The other day I was talking with an old friend who I hadn’t seen in a few years. He shared with me that while things were going pretty well, he regretted the decision to buy a new house early last year.
I was puzzled too, because not long ago I remembered them buying a home, which at the time (maybe three or four years ago) was a major step up for them. It was a very nice home, and one that offered the space they needed for their growing family. I just assumed they would be there for years – maybe decades.
Somewhere along the way my friend got a promotion and his wife returned to work. They had some new-found cash flow, and felt some temptation to step up in house again. Rates were nearing an all-time low, and prices had been knocked down a bit in their area (though not quite as bad as in other parts of the country).
They decided to, in his words, “stretch a bit” to buy a much larger home (around 1,000 square feet larger), with a bigger lot and many more high-end features. They considered it a smart investment.
Fortunately, they sold their old house relatively quickly, and for the first couple of months they were tickled with the new place. Unfortunately, it didn’t last.
They soon realized that the new home came with larger bills. I guess they always knew that would be true, but now they were feeling it. They were paying more in utilities each month. Their payment was significantly higher thanks to higher taxes (they now owed city and county taxes since they moved closer to town).
My friend’s wife saw her hours cut at work, which was a mixed blessing since she missed spending more time at home with their kids. On the other hand, they counted on her earnings to help cover the mortgage. He said they were starting to feel “squeezed.” Looking back, he confesses, it would have made more sense for them to just stay put and find something else to “invest” in.
I can relate to what my friends are experiencing, and his story was a timely one for me. My wife and I often wish we could relocate to a different area. Houses in the area we desire are significantly more expensive than what we owe on our current home.
We feel like a move there would mean depleting our cash for a down payment on a larger debt. At the end of that trade we wind up owning less (savings) and owing more debt. That just doesn’t fit with our financial goals.
Since becoming debt free but the house our goal has been to acquire assets – things that go up in value, or add value to our lives, or create a passive income. While you could make the argument that real estate meets these qualifications, I don’t necessarily want to put all my eggs in my primary residence. I’d rather buy rental property, or land, or invest in REITs for real estate exposure. My home is my shelter; it’s not an investment.
When I start feeling a little house fever, I remind myself that all the granite countertops, square footage and stainless steel appliances in the world can’t change my fundamental feeling about new debt.
I don’t want to take on more debt. I want to pay off the remaining debt I have (the mortgage), and be free from debt altogether.
I don’t want to buy something that will cost me more to maintain, draining more money from future earnings.
I don’t want to buy a fancier roof over my head if I think one day I may not be able to pay for that roof, a roof that keeps the rain and the wind and the cold away from my family.
So for me, curing house fever is relatively easy. I take a walk around the outside of my home and think of the blessings I have inside, beginning with my family. Everything else is just stuff. And I don’t need a bigger box just to hold more stuff.
If I lost everything inside that house, but still had my wife and kids, I’d still be a blessed man. Anything else is just gravy.
As for my friend, he said they are looking to downsize, but are now having trouble selling their home – one of the larger ones in his neighborhood and significantly more expensive than the short sales happening around him.
As he put it, “We may never find someone dumb enough to take this house off our hands.” I told him to be positive, because after all, the previous owners did.