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Darrell In Phoenix says

Nonsense Robert.

Rents are low in Phoenix and there isn't any pricing power due to the massive inventory of excess empty housing here.

And that is precisely the cost in most overbloated areas. Rents have gone NOWHERE. Pricing is falling and rents have remained because rent is about equivalent to purchase or a bit more BUT smart money knows that the property is still going to fall so they bite the bullet and watch the drama of the Theatre of The Ignorant unfold.

No one in their right mind is going to purchase a 500K place even if their rent is more than the mortgage on a 500K as clearly that 500K place is heading toward 250K on the fasttrack.

edvard2 says

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.

Quite right...your situation and conclusions similar to mine.

I also live in Bay Area, rented for the past 10 years - and was loud and clear why we rented despite excellent, steady incomes.

The last house rented (April 2010 begun) was a mere 3 blocks from here in the same cluster of homes, was the same size, number of bedrooms and view. Of course, the same school system and all else. It was built in 1986, tho likely a fine home 25 years ago, it hadn't been updated inside. We paid all utilities incl. garbage pickup.

We bought and been here since July 2012. It's a 12 year old house only 3 blocks away. After 20% down payment (quite a nut, for us) this house costs 15% less (mortgage, interest, taxes) than we paid monthly for the rental. Rents have gone up ~10% from 2010....so the real differential today is more like 20%. If you factor in mortgage interest deduction, it's more like 25%.

Yes, I realize there is maintenance now where there was none previously....but 25% difference is more than sufficient buffer for that hassle. Our realtor kindly bought us the 1 year home warranty (mandatory by lender) so except for $100 dedeductible all major maintenance is thankfully covered the first year.

In the 10 years renting we had a good landlord (this last one thankfully), an average one and the first one for 5 years was a shitbag of a human being. I think we made a smart financial move and left the potential dirtbag landlords behind.

I'm not anti buy or rent....but there's a proper time and place for each and each according to our own lives. A much better case for ownership can be made today than at anytime in the past 10 years.

Darrell,

Because we rented and saved so much over the past 10 years - we were able to make a substantial down payment on this house and have invested in silver and gold with some of the rest.

We were able to score a 2.9% mortgage rate because our FICO's were sound, thanks in part to renting and being entirely debt free save the monthly credit card bills (paid dutifully in full each month). In an era of continued currency debasement, gold and silver will likely appreciate enough in coming years to pay the house off when due...and in the meantime I have no lousy landlord and am living in the best house we have ever had the pleasure of living in.

So, what happens a decade down the line is of little concern - there are so many possible outcomes to future events it's impossible to guess - however TODAY, for our particular circumstances, it was a slam dunk correct decision for us to buy. Cheers.

How about the South Florida area? I have so many people telling me that prices are going up. I really don't see much of a change when I look at prices so I'm not sure what they are talking about. But does anyone know if South Florida is still on the decline?

Darrell In Phoenix says

Your personal circumstances have nothing to do with the fact that you paid a grossly inflated price for a rapidly depreciating asset.

I agree, it's the key part few understand.

jsmarket says

Darrell,

Because we rented and saved so much over the past 10 years - we were able to make a substantial down payment on this house and have invested in silver and gold with some of the rest.

We were able to score a 2.9% mortgage rate because our FICO's were sound, thanks in part to renting and being entirely debt free save the monthly credit card bills (paid dutifully in full each month). In an era of continued currency debasement, gold and silver will likely appreciate enough in coming years to pay the house off when due...and in the meantime I have no lousy landlord and am living in the best house we have ever had the pleasure of living in.

So, what happens a decade down the line is of little concern - there are so many possible outcomes to future events it's impossible to guess - however TODAY, for our particular circumstances, it was a slam dunk correct decision for us to buy. Cheers.

Your story is charming BUT it also appears to me like an ideal commercial for the industry to lure in those who rented played it safe and have some cash and credit.

bmwman91 says

The housing market can't truly improve (in terms of resembling something like a free market) until the greater economy returns to solid fundamentals, and I doubt that anyone really thinks that that will happen any time soon.

My take on this is even with a sound economy solid fundamentals aren't going to be solid and real until housing returns to true VALUE to THE DOLLAR and from todays standpoint that means major further declines.

That comment is to complicated and you are forgetting that whatever the reason the housing market is recovering that is all that really matters. True, the fedeal governmanrt and the banks are sleeping together and manipulating the free market but that is the way it is. So why try to Over analyze it? JUst get out there and buy some damn property andmake some great investments while thew opportunity exists.

You could argue all day about the reasons why and meanwhile you will miss the boat. I know bc I have done it and am enjoting $20000 cash flow a month for my Real Esate investments over the last 5-6 years. The negative thing about this site is people argue over things that don't matter... and debate over the market and USA policies etc in the free market. Meanwhile the greatest opportunity in 60 years is passing you by every single day.