I have not noticed that yet.

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Old 04-24-2013, 08:16 PM   #51
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Imoldernu, your post showed how a guy lost all of his money to nursing expenses after selling his house. He was only able to keep the $35k in his trailer. If he had kept his old house would the entire $280K have been exempt from Medicaid's asset evaluation? Is there a limit to house value exempted? E.g., could someone with a $1M house deplete other assets so his spouse could get Medicaid for nursing expenses and then sell the house to improve his lifestyle after she dies?
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Old 04-24-2013, 08:24 PM   #52
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My former wife and I felt that we needed house and yard to raise kids, but I see lots of families growing in the townhouses to one side of me, and in the apartments down the street. Parents are likely very close to their work, and some of the women seem to be home all day so there must be some cash freed up this way. I thought when the kids got a little older they would likely leave, but I have not noticed that yet.

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Search me. I suspect that the expense of your local market might have something to do with the persistence of families in townhomes/apartments. Or possibly something to do with the school district.

Despite the hassle factor involved in owning a house, I am fine with it. I have a mental bug about home as castle and having control over my small domain. Probably not hugely rational, but like I said, its a lifestyle choice.
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Old 04-24-2013, 08:44 PM   #53
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Imoldernu, your post showed how a guy lost all of his money to nursing expenses after selling his house. He was only able to keep the $35k in his trailer. If he had kept his old house would the entire $280K have been exempt from Medicaid's asset evaluation? Is there a limit to house value exempted? E.g., could someone with a $1M house deplete other assets so his spouse could get Medicaid for nursing expenses and then sell the house to improve his lifestyle after she dies?
Varies by state, but the 5 year lookback is national, I think.
The non nursing home spouse must continue to live in the house. I'm personally aware of a case in Rhode Island, where the non nursing home spouse wanted to pay for the cost as a moral responsibility, until the children went to a geriatric lawyer who persuaded them to allow the state to pay. The interesting part was the age factor. The surviving spouse had thought the house value to be about $150K, but as oceanfront property, it later sold for $850K, which value eventually went to the heirs. I do believe that there are some limits, but those may be rather high...

The five year lookback is the key. Any disposal of assets during that period would preclude saving the house value. Likewise, any increase in value of the residence within the 5 year period would be excluded... such as buying a more expensive house, or going from a rental to home ownership.

In our case, we went from a mobile home to a home with a many multiple value, for exactly that reason. We bought in 2004, and were quite relieved in 2009, which passed the 5 year lookback. (When we bought, the lookback was only three years, so the extra two years were chancy.

Our two tier retirement approach includes the value of the house as a reserve for a the surviving spouse. If all other assets are depleted, the sale of the house (plus Social Security) should be enough to pay for continuing care for 10 to 15 years.

State elderlaw websites should detail the specifics, such as cash savings limits or automobile prices which would obviously vary.

Here's one of dozens of sites that discuss the lookback. Best to find one for the state involved.
http://insurance.lawyers.com/medicar...k-Periods.html
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Old 04-24-2013, 10:26 PM   #54
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What's the American Dream this thread suggests? "Owning" a home rather than renting is the Dream? Why is that specific to our good ol USA? Don't Canadians also want to own vs. rent? Or Brits?

I have always rented. I am convinced my rental circumstances/costs over the past 30 years contributed heavily to my ability to ER a few years ago at age 55. We all can discuss and debate this and that detailed cost of owning/renting a place to live, but I am today extremely satisfied with where I still live today, and what it has cost me to live here these past 30 years, vs. buying a home/or investing the difference. And I don't have to figure out $bookwork or worry about HOA neighbor troubles.
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Old 04-24-2013, 10:50 PM   #55
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What's the American Dream this thread suggests?
The "American Dream" of homeownership is an invention of realtors and mortgage brokers and S&Ls, and all the many people who make money of the compulsion to own a home. Actually, to me is seems that immigrants are perhaps even more into home ownership. For many people, especially non corporate types who own donut shops or restaurants or nail salons or whatever, and who are not going to get moved, it seems to work out pretty well.

Ha
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Old 04-25-2013, 03:26 PM   #56
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There hasn't been too much info on Single Family home ownership changes in recent times. This article indicates an increase in rentals and a decrease in ownership over the period 2007-2012. May be a clue to the future of REIT's...
Calculated Risk: Lawler: How Much Has the Single Family Housing Market Shifted to Rentals (in numbers)?

Understanding the shift, may be an indicator for the future of home values, but the article exposes a number of variables that go beyond the supply/demand factor.
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Old 04-30-2013, 11:38 AM   #57
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I'd venture to say "no," home ownership is not essential to the American Dream. Rather, LBYM and saving your money are essential to allow for freedom of choice (when, where and whether to w*rk).
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Old 04-30-2013, 06:14 PM   #58
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I would say no also : http://en.wikipedia.org/wiki/American_dream

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I'd venture to say "no," home ownership is not essential to the American Dream. Rather, LBYM and saving your money are essential to allow for freedom of choice (when, where and whether to w*rk).
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Old 04-30-2013, 10:22 PM   #59
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The "American Dream" of homeownership is an invention of realtors and mortgage brokers and S&Ls, and all the many people who make money of the compulsion to own a home. Actually, to me is seems that immigrants are perhaps even more into home ownership. For many people, especially non corporate types who own donut shops or restaurants or nail salons or whatever, and who are not going to get moved, it seems to work out pretty well.

Ha
This myth of the "American Dream" thru home-ownership--"an invention" of those who financially benefit by it, as you say--reminds me of what I consider another myth created by those who financially benefit most: the diamond engagement ring.

Didn't folks in the good ol' days just buy gold wedding rings? That was it. My grandparents, now deceased since the early 1990s, had only gold wedding rings. (I still have my grandpa's gold wedding ring.)

There was never an engagement ring (let alone a now-suggested "promise ring") up until the mid-20th Century, as far as I know, was there? When did the diamond engagement ring come to be? (I once heard it was circa 1941, suggested by the highly-monopolized diamond industry.) And why should the diamond engagement ring cost at least two months salary of the man? Who came up with that?

But tell that to the girl you'd like to marry--that an expensive diamond engagement ring is mostly a money-making gimmick by the diamond-industry monopoly--and that a simple golden ring should suffice to express your love and commitment of forever.
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Old 04-30-2013, 11:20 PM   #60
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I suspect that a good bit of the homeownership idea is a modern version of Thomas Jefferson's preference for the yeoman farmer over the city worker. Given that farm life is no longer practical, owning a home gives one a piece of ground all be it generally smaller than a farm.
Of course until recently there was one profession that never owned a house until they retired the protestant clergy, since a parsonage was part of the comp for their job. When they retired then they had to look at buying a house.
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