patrick.net

A flash from the past. We got lucky with the timing. Bought our first house in 1996 for $200k. It was a great stepping stone to get our future investments in the later years. It was appraised for $850k last year on a refinance. Funny we cluelessly bought our first rental in North San Jose in March 1999 for $330k. It's worth about $1M now. Prop 13 is nice I must say. Still own it and won't sell. Have to choke the supply side to get prices higher. ;)

And a couple of decades later, we have another tech boom. This one feels almost like the one last time except most of the current tech companies are actually making profits. I wouldn't be a buyer in the current environment. 2020-2022 might be a better time to buy IMHO.

I find this post to be extremely interesting.

I notice that we sometimes get misaligned in real estate debates because in order to compare whether or not a home purchase was the right thing to do, we have to look at two things: First, we have to identify a starting purchase point in time and an also an assessment point down the line where we assess the purchase. And second, we have to identify what the rent alternative was at the time the home was purchased AND what it is during our assessment point. As of today, I only see a brief window in time where I would argue that it was unquestionably a bad time to buy, which according to the Case-Shiller index was about mid-2005 through 2008. This was the height of the housing bubble, the height of the subprime lending crisis. I say this was a bad time because prices are just now recovering to where we were during that bubble years in California (generally speaking of course as there are some regions that have exceeded it).

I was one of those people that bought in summer of 2007 in the East Bay. I was a few years out of engineering school in my mid-20s, saved enough for a down-payment, and had to make a decision in whether to rent or to buy. At the time didn’t have much real estate education. My regret today is not so much buying at that time, but rather not being educated enough on the topic of real estate to see what was happening. At that time, buying pressure was coming from the media, my real estate agent, my parents, and my friends. House flipping get-rich-quick stories were running in every newspaper at the time. The following statement was being thrown around like candy, “buy now or be priced out forever”. The real estate education came the hard way, as it often does. That property I bought was worth less than I paid for it starting just a year later and stayed that way for a number of years. That was a difficult pill to swallow despite being able to comfortably afford the property and having a nice place to live for all those years. I watched several of my friends foreclose shortly after the bubble years. It wasn’t until this past year or so that prices rebounded enough to put me back in green. And after a decade of ownership, I was able to sell the property for more than I paid for it. I have a great deal of appreciation for what Patrick did with this site and with his book given that it was the ONLY detailed resource out there that I knew of that said, “hey, wait a minute! Let’s take a cold hard look at the less glamorous side of buying a house before we take the plunge”. Big thanks to you Patrick for that. I wish the book was available before I bought.

In regards to Patrick not buying and having regrets, there are several points that need to be considered. First, in affluent areas like the Peninsula, the rent:buy ratios are extremely low. Patrick covers this point well in his book. Next, it sounds like Patrick invested in the stock market and did well. Although it would have been great to buy in 1999 with prop13 in your back pocket, Patrick followed an alternative path. The story is not so tragic given that he isn’t one of those people that decided not to buy while neglecting to pursue any other investment options. And lastly, consider that competition in this area is fierce but it was also competitive back then too. One regret that may be present is that by not buying in 1999, prop13 cannot protect Patrick now from outrageous property taxes that would come with purchasing a home on the Peninsula today. Paying $12K, $15K, $20K in property tax, my gawd.

I moved to San Carlos in 2015. I watched an older lady, who had lived in the house across the street for 25yrs get evicted because the landlord wanted to jump on the rising rental wave. That really etched a point about the importance of home ownership in my mind. Although Patrick’s rent vs buy approach is valid, where it can break down is in the situation of insane YoY rental increases like we’ve seen between 2013-2017.

In terms of what’s to come… I honestly thought that 2017 was the year where things were going to cool off in the Bay Area (at least go flat). And so far I was dead wrong. 2017 was a strong year for real estate and according to Case-Shiller, SF increased 10-12 index points since January of this year. Although home prices and salaries can only diverge for so long, I have to keep reminding myself that here on the Peninsula, it's not just salaries that buy homes and create the frenzies but rather insane tech capital gains that are also at play that skew the normal rules in play at most regions of the country.

I wouldn’t dare get in today, but very interested to see where things go in the next 3-4yrs. Best of luck to everyone in your future real estate endeavors.

Regret not buying in 1849.

ThreeBays, the general rule of thumb is this:

With rent, it’s simple, no explanation needed.

With home ownership, you have to consider the following:
Mortgage principle + Mortgage interest + Homeowners Insurance + HOA (if applicable) + Property Tax

In general if your annual rent is less than annual (mortgage interest + homeowners insurance + HOA + property tax), then it’s better to rent. You don’t count mortgage principle since that remains with you as equity in the house. If really want to get technical, you could also consider the tax deduction from mortgage interest, HOA, and property tax, but I typically look past that to be more sure that the home purchase is the better option.

The problem is that there are two major unknowns: The first is how much you particular home price will change in time. The second is how rental prices in comparable homes in your area will change in time.

BayArea says

If really want to get technical, you could also consider the tax deduction from mortgage interest, HOA, and property tax, but I typically look past that to be more sure that the home purchase is the better option.

In a high COLA and high income you absolutely have to factor this in. Depending on your interest rate and income, it could be a massive savings that is hard to account for in renting. And I know there are calculators out there, but it would have to be pretty detailed rent vs. buy calculator to truly account for this.

For example, buy a $1M home with 80% LTV ($800k loan). In a calendar year you're paying $30-35k in interest depending on the rate (in the first year). Standard deduction is $12,700 for married filing jointly (2017). In this example you're now able to itemize above the standard deduction by $17,300 on the low end. Interest rates are low, so let's say you're annual income as a married couple is $200k. With no other debt, you could very likely afford an $800k mortgage (it would be tight, but trying to illustrate closer to a normal couple/family income). So with that income you're potentially saving 28% of that $17,300 you've itemized. So let's call it $4,800 saved or at least one month of rent saved, back in your pocket.

Now you've got taxes and insurance that can also be itemized. This is completely dependent on your state and property tax structure. Here in IL, property taxes on a $1M property are similar to the interest you'd be paying on the loan. So there's another $4,800 back in your pocket ($1M props in IL easily run property taxes from $20-$30k per year). So maybe call it $3,800 to $4,800. Either way, you're up close to $10k here in IL buying a property in the higher cost of living areas vs. renting. If you're income starts knocking you into the 33-39% tax bracket, the the game is even more in favor of the owner. At a minimum in this scenario, buying would likely knock off 2-4 months vs. the monthly rent in the early years.

Then factor in tax free gains on the appreciation up to $500k, and it's hard to see where renting makes sense. Mind you, my whole argument here is for the higher income earner and carrying a higher mortgage. For everyone not on the coasts and not making $200k plus, please use the rent vs. buy calculator of your choice. Federal and state taxes are a bitch and really do make a difference on the higher end of the spectrum though.

Also just noticed the HOA mention. If you can, avoid any and all HOA's at ALL cost. I don't give a shit what they do for me, that is one cost I don't want to have to itemize. I can mow my own lawn.

Good lord, it's Patrick.net. You can use PITI and everyone knows what it means. Save yourself typing all that out @bayarea

HOA is not tax deductible for owner-occupied properties

I actually made a new spreadsheet modelling the buy vs. rent question, I put in the $1M numbers:

https://imgur.com/a/1SKhH
It models the first 10 years because that's all I'm interested in.

"ACO" is PITI etc. minus the P

"TCO" is all net cash outgo

Monthly OER is how much (per month) living in the home has actually cost vs. the sales price (less 10% transaction costs) at the time.

The Alt Gross Savings section attempts to model putting TCO (less a nominal $12,000/yr in housing costs) in the market

So with a 5.8% average appreciation vs. a 5% opportunity cost, after 10 years someone who had bought the $1M house and sold it for $1.859M would have seen a $205,000 profit, the house paid the owner $1558/mo to live there.

The Alt section shows the renter at $1,000/mo would have just over $1M in cash. $26,000 less than the owner.

But if the renter can get 6% gains in the market then he'd be $50,000 ahead.

If the renter got 8% gains but paid $2500/mo rent, he'd be $90,000 behind after 10 years.

ThreeBays says

I find it hard to believe that buying a property in Menlo Park with a mortgage would not have greatly outperformed stock investment in the same period. Since both housing and the stock market have performed well, the best investment is to own both, the former with a low rate mortgage. The worst is to buy in cash.

Problem is a mortgage in MP takes all your disposable income . . .

I have a friend of a friend who bought in MP in 2000 for $700,000, I thought they bought at the top but I didn't understand "The Fortress" concept at all back then (of course, Google, Facebook, Apple appearing out of nowhere really boosted property values after the Great Recession).



("Fortress" neighborhoods are the green and blue properties, most everyone would like to live there if they could and nobody wants to leave)

So this person having bought in 2000, let's give them a 3.75% mortgage the whole time since then. Average appreciation has been 5.4% since 2000.

All expenses less principal has been ~$600,000, for an average of $2700/mo in expenses.

They have 80%+ equity and if they sold today they'd see a $400,000 gain, the house paid them $1600/mo to live there.

If they were market wizards and were paying $2000/mo rent and getting 9% returns in the market instead, they'd have $1.5M in the bank and be around $200,000 ahead.

8% returns would be a wash in the rent-vs-buy department.

Bellingham Bill says

The Alt section shows the renter at $1,000/mo would have just over $1M in cash. $26,000 less than the owner.

Might be misreading you. Is this a comparison to the $1M home buyer with a $1k/mo renter? Don't know the West coast, but I can't imagine on equal footing that a renter would pay $1k/mo for the same house that the $1M buyer would be getting. How would the numbers look with a renter paying $3k/mo which would be closer to what the $1M buyer would be paying monthly PITI?

All things equal, renter vs. PITI for the buyer, high income and high mortgage owners are far and away going to do better than renters. It's part of the separation of the rich and poor. The system is set up for those that make more to benefit the most. A $100-$200k mortgaged owner, in most cases, likely won't itemize and benefit from the tax benefits at all.

WookieMan says

How would the numbers look with a renter paying $3k/mo which would be closer to what the $1M buyer would be paying monthly PITI?

Giving the renter a $3000/mo rent (with a 2.5% increase every year) and ability to make 8% in the market, a housing market going up 5.4% a year . . .

In the first year (2018) the renter is $76,000 ahead, due to that 10% transaction cost selling the house.

2023, the owner is $40,000 ahead vs renting, he'd take a $13,000 loss on the house but through 2023 the renter has spent more in rent ($230,000) than his market gains ($176,000).

2028, the owner if he sells will see a $140,000 gain, or getting paid $1000/mo to live in the house.
The renter will have spent $450,000 on housing and gained $452,000 in the market.

Hey, I forgot to account for taxes on the investing side, so these aren't after-tax returns, LOL.

Anyhoo, the renter would have $140,000 less on hand in 2028 vs the guy who bought in 2018 and sold 10 years later.

After the loan is paid off in 2047, the owner will have total gain of $1.9M, for a monthly income from owning the house for 30 years of $5,200/mo.

The renter would have $5M in the market and be $600,000 ahead at that point, due to the magic of compounding interest @ 8% (and tax-free investments)

But if he wanted to buy that house, he'd have to pay $4.8M, along with its $50,000/yr property tax, while the owner is only paying $19,000/yr property tax, thanks to Prop 13.

Bellingham Bill says

Hey, I forgot to account for taxes on the investing side, so these aren't after-tax returns, LOL.

I appreciate the calculations. Are the $500k cap gains accounted for too in the tax savings for the home owner? I double checked the spreadsheet and don't believe I saw anything accounting for that though I could have missed it. You're looking at another $75k-100k saving depending on income at the year of gain.

I guess what I'm getting at is if you are going to live somewhere 5+ years, make over $200k W-2 income and have a large mortgage balance (large interest payment upfront/early years due to amortization) then owning in that scenario will almost certainly beat renting a similarly valued rental. If you can live in a $1k/mo rental then that obviously beats owning at this level, IF you religiously invest the difference. But that's not an apples to apples comparison.

It's easy to look back with hindsight and see what one should or should not have done. My personal metric was $/ft. I had been renting for years (and banking the difference) but was ready for more space,my own yard, etc. etc.

Anything much larger was either (1) more than my rent at the time and (2) due to a shortage of 2 bdrm rentals in my area the only other option was renting an entire house at an inflated price (presumably to cover someone's monthly mortgage).So it was sit in a cramped apartment or try and find something in our price range. It took two years before we found something that fit us. I saw a lot of crap in the meantime (and handy I'm not - although I've gotten better).

I'd like to think I was smart - but I flat out to got lucky. Rates were at what ended up begin close to an historic minimum, Rents jumped significantly after that, so staying wouldn't have been much of a bargain in hindsight. We have enough space for the next 30 years and don't plan on moving any time soon. If nothing else all of my research about my area let me recognize a legitimate deal when it presented itself.

Every markets different. Even locally from town to town or neighborhood to neighborhood.

If there are three things I've learned it's

1) stay within your means (not what the bank is willing to lend you)
2) ask the hard questions. If it's such a good deal why is it on the market to begin with? Scrutinize everything.
3) Be patient

Best of luck.

Here is an easy way to calculate these things:
Cap Rate + expected appreciation - mortgage rate/opportunity cost. You need nothing else.
e.g. for a typical Orange County home:
Cap rate = 4%
Expected appreciation = 6%
mortgage rate/opportunity cost = 5%
4+6-5=5. If the answer is greater than 0, you should buy. If the answer is less than 0, you should rent.

Patrick says

The message always was and still is: every house has an appropriate price, and it's not whatever anyone would pay.

Patrick, I'm starting to have doubts about this long term assumption of yours. This is not an ideal world, house prices change wildly beyond anybody control, same as stock. If market is somehow efficient (and yes, it's a big if, since house market is not very liquid), you'll get the right return by buying (in average). It's like investing on REITs but with tax advantadges

anonymous says

Total market return 2000~2017 averages 5.3%. If you took the rental savings and invested them, you would have a gain less than $500k before tax. Let's say $325k after tax. That's quite a lot less than if you assume 9% annual gains.

You are right.. but you have to make the calculations over longer and randomized periods of time. Last time I check, average house return was comparable with stock market

If you've been sitting on the sidelines renting fthe past 15-20, and dumping your savings into equities, you're most certainly a millionaire by now.

All that liquid cash opens up many more possibilities

errc says

If you've been sitting on the sidelines renting fthe past 15-20, and dumping your savings into equities, you're most certainly a millionaire by now.

All that liquid cash opens up many more possibilities

I totally agree with this in 95% of the scenarios. But one of the best ways to reduce tax liability for high income earners, in high cost of living areas is to own. If you have to live in an area with $1M homes, you're better off buying one if you can afford it of course. That mortgage interest deduction is a real bonus to the wealthy. You'd be silly not to take advantage of it. Unless you know you're going to be moving for work and won't be in any one place all that long.

This 5% group is likely on their way to be millionaires anyway, so it's kind of a moot point I guess.

Bay Area,

Thanks for sharing that. A friend of mine sold his townhouse in Fremont in 2006 and bought a big house in Mountain House in 2006 with the proceeds and got whacked hard. Same with you, he didn't know anything about real estate at the time until the market crashed. That was how he learned about real estate, became a flipper in 2011, bought some buy and hold and more than made up for his mistake in the earlier decade.

Based on Bill Bellingham calculations, this reminds me of how the numbers work. We bought our first house in 1996 for $200k. Rent at the time was $1,200/mo. Our mortgage was $1,340/mo. I didn't know much about property tax and insurance. LOL! I was a college kid making money selling cosmetics at the flea market on the weekends making about $3-$4k/mo. I didn't realize it was a lot of money back then till I graduated in 1998 and got a $38k job offer for doing Civil Engineering. What a slap in the face.

Say take out $50k for remodels and upkeep through out the years, it has appreciated $600k in the last 20 years. That's equivalent to $2,500/mo in appreciation. Basically, we get paid to live in the house.

The same with the $330k bought in 1999. Say take out $70k for remodels and upkeep in the last 18 years, it has appreciated at $2,750/mo when the rent equivalent was $1,800/mo at the time of purchase. We actually got paid to own houses in the Bay Area. ;)

A $800k-$1M mortgage deduction is worth something in high COLA compared to a $200k mortgage deduction in flyover states. Once you factored this in, it makes sense to own most of the time.

E-man says

Say take out $50k for remodels and upkeep through out the years, it has appreciated $600k in the last 20 years. That's equivalent to $2,500/mo in appreciation. Basically, we get paid to live in the house.

The same with the $330k bought in 1999. Say take out $70k for remodels and upkeep in the last 18 years, it has appreciated at $2,750/mo when the rent equivalent was $1,800/mo at the time of purchase. We actually got paid to own houses in the Bay Area. ;)

This has been the result for every single home I have purchased. You get paid to own houses, and the government is nice enough to give you a tax write off.
It's a dream come true.

E-man says

Bay Area,

Thanks for sharing that. A friend of mine sold his townhouse in Fremont in 2006 and bought a big house in Mountain House in 2006 with the proceeds and got whacked hard. Same with you, he didn't know anything about real estate at the time until the market crashed. That was how he learned about real estate, became a flipper in 2011, bought some buy and hold and more than made up for his mistake in the earlier decade.

Based on Bill Bellingham calculations, this reminds me of how the numbers work. We bought our first house in 1996 for $200k. Rent at the time was $1,200/mo. Our mortgage was $1,340/mo. I didn't know much about property tax and insurance. LOL! I was a college kid making money selling cosmetics at the flea market on the weekends making about $3-$4k/mo. I didn't realize it was a lot of money back then till I graduated in 1998 and got a $38k job offer for doing Civil Engineering. What a slap in the face.

Say take out $50k for remodels and upkeep th...

E-MAN! Are you still retired?

mell says

E-man says

Bay Area,

Thanks for sharing that. A friend of mine sold his townhouse in Fremont in 2006 and bought a big house in Mountain House in 2006 with the proceeds and got whacked hard. Same with you, he didn't know anything about real estate at the time until the market crashed. That was how he learned about real estate, became a flipper in 2011, bought some buy and hold and more than made up for his mistake in the earlier decade.

Based on Bill Bellingham calculations, this reminds me of how the numbers work. We bought our first house in 1996 for $200k. Rent at the time was $1,200/mo. Our mortgage was $1,340/mo. I didn't know much about property tax and insurance. LOL! I was a college kid making money selling cosmetics at the flea market on the weekends making about $3-$4k/mo. I didn't realize it was a lot of money back then till I graduated in 1998 and got a $38k job offer for doing Civil Engine...

Mell,

Fortunately yes. House is free and clear. Bought wife a new MDX a couple of months ago all cash. Picking up my new Tesla Model S next week. Financing it at 0.99% with Chase. Life is good.

zesta says

You were spot on in 2007, but do you have any regrets about not buying in 1999?

I get it, rents were cheaper than PITI in 1999 so it was a tough choice to buy, but on the flip side if you would have taken out a 15 year mortgage you'd be a couple years short of paying it off. Or you could have refinanced a 30 year today, and I'm guessing you'd be paying substantially less in PITI than your current rent.

Patrick is an intelligent individual.

However with the CRA, there was sincere criticism of this, and even the left:

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?mcubz=1
"In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Remember, the CRA had nothing to do with the Housing Bubble:

"Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites."

WookieMan says

If you can, avoid any and all HOA's at ALL cost. I don't give a shit what they do for me, that is one cost I don't want to have to itemize. I can mow my own lawn.

Absolutely 100% true.

Case and Point: Twice in less than a three year period I had to go out of pocket to pay for "emergency assessments". Once for a roof that failed prematurely and once for outdated sprinklers which were a safety hazard. According to the HOA company, there were not enough funds to cover these assessments and the owners had to go out of pocket. I had absolutely no recourse. Those two assessments cost me $10,000, not kidding.

This doesn't even get into their annoying BS rules which limit your freedom and usually end up costing you money.

And of course the annual HOA dues increases. In the state of CA, the max annual increase is 20%. And yes, my HOA company did increase YoY HOA dues by 20% on more than one occasion.

Stay away from HOA!

BayArea says

Stay away from HOA!

I find HOA's to be convenient with rental properties. You don't have to worry about the exterior upkeep, and the HOA ends up keeping an eye on your property, by sending you notices if rules are broken.
Virtually all new developments have HOA's now.

Strategist says

I find HOA's to be convenient with rental properties. You don't have to worry about the exterior upkeep, and the HOA ends up keeping an eye on your property, by sending you notices if rules are broken.
Virtually all new developments have HOA's now.

Have fun with it. You're likely just lucky so far. HOA's are basically a miniaturized government with your old high school student council in charge. Most of them don't know the difference between their ass and a 2x4. Let alone how to manage a lick of anything. On the surface they make sense. In practice they generally fail at what their main objective is.

A good, LEGITIMATE management company can help. But most of them are looking to just skim off a percentage of the dues and don't care about the owners. It ultimately is a bad setup. I'm actually surprised you haven't been burned yet with a special assessment yet or some silly ass violation of the rules. I wish you continued luck.

WookieMan says

Strategist says

I find HOA's to be convenient with rental properties. You don't have to worry about the exterior upkeep, and the HOA ends up keeping an eye on your property, by sending you notices if rules are broken.
Virtually all new developments have HOA's now.

Have fun with it. You're likely just lucky so far. HOA's are basically a miniaturized government with your old high school student council in charge. Most of them don't know the difference between their ass and a 2x4. Let alone how to manage a lick of anything. On the surface they make sense. In practice they generally fail at what their main objective is.

A good, LEGITIMATE management company can help. But most of them are looking to just skim off a percentage of the dues and don't care about the owners. It ultimately is a bad setup. I'm actually surprised you haven't been burned yet with a special assessment yet ...

The first home I purchased 31 years ago while i was almost finished with my education has an HOA. It's now a rental and never had problems. Most of my rental condos are in Ladera Ranch, Ca. They have 2 associations, where the total dues are well over $400.00 per month. Excellent management and never had a serious problem. They had a lot of problems with the water pipes that leaked. They sued the builders and professionally fixed everything. There was no special assessment. Most of the homes there are around 12 years old.

Strategist says

The first home I purchased 31 years ago while i was almost finished with my education has an HOA. It's now a rental and never had problems. Most of my rental condos are in Ladera Ranch, Ca. They have 2 associations, where the total dues are well over $400.00 per month. Excellent management and never had a serious problem. They had a lot of problems with the water pipes that leaked. They sued the builders and professionally fixed everything. There was no special assessment. Most of the homes there are around 12 years old.

I'll say it again, you're lucky. Seriously enjoy it. HOA's are no different then your local government. Some neighborhoods/towns/cities are phenomenal and others are a shit show. Most of the time when there's a 3rd party managing something and then a group of know nothings running a community, it goes south quickly. Can it work? Absolutely. I personally wouldn't invest in a condo/property with an HOA. Am I probably missing out on some lucrative investments? Sure. Unless you're actively involved, how do you know things haven't been mismanaged and you're about to get hit with a $10k special assessment?

A lot of people are doing their own calculations / spreadsheets in this thread. Why? Do you feel your own calcs are better than the popular established ones like Patrick linked?

https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

goat says

A lot of people are doing their own calculations / spreadsheets in this thread. Why? Do you feel your own calcs are better than the popular established ones like Patrick linked?

The NY Times calculator is pretty good. Like all such calculators they are only as good as the assumptions you put in. The results can easily lead you astray for one of the most important financial decisions you will be making.

goat says

A lot of people are doing their own calculations / spreadsheets in this thread. Why?

the NYT calculator and my spreadsheet return similar results -- for my situation it's saying if rent is more than $650/mo I should buy, while my model says ~$800.

I just like being able to twiddle the variables directly, the NYT's GUI doesn't do much for me.

Bellingham Bill says

I just like being able to twiddle the variables directly,

Well, I can definitely understand that. I cant count the number of calculators I've coded over the years.

With that said, I do think the NYT calc is superb, for what it does do.

Throw the calculators out the trash can. It's called the ghetto calculator because the results are obvious.

Buy buy buy, - in the ghetto.

Avoid, no buy - in prime areas.

Which is the opposite of reality. Price appreciates the most in places people covet.

I don't even need a calculator to know someone like Patrick made multi-million dollar mistake.

Based on his discipline. He would have the home and even more stocks. You know, when you have a fixed mortgage which depreciate over the year. Savings rate. go through the roof eventually. Patrick would have had a peanut size mortgage had he bought the Berkeley place and saving like a mxfx all the same.

You know what's it like to have no mortgage and own a home in the sfba prime. Rich ass mxfx.

SFace says

Price appreciates the most in places people covet.

And where they covet now, is where they will always covet. It's as simple as that.

I said this since 2009.

Location location location will be location location location location location.