Unless you’ve been living under a rock or over a rainbow, you’ve surely noticed that the global economy has suffered a massive bout of what I like to call EPIC FAIL. But you might also have noticed that the month of July just posted a 9.7% increase in sales of new houses since June. I’m sure this is in no small because the government is giving $8,000 to first time homebuyers that I’ve heard can even be counted toward your down payment.
A lot of twentySomethings have been working for a few years and have stockpiled a good sum of money while not having enough of it in the market to be squandered. Many of us also are points in our lives where we’re looking to settle down, maybe buy a house and start a family. It’s only natural to follow the mold and think of buying a house these days if you still have a job and money in the bank. After all, housing prices haven’t looked like this in years!
If you’ve only recently begun thinking of buying a house, don’t forget that the price of the house is not the only thing that matters. HOA (Homeowners Association) fees are imposed on many condos and apartments, and some housing neighborhoods as well. In California, cities, counties and districts can impose Mello-Roos taxes on your property on top of the state property tax. Then there are maintenance fees that renters don’t have to think about, like when your toilet breaks or your shower leaks or your dishwasher breaks. Oh, and if you’re not paying monthly utilities for water and trash, those will officially become your responsibility. Those are all landlord problems, and you’re thinking of becoming a landlord! On top of all those there are the fees you’re going to pay just to buy the house, which may include closing and escrow fees (and buying fees if you eventually sell the house somewhere down the line).
In the interest of full disclosure, I do not own a house and I’ve never purchased one. That really means there may be even more costs I haven’t considered or mentioned, like costs associated with taking care of your lawn. But for many people this is a worthwhile investment, if not financially then just because people take pride in owning their home. For those of you looking to buy, I advise you to make use of this Rent vs. Buy Calculator provided by the New York Times website.