Sunday, May 22, 2005

Renters Enjoying This Boom

There is no stronger economic fact that points to a housing bubble than the rent to ownership ratio. The SFGate has a story up about people who have decided to sit this mania out. "'Every two or three years, I get the urge to buy a place to live in, and then the urge goes away very quickly,' said Guy Smith. 'The amount of risk and up-front capital is not matching the amount of reward I want.'"

"'Personally, I don't like the idea of overbidding 13 times and not getting the house,' said Jim Buckmaster, chief executive of Craigslist in San Francisco. 'I don't have the patience for that type of thing.'"

"Even mortgage professionals see the point in renting. 'It's easier to be a renter with the current level of competition for buying homes,' said Kevin Clay, a former head of the California Association of Mortgage Brokers. 'When you rent, you have more flexibility. You can get another job and move. You don't have the responsibility of a home. You don't have to pay the plumber to fix the toilet.'"

"Ellyn Hament came to a similar conclusion recently, settling in an Outer Sunset flat after enduring a arduous home-buying search. She was advised by her real estate agent forgo a pest inspection that could have protected her from potential structural damage. Hament's TIC offer was accepted, but then she found out about a leaky roof. The seller refused to let her in to inspect the damage, so Hament pulled out of the deal."

"Hament said, 'We didn't want to feel ripped off. Plus, our monthly payments would have been between $2,500 and $3,000. My hand kept shaking when I did the calculations.' Now, she lives 'happily' in a large two-bedroom flat. 'We are savoring the relative stress-free-ness of having a new place to live,' she said."

51 Comments:

At 10:10 AM, Anonymous Anonymous said...

Many people in the Vancouver area share these sentiments.

 
At 10:23 AM, Anonymous goran said...

+++

I rent a beautiful home in NorCal w/moutain and bay views, custom everything. The home is supposedly worth over $2M and I pay about 35% of what it would cost to own it per month.

When I rent, the rental market for high-end homes like this was so bad I struck a pretty sweet deal. The landlord wanted flexibility so didn't want to make a long-term commitment. But since he has just bought another house and pledged this one as collateral, I don't see him selling anytime soon.

I got him to agree to no rent increases beyond the annual CPI (3% or so). He also agreed to give me 120 days notice if he wants me out. And he agreed to 90 days free rent should he want me out within the first 36 months.

Given the rental market out there today, I would encourage potential renters to bargain very hard right now. It's a renter's market. Take advantage of it.

 
At 10:28 AM, Blogger desi dude said...

I see some listing $719,000 - $739,000 for some homes.

why would they do it? I want to understand if it signifies anything?

 
At 10:34 AM, Anonymous JJ said...

My family currently rents a place just outside Philadelphia, despite being able to afford to buy a rather expensive place the old fashioned way (i.e. we actually have a down payment saved after years of concerted effort). I sure as heck know _I'm_ enjoying the stress free renters life while my homebound friends struggle with dishonest sellers and inspectors, and the resultant bad plumbing, electricity, and structural integrity. A short list of renting perquisites in my particular case:

- all utilities paid, so no monthly check writing
- something broke, hey just call Mr. Fixit. he'll be here in 15 minutes
- 1 block to the local train
- no cutting the grass or paying for garbage disposal
- maybe 50% or even 40% the total monthly cost of owning a place of comparable size

We took this place about 6 months ago, and I know they have a couple of empty units in the building that they're really trying to get filled - in fact, if I can refer a friend, they'll give me $300! If I was coming in here today, I'd put heavy pressure on them to lower the rent. We must all of us put pricing pressure on these people in order to get this market back into an efficient mode of operation. Around Philly, there are HUGE numbers of apartments for rent, as every Joe and Suzie Regular have "investment properties". I for one intend to make them see that their investment was not only a bad one, but that in making it with such fervor they have helped screw the market up nigh beyond repair. But repair it we will, eh?

Now, someday we want a place of our own, to be sure (insane as it seems after ALL those good reasons to rent!) - but the key question now is, where is the sweet spot in the broader market of getting a roof over your head.

-JJ

 
At 10:48 AM, Blogger Ben Jones said...

goran,
You are right on, renters must bargain to really get the best deal. I know people who got tremendous price breaks by using their strengths; willingness to sign a year long lease, ability to pay cash up front for seveal months, etc.

 
At 10:56 AM, Anonymous carlfromcarlsbad said...

(It's a renter's market. Take advantage of it.)

A lot of buyers today, IMO, are discounting the "soft" costs of home ownership. They are squeezing into homes that can't really afford and they are doing the math by adding up the cheapo mortgage, taxes, insurance, etc.

But how many of them are prepared for the "soft" costs that add up? My guess is most of them are budgeting next to nothing.

I rent a lovely home that is immaculate. It won't need major capital expenditures for quite some time, barring some disaster.

But here's what my landlord has spent this year so far:

---Two 70-foot trees had to be taken down because they were dying and could cause significant damage. $3,500.

---Hot tub repair (off warranty). $800.

---Stove repair. $750 for new electronics panel plus labor.

---Brush clearing. $750.

---Gutter cleaning. $300.

This doesn't even include standard ongoing maintenance like gardening and watering. And he uses cheap (illegal?) labor for most of it. So over $6K so far this year for "soft" costs. This stuff adds up and I bet it isn't even on the radar of some of these newbie homebuyers.

 
At 11:06 AM, Anonymous Anonymous said...

We have been agonizing over whether to buy our first home in SF, or keep renting, for a year now. We finally decided to rent 2 weeks ago, and feel pretty good about it - though always with some second guessing.

The economic analysis is straightforward, though. For $2900/month, we are renting a gorgeous apartment in one of the best locations in San Francisco, which would sell for about $900k or more as a condo in this market. Monthly housing costs would be at least $5k. Even after accounting for the tax savings and equity, we come out ahead as long as real estate appreciates at <4% per year on average over the next 5 years. On the heels of several +20% years, and with mortgage rates expected to go up and lending standards to tighten, we think this is a good bet, and lower risk than the alternative.

Like another poster on this blog (from Philadelphia), we could EASILY afford to buy that $900k condo with a 20% downpayment and 30 year fixed rate mortgage. The reason we don't do so is that we don't want to compete with folks who have much lower income and savings, but are simply willing to borrow up to their eyeballs. When the mortgage and appreciation climate changes, I am betting that these folks will be out of my market segment.

It is hard being a contrarian - most of my friends and colleagues think I am crazy and digging my own financial grave by 'missing the boat'.

 
At 11:15 AM, Anonymous Anonymous said...

I like the idea of bidding down the rents further, once newbie RE investors will feel the pain of not being able to rent at all while prices stagnate or begin to slide, they will all dump at once.
Late 1980 stile crash is coming, I will enjoy so much bying that same house for half the price that I'm willing to rent for as long as it will take. I like to see them beg for my cash when nobody will be there to buy that 1950 old house or better yet, I'd love to buy a 1M house that would be 500k after the crash. They would also have to sell their BMWX5 they all bought by cashing out their inflated homes, boy this will probably the most rewarding experience for all this waiting. RENT IS SIMPLY ECONOMICALLY MUCH MORE PROFITABLE IN THIS INSANE MARKET.

 
At 11:19 AM, Anonymous Rob said...

Anon 11:06
"....most of my friends and colleagues think I am crazy...."

That will change, soon enough your friends will be asking you for a loan.

 
At 11:29 AM, Anonymous Anonymous said...

Denver RE prices are way out of wack with rents as well. There's a huge number of vacancies here. After 31 years of being a homewoner I decided renting made much more economic sense, and therefore made the switch.

I rent a 2 bed/2 bath 1240 sq ft luxury apartment on the edge of Cheesman Park, 7th floor, drop dead view out the picture window in my living room or from the 25' balcony. A great, well managed building with the park and running path right out the door. Walk to most anything. Bus stop at the door.

Rent is $1000/month.

Across the street is a very similar building. A 1400 sq ft condo there is on the market for $400,000.

20% down would be $80,000
then P%I of around $2000/month
HOA fee of $400/month
taxes $150/month
possible assessments ?
maintenance ?
Total: at least $2550/month
(plus the loss of income on the $80k you have invested in the unit)

vs. renting $1000/month

and prices on the condos in town are slightly declining. So you have a loss going on for the owning side as well, at least at the moment.

Selling prices are going to have to come down, wouldn't you say?

...DenverKen

 
At 11:30 AM, Anonymous Anonymous said...

yea, right you have 900k in cash and they say you are digging your own grave? I wish I could dig such a "grave" for myself. Ignore those idiots, you call friends, losing half or more of all your money that is much more of a fin. grave; when every pizza boy on par with RE agents tell you that homes right now are such a good investement, I'm getting ready to short the home builder market.
BTW they all dropped 2% on the day when Greenspan finally acknowleged that there is a bubble on most big cities. Big money is leaving quitely while dumb money keep pushing it up. Let it burst, let it burst, the floor will come off so fast you wouldn't believe.
Also why do you think Buffet is sitting on $50b cash? I bet he is sparing some of that to buy the properties AFTER the crash. Smart money is sitting on the sidelines and waiting very patiently. Those who buy now will be soon broke and under the new law they may have to repay some significant amount, which they woule will feel like being a slave worker for the rest of their lives. I have no simpaty for them let them get into the fin. grave so that there will be some order and normal people could find a decent place to live once again.

 
At 11:49 AM, Anonymous Anonymous said...

DenverKen,
I really admire guys like you, who realize that selling now is such a freaking good option and you actually go and do it. Like in any investement it is very important to know when to dumpt it. I think your timing is near perfect. In a year or two you'd buy it back for half the price, the rest would be a tax free gift into your retirement that you well deserve. Those idiots that pushed prices 3x in 5 years just paid you a huge amount of money tax free. Buy some good wine and celebrate - those dumb 25 year old, high on easy money, leveraged at 500x, newbie investors paid for it :)

 
At 12:05 PM, Anonymous Anonymous said...

11:49..

Thanks. The interesting thing is the reaction I have received from many of my friends and business associates over making this choice.

From the polite ones I see lots of sceptical looks when I say I think prices will fall. The not so polite ones tell me I'm crazy. RE always goes up you know...and I'm going to be sorry when I can't afford to buy a place down the road.

Fine..let them think it. Some will listen to my reasoning, but the hard core ones won't even let me get through a sentence. You'd think they'd want to know of possible risks, wouldn't you? It's pretty interesting.

..DenverKen

 
At 12:06 PM, Anonymous Anonymous said...

my wealthy uncle was right most of the time. He bought a condo in 1992 right after the crash, then in 1995 he bought a house, which is now selling at 2.5x; the condo is now 4x the price he paid. Then he bought some stock in 1996 for $10 and sold it for near $100 in 1999 before it reverted back to $10 the very next year. He really likes his house and makes more than enough money by all means.
Guess what he wants to do next? SELL HIS HOUSE and Condo.

 
At 12:18 PM, Anonymous Anonymous said...

"hard core ones" are usually those that are dead wrong. They are looking back and are overconfident - look it keeps going up, I'm so right then..

My family makes $150k and we are virtually priced out, tell me who can still afford it then? Only those that don't know what they are really doing. If I buy now, who will buy it from me 5 years from now? Those oursourced SW engineers? Those doctors who may not get a payment due to people being forced to sell at a huge loss? Think about it? In an extremely competitive world we live in, where China's labor and price damping causes job losses and outsourcing, who will bet on salaries to ever catch up with these home prices? I wouldn't bet on it. Afterall we are under the belt of OPEC - they now rule the whole world not us. I can much rather bet on the reversion to the mean, that Bill Miller adhered to building his $20B mutual fund, one of the best. Markets do punish excess and ones that see that excess will always be ahead of the herd.

 
At 12:32 PM, Anonymous Anonymous said...

I rent a nice, large, spacious 2-bedroom apartment in a quiet building one mile from the ocean in Newport Beach. Windows facing east and west so there is a great ocean breeze much of the time. My rent: $1400/month.

To buy an equivalent condo (some of the units in the identical building next door are condos) would cost between $500k and $600k.

I would not consider a mortgage riskier than the traditional (LA Times says nearly extinct) 20%-down, 30-year mortgage. That would imply that buying would cost me $2400 to $2900 just for the mortgage, and on top of that there would be property tax ($500 to $600 per month), insurance, condo fees, and maintenance, so out of pocket total somewhere in the ballpark of $3500 to $4000 per month. My salary is in the low $100k range, and I would struggle to make such a payment, even if I adjusted my withholdings to anticipate reduced tax liability - which is not guaranteed as there is AMT to consider. Also, I would have $100k to $120k tied up in a dangerously levereged asset with very little potential upside and much potential risk of loss.

For me, the biggest red flag consists of two numbers. The median household income in Orange County is $65,000. The median house price in Orange County is $650,000.

If I, making nearly double the median household income, can barely, if it all, afford a condo priced below the median, then what greater fool is going to come along a few years down the line and buy it from me at such a price that I will make a profit, even after transaction costs and factoring in the loss of income from the downpayment? It seems like a pipe dream. It is much more likely that prices will drop by 20% or even more, leaving me in a financial mess. No thanks: I'll keep renting.

 
At 12:32 PM, Anonymous Anonymous said...

this bubble has spread to the whole World (except Germany and Japan). In Russia it is much crazier than here in the us. Prices are 4x they were 3 years ago. Only about 1% makes that kind of money to pay 100k for a 2br,
they also build like crazy, 15 story buildings rise everywhere, yet prices are not cooling off.
At least not yet. My worry is that the coming RE collapse may cause a World Wide recession where Nasdaq 2000 will feel like a small pinch.
My guess is that Germany and Japan stand to come out winners - they have had no bubble.

 
At 12:55 PM, Blogger goleta said...

On page 5 of Chris Cagan's paper titled " Has the fire burned out? The return to a normal market" that Desi Dude provided, California's median SFR prices jumped from around $65K in 1968 to around $120K inflation corrected price in 1998. But that appreciation is all gone or becomes negative if the 3-5% annual cost in tax, fees, and maintenance are counted, as 65000*(1.03^30) = $157K

So it's not a good investment against even inflation if properties are not used by owners or rented out.

Now we have home ownership at all time high and excessive building in Vegas, Florida, Denver, and even So Cal, home owners will lose money on their 2nd or 3rd homes if they don't rent them out. This is the case even when the home prices stay flat for the years they own the home and the 8% closing cost is not even in the picture. Needless to say, the owners are going to have significant financial pressure to fill or sell their properties.

With so much competition to offset their cost, renters are getting the best deal of the life time!

 
At 1:22 PM, Anonymous curmudgeon said...

s

Like some other posters here, I could readily buy a home where I live. I could pay cash if I had to. But I'm not willing to get into bidding wars with folks who don't have two nickels to rub together.

Sure is an odd state of affairs when folks with cash, good credit, strong income are being outbid and run out of the housing market by folks with no cash, poor credit, etc. Topsy-turvy if you ask me.

But what are you going to do? That's where we are right now. So all I can do, as a prudent person, is sit it out and see what happens.

I read a lot of people today saying, "Buy now or be priced out forever." Well, i've been around for a while. Things that were never true before rarely come to pass. I'll take my chances. And if things are truly "different this time", heaven help us.

 
At 1:54 PM, Anonymous gumboy said...

(I'd love to buy a 1M house that would be 500k after the crash.)

I'm not banking on a crash. The reason i'm not buying today in Calif is not because of the actual price, but the relationship b/w the price and all historical fundamental metrics like job growth, rent equivalency, population growth, income, etc.

I'd be happy to pay $1M for that house if all the other variables start coming inline with historical parameters...whether that comes about via a crash or a slow leak or whatever. If I can rent a home for $3K a month that would cost me $6-7K to own, it's too risky to buy, particularly when appreciation has been 100% or more over the last five years.

 
At 2:17 PM, Anonymous Anonymous said...

Hi JJ,

My wife and i are thinking about buying a home to live-in somewhere outside philly, possibly around the mainline... we haven't really started looking yet.... but just are curious about the philly market... what's it like? has it been bid up within the past couple of years? are there any towns we should stay away from? Many thanks for your help!

 
At 2:22 PM, Anonymous Anonymous said...

We rent in North Seattle, and have been renting for the last five years. While its a sturdy duplex and close to at least five buslines to work, we don't have a view to brag about.

We've had only one moderate price increase during the second year, otherwise our rent has been flat.

Last summer we attended a zero-down home-buying session where various creative deals were presented. It wasn't hard to see what crappy deals and what bad gambles they were.

"Owners" who are assuming an IO loan are renting, they just haven't figured it out yet.

 
At 2:29 PM, Blogger deb said...

""Owners" who are assuming an IO loan are renting, they just haven't figured it out yet."

Worse, they have commited themselves to pay back whatever principle amount they borrowed to get into the home. No one is thinking about how they are actually going to pay back these astronomical sums. The lenders will want their money back no matter which way the market goes.

 
At 2:52 PM, Anonymous Anonymous said...

This has been a great thread. On Wednesday we will begin a 1+1 year lease in a beautiful new condo on a beautiful river. We then are selling our much smaller oceanfront condo "while the sellin's good." Then we'll kick back and wait for the larger condo we wanted to buy to come within our all-cash price range.

My wife has been cautiously supportive of this strategy -- posts like these help a lot to firm up resolve that we are doing the right thing.
Chip

 
At 5:13 PM, Anonymous Anonymous said...

("Owners" who are assuming an IO loan are renting, they just haven't figured it out yet.)

I like to say they are renting from the bank, with a requirement to pay the bank for any decline in the market if they decide to move out, or can't handle the future rent increases. Greenspan/China sets the rent.

 
At 5:32 PM, Anonymous Anonymous said...

I rent here in LV with a roomate I've known all my life for 460 a piece in a nice part of town.....I'm going to move into my own apt when the lease is up but you can't beat 460 for now:)

 
At 6:13 PM, Anonymous JJ said...

anon 2:17 - The Philly main line is very nice, as is the area north of the City (not North Philly, but above that, past the Chestnut Hill area). My impression is that prices are way overblown here, but if you ask the locals they are all happy about it, and feeling wealthier (i.e. overleveraged) than ever. Few of them understand economic fundamentals, so I see the market here as quite vulnerable to a correction. There are so many great places to rent on the cheap that I'd really consider that for a time if I were in your position, and see what happens over the next couple of years. Unlikely that things will get much more expensive, unless you're looking to borrow at a very low rate. If this is the case, and you plan to be here for a long time, perhaps buying a place becomes a more tenable move.

best of luck
JJ

 
At 6:31 PM, Anonymous Anonymous said...

Hi JJ,

Thanks for the info on the burbs of Philly... my wife and i really appreciate it... we aren't going to buy anything for at least 1-2 years... we live in nj and we see the bubble up here as well... good luck to everyone!!!

 
At 7:46 PM, Anonymous Anonymous said...

Dont you see it :

With buyers struggling to meet payments they dont have too much discretionary spending

Renters gloating over their bargains are not saving the difference but living "high off the hog" and spending it making up for the buyers.

Consumerism can continue.

Buyers doing it hard but "force saving" and renters living the good life with no savings.

A winner is a renter who has the discipline to save the difference and be ready to take advantage of lower RE prices.

Ultimately:

no discipline = loser

 
At 8:00 PM, Anonymous Anonymous said...

"""It is hard being a contrarian - most of my friends and colleagues think I am crazy and digging my own financial grave by 'missing the boat'."""

u got that right it's hard being a contrarian, the herd always wants a friend.

 
At 8:14 PM, Blogger John Law said...

what we'll see soon is a massive transfer of wealth from owners to renters or a scale more than what we see now.

 
At 8:31 PM, Anonymous Anonymous said...

and the herd is almost always wrong and the biggest profits come by playing against the herd provided that the contrarian is patient enough to strike only when the right time comes. market is most of the time efficient and random - all the news are already priced in. RE prices today reflect the EXPECTED future appreciation at the rate of 15%+ for ever and that the incomes will continue to rise for ever as well, while discounting any negative effects, such as higher rates, workers being outsourced, wages falling, etc; is such a rosy view likely, I'd say - NO. Do you remember Jan 2000? Did it feel like stocks are never going to stop their insane run? Did everybody trade stocks? Where are they now? Anyway there is a potential for a reward and there is risk; RE now is perhaps one of the riskiest plays that exist. I'd say since the herd is now out of equities it is then probably a good time to buy some stocks instead and may be even short the hottest RE stocks.
my 2 cents.

 
At 9:55 PM, Anonymous Anonymous said...

7:46 unknown - very sage statement. With luck, those of us smart enough to sit out this madness will keep our heads when the ball is in our court. Perhaps with a good ***-kicking, the other side too will learn their lesson. Then maybe we can get back into the business of enjoying our lives. It's stressful watching fools run amok with the potential to affect your life and hard-won fortune...

 
At 10:37 PM, Anonymous jabberwocky said...

(u got that right it's hard being a contrarian, the herd always wants a friend)

Remember what they say, "Always drink upstream from the herd." Or as Frank Zappa once croaked, "Don't eat the yellow snow."

 
At 10:47 PM, Anonymous Anonymous said...

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At 11:00 PM, Anonymous Anonymous said...

I live in San Diego and the home prices have been going up since 2002. But now they have been stable, and the growth rate seems normal. I work with appraisers on a daily basis and I ask all of them what they think about a "bubble burst" and most of them agree that it probably won't happen on a national level becuase there is no "National housing market". As long as a buyer does not get in over there head, with a neg am and interst only loans, they should be fine. Just don't think of a home as a place where you can make tons of money. It is a place to live. Equity is built by apprecation and paying off our mortgage. Please do not relate the housing market to the stock martket, because it is two differnet games. People live in houses, so it is harder to trade and dump. And if there is a decline in real estate it is only because of poor economic conditions, not a SUDDEN STOP OF DEMAND. If interest rates go up, THAT MEANS THE ECONOMY IS BETTER AND PEOPLE ARE MAKING MORE MONEY. And most people than can afford the higher interst rates. Don't scare off these people who are on the border, show them both sides of the story.

 
At 11:34 PM, Anonymous horatio said...

(I live in San Diego and the home prices have been going up since 2002. But now they have been stable, and the growth rate seems normal.)

Actually home prices in San Diego have been going up since mid-1996. But they have gone up parabolically since 2002.

Check out the charts on http://www.piggington.com/ and see if the growth rate in home prices looks "normal" to you---also compare with the rates of growth in population, income and rents over the same period.

If you don't see the disconnect, then i'd like to have some of the drugs you are on.

I agree with many on this board that there are regions of this country where home prices don't seem grotesquely out of line with fundamentals like rent, income, etc. So I could see your reasoning if you lived in Peoria or Memphis. But San Diego is undoubtedly the poster child for the housing/credit bubble.

When this boom ends, San Diego will without question be hit among the hardest of any city in the U.S.---at least on a par with LA and OC during the early '90s (20-30% declines across the board) if not significantly worse.

 
At 11:37 PM, Anonymous lance nopants said...

(When this boom ends, San Diego will without question be hit among the hardest of any city in the U.S.)

I agree. If they made a movie about it, it would be called, "Dude, Where's My Equity?"

 
At 5:38 AM, Anonymous Anonymous said...

"And if there is a decline in real estate it is only because of poor economic conditions, not a SUDDEN STOP OF DEMAND. If interest rates go up, THAT MEANS THE ECONOMY IS BETTER AND PEOPLE ARE MAKING MORE MONEY."

You must be a realtor... because according to your statement, you imply that real estate should only just go up and up and up... sorry, dude... but the party is over... this market has been driven by artifical demand (speculators) and lax lending standards... of which both elements are in the process of change... my advice to you is to be honest with your clients... they might not buy right now but when they decide to they will give you a call... i wish you good luck!

 
At 6:08 AM, Anonymous Anonymous said...

yes, realtors are in denial..
how about a scenario when growth stagnates, yet inflation accelerates? this is what is known as stagflation, which often occures when oil prices that high for a long time; how's that for a theory why rates will go up while people won't be able to afford this overpriced RE? once easy credit wih 0% is closed this house of cards will collapse; you may still see a climax top, but that will be short lived.

 
At 6:11 AM, Anonymous Anonymous said...

btw realtors almost never see it coming, because at the top of the bubble they make so much money that they are practically blind at that point.

 
At 6:33 AM, Anonymous Anonymous said...

Don't scare off these people who are on the border, show them both sides of the story.

I like how mutual funds have the blurb that says "past performance does not guarantee future results". I'd love to see realtors say that to the potential buyers.

 
At 6:53 AM, Anonymous Anonymous said...

My wife is a Realtor and I have convinced here that there is a bubble and it will burst. This blog had a great deal to do with that -- intelligent people with intelligent arguments and facts. I recently hear her advice a customer that it is her husband's view that the market will turn down.

 
At 7:09 AM, Anonymous Anonymous said...

With every financial transaction, there's a winner and loser... and right now, if you buy a house you are on the losing end of the stick... greenspan recently said: if you recently purchased or just purchased a home, you are going to have problems.

For anyone sitting on the fense, i really don't know how much of a clearer statement you need to help you determine what to do -- especially coming from the chairman of the fed reserve.

 
At 7:55 AM, Anonymous Rob said...

"most of them agree that it probably won't happen on a national level becuase there is no "National housing market"."

Maybe not, but there is a national lending institution that is larger than ever before in the history of mankind. Fannie/Freddie

 
At 4:18 PM, Blogger SOJ said...

Why own when you can rent?

 
At 4:25 PM, Blogger SOJ said...

On the other hand, most of my friends who have recently sold their homes (after owning them for several years) have walked away with an extra $50 to $70K! To them, I look like the fool (?)

 
At 8:52 AM, Anonymous Anonymous said...

SF = rent control, rent control, rent control! yeah why buy when you rent a nice flat for $800/mo.

the problem with SF is rent control. let ALL rentals go to market price and you'll see a lot more leaning towards to buy.

plus, what i find really funny is that many who rent, just mess off their money anyway. no real savings, no real retirement (or very limited), nothing to them. at least homeowners have something.

 
At 9:37 AM, Anonymous Anonymous said...

I pay $850/month including utilities in a 2,000,000.00 house by the beach in Marina Del Rey, Ca. Now tell me why I should pay 700,000.00 to buy a condo there and pay everything I make monthly and more and end up with lots of stress. Housing is 200% overpriced. I believe if all the buyers just hold off and stay put just for a few month then they can have the buyer's market back. Just stop looking and relax.

 
At 9:43 AM, Anonymous Anonymous said...

I am renting a 2,000,000.00 home for 850.00 a month including utilities on the beach in california. Why buy now when its seller's market. Stop rushing into buying and you'll see the market turn around to become a buyer's market.

 
At 9:16 AM, Anonymous Anonymous said...

it's hard to believe that you pay 850 per month; for 850 per month you may be lucky to rent a 1br in boston area. I agree that buying now is at least not a pleasunt experience and most likely will make once life miserable whenevr the next recession comes and one or both adults lose jobs, then it'll return to the mean.

 

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