How do I deal with this Arduino IDE installation error?
Delete (or edit) your preferences.txt file - it most likely has your sketchbook folder set to your home directory.

You may find it in ~/.arduino15 for the "real" Arduino IDE, or in (I think) ~/.arduino for the arduino.org one.

Unless you have a specific reason for wanting to run 1.8.0, which is actually 1.0.6 re-numbered, you should be using the version from arduino.cc which is currently 1.6.13.