How often do you buy a primary residence?

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pomidoro
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How often do you buy a primary residence?

Post by pomidoro » Sun Jul 15, 2018 9:16 am

Background - I live in MCOL with a LOT of development in the area and we bought a new house (primary residence) in a new neighborhood in 2015 which satisfies all of our needs.
We did a lot of searching before buying and found the following - even if the 10yrs old house is really good the price is still 10-15% lower than the new one. 20yrs old houses look really outdated nowadays because of old design so the discount is bigger. 60-70yrs old houses prices are close to the price of a land slot.
Our neighbors spent 5 years in their new house then sold it and moved to another brand new house in a brand new neighborhood literally across the street. We are friends with them so they shared their motivation and calculation openly - "We bought the original house for $X and we sold it for $1.08X (all transaction costs are deducted). Our new house costs $1.05X so we didn't really make any money BUT we literally lived 5 years in a brand new construction for free. That's what matters - our primary residence will never get old."
Does anyone else follow this tactic? I'm thinking it sounds decent from financial perspective but it's a lot of effort to keep moving every 5 years.

Dottie57
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Re: How often do you buy a primary residence?

Post by Dottie57 » Sun Jul 15, 2018 9:28 am

pomidoro wrote:
Sun Jul 15, 2018 9:16 am
Background - I live in MCOL with a LOT of development in the area and we bought a new house (primary residence) in a new neighborhood in 2015 which satisfies all of our needs.
We did a lot of searching before buying and found the following - even if the 10yrs old house is really good the price is still 10-15% lower than the new one. 20yrs old houses look really outdated nowadays because of old design so the discount is bigger. 60-70yrs old houses prices are close to the price of a land slot.
Our neighbors spent 5 years in their new house then sold it and moved to another brand new house in a brand new neighborhood literally across the street. We are friends with them so they shared their motivation and calculation openly - "We bought the original house for $X and we sold it for $1.08X (all transaction costs are deducted). Our new house costs $1.05X so we didn't really make any money BUT we literally lived 5 years in a brand new construction for free. That's what matters - our primary residence will never get old."
Does anyone else follow this tactic? I'm thinking it sounds decent from financial perspective but it's a lot of effort to keep moving every 5 years.
They have also moved the ball down 5 years for having a life without house payments. Not great in my estimation.

If 30 year mortgage, they will make 35 years of payments for the same price house. :confused

anil686
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Re: How often do you buy a primary residence?

Post by anil686 » Sun Jul 15, 2018 9:36 am

I am not interested in that strategy - not financially motivated in my dislike (well maybe) because while transaction costs were deducted - there was no mention of moving costs and PIA time moving. Not to mention PIA time showing your house for sale, dealing with strangers going through your house, going through the contract period, negotiating all the details, applying for lending/freeze and unfreeze and freeze credit.

But that is step 1. We have never moved into our “dream house”. Maybe I am picky but I have needed to make it mine. You know, paint it the colors I want, replace electrical outlets to have those usb things in them so I don’t have plugs everywhere, drop Ethernet jacks throughout the house, put the cable modem in a panel behind the wall so it is out of site, arrange rooms just the way I like it with furnishings to fit the room dimensions and feel.

I would think it is taking 3-6 months out of your life every five years just to have a “new house” when most things will work well for many years and replacing high cost things typically is done only once or twice (i.e. air conditioners in Texas every 10-15 years, roofing every so often, water heaters, etc). All of these could be bought well within 3 moves over 15 years - IMO assuming $2000 for a move and all the additional time spent on the process that could be spent working

JMO though...

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Pajamas
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Re: How often do you buy a primary residence?

Post by Pajamas » Sun Jul 15, 2018 9:39 am

Sounds like living in new construction is important to them.

Isn't a new house worth $1.05X less of a house than one that is five years old worth $1.08X?

Also I doubt they really lived for free. They had opportunity costs on their down payment plus other expenses such as property taxes, insurance, and maintenance. There are also the high transaction costs with real estate.

Seems like very irrational thinking financially but if doing that suits them, then it's fine with me.

Since you asked, I have only bought one primary residence. Before that, I rented. New construction has never been a consideration for me in choosing a place to live and I never even thought about it in relation to choosing a place to live for myself until I read this thread.

I do know people who placed a lot of importance on building their own house but it seemed to have more to do with having exactly what they wanted in a house as opposed to it being new construction, although that may have been a factor.
Last edited by Pajamas on Sun Jul 15, 2018 9:55 am, edited 1 time in total.

pomidoro
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Re: How often do you buy a primary residence?

Post by pomidoro » Sun Jul 15, 2018 9:41 am

Dottie57 wrote:
Sun Jul 15, 2018 9:28 am
pomidoro wrote:
Sun Jul 15, 2018 9:16 am
Background - I live in MCOL with a LOT of development in the area and we bought a new house (primary residence) in a new neighborhood in 2015 which satisfies all of our needs.
We did a lot of searching before buying and found the following - even if the 10yrs old house is really good the price is still 10-15% lower than the new one. 20yrs old houses look really outdated nowadays because of old design so the discount is bigger. 60-70yrs old houses prices are close to the price of a land slot.
Our neighbors spent 5 years in their new house then sold it and moved to another brand new house in a brand new neighborhood literally across the street. We are friends with them so they shared their motivation and calculation openly - "We bought the original house for $X and we sold it for $1.08X (all transaction costs are deducted). Our new house costs $1.05X so we didn't really make any money BUT we literally lived 5 years in a brand new construction for free. That's what matters - our primary residence will never get old."
Does anyone else follow this tactic? I'm thinking it sounds decent from financial perspective but it's a lot of effort to keep moving every 5 years.
They have also moved the ball down 5 years for having a life without house payments. Not great in my estimation.

If 30 year mortgage, they will make 35 years of payments for the same price house. :confused
No, they are debt free. Mortgage is not a part of this equation

sport
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Re: How often do you buy a primary residence?

Post by sport » Sun Jul 15, 2018 9:41 am

We bought our first house when it was 5 years old and stayed there for 35 years. We have been in our second house 12 years (bought new). We love the house and have no desire to ever move. We moved from the first house when it no longer met our needs. As far as we can plan, we will move from here only to a nursing home or a cemetery.

Mike Scott
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Re: How often do you buy a primary residence?

Post by Mike Scott » Sun Jul 15, 2018 9:44 am

If I have any choice, I'm never moving again. Besides the hassles of moving everything on a small farm, we have already invested many years of improvements into this place and plan many more. This is not some random place; we spent 5+ years looking for the right one.

jebmke
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Re: How often do you buy a primary residence?

Post by jebmke » Sun Jul 15, 2018 9:45 am

Whenever we move. Next time may be different. It may pay to lease instead of buy. Lessors get to deduct property taxes in full so it may change the economics a little.
When you discover that you are riding a dead horse, the best strategy is to dismount.

jebmke
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Re: How often do you buy a primary residence?

Post by jebmke » Sun Jul 15, 2018 9:46 am

Mike Scott wrote:
Sun Jul 15, 2018 9:44 am
If I have any choice, I'm never moving again. Besides the hassles of moving everything on a small farm, we have already invested many years of improvements into this place and plan many more. This is not some random place; we spent 5+ years looking for the right one.
I have probably moved 20+ times. It is enough of a hassle that I'm not going to do it just to change houses in the same town.
When you discover that you are riding a dead horse, the best strategy is to dismount.

livesoft
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Re: How often do you buy a primary residence?

Post by livesoft » Sun Jul 15, 2018 9:50 am

We have only bought one house and we still live in it.

I do know people who switch homes every few years in the same ZIP code. These are folks who are either realtors or home builders or interior decorators.

Our home value has not kept up with inflation in the 24 years we have owned it. We have certainly done better with the money invested in the markets. I suppose folks who leverage their homes with mortgages do well in many cases.
Last edited by livesoft on Sun Jul 15, 2018 10:20 am, edited 1 time in total.
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Sandtrap
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Re: How often do you buy a primary residence?

Post by Sandtrap » Sun Jul 15, 2018 9:53 am

As we search for an buy a "home" rather than a "house", we stay in it at each stage of life and beyond . . . where memories are made.
j :D

stan1
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Re: How often do you buy a primary residence?

Post by stan1 » Sun Jul 15, 2018 9:55 am

We seem to move about every 15 years. It's mostly because of lifestyle changes but it comes at a cost. There are a lot of hidden transaction costs that come with moving beyond those involved in the purchase and sale itself, such as hiring movers, fixing up the old house to put it up for sale, and fixing up the new house to get ready to move in. If the new house is new construction there can be significant costs with landscaping, adding storage shelves, window coverings. Also we've found out that our old furniture sometimes doesn't fit well in the new house which leads to more expenses.

For someone who likes something new every so often I can definitely see that buying a different house is lower cost than doing a large remodeling project provided that there is new construction available in a desirable area. Where I live new construction is generally not available within a 45 minute commute of my workplace so buying an existing house is really the only option.

Jack FFR1846
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Re: How often do you buy a primary residence?

Post by Jack FFR1846 » Sun Jul 15, 2018 9:58 am

In my region, super traditional sell the best. New houses are built to look 200 years old and actual 200 year old houses that are updated inside bring even more. Moving because a house is out of style is the silliest thing I've heard in a long time.

We bought our first house just out of college. Bought another when I went to grad school because the cost of the mortgage was well under 1/2 the cost to rent a reasonable apartment because the town was dominated by college students. Moved back to our first house and after a couple years took advantage of a crashing economy and bought our current house.

With none of these houses did "being in style" enter into our decision.

Been in our present house for 26 years and don't plan to move again.
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annielouise
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Re: How often do you buy a primary residence?

Post by annielouise » Sun Jul 15, 2018 10:05 am

We bought our first house after 8 years of renting.

We bought our second house when my husband's company moved us to a new state.

We bought our third house (locally) because (a) our neighbors were making our lives miserable and (b) we wanted to cut costs and save more.

We bought our fourth house (current) because my husband's company moved an hour's drive away and my husband hated commuting 2 hours a day.

I'd be happy to never move again, but stuff happens.

runner3081
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Re: How often do you buy a primary residence?

Post by runner3081 » Sun Jul 15, 2018 10:10 am

Our views on the subject have changed as we have gotten older. Initially, it was all about getting in, fixing up, selling for a profit and then moving up. Now? A house just doesn't mean that to us anymore. In fact, what we have now is too big, haha.

First Purchase - Lived there one year (Condo) - The building was falling apart and large assessments were lurking, though not decided yet.
Second Purchase - Lived there five years - Got out of due to out-of-state move.
**Rented for 6-months**
Third Purchase - Been here 5.5 years. Don't plan on leaving.
Last edited by runner3081 on Sun Jul 15, 2018 10:11 am, edited 1 time in total.

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GoldStar
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Re: How often do you buy a primary residence?

Post by GoldStar » Sun Jul 15, 2018 10:11 am

We have found remodeling cheaper than moving to new construction and without a mortgage - we can pay a bit to remodel one part of the house or another every few years.
As someone else mentioned - I wonder if your friends calculations are accounting for the fact they might be resetting to a 30 year mortgage with each move (not to mention all the transaction and moving costs).
We only moved once and it was to get significantly more square footage - we've now been in the same home for 20+ years and don't plan on moving again except, perhaps, to a new area for retirement. (We did consider moving a couple of towns over from where we are to save on property taxes now that public school rankings don't matter to us but the transaction costs basically wipe out the property tax savings).
I disagree with your generalized statement about 30 year housing looking outdated - not sure what types of houses you are looking at but with remodeling I can't tell when I walk into a house if it is 5 years or 30 years old. The way I can typically tell is the older houses often have better and more mature landscaping if well kept whereas a lot of new construction have cleared boring lots.
We also have some really nice 60 year as well as 100+ year houses in our area - nice Victorian mansions that I wish I could afford. Your thought that newer is better is a different view than mine.

terran
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Re: How often do you buy a primary residence?

Post by terran » Sun Jul 15, 2018 10:16 am

pomidoro wrote:
Sun Jul 15, 2018 9:16 am
We did a lot of searching before buying and found the following - even if the 10yrs old house is really good the price is still 10-15% lower than the new one.
...
Our neighbors spent 5 years in their new house then sold it and moved to another brand new house ... "We bought the original house for $X and we sold it for $1.08X (all transaction costs are deducted). Our new house costs $1.05X so we didn't really make any money BUT we literally lived 5 years in a brand new construction for free. That's what matters - our primary residence will never get old."
These two statements seem to be at odds with one another. Why is the 5 year old house selling for 3% more than the new one (actually more since the $1.08X doesn't include transaction costs) and yet five years later when it's a 10 year old house it sells for 10-15% less than the new house? It doesn't make sense that house values would increase for the first 5 years of their life then decrease for the following 5. You've done your own research and seen what prices do in your area, so my guess is your neighbors are doing some creative mental math and forgetting about some cost that would change the result.

Perhaps your neighbors put money into their old house that they aren't accounting for that increased the value? Or perhaps they're especially good at buying and/or selling? In which case they should do even better financially if they moved into an older house instead of the newer house.

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jharkin
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Re: How often do you buy a primary residence?

Post by jharkin » Sun Jul 15, 2018 10:24 am

People actually do this? :oops:

This is like people that buy a new car every 2 years so they always have "that new car smell".... what a colossal waste of money, energy, and building materials. To say nothing of the environmental impact.


I buy what I need, and will actively go out of my way to NOT buy new construction. I have lived happily in houses 100 years old (previus) and 200 years old (current). Well maintained older homes tend to have more character, better quality of materials and construction, more privacy (larger lots, I dont have to look out my window and stare into my neighbors yard), more shade (since developers love to cut down all the trees on new construction) and better landscaping (new developments scrape off all the topsoil so you are FORCED to irrigate and fertilize to make anything grow :( ) And then you add in all the Mike Holmes horror stories of shoddy construction, the ever decreasing reliability of appliances as they get more complex, etc.

And dont even get my started on how architecturally ugly most new construction is.....

No thanks. You folks please all keep chasing new so that old house lovers like me can get deals :moneybag :moneybag :moneybag
Last edited by jharkin on Sun Jul 15, 2018 10:59 am, edited 1 time in total.

Rupert
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Re: How often do you buy a primary residence?

Post by Rupert » Sun Jul 15, 2018 10:34 am

Jack FFR1846 wrote:
Sun Jul 15, 2018 9:58 am
In my region, super traditional sell the best. New houses are built to look 200 years old and actual 200 year old houses that are updated inside bring even more. Moving because a house is out of style is the silliest thing I've heard in a long time.
+1. OP, where in the world do you live that 60-year-old houses are worth only the price of the land? There's something terribly wrong with that market. I'm imaging a city in a desert full of tract houses. Yuck.

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Pajamas
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Re: How often do you buy a primary residence?

Post by Pajamas » Sun Jul 15, 2018 11:01 am

Rupert wrote:
Sun Jul 15, 2018 10:34 am

+1. OP, where in the world do you live that 60-year-old houses are worth only the price of the land? There's something terribly wrong with that market. I'm imaging a city in a desert full of tract houses. Yuck.

In Japan a house's lifespan is considered to be something like 20 or 30 years or perhaps the life of the owner.

A 40 year old house presumably would be worth less than the land it is on because of the cost of tearing down the existing house and disposing of the debris. There would be little demand for the house itself.

http://freakonomics.com/podcast/why-are ... podcast-3/

They certainly don't expect houses to appreciate or look at them as investments. They think of them more like clothing or appliances or a vehicle.

Here's a good article on the reasons for it, linked to in the article above:

https://www.archdaily.com/450212/why-ja ... t-housing/

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Re: How often do you buy a primary residence?

Post by Grt2bOutdoors » Sun Jul 15, 2018 11:17 am

livesoft wrote:
Sun Jul 15, 2018 9:50 am
We have only bought one house and we still live in it.

I do know people who switch homes every few years in the same ZIP code. These are folks who are either realtors or home builders or interior decorators.

Our home value has not kept up with inflation in the 24 years we have owned it. We have certainly done better with the money invested in the markets. I suppose folks who leverage their homes with mortgages do well in many cases.
I've been in my house now 10 years, the house value has not kept up with inflation in the 10 years I've owned it. Same - had I put my money in the market, I'd have substantially more available without having to pay large transaction fees and clicking a button would make it super easy to get my hands on the money instead of a long drawn out process of selling it. But I need a place to live, and moving does not appeal to me, such a pain to pack up boxes and unpack boxes.
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Re: How often do you buy a primary residence?

Post by HEDGEFUNDIE » Sun Jul 15, 2018 11:45 am

Rupert wrote:
Sun Jul 15, 2018 10:34 am
Jack FFR1846 wrote:
Sun Jul 15, 2018 9:58 am
In my region, super traditional sell the best. New houses are built to look 200 years old and actual 200 year old houses that are updated inside bring even more. Moving because a house is out of style is the silliest thing I've heard in a long time.
+1. OP, where in the world do you live that 60-year-old houses are worth only the price of the land? There's something terribly wrong with that market. I'm imaging a city in a desert full of tract houses. Yuck.
In the Bay Area the only houses that come close to the worth of their lots are old ones built by historically significant architects. My newly built house appraised for only 25% the value of the property as a whole, a percentage sure to go down as land values continue to skyrocket.

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snackdog
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Re: How often do you buy a primary residence?

Post by snackdog » Sun Jul 15, 2018 12:27 pm

Most people average about 7 years per home, less on the early ones and more on the later ones.

It is more common than you may imagine for people to covet homes near their own because they see them often and already know/like the location. When they come up for sale, they buy. My parents moved into their current home in about 1980 and it was a HUGE upgrade from house three blocks away they bought in 1970. The transaction costs can be justified eventually and even minimized by using the same realtor for both deals.

rich126
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Re: How often do you buy a primary residence?

Post by rich126 » Sun Jul 15, 2018 1:24 pm

There are a lot of hidden costs (not to mention stress) when it comes to moving, unless a company is paying for it. Having said that, getting stuck in a house that isn't rising as fast as others may doom you to stay where you are living (which is fine if that is your final resting place).

My worst house was my first one because I couldn't afford much (it was under $100K), and it turned out to be not a real desirable area and with weak schools. I probably broke even or less on that house. My next house I went with the idea of a fixer upper in a really nice area. I spent a lot of time and some money on it but when I moved next (covered by a company so I had no out of pocket expenses) it sold above list price in the first weekend.

I ended up moving back where I was previously (another company move covering most of my expenses). My original goal was to rent (since I had kept the other house) but rent of a 2bed/2bath was nearly that of a house w/o the tax advantages. I found a house being house by an estate (lower price, wanting quick sale) which needed a lot of TLC but was sound structurally.

I'm not pondering whether to sell this one now or wait until next year.

In my case the 7 yrs is about right.

Avoid the house poor problem as you get older. It is ok starting out to have most of your money going into your house if you can assume your income will grow but I had a relative who was wondering why most of his coworkers were complaining about having no money despite making a good salary. Then he realized it was all going into the house and trying to keep up with the "Joneses".

I'd stick with getting a really good area and not having the high end house in the area. The standard things are true: neighborhood, schools, 3+ bed, 2+ bath and don't customize it much.

As you get older the % of your income going to housing should be decreasing IMO.

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Re: How often do you buy a primary residence?

Post by honduranhurricane » Sun Jul 15, 2018 2:36 pm

Rented up to 8 years ago then bought a 15 year old house (now 23, I am coming up on 51 y/o). No plans on moving, previously mentioned costs tamp that idea down. That said, never say never, though it would have to be a very compelling proposition to get us to buy another primary house.

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Phineas J. Whoopee
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Re: How often do you buy a primary residence?

Post by Phineas J. Whoopee » Sun Jul 15, 2018 3:16 pm

Once, so far. I didn't look for a "starter." I looked for a "finisher." I found one.

Of course anything could happen to compel me to buy and move again. Perhaps if I eventually need assisted living it might make sense.

Here's a post from three years ago about my original purchase reasoning, which I still use. Break-even on cash flow alone is less than one year out.

PJW

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Re: How often do you buy a primary residence?

Post by golfCaddy » Sun Jul 15, 2018 3:25 pm

Homes built before the mid 1970s may contain asbestos and not meet modern electrical codes. If a home was 50+ years old, I would have more safety concerns.

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Re: How often do you buy a primary residence?

Post by RadAudit » Sun Jul 15, 2018 3:29 pm

pomidoro wrote:
Sun Jul 15, 2018 9:16 am
Does anyone else follow this tactic?
I don't. 2 houses in 45 years. (1st house was good for 10 years. Needed a third bedroom. 2nd home was new construction.) Mortgage free for last eight years. Next move will be either a retirement community or ... something more permanent.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The calvary isn't coming, kids. You are on your own.

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Re: How often do you buy a primary residence?

Post by daveydoo » Sun Jul 15, 2018 4:06 pm

One house. One spouse.

(fingers crossed)
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unclescrooge
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Re: How often do you buy a primary residence?

Post by unclescrooge » Sun Jul 15, 2018 4:16 pm

terran wrote:
Sun Jul 15, 2018 10:16 am
pomidoro wrote:
Sun Jul 15, 2018 9:16 am
We did a lot of searching before buying and found the following - even if the 10yrs old house is really good the price is still 10-15% lower than the new one.
...
Our neighbors spent 5 years in their new house then sold it and moved to another brand new house ... "We bought the original house for $X and we sold it for $1.08X (all transaction costs are deducted). Our new house costs $1.05X so we didn't really make any money BUT we literally lived 5 years in a brand new construction for free. That's what matters - our primary residence will never get old."
These two statements seem to be at odds with one another. Why is the 5 year old house selling for 3% more than the new one (actually more since the $1.08X doesn't include transaction costs) and yet five years later when it's a 10 year old house it sells for 10-15% less than the new house? It doesn't make sense that house values would increase for the first 5 years of their life then decrease for the following 5. You've done your own research and seen what prices do in your area, so my guess is your neighbors are doing some creative mental math and forgetting about some cost that would change the result.

Perhaps your neighbors put money into their old house that they aren't accounting for that increased the value? Or perhaps they're especially good at buying and/or selling? In which case they should do even better financially if they moved into an older house instead of the newer house.
That's what I thought too. Why would an identical, newer house across the street sell for less? Doesn't make any sense.

furikake
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Re: How often do you buy a primary residence?

Post by furikake » Sun Jul 15, 2018 5:02 pm

My friend's friend does what your neighbors do, but they carry a mortgage. It doesn't make sense to me, it's so much trouble and a waste of money.

We lived in our old small house for almost 20 years, and then we outgrew the house and built this house. We won't move ever again, this is our retirement home. It's in a small town, and there are quite a few retirees living in our neighborhood.

obgraham
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Re: How often do you buy a primary residence?

Post by obgraham » Sun Jul 15, 2018 5:45 pm

Been in this community 40 years. 4 houses over that time.

We change when our life situation changes. (Except for one, which we only decided we didn't like after being in it 8 years.) Most of our friends have stayed in the same house their whole time here. So people look at a house differently. For us it is a place to live, and should fit the stage of life we are at. Now we are single level, built for easy maintenance, with layout designed for retired folks like us.

No, doing it this way has not resulted in any realty profits. Such is life.

bltn
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Re: How often do you buy a primary residence?

Post by bltn » Sun Jul 15, 2018 7:52 pm

Moving is a lot of trouble. The first time we moved , we did a lot of work associated with the move. The second time even more. We ve been in our current house for about 20 years, and it feels like home. I doubt we ll ever leave. I guess we don t feel like a house needs to be new to feel good.

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Will do good
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Re: How often do you buy a primary residence?

Post by Will do good » Sun Jul 15, 2018 8:01 pm

Would you keep moving after having kids? Will their school change for the better after each move?
Is your children's friends and friendships important?

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Re: How often do you buy a primary residence?

Post by Ron Ronnerson » Sun Jul 15, 2018 8:06 pm

As infrequently as possible. We bought our home 8 years ago. It’s the first one we’ve purchased and we have no plans to move in the near future (we’ll likely stay in our house another 15-20 years). We live in a town where the median home price is over $1M so the dollar amount involved for transaction costs is high enough to discourage me from moving every few years. Also, due to Prop 13 in California, our property tax bill is based on the purchase price of the home (and rises little as time goes on) but would reset if we purchased a new house. Our mortgage, which has 25 years still left, is at 3.25% (actually a bit lower after tax deduction). Since rates like that aren’t around anymore, it’s another reason to stay put. Then there is also the hassle involved in selling a home and buying a new one.

We bought a home we wanted to keep for the long-term. It’s a good size and located in a nice town with excellent schools. We also have lots of family nearby. Life is good here so we plan to stay.

BogleBike
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Re: How often do you buy a primary residence?

Post by BogleBike » Sun Jul 15, 2018 9:31 pm

Once in a lifetime.

Bought a place that was over 30 years old, not up to the minute at all. It was in a neighborhood some of the real estate agents thought I should be scared of. "I'll take the short drive to downtown and dirt cheap purchase price, I don't care which side of the tracks it's on," I thought, wondering if the place might be worth something one day. I left my door ajar one day rushing to work, came back with all possessions untouched.

Two decades later, the neighborhood has gentrified. The style of the house became trendy. Value has more than tripled plus inflation (6x-8x in nominal terms, depending on whose valuation you accept). Avoiding newness worked out.

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gasdoc
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Re: How often do you buy a primary residence?

Post by gasdoc » Mon Jul 16, 2018 5:40 am

Three homes:
1) Starter home
2) Bigger home
3) Over 55 community home

gasdoc

maggabelle
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Re: How often do you buy a primary residence?

Post by maggabelle » Mon Jul 16, 2018 6:57 am

golfCaddy wrote:
Sun Jul 15, 2018 3:25 pm
Homes built before the mid 1970s may contain asbestos and not meet modern electrical codes. If a home was 50+ years old, I would have more safety concerns.
I have a 98 year old house and the electrical was all updated at some point. If you just get it all inspected there isn't a problem. Asbestos is only a concern if you try to rip it out and even then it isn't that big of a deal. Just cover it up if it's visible and you're totally safe! I think it's really strange this idea that an older home would somehow be unsafe.

I know someone who works in HVAC and says that some new homes sometimes have lots of mold growing in the walls because they are too "tight." That seems like a safety concern exclusive to a new home, no? Every home will have drawbacks - it just seems odd to vilify older homes for "safety" reasons.

TravelforFun
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Re: How often do you buy a primary residence?

Post by TravelforFun » Mon Jul 16, 2018 9:14 am

If the new home is 1.05X and the old home is at least 1.08X, the new home has to be less than the old home from a yard size, interior square footage, or amenity basis.

Moving to a new home would incur costs that may not be included in your neighbors' calculations:

- Home selling (time and money)
- Moving (time and money)
- New widow coverings and new homes have a LOT of windows
- New landscaping and perhaps fencing
- Perhaps new appliances and furniture

They must have liked new homes a lot.

TravelforFun

mlz
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Re: How often do you buy a primary residence?

Post by mlz » Mon Jul 16, 2018 9:38 am

pomidoro wrote:
Sun Jul 15, 2018 9:16 am
"We bought the original house for $X and we sold it for $1.08X (all transaction costs are deducted). Our new house costs $1.05X so we didn't really make any money BUT we literally lived 5 years in a brand new construction for free. That's what matters - our primary residence will never get old."
This is not a sustainable strategy: the only way to keep breaking even after 5%+ transaction costs is to move into houses that are less and less desirable. At some point, sacrificing other aspects for a new home will not be worth it. Or, they will have to start forking out extra to keep getting a new house every 5 years.

kaudrey
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Re: How often do you buy a primary residence?

Post by kaudrey » Mon Jul 16, 2018 9:46 am

Well, I'm on my 2nd house and I am almost 50.

First house bought when I was 27, sold 3 years later because we moved to a new state for my job.

I have been in the same house for the last 20 years. I bought it new, and over the years have updated the kitchen, the master bath, and all of the flooring throughout. I've also replaced all of the ceiling mounted light fixtures, and painted various rooms (some several times).

Works for me. I figure we'll stay in this house until we relocate for retirement; but not sure when. I plan to retire in 3 years, but with friends and commitments, I don't think we'll move for another 10 or so.

dknightd
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Re: How often do you buy a primary residence?

Post by dknightd » Mon Jul 16, 2018 9:59 am

So far I have only bought one house. I might sell this one and buy another. Or I might rent.

bikechuck
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Re: How often do you buy a primary residence?

Post by bikechuck » Mon Jul 16, 2018 2:51 pm

I'll play as DW and I are about to buy our fourth house

Kept first house for 4 years until I had an out of state transfer. All of the costs were paid by my employer and it was a nice inexpensive way to move up from a two bedroom to a three bedroom home for my growing family.

Kept that house for 5 years until I got downsized and moved back to my original location with a new employer. My new employer paid for the move and we bumped up from three bedrooms to four. Again an inexpensive move.

Kept our current house for 28 years and we are in the process of selling it and moving to a three bedroom courtyard home as we are now empty nesters and the neighborhood that we are in is deteriorating. We will be paying for this move ourselves as we are both retired.

This might not be our last house as both of our daughters have moved out of state and at some point we might need to move close to one of them for their support as we age. When that time comes we will look into renting or perhaps financing a new house with a HECM mortgage. For now though we are in central Ohio with one daughter in Washington DC and the other in Madison Wisconsin. That makes it easy for family get-togethers with no one having a multi day drive.

pomidoro
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Re: How often do you buy a primary residence?

Post by pomidoro » Mon Jul 16, 2018 3:51 pm

Thank you all!
Summary - it's not a good strategy for Biggleheads :happy

Luke Duke
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Re: How often do you buy a primary residence?

Post by Luke Duke » Tue Jul 17, 2018 3:50 pm

My wife and I have bought one house together. I've told her on multiple occasions that when it comes time for me to permanently leave the house it will be in a hearse.

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DaftInvestor
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Re: How often do you buy a primary residence?

Post by DaftInvestor » Tue Jul 17, 2018 4:14 pm

snackdog wrote:
Sun Jul 15, 2018 12:27 pm
Most people average about 7 years per home, less on the early ones and more on the later ones.
The 7-year average was true back in the 90's (and perhaps up until 2008 afterwhich it started to increase).
Depending upon the source - the average I've heard more recently is 11 to 13 years.

OP: Your friends are working the numbers to justify their desire. There is no way they aren't making a worse financial decision by switching homes every 5 years as compared to someone that stays in their home 25-30 years. Transaction costs, etc. add up. I also agree with others that state that newer isn't always better - there are certain risks you take with new construction versus the risks you take with older homes.

bigred77
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Re: How often do you buy a primary residence?

Post by bigred77 » Tue Jul 17, 2018 4:28 pm

- Bought a condo at 24.
- Sold condo and moved to a single family home a mile away at 28.
- Goal is to keep the same house until retirement when we plan to move back to a condo. I miss the "lock and leave" lifestyle.

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