Experiment #18: I didn't buy a house

Lots of time... from www.househunter.com

Kind of an odd title for a self-experiment, right? It's something I've been working on/thinking about/agonizing over for about a year now, and I've finally come to a conclusion - I am choosing not to buy a house, and this blog post is about why.

We all know and have been given advice that buying a house as soon as you can is a good idea. The math is ridiculously easy. If you pay $1000 a month in rent a month, that's $12k a year you never see back. If you pay $1000 towards a mortgage every month, sure a good chunk is going to interest but you ultimately get back some of that $1000 if you choose to sell the house and eventually you stop paying that $1000/month because you own the home! Yay!

Plus, it's yours. You can paint it pink, you can drill holes in the walls, and you can get 50 dogs and let them pee on every surface. Not my nirvana, but it's an option, right? Buying a house gives you the freedom to make your little plot of land what you dreamed it would be. Kind of.

At first in graduate school, maxing out my yearly Roth IRA contribution was my one savings goal (ahem). At some point though, I started to hit that goal regularly but continued my aggressive savings plan. When I did an internship at Los Alamos, I put almost all of my paycheck away in the S&P 500. Why? Because it dawned on me - I needed to start saving for a house down payment. Houses don't buy themselves, and I wanted the best head start possible.

I watched my little house hedge fund grow over the years and dutifully kept stoking it's little fire. That house fund represented a dream - it represented the day I could walk into a home, lay on the floor naked staring at my ceiling on my hardwood floors and have my 19 cats come lay on top of me (no apartment would ever allow that!). It meant I could turn my backyard into a massive garden. I'd have a real mailbox. Saving for a house felt approximately one billion times better than saving for retirement - this felt real, the happiness was imminent, and it didn't feel like an annual gynecological exam (you know you need to but it just doesn't feel that great).

Then I moved to Seattle and started a career path. I decided to go full force on the house fund, neglecting my 401 k (whoops) and scrimping where I could (not on the bikes though...). The house fund grew and grew and grew, and one day, it became a thing where I could actually consider buying a house with. So I started my search :)

The "M" stands for "million". O.O

Yeah, so, the Seattle housing market is pretty objectively depressing for millennials and first time home buyers. People swoop in and pay a million dollars cash (W.T.F) on a house that's only asking ('only') 900k. Houses under a million dollars usually don't stay on the market for more than a week. People sign the sale paperwork at midnight by candlelight in a "hush-hush" deal their "awesome realtor" worked out with them with the seller's realtor because they're "kissing cousins". But I wanted my little box of my own, so I dove in.

I have a realtor who emailed me dozens of listings every week that I pored over. I went to a few showings but never felt a 'magical connection' with the house. I did find an apartment I loved and signed a lease to buy myself enough time to figure out what I really wanted in a house. I studied, I saved, and I used little mortgage calculators to figure out if a garage was worth another $100,000 (some of you are saying "my entire house with a garage is $100,000". Mmmm I wish.) I would find one that I really thought was "the one" and prepare myself to go get a mortgage and then...

I would never do it. I would look at my now significant house fund and be unable to give it away for a box in a condo building that I would spend the next 15 years paying off. Fifteen years!! I mean, when did we become OK with being horribly in debt for 15 years?! I was legally a child 15 years ago. Every month I'd have to pay my mortgage too - a bill that could be up to 50%-60% (that was my personal limit) of my income. If I lost or quit my job, it would be rough times. If I needed the money, houses don't sell overnight. This whole house thing was starting to look like a prison cell instead.

So now you all know my vacations are my
house consolation prize 
On the other hand, in this past year of tumultuousness and indecision, having that house fund has been one of my greatest anxiety reducers. It's taken on different names at times - my "fuck it all I'm going to Australia for a year" fund, my "I'm going to run a bike shop in Michigan" fund, and my "don't sweat the small stuff" fund. It's allowed me to be brave and not fear bankruptcy when I say things like "I don't like this situation and I will leave this job if it continues" to my boss. It's allowed me to take career risks that have paid off enormously because I'm not scared of losing my job. I wake up everyday and going to work is a choice, not an obligation. Fortunately, I really like my job and I continue to choose to go everyday. To me, that... that is freedom.

So, I'm not buying a house for now. I will continue to live in an apartment where all my possessions can be boxed up and moved out in a moment's notice. Sure, one day my kids may read this post and go "but mommy, you could have paid for our college education with your Seattle townhouse" and yeah, they'd be right. But I'm sure they'd appreciate a happier mom who didn't feel trapped by life for 15 years. I'll buy a house when I have found somewhere I want to stay for a while, but... right now, I like the idea of going to Australia if my job sours or the Seattle rain gets to be too much. 

Moral of the story is save your pennies kids, aim for the sky, be patient, and settle for snorkeling in New Zealand when you live in a city and can't afford your dream house anyway.

Lo

2 comments:

Charles McEachern said...

The conventional wisdom is to buy a house as soon as you can, but it turns out there's a bit more to it. Even in the midwest, where houses are cheap, I've talked a few friends out of buying.

Are you going to live here for 4+ years? If not, you're probably going to spend more on realtor fees (about 7% on each end) than you save in rent.

Do you have a few thousand dollars on hand after the down payment? A roof/furnace/pipe can fail at any time -- and, if not repaired right away, it can destroy the value of your house.

Etc

Lois Keller said...

Thanks Charles for chiming in! I think until you are settled (stable job, a plan), buying a house is a risk. I just don't hear people saying "I bought a house and it was the best decision" except from people who have families and have lived in the same place for 5+ years. It's a great decision for some, but it wasn't a good decision for me.

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