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SFace
@
2011 Nov 1, 9:28am
Well... starter houses in our 'hood' were going for around 350k or so in 2002-2003 and then peaked at around 600k in 2005-2006. Starter homes are now sitting at the 400k-500k mark. So had we bought in 2002 for 350k, the monthly bill would have been around $2,000 a month minus taxes and maintenance
You could have financed your way down from 6% to 5.25 in 2004 to 4.75% in 2009 to 4% in 2011. That $2000 would have gone , $1,900 in 2004 to $1500 by now. Within the 2,000 or 1,500 now are about 400 in principle. You could have also secured a prime - 1.25% HELOC in 2005 which effectively would be around 1.5% now. Lot's of what if's but that mortgage would have trend down for the last 9 years.
On the other hand our rent works out to be around $1,300 a month ( we have a housemate) so over time we paid $700 less per month over paying for a $350k house,
Nothing would have stopped you from having a housemate owning as well and for the sake of A-A comparasion.
not including taxes for the purchased home.
You mentioned you are dink's making 100K each, your tax writeoff would have 1.5X - doubled what you paid in property tax.edvard2 says
had bought say in 2004-2006 or 2007, that equation becomes grossly lop-sided in favor of renting.
True
You could have financed your way down from 6% to 5.25 in 2004 to 4.75% in 2009 to 4% in 2011. That $2000 would have gone , $1,900 in 2004 to $1500 by now. Within the 2,000 or...
I have no doubt that via some sort of financial finagling we could have done this or that and would've maybe be better off -but ONLY if we had bought at the bottom in 2002-2003, but as mentioned, at that time we made about 1/4 of what we currently make thus buying was out of he question. Sure- we could have also written stuff off. But I would counter with that by saying that we have also been heavily investing in various retirement funds, which throughout that period and even today has done pretty well. Had we tied that money down on a house we wouldn't have that.
In reality we were in a position to buy probably in 2004-2006, at the height of the boom. Indeed if we had bought then, comparatively speaking we would be paying out the nose for a depreciating/depreciated asset and losing money each and every month.
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Last week I came to the realization that lo and behold, we have been renting the same house now for NINE years. Long enough to know anything and everything about the neighborhood, the neighbors, and so on. Longer than I'd say 30-40% of the homeowners have "owned" the houses they have bought on our street. Longer than any of the other renters. So its sort of ironic to me. A lot of people say they buy because they're looking for long-term stability and that a house makes them feel like they're putting down roots or whatnot. But given that we've basically done the same thing by renting- and renting for a lot less than buying, it sort of blurs that assumption. Sure- we don't own the house, but we've pocketed the savings from renting that could easily count as future house payments.
But anyway, I know for fact that out of all of our friends and co-workers, we have been in the same place for longer than ANY of them, and that includes renters and homeowners. Perhaps that makes us a bit unusual in that respect. But I'm sure others have rented for longer then that. I only know one other person who rented longer. I had a friend who had been renting the same house in SF for 14 years. It was rent controlled and one day he just up and decided to move to Portland, taking the cash he had saved with him, and bought a house free and clear up there.