patrick.net

David Losh says

We are just waiting for the next big thing.

I'm right here!

JFP says

RentingForHalfTheCost says

robertoaribas says

Mobi says

If in the next 5-10 years, major deflation collapses set in (housing price, rent halve), then David Losh is right.

Yes, make your life decisions based on paranoid delusional fantasies... good thinking!

Would have been great thinking to the SFBA folks that paid top dollar in 2007 don't you think? In SFBA things are just as bad now as they were then. Salary inflation is nill, but yet housing keeps rising. It'll only end bad again. I can rent two places now for the price of one ownership shack. Silly beyond reason.

No you can't.

Um, yes I can. Two $2k rentals that each have an ownership cost of 4k/mth to carry. I didn't make up math.

RentingForHalfTheCost says

Would have been great thinking to the SFBA folks that paid top dollar in 2007 don't you think? In SFBA things are just as bad now as they were then. Salary inflation is nill, but yet housing keeps rising. It'll only end bad again. I can rent two places now for the price of one ownership shack. Silly beyond reason.

No you can't.

Um, yes I can. Two $2k rentals that each have an ownership cost of 4k/mth to carry. I didn't make up math.

Um, yes you did make up the math. In the Bay Area, houses that cost $4K/month to own, rent for at least that. You seem to live in some alternate Bay Area than the rest of us.

I don't know about SF, but LA definitely has pockets where rent is 35% less, so you get close to *breaking even* with buying if you indenture yourself to the house for 10 years, take renovation/maintenance out of the equation, and rents inflate faster than house prices (not happened in LA in at least 13 years).

Frankly I find that many qualifiers distasteful.

Now, 2x the rentals (50% less) for the monthly on a comparable house? This sounds more like glib hyperbole.

JFP says

In the Bay Area, houses that cost $4K/month to own, rent for at least that.

I've not found that to be the case since I started to consider buying in 2003. Any rent/buy comparable amounted to a significantly increased monthly payment(not even considering total cost of owning), or an ARM to get them even close. I've not looked throughout the Bay Area though, only San Francisco, San Mateo, San Carlos, and Burlingame. The last year did see them get closer, but not when considering the total cost of owning. I don't know how anyone who won't just throw money away buys in those cities.

FunTime says

JFP says

In the Bay Area, houses that cost $4K/month to own, rent for at least that.

I've not found that to be the case since I started to consider buying in 2003. Any rent/buy comparable amounted to a significantly increased monthly payment(not even considering total cost of owning), or an ARM to get them even close. I've not looked throughout the Bay Area though, only San Francisco, San Mateo, San Carlos, and Burlingame. The last year did see them get closer, but not when considering the total cost of owning. I don't know how anyone who won't just throw money away buys in those cities.

Really? At no time since 2003 did you find it cheaper to buy than rent? Not even in 2008-09? I can only conclude you weren't doing any serious analysis.

JFP says

Really? At no time since 2003 did you find it cheaper to buy than rent? Not even in 2008-09? I can only conclude you weren't doing any serious analysis.

We probably just don't have a shared understanding. Could I find any house that met that finanicial criteria? Sure. Did I want to live there? No. My day-to-day living matters a lot to me and any place that would meet my budgetary constraints of less than a third of net income would require me to travel hours a day to work. That would mean months or years of time away from my family and the house I paid so much for. That doesn't make any sense to me. Especially given that I'd be spending a huge percentage of my net worth just to pay the down payment. Especially given the unlikelihood the house would ever return any of the money I spent.

FunTime says

JFP says

Really? At no time since 2003 did you find it cheaper to buy than rent? Not even in 2008-09? I can only conclude you weren't doing any serious analysis.

We probably just don't have a shared understanding. Could I find any house that met that finanicial criteria? Sure. Did I want to live there? No. My day-to-day living matters a lot to me and any place that would meet my budgetary constraints of less than a third of net income would require me to travel hours a day to work. That would mean months or years of time away from my family and the house I paid so much for. That doesn't make any sense to me. Especially given that I'd be spending a huge percentage of my net worth just to pay the down payment. Especially given the unlikelihood the house would ever return any of the money I spent.

That's totally different than what you said previously. You said that since 2003, you had neve found a time when buying was cheaper than renting. That was a ridiculous comment. More to the point, all your arguments against buying apply to renting when renting is more expensive.

And, for the record, had you bought pretty much anywhere in 2003, you'd be ahead.

JFP says

That's totally different than what you said previously.

I carefully wrote them to be exactly the same. I get that what I wrote is not working for you. I'm trying, but writing is a slow, difficult way to communicate sometimes.

What's the point of living somewhere you dont't want to live? For seven, ten, fifteen, or thirty years? That's a bid part of your life to live in misery. I'm more comfortable spending money on the stock market over that time and buying a house would have taken almost all of my money out of my hands on the day I took the loan.

Renting to own is something that's either a great idea or an awful idea. Great idea if you literally have no other choice, because your finances or credit are completely blown. If you don't need it, DONT rent to own. It's really a last-ditch try at home ownership if everything else has been exhausted. This is a good read about it http://www.homestarsearch.com/when-to-rent-to-own

JFP says

And, for the record, had you bought pretty much anywhere in 2003, you'd be ahead.

I'm not convinced. Today's Case-Shiller report states that national prices are now back to mid2003 levels.

http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245347994960&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true

So you might say that San Francisco is a special market, to which I agree. I was looking at the time at these places, though and this one looks a lot like one of the units I actually took the time to walk through with an agent. I even had gone through part of the process with a bank to understand how much I'd be loaned. I considered these places out of reach, but was being told I qualified to buy them. At the time, they were listed somewhere between $429k and $479k. I remember both numbers from the visit. Who knows how good my memory serves. In hindsight, if I'd sold the place in a year or so, I'd have made money. If I was still living in one of these shittily constructed lofts though, I think I'd be pissed and broke!

http://www.zillow.com/homedetails/221-Clara-St-APT-4-San-Francisco-CA-94107/80741045_zpid/

This will be debated until the end of time. In my experience, purchasing an owner occupied home has been a great investment for me, so far. I got lucky and purchased at the exact right time and have gained about $200k in appreciation on a $229k purchase. My monthly payments (including HOA, taxes, insurance) are about $800-900 less than what I could rent the property for. Had I been renting over this same time period my rent would most likely have been increasing every year or two.

Yes, you can get screwed financially with an owner occupied property purchase if you have to sell unexpectedly and can't ride out the current real estate cycle.

Damn, resurrecting a thread from four years ago? There should be a PatNet classic tab.