patrick.net

Bellingham Bob says

Even at 0% interest rates?

Yes. Even at 0%. Like I said- I could pick up and move just about anywhere and buy a pretty nice place for 150-200k cash and call it a day. One of the reasons a lot of us are on this site is because property prices in places like the bay area are atrocious. I make a 6 figure income and there is no way I will ever pay anything close to 700k for a house. Perhaps others are conditioned to accept this. I'm not and perhaps its again- because I came from somewhere where home prices are a fraction of the cost.

Everyone's going to have a different idea of what value is. Anyway, we're goin' off in the weeds again. I am not familiar with Oakland hills rents. But $3,000 sounds rather steep. Thus I can understand why the OP is asking this rent versus buy question because if I were in that situation and had no plans to move, I too would be weighing options in regards to buying.

edvard2 says

One of the reasons a lot of us are on this site is because property prices in places like the bay area are atrocious

Incomes are "atrocious" too. Plus not everyone living here has to pay $700,000. Plenty of people living here paid $70,000 30 years ago and have enjoyed the 8% pa appreciation ride.

I make a 6 figure income

Making that outside of an expensive area to live is not something more than 1-2% of the population can realize from their labor alone.

because I came from somewhere where home prices are a fraction of the cost.

As you say, the bottom line is rent vs. buy. What prices are in flyover country has all the relevance to the price of tea in china for the Bay Area.

Rents are high because household incomes are high, quality supply is low, and demand for quality greatly exceeds supply. This is basic economics.

Bellingham Bob says

Incomes are "atrocious" too. Plus not everyone living here has to pay $700,000. Plenty of people living here paid $70,000 30 years ago and have enjoyed the inflation ride.

That's not really relevant to the conversation or general. There's old people that live up the street from me who could never afford the houses they live in now if they did what they do or did for a living. They also didn't shell out every penny they owned paying for their houses. At some point the cost of housing in the Bay Area was in lock-step with the rest of the country. For the last 10+ years it has been very seriously out of whack. The fact that even the people making 100k a year are having trouble buying a crappy fixer-upper in the area tells you this.

Bellingham Bob says

Making that outside of an expensive area to live is not something more than 1-2% of the population can realize from their labor alone.

Its not like a 6 figure income is common even in the Bay Area either. Last time I looked the average income was around 65-70k here. That compared to Austin TX where the median is around 63-65k... but with an under 200k median home price compared to the 700k+ you'll have to pay these days in SF. In reality the overall income strata is much, much tighter nationwide than most people know. But even so, let's say my salary was cut in half and I made 50k a year. Assume my wife made close to the same. So 100k total. That income will go about 3 and 4 times further in "Flyoverland" or whatever. I know because my parents and friends of mine who stayed make less then that yet comparatively speaking they're doing a lot better than we are- and yes- their kids go to good schools and they own nice homes. One in a cool old historical neighborhood in a larger house they paid $131k for. A 6-figure income in the Bay Area is about the same as 40-50k elsewhere. I'm not saying I don't appreciate it. I was making $8 an hour when I first moved here. I'm the most miserly cheap bastard you'll ever meet too. Its just that its shocking at how much it costs to live in the Bay Area- to buy a house, drive, etc etc. Its like its NEVER enough. You have to be phenomenally wealthy to do decently here. I find that highly irritating and nonsensical.

Bellingham Bob says

As you say, the bottom line is rent vs. buy. What prices are in flyover country has all the relevance to the price of tea in china for the Bay Area.

First of all, can we stop using the words " flyover country"? That's such a deragatory term. I grew up not far from the Blueridge parkway and if some of you folks only ever fly over it and consider it not worth visiting then too bad for you. There are beautiful places in all 50 states and to merely focus on a select few is silly. Secondly, no- we live in a global economy and the cost of living in one area doesn't necessarily mean its better nor with better economic opportunities. See my above statements for reference.

"First of all, can we stop using the words " flyover country"? That's such a deragatory term. I grew up not far from the Blueridge parkway and if some of you folks only ever fly over it and consider it not worth visiting then too bad for you. There are beautiful places in all 50 states and to merely focus on a select few is silly. Secondly, no- we live in a global economy and the cost of living in one area doesn't necessarily mean its better nor with better economic opportunities. See my above statements for reference."

Before I got into Law, I was a flight attendant.

The Flyover is exactly that - vast inland sectors of the nation where no one wants to go and neither is there an airport if you wanted to land.

It will always be referred to as The Flyover because that's what the Midwest is; btw, not everyone regards the "Flyover" term as an insult.

It is what it is, just like we Californians have to put up with earthquake jokes about CA falling off into the Pacific.

~Misstrial

bubblesitter says

The cost of my last move was $250. Thousands for moving? doesn't makes sense.

Yeah, if you are single and moving from 1 bedroom to 1 bedroom...

Moving a family of 4 four is definitely gonna cost $1000+ in cash minimum.. and thousands more if you value your time in dollars... Packing and cleaning alone takes days.

edvard2 says

That's not really relevant to the conversation or general.

Old people are entirely relevant since they are taking up a lot of the available SFH supply.

At some point the cost of housing in the Bay Area was in lock-step with the rest of the country.

Not in my lifetime, and I've been living in the BA since the 1970s.

For the last 10+ years it has been very seriously out of whack. The fact that even the people making 100k a year are having trouble buying a crappy fixer-upper in the area tells you this.

Prices have crashed outside the fortress, since prices outside the fortress were juiced by the suicide loans. In San Leandro prices went from $300 to $600 during the bubble, now they're back to $300. Prices in the nicest areas are being supported by incomes, 4% interest rates, and the MID.

Its not like a 6 figure income is common even in the Bay Area either.

It is at the household level, which is what matters for home prices.

but with an under 200k median home price compared to the 700k+

Texas has 166 million acres of buildable land, or will once the fires die down. The Bay Area has the Bay, which is difficult to build on unless you like houseboats, and is surrounded by Mountains, which limit density and reduce transportation access.

Texas also has much higher property taxes, which are an excellent way to limit price appreciation : )

You have to be phenomenally wealthy to do decently here. I find that highly irritating and nonsensical.

Yup, and it's been this way since the Gold Rush. Life was better when the Caudillo was handing out 100,000 acre homesteads, but that could only last so long.

http://en.wikipedia.org/wiki/Henry_George#Economic_and_political_philosophy

First of all, can we stop using the words " flyover country"?

No, we can't, because that's what it is. Just empty space with very low population density.

Bellingham Bob says

First of all, can we stop using the words " flyover country"?
No, we can't, because that's what it is. Just empty space with very low population density.

So, what exactly is flyover country? Everything outside of the coasts? I agree with Edvard that it's a pretty inaccurate term if that's the application.

tatupu70 says

Everything outside of the coasts?

everywhere were livestock outnumber people I'd think.

tatupu70 says

So, what exactly is flyover country?

I liked the term "Elvis Country" as used in The Sopranos. "Anywhere where there are no Jews or Italians." :)

Misstrial says

Before I got into Law, I was a flight attendant.

The Flyover is exactly that - vast inland sectors of the nation where no one wants to go and neither is there an airport if you wanted to land.

It will always be referred to as The Flyover because that's what the Midwest is; btw, not everyone regards the "Flyover" term as an insult.

It is what it is, just like we Californians have to put up with earthquake jokes about CA falling off into the Pacific.

Then that's a rather sad statement. Perhaps the most beautiful place I've ever been in my life- and that includes places I've been such as Hawaii, California, Ireland, and the UK was Mount Le'Conte in a part of the Smokey Mountains, a part of the Appalachian chain. Its a somewhat tall mountain that has some of the most diverse plant life you'll find in the US. Its up in the clouds and its totally silent when you cross over some of the balds. Words can't describe it because its simply beautiful. But golly gee-wiz its in Tennessee which I reckon none of you will see since its "flyoverland" and all. I've driven across the country several times. Its a beautiful country. All of it.

Bellingham Bob says

Prices have crashed outside the fortress, since prices outside the fortress were juiced by the suicide loans. In San Leandro prices went from $300 to $600 during the bubble, now they're back to $300. Prices in the nicest areas are being supported by incomes, 4% interest rates, and the MID.

Realistically almost any house within a reasonable commutable distance to the main job areas in the Bay Area are still at nosebleed levels. I already have a fairly long commute. Its not like the East Bay area I live in is anything to brag about but you're still going to have to shell out 450k+ for anything decent. That's ridiculous.

Bellingham Bob says

Texas has 166 million acres of buildable land, or will once the fires die down. The Bay Area has the Bay, which is difficult to build on unless you like houseboats, and is surrounded by Mountains, which limit density and reduce transportation access.

We're not talking about TX in general. I mentioned Austin- which like the Bay Area is a high tech hub, has numerous universities, is generally considered liberal and artistic, and is also a major metro. But even so, it has more buildable land? Well in my opinion that's a good thing.... don't you think? I guess then you could add that to my last set of points which is that Austin is considerably cheaper than the Bay Area in more ways than one and even with it being a comparable city.

Bellingham Bob says

Not in my lifetime, and I've been living in the BA since the 1970s.

I think you're missing my point. I know for fact that my neighbors bought their large Victorian home back in 1980 for 70k. While that wasn't chicken feed in that time period they were able to buy it with their incomes at jobs that they still have. Jobs that now would in no way shape or fashion enable them to buy that house today. They are solidly middle class professionals. We're not talking working class people but rather the same group of people that fill jobs like HR managers, teachers, and state workers etc. So while the BA has been more expensive for decades its also drastically changed in overall affordability. It is far less affordable, even throwing in inflation- than it was in the not-so-distant past.

Bellingham Bob says

No, we can't, because that's what it is. Just empty space with very low population density.

Fine. I guess we can then call California "Fly Out of country" because so many people are leaving it.

edvard2 says

I think you're missing my point. I know for fact that my neighbors bought their large Victorian home back in 1980 for 70k. While that wasn't chicken feed in that time period they were able to buy it with their incomes at jobs that they still have.

Population has risen 50% since 1980. Land supply has risen 0%.

Interest rates were really holding down home prices in 1980 -- 30 year rates were 12-15%.

$450K is easily affordable with 4% rates. $2500/mo PITI etc and PITI less the P is $1900/mo starting out and approaches $650/mo as the loan is paid down.

Average cost of ownership over 30 years is $1300/mo. Cheap!

15% rates raises this to $3000/mo. Not so cheap!

0% rates would be $750/mo. Really cheap!

edvard2 says

it has more buildable land? Well in my opinion that's a good thing.... don't you think?

Sure. Texas is great. Gonna move there for sure. ::Eye roll::

edvard2 says

"Fly Out of country" because so many people are leaving it.

The losers are, yes.

tclement, be happy you're being told now (beginning of September) and not on December 1st as one landlord did, giving us 30 days to leave the house. Yes, we had to move over Xmas/New Year. We pushed back with an emotional appeal and we were given until January 15.

It wasn't a negotiating ploy, the landlord couldn't afford his big, shiny, new house purchase and had to move back to the crapbox rental and give up the bigger place.

In fact, being kicked out over the holidays was we bought a house, we never wanted to go through that again. And we didn't even have kids to disrupt at that time.

Bellingham Bob says

$450K is easily affordable with 4% rates. $2500/mo PITI etc and PITI less the P is $1900/mo starting out and approaches $650/mo as the loan is paid down.

Average cost of ownership over 30 years is $1300/mo. Cheap!

8% rates raises this to $2000/mo. Not so cheap!

You are never going to convince me that 450k is "cheap". Try saying that 450k is cheap to the vast majority of people who don't live crammed on the coasts. They'll think that's nutty. I don't care how many little hoops, tax shuffling or little financial investment schemes are out there that could potentially squeeze me into my own little crap shack in heaven, the prices are still seriously out of whack on principal alone.

Bellingham Bob says

The losers are, yes.

If you want to call them that then be my guest. When my folks and any of my friends come to visit us they certainly don't think of themselves as losers. More often than not they are really, really happy they don't live here because the quality of life is pretty bad compared to where they live. In fact if any of them are here long enough to see a home price tag they're absolutely floored.

Either way, I see this is not really going anywhere. I've had my fair share of conservations with people who are overly enamored with the Bay Area think the whole area is "special" as if its plated in gold or something who will pay absolutely anything to stay. I've been here for years and still see it for what it is: A large, overcrowded, sprawly metro with poor transportation and a poor infrastructure paired with overly expensive real estate and a high cost of living.

jworm said: This home, http://sfbay.craigslist.org/eby/apa/2582869572.html, might meet your challenge.
Ding, ding, ding! We have a winner. Prop 13 tax basis of $216k. They will probably pass this property on to their children and would love a diligent caretaker like you. If you have a stash of cash and like the place, offer to pay 6 months in advance. They'll know you're serious.
I know this will be disruptive to your son, but seriously, why not consider a place with better high schools (BAP, or over the hill in Lamorinda)? I think it would be even more disruptive for him to make the move when he enters HS. I know of a poster on another blog who found a Prop 13 rental for less than $3k in Piedmont; he'll probably never buy at this point.

edvard2 says

the prices are still seriously out of whack on principal alone.

LOL. What if I give you a 40 year 2% loan like what they have in Japan? Principal still too high? PITI etc is $2000/mo and the average monthly cost is $1000/mo. How much rent are you going to be paying?

Prices are driven by interest rates.

I've had my fair share of conservations with people who are overly enamored with the Bay Area think the whole area is "special" as if its plated in gold or something who will pay absolutely anything to stay

Don't get me wrong -- no way would I pay big bucks to live in the Bay Area for the next 30 years, unless it's in a fortress, and the fortresses on the Peninsula are just ridiculous if you don't have a job close by.

I wouldn't mind retiring to Kensington, since the quality of life up there would be better than a nice spread in the Santa Cruz Mountains, or out by Bellingham (where I'd also like to retire maybe).

But for people who plan on working in the BA for the next 20-odd years, today's prices are not that out of whack, as long as things don't fall apart on the macro level.

Seriously buying anything over $600,000 will cost you much more than renting at $3100? What are those people calculating. Remember $3,100 is all inclusive.

A little more color commentary would help. I almost did a spit take when I looked up your house. At least it appears that your landlord is not in foreclosure (yet?) Might I suggest as an opening to your post:
My landlord bought our rental at the peak of the market for $930k in July of 2008. We think her BofA ARM may be resetting and she wants to raise the rent....

EBGuy says

I almost did a spit take when I looked up your house

Who's house? How did you look it up? Our landlady inherited this house from her mom.

I guess that would be a different tclement. Yikes.

Bellingham Bob says

Asset Cost 700000.00
Total Interest 402469.24
Prop Tax 262500.00
Other 147750.00

Subtotal 812719.24
Tax credit 234,069.17

Net cost 578650.06

Over 360 months: $1607.36

Ahhh yes, financial engineering to justify buying a house that is a rental yield of 5%

First, don't assume down payments as reducing the interest part. This makes it seem the house is cheaper since there's less interest paid, but there's a huge opportunity cost. Either investment or just having $140k of cash laying around in case of a rainy day. Either way, huge cost.

Second, at the end of the day, you're making a bet on low interest rates and government subsidies for housing for a long period of time. If interest rates go up, tax credit goes away (which it probably will), property taxes go up, the math works out to make the house value go way down.

Third, your'e stuck with very high principal payments. The person is automatically saving, but they're automatically saving into a house valued at $700k. At a 5% yield and since the house isn't probably going to magically get better, that's a price that's probably not going any higher. That's a lot of money to go into one fixed, fairly illiquid asset.

Fourth, the calculations don't factor in realtard commissions or much in the way of housing improvements.

The OP's initial gripe is a real one though. It's tough to find single family rentals in a lot of areas. Or, if you have a dumb landlord, then well you're stuck with moving costs and headaches that may set you back about $1000-$2000 on average to find something that's just the same. Not the end of the world provided there are other houses out there.

Biting the bullet and paying for a house is always an option, but if $700k juts gets you a $3k rental, then it sounds like renting is still the best decision. In sane areas of the country, a $700k house will generally rent for at least $5k.

Interesting thread. For those who wish to move to a more rural area with decreased prices I say go for it. It is sort of a waste of time and a life to live somewhere you don't like, such as the SF Bay area.

As for me, I have lived in rural, city, suburban areas, east, west, north and south, and I would have to say that this is my favorite local just behind Vancouver.

Hell, I even lived in Nashville, but after the GOP turned christianist and folks of my kind were reminded by them that we were not equals everyday, somehow, my gorgeous home on gorgeous land at 1/4 the price I pay here actually was no bargain.

I put a HUGE VALUE on quality of life. Despite my real estate nirvana my emotional, spiritual and daily well being were in the sewer due to right wing nut jobs who have taken over. Yes, they live here too for sure, but in far less numbers.

Of course if you go to the right church, have the correct skin colour and the correct sexuality, you may really enjoy what I gave up.

Lastly, strictly from a money pov, which seems to be the only thing most care about, by moving here, my salary more than tripled. So all is good.

Ptipking222 says

Either investment or just having $140k of cash laying around in case of a rainy day. Either way, huge cost.

shrug. The 10 year is what, 2% now?

you're making a bet on low interest rates and government subsidies for housing for a long period of time. If interest rates go up, tax credit goes away (which it probably will), property taxes go up, the math works out to make the house value go way down.

yup, but: Interest rates generally go up to curb wage inflation, and wage inflation pushes rents and home prices up, so that's all a wash. People are making noises about eliminating the MID, but that is something Osama would have done to us if he really wanted to destroy our financial system. Prop 13 changing is likewise not in the cards, and at any rate Prop 13 change hurting would mean we've seen appreciation and thus a win for the buy case.

That's a lot of money to go into one fixed, fairly illiquid asset.

Gotta live somewhere. I'm only going to buy a place I want to die in.

At a 5% yield and since the house isn't probably going to magically get better, that's a price that's probably not going any higher

Future appreciation is neither here nor there with me. All I care about is buy cost vs. rent cost.

Almost half of :

Other 147750.00

is maintenance over 30 years -- specifically, ~$200/mo in maintenance setaside. Basically a roof, a kitchen, some bathrooms, and whatever breaks.

The bottom line is when you buy a $700,000 house with 20% down and a 4% loan, you're going to limit your housing expense to under $600,000 over the next 30 years, around $1600/mo.

Yes, there is an opportunity cost in not saving that money. But someone paying $3100/mo on rent is not going to be saving dollar 1 in comparison with this loan -- the actual after-tax expense of this loan is $2900/mo:

PITI 3525.61
Tax Credit -913.73
HOA/Utils 100.00
Maintenance 187.50

Actual Expense 2899.38

It's not "financial engineering" to just look at the actual cost of the loan over its life. Not analyzing this correctly is what prevented me from buying in 2001 when I really should have.

I saw the $2500/mo PITI was greater than my $700/mo rent and decided to keep waiting.

10 years later my rent was $1750 but if I had bought & serially refid down with rates I'd have had a housing cost of $1000/mo or less (plus another $1000/mo in principal repayment). And also around $300,000 in equity.

You are either a bad tenent or your landlord is in financial trouble to hike the rent by that much . I am guessing financial trouble as she has already put out feelers asking if you are interested in buying the place .

Why not make a offer , maybe 30 % below market value for your area ? See what the response is .

i dont think buying a house is the right move. Youve stuck it out this long. 4 years until kids are gone right?
Even at $3-$4k per month, It's almost worth the premium for the flexibility of renting.

once your kids are gone you wont be tied to buying within a certain school district.

I have to say that it is amazing that I can tell the story of what is happening in my life and get such rich and diverse perspectives from this community of intelligent and thoughtful people. Thank you all for your contributions.

Do you really need to stay in that area? Kids at that age, from our experience, make new friends almost instantly and move on when changing schools.

So hope that helps man.

So I modified my invest vs. buy spreadsheet with new numbers (we weren't so quite into ZIRP the last time I looked at this). . .

This spreadsheet says, with a $700,000 buy, 20% down 4% fixed vs. $3100/mo rent --

with rent raises at 0%, savings yield of 2%, 3%, 3%, then 5% on, I get:

Total rent paid by 2041: $1.1M

Accumulated savings in year 2041 when renting: $560,000

Rent case's savings starts with the $140,000 down payment. Curiously, for the first 10 years, buying is cheaper than renting on a cash outgo basis -- ~$2000 cheaper/yr starting out. But the decreasing MID slowly turns that around so by year 13 rent vs. buy is breakeven on the cash basis. This assumes no rent increases though, LOL. With just a 1% pa rent increase, there is no turnaround at all, renting is always more expensive than buying, month to month.

But with a 0% rent increases, the $140,000 in the bank slowly starts compounding interest such that by year 20 there will be $300,000 in the bank and by year 30 the rent case will see $560,000 in the bank.

The year 30 comparison is educational I think. After the loan is paid off the buyer will have a $700,000 asset owned free and clear and housing costs of ~$900/mo going forward.

The renter will have $560,000 in the bank, which would yield $2300/mo at 5%.

Buying is much better by this analysis. And of course any inflation just utterly destroys the rent case. Having rents go up half the previous year's savings yield will wipe the renter out by year 25, with no accumulated savings at all. He'll be $180,000 in the hole by year 30, and it only gets worse from there.

Bellingham Bob says

It's not "financial engineering" to just look at the actual cost of the loan over its life. Not analyzing this correctly is what prevented me from buying in 2001 when I really should have.

So you were going to live in that condo for 30 years?

Buying should be cheaper than renting because renting should cost more because of profit to the landlord and being more liquid/flexible, but buying can be far more expensive in the short term due to transaction costs in some cases. If you only live in a place for 5-7 years, you will generally pay more by buying.

Bellingham Bob says

Population has risen 50% since 1980. Land supply has risen 0%.

I'm not so sure about that. 1) we could build denser, so land supply could be stretched; 2) not all parcels were built upon in 1980. I don't disagree in concept, however, because land use is one of the biggest drivers of housing cost here. There is more than enough land in the Bay Area -- you just can't build on a lot of it.

Not sure how many details you want to give on this forum, but is your son in junior high your only child, or does he have younger siblings? Do you think you will want to keep a house of the same size and in the same location once he has finished school? If you would probably downsize or move to a lower-cost area with worse schools once your son is out of high school, the cost-benefit analysis of renting vs. buying is different than if you have several more kids and want to stay in the same school district for another 10+ years.

corntrollio says

So you were going to live in that condo for 30 years?

Maybe. It was a 2B/2B on the edge of Los Altos. Borderline fortress. Plus if I had bought the condo it would have worked as a "starter home" and I could sell it now and get a nice place in B'ham or whatnot.

1) we could build denser, so land supply could be stretched; 2) not all parcels were built upon in 1980

We could, but we haven't. Another way to increase land supply is to shorten transit times via highways and mass transit. That's how LA and Tokyo grew in the 20th century.

Investment in mass transit has been a total joke in my lifetime. I rode BART when it was new but it's not a credible expansion of transit. Don't get me started on Caltrain, I've lived in Japan so I know what a real system looks like.

What has actually happened since 1980 is Props 13 and 58 locking away houses from the market. This is significant and will become more so as those who bought in the pre-1994 period die off. They're in their 50s ~ on up now. The Prop 13 valuations on these pre-94 houses are ridiculously low.

http://www.zillow.com/homedetails/9-San-Miguel-Cir-Salinas-CA-93901/19315096_zpid

I think all you folks who are so focused on the calculation of buy vs rent should stay renters. You have no control over rent increases, inflation, interest rates, stock market. You have little control over future maintenance costs of a purchased home. Because of these unknowns, you cannot predict your housing costs. If the comparable cost is such a deciding factor and you can't predict it, don't buy.

Payoff2011 says

I think all you folks who are so focused on the calculation of buy vs rent should stay renters.

But that's silly. Except in certain markets, buying will always be cheaper than renting in the very long-term. Excluding during bubbles, renting will always be cheaper than buying for short-term because of transaction costs.

Just because you cannot predict something exactly doesn't mean you can't make an educated guess.

corntrollio says

Just because you cannot predict something exactly doesn't mean you can't make an educated guess.

He's just saying if you're into analysis paralysis then stay that way : )

Bellingham Bob says

What has actually happened since 1980 is Props 13 and 58 locking away houses from the market. This is significant and will become more so as those who bought in the pre-1994 period die off. They're in their 50s ~ on up now. The Prop 13 valuations on these pre-94 houses are ridiculously low.

I couldn't agree more Bob. Prop 13 is a massive subsidy for the richest generation at the expense of the young. Back in 2005 when I owned a house in Berkeley, I was paying 10 times the property taxes as my neighbor.

somebecca says

the cost-benefit analysis of renting vs. buying is different than if you have several more kids

Thanks for the perspective somebecca. We have one 12 year old child, and do not expect to stay in the same place for 30 years. My guess is that we'll be downsizing in 10.

Payoff2011 says

You have no control over rent increases, inflation, interest rates, stock market.

Yep, those are exactly the kind of factors that I'm faced with now. Owning has a bit more predictability, and right now I'm confronted with a decision being made about where I live that is not of my own choosing.

tclement says

I was paying 10 times the property taxes as my neighbor.

I think that's fine if it's owner-occupied, people shouldn't be forced out of their houses due to inflation and whatnot. But renting it out and enjoying that subsidy is

T O T A L    B U L L S H * T.

I think all you folks who are so focused on the calculation of buy vs rent should stay renters.

I think all you folks who have a taste for gag-balls and muscle memory for the over-the-barrel position should be more thoughtful toward those who've yet to develop such tastes.

I've saved prodigious amounts of cash in the past three years, made a few great investments, and had some goddamn fun. A major part of what facilitated all of this was renting for cheaper than it would have been to purchase.

Payoff2011 says

I think all you folks who are so focused on the calculation of buy vs rent should stay renters.

another uneducated home owner...

I think it bears worth repeating that renting and buying are not black and white in terms of what is better. In either case if you're willing to make compromises then you will have more options. If you want to live in the most expensive metro in the country in one of its priciest areas to be near the best schools in the safest neighborhoods then you're going to pay more. A lot more. On the other hand if you're willing to either live in a lesser expensive metro or in perhaps an area of an expensive metro that isn't as good- but rather adequate- then you'll pay less. As of now I'm paying about 1/3rd over the cost of buying and probably 50% less than the typical person rents. But that's only because I rent in a decent- but not perfect area, and share a house with another housemate. Sure- its not perfect. Its a compromise. On the other hand I save over 50% of my income.

On the other hand some people value location and standards more and thus will have a higher price threshold. There isn't a right or wrong answer. We all have different standards.