Thanks y’all for the comments and opinions on my last post. It took me longer than usual to reply because I was, interestingly enough, en route to visit my parents — I’ll be working remotely much of this week so I can hang out at their place and also do some massive, massive attic decluttering (more on that later in the week.)
Some very reasonable thoughts and concerns came up a few times so I figured I’d do a bit more of a group response. So, here goes:
1) House?! What?! It really is only hypothetical right now. I’m not rushing right off to stop retirement contributions (I liked Hannah’s rule of thumb that I should be closer to 75% sure before I think about that more seriously.) Also, guys, I was kidding about the idea that I’d raid my emergency fund for a down payment. No way I’m wiping that thing out, after I’ve worked my butt off to build it this year. If I do buy instead of continuing to rent (see below), the only real options are borrowing a little, or a lot, from my parents.
1a) Wait, job?! What?! I haven’t said much about this lately but longtime readers will remember that I’m currently working on a yearlong contract at a major university (I just started my second yearlong contract, actually, so this one will be up at the end of June 2016.) I don’t want to go into much detail because all these discussions are ongoing, but over the last six months it’s developed into a certainty that I could shift into a different role at the same university and stay more or less indefinitely. It’s not tenure track, but it would be a very good deal, better both financially and in terms of workload than the t-t at a lot of places, and it’s work I’d enjoy. I’m excited about it. At the same time, I’m going to poke around at a few other possibilities, so I’m not signing up right now to stay in my current city. Sorry for all the mysteriousness — the upshot is I’ll either stay, or move somewhere else, but either way I won’t be unemployed, which is a good thing 🙂
2) Why not just rent for another year while you save for the down payment?/Why not just skip the whole house buying thing altogether? Yeah, I know, and actually I don’t have anything particular invested (heh) in the idea of home ownership. I wouldn’t be expecting to make money if I bought in my current town, just hoping to break even over time. However, there are a few problems with the idea of renting either another year, or permanently, in this situation.
The first is that when I moved to this city, I wasn’t expecting to stay two years, let alone indefinitely. So my current situation is that I rent a spare bedroom in someone’s house. My clothes and about half of my cooking equipment are there. Meanwhile, everything else I own is boxed up in a friend’s basement across town, or in my parents’ attic. By the time we get to spring 2016, I will more or less have been living out of suitcases for two years. Every time I want a book that I didn’t anticipate needing, I have to drive across town and dig through all these boxes to find it. Some of my lesser-used kitchen equipment is inaccessible and I do miss it. I miss sleeping in my own bed with my own mattress. None of this is going to kill me, and there are real positives (I like my housemate and her house, I like the cheap rent) but this situation was never really meant to be a long-term one, and I don’t particularly want to do it for more than two years.
I could, obviously, move out of the spare bedroom and into my own rental apartment/house. This would actually be my preferred option if it were a nice enough and cheap enough space that I could see being there for 5+ years. I’d definitely look around for situations like this. However, they can be very difficult to find in my current city. It’s a college town and the vast majority of the rental stock is wildly overpriced and kind of cruddy because it’s aimed at 4+ undergraduates and/or master’s students sharing the space. Grownups here, including even PhD students who will be in town for five years or so, buy houses, which are plentiful and cheap enough that I actually know several people who are renting out their spare rooms and making more than enough to cover the mortgage just from that. (I would also look for a renter to share my hypothetical house, probably.)
So, that’s why I think it’s more likely I’d find something to buy than to rent, and why I’d like to make a move next spring rather than a year later. (And I really don’t want to move to another temporary apartment for a year while I save up for a down payment — if I had to I’d probably rather stick out the spare room thing for another year!) On top of everything else, houses tend to come up for sale on the academic schedule because, again, college town. By far the best time to buy here is during the late spring and early summer; even if I waited six months to save more, it would be hard to do that.
3) Borrowing from family is always a terrible idea/if you have to borrow you can’t afford it. It’s interesting to me, the way people think about this. I find it tends to be highly conditioned by the person’s previous experience, which makes perfect sense. In my family it’s fairly typical. My parents borrowed from their parents for their down payment (it was kind of a sudden emergency house-buy, as it turned out a fourth floor walk up was not a great idea with an infant), and they’ve always said they’d do the same for us if they could afford it. They paid my grandparents back religiously and, while they couldn’t have afforded to help me much when I was in my early 20s, their circumstances have changed a lot and they really could now. I’ve never wanted to have them support me — I toughed it out in New York on $12000 of freelance income one year! — but I think it’s actually my track record of financial independence that makes them want to help me (I didn’t spend my 20s siphoning off $$ from them, so they trust me) and makes me feel confident that I could and would pay them back in short order.
This is getting really long so I’ll stop there. The short version is: no need to worry, I am not off the deep end and signing a contract tomorrow, just looking ahead and trying to lay out various options, and there are some actual reasons why buying might end up being a better life choice (not necessarily a better financial choice) than continuing to rent, but on the other hand, it also might not! So I guess we’ll see. I’ll obviously get more serious about thinking through this stuff if I commit to stay here.