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Check out the rest of the "funding" sources... see any connection or pattern??
You should read up the 2003-2005 reports produced by the Harvard group.. same old story plus they flatly denied of any housing bubble.. so the smartest heads at Harvard missed it big time. It was already pretty clear we decoupled form income/inflation long before 2005.
Propaganda.
Debt is slavery.
Renting rules.
1997 + inflation pretty much eliminates any risk!
National Association of Realtors = Instant and permanent disqualification from any discussion of real estate. Anybody that's been paying attention for the last 10 years knows that organization has absolutely no credibility.
Do I really need to bring up quotes from past years?
Eman
@
2012 Aug 26, 4:31pm
Propaganda.
Debt is slavery.
Renting rules.
1997 + inflation pretty much eliminates any risk!
So I guess you're not in the camp that home prices will go back to 1975 level in nominal term then.
I'm in contract to buy a property for $216k. Someone paid $510k for it in 2005. Also in contract to buy another property for $140k. Someone paid $395k for it in 2006. Waiting to get into contract for another one for $265k. Someone paid $505k for it in 2004.
Not sure if they are 1997 + inflation prices, but I figure they should be pretty close. :)
Actually it is WAY more expensive to buy in the bay area. I looked at a normal 3/2 home in Sunnyvale and while it is new and nice they want 1.1 million for it so would need to put 200k down cash and pay 5k a month mortgage plus maintenance costs. I can rent for half.
To have some credibility here, you have to post good data and well thought out arguments. This guy looks like a newbie realtor trying his hand as this site. Maybe he drinks the kool-aide.
Discussions started by wave9x
it's cheaper to buy than rent
By wave9x 9 comments, latest 52 minutes ago:
There is no "shadow inventory"
By wave9x 170 comments, latest 1 hour ago:
Excellent graph showing SF Bay Area NOT in housing bubble
By wave9x 1 comment, latest 1 week ago:
wave9x says
Page 1 of 1
rooemoore
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2012 Aug 27, 3:31am
Propaganda.
Debt is slavery.
Renting rules.
Spoken like a true landlord!
http://abclocal.go.com/kgo/story?section=news/local/san_francisco&id=8765551
http://www.huffingtonpost.com/2012/08/26/san-francisco-home-prices_n_1828560.html
http://blog.sfgate.com/ontheblock/2012/08/16/peninsula-rents-going-the-way-of-sf-and-manhattan/
do whatever math you like
The math I just did says you have about half-a-million dollars that's not doing anything for eight years.
The reason the lending system works the way it does, is the math. The "time" part of the math is the most important. So the lenders are the ones maximizing the time by earning money at the instant the buyer signs the agreement. Nice deal.
Rent and start a business like "Southern Living at Home" and then you can deduct some of your rent and utilities. Your actual rent could be reduced to $300/month.
To deduct expenses on a mortgaged house, you may have to recapture those expenses when you sell for a profit.
Its seldom really accurate to make blanket statements about economics, especially real estate. I rented for 17 years. 12 of them in the Bay Area. For the past 10 years it was a lot cheaper to rent on average. These days? Its a little more of a gray area. What we're paying for the house we bought is $100 more than what it cost to rent our last place, which was obscenely cheap for what it was- a large 4 BR house. If we were paying current rates to rent what we had been renting, our mortgage is about 30% less than renting the same place.
Honestly I don't give a damned. Who cares? Its ok to rent and its also ok to buy. It comes down to dollars and cents. Do what makes you happy.
The reason the lending system works the way it does, is the math. The "time" part of the math is the most important. So the lenders are the ones maximizing the time by earning money at the instant the buyer signs the agreement. Nice deal.
What's wrong with the lenders making money? Lets say they make $500/month off the loan, and you (as the landlord renting it out) make $250/month clear of all costs. Win/win?
Win/win?
Sure.
My thinking is, though, that people who buy houses generally don't make money. I base this somewhat on my own intuition and, hopefully, more based on the reports of those who really know something.
http://www.econ.yale.edu/~shiller/data/Fig2-1.xls
That knowledge combined with the unfounded idea that the lenders really are making money, leads me to think this is a major reason for the huge gap between the few people in the U.S. with massive amounts of money and most of the rest with practically nothing, in terms of net worth.
I can rent for half.
Yeah, this was the case even back in 2004 when I really thought I was serious about buying something in San Francisco. Sure you can buy something much further away and maybe start to make that change, but does it keep up with the other costs of the distance away from work, for example. That would be an interesting study! As you move further from the place you spend most of your time, work, does the cost reduction or net cost have a linear relationship to the distance? If not, you could pick a distance with an optimal cost effect.
Housing "costs" are a tad bit more complex then some of these calculators and speculations will have you to believe. Even those paying cash for housing right now are assuming untold risk. When you buy RE you assume the responsibility of the RE taxes, which are variable. What with local/state governments being so FUBAR and in debt, the person holding the deed is liable for whatever happens in the future, if the local government decays away, then the house will fall to zero
That's part of the reason why I think rents have been rising, is the renters are being forced to pay a premium for not taking on the risk of tying their name to the liability (taxes) part of house ownership. If one is using levered financing, then the risk is much greater.
Renting is the sure thing, and its become more a crowded trade of late. Owning a house, paying cash or using highly levered financing, comes with great risk. We can pretend like the Fiscal Cliff, and auto cuts in spending set to begin jan 2013 don't exist and don't matter, but do so at your own peril.
I think so long as interest rates are falling, paying a premium for renting over buying is sensible. It will be interesting to see what happens when the 30+ year trend of falling rates, changes course (if that's even possible)
freak80
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2012 Aug 28, 1:16am
It will be interesting to see what happens when the 30+ year trend of falling rates, changes course (if that's even possible)
It's not. Everyone is in debt: individuals, governments, and the big banks. ZIRP is here to stay. Unless they get fusion power working.
Comments 1 - 17 of 30 Next » Last » Search these comments
Maybe a few years ago renting was more cost efficient than buying. Time to move on with the times, it is no longer the case.
http://cbsfbaymarketwatch.wordpress.com/2012/07/06/new-harvard-housing-study-its-now-cheaper-to-own-a-home-than-to-rent/
Patrick's rent vs own calculator is whack if you leave the (hidden) default settings, e.g. house prices to go down 1% year after year. Plug in realistic values and you will see for yourself which is better.
#housing