Comment Re:Can't get worse (Score 4, Insightful) 309
Bah. It's the luck of the draw.
My wife and I were both college educated and graduated in 98. In late 2001 we bought a house. At the time it was at the limit of our expenses and we became "house poor". (This is a conservative measure. We both maxing out 401k's and stock purchase, and after that we didn't have too much left over. But by my calculations at the time if one of us lost our job we could barely scrape by.) However, in a few years, we both had improved our income through raises and advancements and both agreed we made the right choice to stretch and buy a nicer house.
This is the way it works in many normal circumstances.
In addition, the housing value curve is wonky. People get priced out of the market so what you get for what you spend is often way off. Spend a little more and get a much nicer house. If you're shopping at the bottom of the market you can pay 75% of what you'd pay at the middle of the market but get a much shittier house in a much shittier school district. This is mainly true in places where the housing is saturated in big cities and the like. I'm sure it's much less true in the middle of nowhere, but I'm only familiar with buying houses in big cities in California.
Additionally a house has much to do with your quality of living. Your neighbors will be different, who your kids hang out with will be different, what school your kids will go to will be different, etc. Buy a dump of a car as long as it gets you from point A to point B because who cares? But a house... a house will affect your sanity and quality of life 10x more.
The 2001 house is still worth about 50% more than we paid for it because we got lucky. We didn't have anymore insight into the market in 2001 than other people here did in 2006. Yes, buy within your means when you can, but there are also times in life when you should stretch and accept the risk that comes along with that.
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