patrick.net

I do not know why people glorify ownership so much that they deny it is even possible for it to be comparable to renting in terms of cost.

Ownership is glorified so much in the SF Bay, because after burning yourself out on your job, the only thing you have to show for your sacrifice is your possessions, aka "lifestyle". (IMO)

Interestingly, though, once you go below 4.3%/yr. expected appreciation, you no longer break even. If you had assumed in 2000 that prices would not exceed CPI-calculated inflation for that year (3.4%), then renting would have had a small advantage.

Ownership is glorified so much in the SF Bay, because after burning yourself out on your job, the only thing you have to show for your sacrifice is your possessions, aka “lifestyle”. (IMO)

I rather not get burnt-out in the first place. :)

Interestingly, though, once you go below 4.3%/yr. expected appreciation, you no longer break even. If you had assumed in 2000 that prices would not exceed CPI-calculated inflation for that year (3.4%), then renting would have had a small advantage.

HARM, you are using median price and median rent. In other words, you are assuming that the median rent is the same as the rent for the median-priced home. However, rental homes are less expensive than owned homes in general, as a result, you may have been underestimating rent.

Use higher rent and you may not require 4.3% appreciation to break even.

However, rental homes are less expensive than owned homes in general, as a result, you may have been underestimating rent.

Use higher rent and you may not require 4.3% appreciation to break even.

Sounds reasonable, but reliable past rental statistics for ANY area are extremely hard to come by (the Sunnyvale stat came from the 2000 census). I have no idea where you'd find any "ownership-equivalent" median rent statistics, unless you had access to proprietary industry data.

Crap, I'm really off today --posted the wrong #$^&@ link!

Here ya' go:
http://realtytimes.com/rtmcrcond/Virginia~Fairfax_County~monikakumar

There are times when I am ashamed to be a REALTOR…reading ignorant crap like that spewn by idiot agents is one of those times.

Do not be ashamed. I have realtor friends and they are decent people too.

I no longer blame people for their apparent optimism.

But if it takes you 30 years to *never* to pay off your place, we’re talking Middle Ages level poverty.

Theoretically, I/O loans take longer to pay off than the half-life of plutonium.

Also, with the negative amortization loans I keep hearing about, how long do they let people keep paying the minimum amount?

I think Option ARM recasts every 5 years or 125% of value whichever comes first. Do not take my work fot it.

Anyway, I am still amazed at the complexity of Option ARM and the fact that it is actually available to consumers.

"In the third quarter 73 percent of refinanced loans resulted in cash out and the recent fourth quarter, figures are the highest since the third quarter of 2000 and, in fact, are near the highest this century"

Hah! 3Q 2000? Can you say: "Margin call?!?"

New thread: No Bubble, My Bad :-(