As we are on the topic, which percentage of your salary going to pay up rent would you consider "sane"?
Edit: I mean post tax. It's a cultural thing, in Italy we don't ever consider the gross salaries.
It's A Terrible Time To Buy An Expensive House
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Re: It's A Terrible Time To Buy An Expensive House
#12In many places, homes available to rent are not and will never be comparable in quality to homes available to purchase.
Plus renting is basically flushing your money away each money opposed to building equity in something over time.
This argument only makes sense when home prices stay flat or go up, which isn't always the case. I'd rather be "flushing my money away" each month than get stuck tens of thousands of dollars underwater on a mortgage.
Re: It's A Terrible Time To Buy An Expensive House
#13Some very solid points about the market in general, but I wonder how several of these points (particularly the points about oversupply, baby boomers, etc.) apply to places like SF or Manhattan. SF, in particular, seems to be extremely young (though that could be observational bias on my part), well-monied, in sharp undersupply of housing, with rent matching or in some cases exceeding the cost of a mortgage. Historica…
Some very solid points about the market in general, but I wonder how several of these points (particularly the points about oversupply, baby boomers, etc.) apply to places like SF or Manhattan.
I was just coming to say the same thing. Solid advice, but housing has such metro-geographical differences, 40% of this doesn't line up with my area (Atlanta).
Edit: Had 60% went back and modified to 40% after reading again.
Re: It's A Terrible Time To Buy An Expensive House
#14In many places, homes available to rent are not and will never be comparable in quality to homes available to purchase.
Plus renting is basically flushing your money away each money opposed to building equity in something over time.
Actually if you read the article he argues otherwise. Don't fall into the banks mentality.
> If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or a mortgage rate adjustment, he lost 100% in the real world.
Re: It's A Terrible Time To Buy An Expensive House
#15In many places, homes available to rent are not and will never be comparable in quality to homes available to purchase.
Plus renting is basically flushing your money away each money opposed to building equity in something over time.
Same thing happens when you pay interest. Either you rent the money or you rent the house.
Re: It's A Terrible Time To Buy An Expensive House
#16As we are on the topic, which percentage of your salary going to pay up rent would you consider "sane"? Edit: I mean post tax. It's a cultural thing, in Italy we don't ever consider the gross salaries.
15% of my post-tax wages go towards rent
EDIT: That's 11% of my pre-tax wage
Re: It's A Terrible Time To Buy An Expensive House
#17As we are on the topic, which percentage of your salary going to pay up rent would you consider "sane"? Edit: I mean post tax. It's a cultural thing, in Italy we don't ever consider the gross salaries.
Extrapolating from some of the numbers thrown around in the article, about 18%.
Re: It's A Terrible Time To Buy An Expensive House
#18As we are on the topic, which percentage of your salary going to pay up rent would you consider "sane"? Edit: I mean post tax. It's a cultural thing, in Italy we don't ever consider the gross salaries.
I spend 17% of my net wage on my mortgage. I'd probably be happy doubling that once I've built up a larger rainy day reserve.
Re: It's A Terrible Time To Buy An Expensive House
#19"Because the housing bubble was not driven by supply and demand." .... except in San Francisco. Everyone wants to live here, and Facebook, Twitter, etc. are turning out paper millionaires by the bushel. Expect the house prices to tick up again once Twitter IPOs. There is some construction now[1] (just walk down Market street from the Castro), but I think the number of techie millionaires being minted seems to exceed the number of dwellings under construction.
Plus: there is the externality of outside money. I've heard of buyers from PRC paying cash down, sight unseen, for properties in desirable neighborhoods [2] [3]. A lot of the analysis such as the one in this article assumes a somewhat closed market; but outside money flowing in can change the dynamics significantly.
[1] http://sf.curbed.com/archives/2013/07/25/the_40_most_notable... [2] http://www.forbes.com/sites/kenrapoza/2013/07/10/chinese-to-... [3] http://www.sfexaminer.com/sanfrancisco/chinese-real-estate-b...
Re: It's A Terrible Time To Buy An Expensive House
#20Think this is all true, but when will any of these points be recognized by the masses? Never? 5 years?