Housing Report: Broad and Deep Pain Across U.S.
An article this weekend in the Real Estate Journal (which, unlike its parent paper, is free online) told of widespread doom and gloom for the nation’s housing market. The article sites a recent report by Economy.com that predicts that prices will continue to slide for at least another couple years in roughly 100 metropolitan markets…
An article this weekend in the Real Estate Journal (which, unlike its parent paper, is free online) told of widespread doom and gloom for the nation’s housing market. The article sites a recent report by Economy.com that predicts that prices will continue to slide for at least another couple years in roughly 100 metropolitan markets across the country. The biggest risks lie in California and Florida, the report says. As for New York, the forecast is for a relatively benign decline of 3.5%. Elsewhere on the East Coast, Economy.com says that Boston has already bottomed out. The good news? The current downturn “so far looks more like a correction than a crash on a national scale.” A spoonful of sugar helps the medicine go down.
Prices in 100 U.S. Cities Expected To Decline [Real Estate Journal]
Photo by sercasey
Dear Anon 4:54
You say “36 posts debating the state of the housing market and the final post concludes that “moving is sort of a hassle.”???
What the post says is:
“Said person needing place to live then has to move. Goes through the hassle and expense of moving….”
The point is that one of the less directly measureable value of owning real estate is that it gives the owner
a certain control over his or her living circumstances. To have no control over where you live from year to year is a problem.
Attention Deficit disorder is a problem too.
Just a simple question. So often I see pre-tax rental income used in caclulations to offset the cost of multi-family home ownerships. These calculations take into account the tax deductions of mortgage interest and property tax but fail to reduce the rental income by the appropriate marginal income tax.
Doesn’t anybody in Brooklyn report rental income and pay taxes on it?
It would appear that even when reduced by proportionate maintenance expenses, the benefit of rental income is oft overstated.
36 posts debating the state of the housing market and the final post concludes that “moving is sort of a hassle.”???
The level of intelligence in this discussion is mind boggling.
Ok, for the quants out there. Answer this question. Person needing a place to live does extensive calculation and determines time value of money, net present value, opportunity cost, etc. etc., determines that it is smart to rent. Rents nice apartment with lease. Owner decides to sell vacant and not renew lease when up in one year. Said person needing place to live then has to move. Goes through the hassle and expense of moving. Rents another place and in one year that owner decides to sell the place, vacant. This happens. This happened to the people renting a duplex next door to me. The value of stability in your life has a cost that has to be entered into the equation.
Not sure if the 2:29 post was directed toward my post about cost of owning vs renting, but if you’re talking about a down payment of 50%ish, then we’re in a whole ‘nother league. I’m just a regular guy (no rich relatives). Since a 10% down payment would pretty much stretch me to the max, that’s the figure I always use. $50K cash in the bank is worth way more to me than $50k equity in my house. I’ll never be a big down-payment sorta guy.
If I’m off-base, then nevermind.
i don’t know exactly how much rents have gone up, but i’d guess it’s around 10 or 12% since last year, at least in the neighborhoods i’m looking in. anyone have a better estimate?
You can’t buy a house for $1.3 in the neighborhhoods mentioned in the 2:29 post above because and you won’t be able to in the future because of the point raised in the post. That’s why I think all the posters on this site who think that every property that comes to market right now is overpriced and that they’ll get a big discount by wating will ultimately be disappointed.
Anon 2:29’s example works anyhow because even though the bstone will cost more like $2mm in today’s market, that buyer will be putting $1mm down. Yes, there I said it. There are people with $1mm down payments. Today’s bstone buyers are not taking out $1.8mm mortgages, and if they did, they probably expect to pay it down by half with their next bonus. Anyone who sold a 2BR apt in Manhattan might have a $1mm down payment. And a lot of them are getting money assistance from the wealthy parents, like it or not. That’s reality. So, the $1mm mortgage scenario works. And with a 2fam, the rental income offset, makes it quite affordable relative to renting. And owning means you can renovate it to exactly the way you want and nobody can tell you what to do with your own home.
There is substantial value to owning a bstone, even in today’s market, when you factor in the rent equivalent for the space.
How much have rents gone up?