Oh, Inverted World: Renting Better Than Buying?
As prices for residential real estate were reaching all-time highs around the country back in 2005, the smart money decided to wait it out on the side lines in a rental, says the New York Times today. And even though purchase prices have fallen considerably since then and rents have ticked up, when you add…
As prices for residential real estate were reaching all-time highs around the country back in 2005, the smart money decided to wait it out on the side lines in a rental, says the New York Times today. And even though purchase prices have fallen considerably since then and rents have ticked up, when you add in all the expenses of owning (taxes, maintenance, mortgage), it’s still a better bet to rent in most markets. For buying to make sense, the article asserts, you have to believe that your local market will appreciate five percent a year for the next five years. Do you think Brooklyn, and New York City as a whole, can do that?
A Word of Advice During a Housing Slump: Rent [NY Times]
Photo by bondidwhat
Wait, now I understand it. Sorry, had to read it a few times.
I wasn’t implying that all this chatter about home prices means the market is going to tank. I was saying that no matter what the market does, people will still want to own.
Of course, no matter how much chatter there is about real estate, the fact remains, the market is going to tank. 🙂
(why would someone who owns property wish to have a housing crash, wt economist? your tone makes you sound like you are looking forward to it with anticipation.)
So in a decade my children can afford to live here as well. What benefit do I get from inflated prices? None.
And yes, this has gone on longer than I thought it would, but it cannot go on forever.
Well, WT Economist did say in his post that he and his wife saved up for their downpayment in the 80’s and 90’s so I’m guessing that means he owns now. Doesn’t have to be, but seems logical. Much more logical than the idea that he would just pimp himself out as owning to establish some sort of posting cred. I mean, really.
I do agree with sylvia, though. There are advantages (listed ad nauseum above) to owning: you aren’t subject to getting the boot, your payments are fixed (assuming you didn’t get an ARM), you can redo the place as you like, any improvements you make are an investment instead of a consumed decoration, etc., etc. But that still doesn’t mean diddly about current real estate prices relative to how they’ll go up or down in the coming years.
What? I really don’t understand your comment, anon 3:46. And if you bother to explain it, could you bother to give yourself some kind of name so we don’t have to go through this infuriating anon534789563489756 nonsense and we can keep track of your comments, as you obviously enjoy keeping track of mine?
All y’all want to live in NYC. You won’t live anywhere else, you often say. AND you do want to own rather than rent. The strong desire to live here, and the strong desire to buy not rent, keeps the NYC real estate market going through hard times. I think that’s all anybody is saying.
sylvia your comments never cease to amaze me. lordy.
real estate has been at the forefront of conversations by new yorkers forever. perhaps we have blogs now to discuss it in infinite detail, but come on people…anyone who’s been living here for a relatively substantial amount of time knows that real estate has been number once choice for dinner party topic for decades.
don’t pretend like all the talk is leading up to something as a scare tactic. super ignorant.
People want to own, therefore the market is strong? That’s the most back-asswards logic I’ve heard so far.
People want to own for all the reasons already listed above. It’s about mass pyschology, the allure of being your own landlord, the all-American ideal of homeownership, the desire to be invested in a community, the (possible) financial benefits, a love for old houses, etc etc.
It has nothing to do with the market being strong or weak. The market could (hypothetically) be a flimsy deck of cards built on the largest unsustainable credit bubble in history with the hurricane winds of reality forecast for next week, and people in this country would still want to own.
The internet, allowing people to form communities and discuss topics like real estate (and health problems, and job market, and politics, etc etc etc) has educated more people on these topics and got more people involved as boosters and “experts”. Keep that in mind. I don’t know if I’d say it means real estate is any different than it’s been during other eras. Only difference is there is a public forum to discuss it.
wt economist is correct. I own and I bet he owns too. The cries of “bitter renter” are from brokers and/or owners who are frightened that they have paid too much and made a bad investment.