Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Re: Housing: Rent vs. Buy
Old 01-11-2005, 04:40 AM   #41
Thinks s/he gets paid by the post
Jay_Gatsby's Avatar
 
Join Date: Oct 2004
Posts: 1,719
Re: Housing: Rent vs. Buy

Pete,

It sounds like Southern California is approaching the point New York City (or more specifically, Manhattan) many years ago where it became cheaper to rent than it did to buy. Areas like NYC and Southern California, as well as Washington, D.C., are among the most highly concentrated areas of job growth/availability in the country. Consequently, I don't expect that prices will fall dramatically as interest rates rise. On the other hand, prices won't rise substantially again until wages rise and there is a subsequent decrease in interest rates.
__________________
He had one of those rare smiles with a quality of eternal reassurance in it . . . It faced, or seemed to face, the whole external world for an instant and then concentrated on you with an irresistible prejudice in your favor. -- The Great Gatsby, F. Scott Fitzgerald
Jay_Gatsby is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Housing: Rent vs. Buy
Old 01-11-2005, 04:50 AM   #42
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: Housing: Rent vs. Buy

Quote:
Hi guys,

This is pete from san diego, california where renting is a way of life not a choice. The homes are ridiculously overpriced(557K being the median). This does not make any sense where median income is said to be 63 K, yet the demand seems to be constant. The question is not whether to rent or buy rather whether to stay or leave. Any thoughts on this irrational phenomena?
Pete: I started to answer this question with a somewhat different angle (real estate in coastal Calif. requires more of a creative approach than most areas of the U.S.
However, I see your question is whether you should stay or leave. That's a decision you'll have to make yourself.
Jarhead
Jarhead* is offline   Reply With Quote
Re: Housing: Rent vs. Buy
Old 01-11-2005, 04:53 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
Re: Housing: Rent vs. Buy

Oldest nephew has rotated from Whidbey to San Diego - now renting. Any creative solutions would be welcome.
unclemick is offline   Reply With Quote
Re: Housing: Rent vs. Buy
Old 01-11-2005, 05:53 AM   #44
Thinks s/he gets paid by the post
 
Join Date: Dec 2003
Posts: 1,375
Re: Housing: Rent vs. Buy

Quote:
Oldest nephew has rotated from Whidbey to San Diego - now renting. Any creative solutions would be welcome.
Is your second question any easier?
In today's overheated mkt. in the coastal area of Calif.,and the short time span that your newphew will probably have in that area, he should probably enjoy the relatively inexpensive rent. (And the So. Calif girls, if he's single.)
Jarhead* is offline   Reply With Quote
Re: Housing: Rent vs. Buy
Old 01-11-2005, 06:42 AM   #45
Thinks s/he gets paid by the post
Hyperborea's Avatar
 
Join Date: Sep 2002
Location: Silicon Valley
Posts: 1,008
Re: Housing: Rent vs. Buy

Quote:
This is pete from san diego, california where renting is a way of life not a choice. The homes are ridiculously overpriced(557K being the median). This does not make any sense where median income is said to be 63 K, yet the demand seems to be constant. The question is not whether to rent or buy rather whether to stay or leave. Any thoughts on this irrational phenomena?
I live in Silicon Valley where the prices are even higher but so is the median family income ($80K - $100K depending on town). *Yes the median income family will have trouble buying the median priced house but the market isn't made up of median income families. *It appears that the incomes here are bimodal. *The income distribution curve probably looks more like a two humped camel. *There are a lot of people whose family members work in low paying jobs - teacher, fast food employee, grocery clerk, nurse, government employees, etc. - and their family incomes are below the median. *This is the lower of the two humps on the income distribution curve.

The upper hump in the distribution curve are those families where the members are working in high tech jobs making from $80K to $200K (and up) each. *If you've got two people working in such jobs the family income can be very large. *So, what you've got is maybe one third to one half of the families that have at least one member in the high tech industry and who can really buy a home that are driving the housing market. *The rest will probably never be able to buy even if the prices do drop.
Hyperborea is offline   Reply With Quote
Re: Housing: Rent vs. Buy
Old 01-19-2005, 12:54 AM   #46
Thinks s/he gets paid by the post
 
Join Date: Dec 2004
Posts: 1,798
Re: Housing: Rent vs. Buy

I think Hyperborea hit the nail on the head. The median income will always seem low when compared to the median house prices. When compared to the median household income it doesn't look so bad. Attempting to predict the housing market is a loosing propasition. Not long ago the housing gurus predicted a housing crash nation wide. Obviously it didn't happen. I think that if conditions remain the same you might see a slight drop in housing costs or a slowing of apprieciation, but I doubt it. I don't foresee a sharp decline everyone is screaming about. Interest rates go up, but only to the point where banks start losing money, then they will lower them again. It has happened in the last couple of years. The mortgage rates started going up, the real estate market started to cool, then the banks started lowering them again, and the values started rising again.

As far as buying goes I have been fortunate I've owned four houses and have made a profit on three (I still live in one). I owned the houses for 4, 3, and 1 year, I lived in all of them and normally made over 15,000 per house when I sold it. If your motivated, then owning them short term can produce profits. However they need to be in poor condition and you need to be able to do all of the work.

If you are unsure whether you should buy or rent, then you should rent. If there is a quetion in your mind then you probably aren't ready for the long term commitment of dealing with owning house. Also if you are unsure if you are going to stay in your current area then I would definately say rent until you find an area you are willing to live for at least 5-6 years.

Of course al of this is looking through the rose colored glasses of a place where retirees love to live so until the baby-boomers quit retiring the property values around here will most likely go up.
__________________
You don't want to work. You want to live like a king, but the big bad world don't owe you a thing. Get over it--The Eagles
lets-retire is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Retirement 2nd home/condo Rent vs Buy chinaco FIRE and Money 16 03-10-2007 03:14 PM
Elderly Parents - Rent vs. Buy Da Nag FIRE and Money 18 02-14-2007 12:42 PM
Housing: Own versus Rent Sam FIRE and Money 53 10-31-2006 06:32 PM
Will the price of housing ever give... a bit? ShokWaveRider FIRE and Money 23 09-05-2004 09:49 AM
48% of pretax income spent on housing? I think not Syarzhuk Other topics 7 02-09-2003 06:09 AM

» Quick Links

 
All times are GMT -6. The time now is 08:09 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.