91–100 of 199 posts
"the renter - if willing and able to save his money - can buy a house outright in half the time that a conventional buyer can pay off a mortgage"
I don't think this is taking into account the rent that a renter pays. If a renter can just afford to pay a mortgage, then using the figures given (3% pa to rent, 8% pa to own) - that's 5% of the house value they're gaining p/a. At that, they can buy outright in 20 years. Is a typical mortgage 40 years?
"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…
I was in Vegas during the start of the housing bubble and all I saw were investors buying houses to flip immediately for big profit selling to other investors who thought the same. Anyone who actually wanted to buy a house to live in was required to get caught up in a risky mortgage option that left many of them in serious problems when their house was suddenly worth less than half of what they owed on it.
We looked at a house at the start of the decline and offered $50,000 less than asking. They laughed at us and we stopped bothering to look. Less than a year later the same house was for sale for more than $100,000 less than our offer. The realtor who showed us houses later moved out-of-state so she could earn a living.
Someone I knew told me about his friend that bought a house, did bare updates to it, and sold it within a month for nearly a $100,000 profit. He was gleeful at the idea you could do such a thing. I told him that was good for his friend but incredibly bad for everyone else in the city. About a year or so later I was shown to be correct beyond my worst doomsday predictions.
I'm seeing the same things I saw in Vegas starting again.
Earlier quoted context omitted.
Right. This calculator is helpful: http://www.nytimes.com/interactive/business/buy-rent-calcula...
It's been said a few times in this thread, but you have to remember to make this calculation on equivalent properties. In a perfectly functioning market, there'd be no difference between "rental" inventory and "owner-occupied" inventory, but in practice there are often qualitative differences between the two, and if you value certain characteristics you will likely have to buy. EDIT: Also, don't forget to change the…
This looks like the same set of points Patrick has been making since before the bubble burst. They're all great rules of thumb. And all bubbles pop eventually, but the problem is that it's very hard to predict exactly what pops them and when it will happen. So in retrospect, it would have been a terrific idea to buy a house in SF in mid-2009 and then sell it now. But if you followed Patrick's advice, there's no way y…
Sell when people say it is awesome.
This goes for real estate and basically anything else.
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. 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…
Isn't this already basically true?
Earlier quoted context omitted.
>Anywhere Google takes its Fiber is a good bet. This... is not as true as you think it is, even here in Silicon valley. If I could get $50/month/resident out of any of the reasonable-sized condos around here, I could easily give everyone gigabit Ethernet. Problem is? even here in the heart of silicon valley, most people don't give a shit. Faster than wi-fi doesn't matter. Hell, even you and me... I talk about bandwid…
It's never obvious why a technology is valuable before someone invents an application for it. No one knew what to do with broadband before VoD and digital delivery (Steam, GoG, app stores, etc.) came along, and we're only a few years into widespread adoption of those technologies. Anything could happen on the 5-15 year time scale we're talking about here. Gigabit Internet and the places that have it could look very a…
When I read this, I can feel the pull of confirmation bias pushing me to nod my head in agreement, but my skeptical side longs for more citation. The author makes many claims of fact in this article, but offers no citations to back them up. For example: > Because there is a huge glut of empty new houses. Builders are being forced to drop prices even faster than owners, because builders must sell to keep their busines…
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. 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…
But it's conceivable that SF basically becomes the Mahattan of the Bay Area, a playground for the rich, while everyone else gets pushed into the outlying boroughs and beyond Isn't this already basically true?
It will happen again. Pushing out the middle class yuppies who pushed out the poorish people before them, who pushed out the immigrants before them, who pushed out...
This looks like the same set of points Patrick has been making since before the bubble burst. They're all great rules of thumb. And all bubbles pop eventually, but the problem is that it's very hard to predict exactly what pops them and when it will happen. So in retrospect, it would have been a terrific idea to buy a house in SF in mid-2009 and then sell it now. But if you followed Patrick's advice, there's no way y…
Buy when people around you say the market sucks. Sell when people say it is awesome. This goes for real estate and basically anything else.
When I used to participate in his online forum, it seemed to me that his main objective was to eliminate the mortgage interest and property tax deduction immediately so it would trigger an immediate crash in the market and allow anyone with cash on the side to clean up. Whatever floats your boat of course, but that seemed a pretty reckless plan to me. That said, reforming said deductions gradually is probably sensible, just not all at apocalyptically once.