Wednesday, December 9, 2009


I moved back to Houston a few months ago and decided to rent vs. buy for various reasons. Mainly because I can't see myself in Houston longer than a year.

The impending question I've received from co-workers/friends/family has been "Dude, buy a house, it's a good investment, Houston's housing market is nearly bullet-proof"..
Some co-workers have even tried to psychoanalyze me and relate my decision not to purchase a house as a sign of fear of commitment to a relationship.. this gave me a good laugh because the parallels they drew were uncanny.

Nevertheless people try to provide reasons as to why I should purchase a home. Here's a few:
1) There's an incentive 'bonus' of $8,000 the government is providing to new home purchases, now extended till next year! Hurry up and buy your house before time runs out. A 'stimulus' like this one just plays toward the American habit of buying things in haste because a good deal has been placed on the table. The longer the stimulus is out there, the higher home prices will go up because of the blanket $8k you can incorporate into home purchases. The government's message to the public re the financial crisis last year was citizens should save more, spend less because we were essentially spending money we didn't have. They've cracked down on making loan approvals more difficult, but the incentive only promotes more debt at the cost of the beneficiaries.. if you can call it that. This is just like the Cash for Clunkers program - what a crock. It encourages people to buy something at a time when a lot more people are pressed for cash to begin with

2) Houston's housing market is bullet proof.. it's a good investment! Sure Houston's market went relatively unscathed through the recession, but that's because Houston's housing market is known for being mediocre in terms of any long-term appreciation. Growth rates will stay low single digits and this isn't enough to pay-off all the mortgage rates, property taxes, HOA fees, maintenance, general OCD type of repair work in addition to all the headache. I can only see 2 ways a return will be seen here: 1) Living in the house for a long time (15+ years) 2) Getting lucky with appreciation.

3) Comfort, stability. This just boils down to values.