Everyone knows that the NYTimes is full of capitalism hating Communists who hate California, freedom, and ownership. Here’s another example:
One of the big lies of the real estate business is the idea that renting a home is tantamount to throwing money away. It’s a useful fiction for real estate agents, because they make vastly bigger commissions on house sales than rentals. But the comparison isn’t nearly so straightforward for the rest of us.
Renting involves one obvious, recurring cost that can never be recouped: the monthly rent check. Buying, on the other hand, involves multiple expenses, some of which aren’t so obvious. On top of closing costs, there are repairs, property taxes, mortgage principal and mortgage interest. (The mortgage-interest tax deduction reduces this last cost but doesn’t eliminate it.) When you own, you also lose the ability to invest your down payment elsewhere, like the stock market.
I’m also not sure that we would have been willing to buy in Boston, New York or much of California, where the rent ratios remain above 20, according to data from Moody’s Economy.com.
In fact, if you’re now renting — almost anywhere — and do not need to move, I’d probably recommend that you wait to buy. The market is still coming your way.
How dare David Leonhardt say that he wouldn’t consider buying in much of California – world’s paradise?
Now, I will give David a chance, he did say “much of California”. That could mean that he wouldn’t consider buying anywhere in California except for the Real Bay Area. And if that’s the case, then he’s ok.
But still, can we trust him?
Does anyone have historical sales price/rent price data handy? Does it even matter?
Maybe it’d be better for everyone if the ratio hit 50! Then we’d finally topple Manhattan.
One can only dream…