Steve, if you'd read my post, you'd understand that houses in the Bay Area are less affordable than they were in 2000. How does that sit with your theory? By my calculations, the total cost of ownership of a $600,000 house bought in 2000 with 30 year fixed notes at 8% is $1,381k. That house today costs $800,000 and the total cost of ownership at 5.5% is $1,565k. If people really wanted to buy houses so much and hate renting as much as you think they do, they would have bought them in 2000 when they were comparatively cheap, when the economy was booming and rent was much more expensive than it is today. Martin
most of the houses/condos are being flipped it has nothing to do with wanting to live in the house...they are using it as an investment vehicle..the trend is up and they want in...it may go thru several hands before someone top tics his ass into a 700 square ft. condo for $350k which is 2 years from being built.........
Exactly. Steve D's simplistic Realtor cheerleader arguments do not allow for bubble euphoria, crowd behavior, or any manifestation. If you examine his posts, they are just a re-wording of Realtor speak over and over...ie: properties and houses are referred to as "homes", phrases like "desire of ownership", "constant human dream", and other Realtor speak that supposedly warms your heart. I can see Sparohok's point in my own neighborhood. "Homes" that sat on the market for 4-8 months 5 years ago for $480k before finding that ONE buyer have recently been sold in one week with 10 offers for $800k. This cannot be explained away by wage growth or population growth, or some improvement in the school system. It is "simple", it is speculation plain and simple fueled by the mother of all credit bubbles and lax lending standards to extremely marginal people. The reality is when something is virtually free, obviously demand will be nearly unlimited. By virtually free I mean... 1% teaser loans, 100% LTV or more, lines of credit based on the appreciation of your home (while you sleep you make "free" money), etc. Like I stated above in another post, the "demand" is so much B.S. It is not reflected in the fundamentals of population or wage growth. San Francisco has had a net loss of population for several years. Same with wages. "Nonsense is good only because common sense is so limited." -- George Santayana 1863-1952, American Philosopher, Poet " "The cloud of stupidity hanging over SoCal threatens to flush the entire LA and San Diego area down the toilet faster than the Rains of 2005." unknown
LOL, you guys are a scream. If SF lost people they are probably the tenants and that is why rents are going down. Otherwise, the home prices would be declining as everyone flees town with their sofa on top of the car. That huge mass exodus of homeowners that has been predicted for several years now. Now you must understand, I do not agree with the mentality but I was asked why it was happening. Same with public home builders. People use the LA/SF/SD markets as a reason to "short" the homebuilders. Very silly and totally ignorant of economic fundamentals. Flip the argument around. Maybe home prices have been 25% under valued since the mid 80"s??? We are just playing catch up. The speculators/flippers etc could get hurt if they don't know what they are doing. These are the "hot" markets. The aging baby boomers are buying homes. That is demand!!! New York, Houston and Las Vegas are three cities that are vulnerable to downturns as they rely on one major industry. If something drastic happens to cause major job loss the prices will drop in a hurry. I think Wall Street lost 250,000 jobs after the 1987 crash. Big drop in condo prices!! Same with oil in Houston. Each and every owner is different with a unique financial situation. Could there be foreclosures? Sure. Don't buy a house in a hot market. SteveD
First, association fees are normal in most parts of the country in condos/townhouses. There may also be some association fees in some single family home areas. But in my area these are small relative to the value of the property, as are insurance (sometimes this is part of the association fees) and taxes. But I think it's clear that most landlords are going to reflect their costs, to include repair costs, in the rent. I know I do in the properties I rent out. I can understand though your desire to remain "uncommitted". But do not ever think that over time it is "way cheaper" to rent versus buy. Now, I'm not suggesting that you go get into a bidding war on a condo in a hot area. Thankfully there are still some with your belief. I rent to guys who don't want the "committment". Guys like you have paid off a number of properties for me at this point. That said, I don't know the New York market. Nor do I know how old you are. But chances are had you been a little more "committed" you could have bought a place a few years ago, that would have made you some very nice money. Of course, you would have been required to give up you desire to have the ability to move on on a moments notice, like a nomad. Either way, age will give you some perspective. It's not cheaper to rent over your lifetime. At the end of it you will have nothing. If you buy on the other hand you will have a free and clear house. Yes, you will have taxes, insurance, and repairs. But at my age I can recall renting a place when I was first starting out for about $50 per month. There are no places anymore that rent for that. So what you think is reasonable rent today will be much higher 10 years from now. Best of luck to you. OldTrader
You guys ring the bell when its the top. I have been reading about the buble for in Real Estate for 4 years. The baby boomers ran up drugs and free love, then tennis, then golf then ceo salaries, then the stock market, then cigars and now real estate. They got a good 5-7 years to go running up prices in warm weather areas.
No duh. I don't think anyone in any of the real estate threads has either said or implied that renting is cheaper than buying in the long run. Martin
I guess you don't really read what's being posted. This is what Hydroblunt has said: "I do not think people understand that renting is way cheaper than buying and it really does not matter if you get to own your home in 20-30 years when you pay up the a$$ for it with fees, taxes & insurance."