@patrick why are you so fixated on this idea that buying a house is always bad? It makes no rational sense. A lot of this stuff is out of date anyway. What applied in 2008 doesn't necessarily apply in 2015. Many if not most housing markets (except CA) have returned to historical norms. I'm not advocating buying houses. Each person should look at what is best for them where they live not listen to some naysayer looking to sell his book that says everything about buying is bad.
The truth in your thesis targets a certain class only.
That would be people trying to buy more house than they can really afford.
Most of that reason is out of Prejudice, Elitism, Pride, and misguided self esteem.
I mean 90% of those bellyaching about RE affordability. Wouldn't be caught dead in a house they actually could afford.
We've lost our can do, make do spirit as Nation. Housing market or any market for that matter will never turn around as long as we continue this path of high roller lifestyle birth rights. I moved into a house "I" could afford, and not the house the RE said I could afford. 1/3 or even 30% on housing is too damn much. Most renters out there are even paying more. I don't agree with that. I was taught in School by a sweet old lady who was a cracker jack at household accounting, that you should never pay more than 25% of your income on housing.
I bought what I could afford. Eventually not if but when prices come down. And then if I think my neighborhood has become bellow my pay grade. Then I'll move up into a better house. Possibly cheaper than what I paid for this one. Keep this one and rent it out.
Your thesis is a sound argument for those willing to enslave them selves so they can live in an area that gets more expensive by the day.
But for anyone buying within their budget and a budget they are convinced they can maintain for 15 to 30 years, through up and down economic times, and that includes tax and insurance escrow. Then buying is 1,000,000,000,000,000,000 X's better than renting any day.
Especially in this day and age. I can guarantee you that every renter of a house in South Florida in the last 5 years, has had to put up with Realtors and potential buyers, parading through their homes all hours of the day. And broken crap that the landlord refuses to fix because he's selling the place. But that hasn't stopped him from raising the rent to keep up with other lemming landlords. Because the NAR keep releasing "Data" saying that rents are going up because of the housing shortage. Yes the same shortage we are experiencing right now where 2 out of 10 SF homes are boarded up because they have been foreclosed for over 7 years.
Yes this book came out right at the start of the BEST BUYING OPPORTUNITY for RE in our lifetimes.
Especially in bay area where patrick is mostly concerned with.
09,10,11 was a rare, never to be repeated period where houses cost far far less than today. And the banks with thier short sales did not care what price they got (if you could land one of those deals, there were lots of them)
I know in LA area 2 bedroom apartment style condos couuld be had for 130 to 200k and the same units are now 300 to 500k and rent for 2300+ per month.
Anyway no one knows the future but patrick is a perma bear - you gotta buy the dips people.
Patrick should have released this book in 2005, then another book in 2009 saying 'now is the time to buy re' then another book NOW saying 'now is time to sell re'.
That would have awsome.
These fuking bubbles are makeing me crazy. They are really all scams and frauds we actively participate in, so I guess i respect patrick for not knowingly investing in a ponzi fraud scheme, but we cant all rent, that society cant exist.
Patrick is providing his free opinion. Like any opinion we as individuals are responsible to make our own decisions. Obviously he sees a home as place to live not an investment vehicle. That is because he is not a speculator so do not expect him to tell you how to gamble on the housing market. Once housing begins its next downturn, he will be proven correct. Then people will blame him for not telling them to sell.