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Tuesday, October 18, 2016

I Dreamed of Owning a Home; Here’s Why I’m Selling It

A big house and the debt that goes with it is not all it's cracked up to be.

A few months ago, my wife and I began talking about selling our home.  We should be closing escrow by next month.

I never thought we would be in this position. We had previously thought that home ownership would always represent the fulfillment of our dreams. Now we have a different view.

The Dream of Homeownership

Property-ownership has always been a key ingredient to America’s secret sauce.  

In 20th century America, homeownership signaled that you were coming up – professionally, financially, and personally.Feudalism was coming to an end in Western Europe, around the time Enlightenment philosophers like Locke were advancing natural law theories on property rights.  These ideas would set the tone for colonial and post-revolutionary politics.  

Although the Puritans arrived in Plymouth to establish a theocracy based on communal ownership, they quickly learned about the Tragedy of the Commons, and switched to a private property system, tout de suite.  

By 1776, British intrusions on civil liberties, including property interests, became casus belli.  A century later, Manifest Destiny drove adventure seekers and homesteaders westward to acquire, and settle land.  

As World War II drew to a close, the new “American Dream” invoked an image of social mobility, inextricably connected to suburban home buying.  

In 20th century America, homeownership signaled that you were coming up – professionally, financially, and personally. Professionally, because you had a job.  Financially, because the job covered a mortgage payment (with raises, and promotions on the horizon). And personally, because you were settling down, and starting a family.  

The Dream

In 1971, my parents bought a new, 1,300 square foot home in sunny Southern California. They paid about $25,000.  

We learned that we will never again tear down wallpaper, paint, dig trenches, or lay sprinkler systems.  In 1984, baby no. 9 came along.  From about the time I could walk, I was dying for more space. To many who spend their twenties bouncing from dorm rooms to apartments, the experience is probably a daunting, sometimes uncomfortable adventure. But when you grow up in house of eleven, a shared dorm room is basically a five-star tropical resort.  

Still, while I didn’t mind college-living, homeownership was always a distant, yet certain life-goal.  

Finally, for my wife and I, our time had come: Law school was over, the bar was behind us, and careers were taking shape. Commencing our house hunt, we each had our “deal-breakers.” She wanted something charming, that could be made into a home. I wanted space: Lots of square footage, and a big yard. We both wanted a good location, and a big kitchen. We did not want a swimming pool, or a busy street.  

In 2013, we bought a 1,600 square foot home in sunny Southern California.  We paid… well, let’s just say slightly more than $25,000. And we got most of our deal-breakers. I got my big yard.  

Immediately, we proceeded to make it our own – gutting the inside, tearing down wallpaper, replacing everything, painting, and customizing it to fit our tastes. I learned how to do a sprinkler system, dug trenches, and laid the sod myself. We lived and breathed HGTV, and YouTube DIY projects.    

Through it all – house hunting, getting out-bid, escrow, and remodeling – we learned a lot.  

We learned that we will never again tear down wallpaper, paint, dig trenches, or lay sprinkler systems.  

We learned that lawyers aren’t as bad we’re made out to be, once you’ve met a few realtors, loan officers, and contractors.     

We learned what was important to us in a home, and what was unimportant.  

Costs and Benefits

We all know the financial benefits of homeownership: Your mortgage payment goes toward some equity, and you can write-off the interest. Smarter than renting, right? 

Today, your equity looks good. Tomorrow, who knows?  Unfortunately, you can’t write off your bills for water and electricity, and no matter how much money you spend at Home Depot, they never offer you the shares of common stock you feel you deserve at this point.  

And you will never get back all that time spent caring for a house – weekend, after backbreaking weekend.   

Now, some of that is time well-spent. Gardening and buying furniture can be a lot of fun.  Even mowing the lawn can be fun – at least, the first time you do it because you’re really excited about your new lawnmower.  

But by the 20th or 30th Saturday morning spent replacing sprinkler heads you just mowed over, you call a gardener, and you turn that lawnmower into a snappy new garage ornament.  

You start paying a gardener every month.  

Smarter than renting? I guess it depends.  

And, all the while, you’re gambling on housing market roulette. Today, your equity looks good. Tomorrow, who knows? And if the market drops again, you’re stuck waiting to recoup your losses.  

Of course, that might not a problem if you plan on riding it out, and staying in your house for many years to come.  But is that the plan?

We thought it was our plan, until a few months ago.  

New Dreams

I started to question how many material things any of us really need.  Tragedies and setbacks always hit at the wrong times.  But sometimes, they can force you to ask the right questions. That happened for us last year. Suddenly, we were thinking about life, and the future in new ways. We asked questions we hadn’t asked of ourselves, and started to reevaluate our wants, and dreams.  

Naturally, that discussion led to money, income, and debt.  

We realized that – whatever new dreams we were contemplating – by eliminating our mortgage, and paying off most of our student loans, these new dreams might actually be achievable.  

However, this also meant waking up from our old dream of homeownership.  

Monks and Tiny Houses

Midway through our discussion, we took a long-awaited trip to Italy.  

You can’t quite describe the devout and meditative air enveloping the hill town of Assisi.  In the basilica, I gazed at the old brown smock of St. Francis. This isn’t just his favorite outfit we see Francis depicted in – it was his only outfit. Hagiographies recall the scene of Francis removing all his garments, and abandoning his worldly inheritance to live out his days in contemplative prayer.  

Thinking about this radical calling to a life of hermitage and poverty, I started to question how many material things any of us really need.  

I definitely needed some wine and gelato.  

I’m looking forward to the freedom of being house-free and, one day soon, debt-free.  Life altering pilgrimages aside, we also kept watching these tiny house documentaries. I would ask myself: “Are these people crazy, or am I?” Actually, I think tiny houses are a wonderful idea if you’re outdoorsy, or some kind of gnome.  But when you’re a professional working in a city, with bills and obligations, a tiny house on wheels out in Idaho probably has to go under the “long term goals” file.  

Anyhow, we weren’t sure if becoming monks or buying a tiny house was the right move for us, but we were finally certain of this much: We had way too much too stuff, and way too much house.   

Go and Build a Tiny House, or Rent an Apartment

Buying a home can be a joyous, and prudent decision. Or, it can be a burdensome, and reckless decision. There is no universal right-answer. But I think it is a mistake to treat homeownership as an end in itself, or as some abstract social goal.

I may buy a house again one day. But right now, I’m looking forward to slicing my debts, and renting an apartment. I’m looking forward to the freedom of being house-free and, one day soon, debt-free.  

Most of all, we are looking forward to discovering our own American dreams.

  • Thomas Smith is an alumnus of Berkeley and Pepperdine Law, and a corporate attorney.