Perche' non voglio comprare casa nella Baia di San Francisco

Qualche giorno fa, appena tornati dall'Italia, mi era sembrato di capire da una conversazione con Jenny che fosse arrivato il momento cruciale in cui avremmo cominciato a cercare casa. Ma dopo ulteriori chiarimenti, abbiamo concluso che non siamo ancora sicuri.

Per aiutare me stesso a capire da che parte sto, scrivero' una breve serie di post in cui soppeso i pro e i contro. I post sono scritti in Inglese per semplicita'.

Comincio con l'elencare le 4 ragioni per cui non voglio comprare.

1. Sets us back in our goal for Financial Independence
We modeled our "number" to consider ourselves financially independent but unfortunately, our number is "$X + home ownership".

Buying in a region where the median price of single family houses is $1.3M means that we need to save an additional $1.3M and lock that capital in a non-income generating investment.

Things may be easier if we lived in a place where houses are substantially cheaper. Although... warning! Moving to an area with low cost of living may also mean less career opportunities for our family, lower salaries, and inferior education options for Alessio...

2. Low expected returns on investment
Real estate in the Bay Area dropped less than most of the United States during the crisis of 2008-2010 and recovered sooner, faster, and stronger than most regiorns. It's now one of the most expensive, if not THE most expensive, market in the United States.

Most people assume that the market will stay bonkers for the foreseable future and it's hard to contradict them: on average properties stay on the market just 7 days, sell after bidding wars with 10+ offers per property, and supply keeps decreasing.

However, even if nobody can see it now, YoY price growths of 10-20% are not sustainable and sooner or later the market will have to cool down and maybe drop a little. After all, veterans of the technology bubble tell that the overheated real estate market suddenly turned into rental vacancies and drops in prices across the Bay Area. We don't have reason to believe that this time is going to be different.

So why is this a bad reason to buy? Because investing in real estate now bears the risk of delivering very low returns on investment for the years to come, with the net effect of setting us back even further with respect to our goals of financial independence.

3. Ugly concentration of capital
Being squarely middle class means that purchaing our first house is going to lock the majority of our savings. The more expensive the house, the larger the portion of our savings that will be locked into the property.

We may pay a high price for the lack of diversification as we wouldn't be able to participate in global market gains if they were to occur as we would be sitting on the sidelines and using all our savings to pay off the mortgage.

4. Less mobility for our family
Mobility may not be a need as long as there are decent work and educational options for our family.

But life may surprise us with the need to live somewhere else for at least some time. Purchasing a house makes the option of moving for the area very expensive in many ways: moving would be expensive because of high transaction costs on real estate, emotionally taxing, an dtime consuming.

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