May 31, 2008

“I’m also not sure that we would have been willing to buy in … much of California”

Everyone knows that the NYTimes is full of capitalism hating Communists who hate California, freedom, and ownership. Here’s another example:

Economic Scene – Time to Buy? The Conversion of a Renter – NYTimes.com

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.

<snip>

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…

Comments (10) -- Posted by: burbed @ 5:12 am

10 Responses to ““I’m also not sure that we would have been willing to buy in … much of California””

  1. Er Says:

    Burbed,

    Your faux superiority shtick is wearing thin.

    Just saying …

  2. burbed Says:

    sorry. I never fully recovered from the writers strike.

  3. Er Says:

    Touche!
    :)

  4. sonarrat Says:

    I’ll be buying a house in the bay area soon. Not the RBA mind you. But I’ve lived here all my life, this is my home, and besides, my new mortgage will be less than my current rent though the commute will suck a big one. I’m after shelter, not an ATM. If I was not a Californian and didn’t understand exactly what I was doing, I’d think twice. It’s a perilous market.

  5. TAYTAY Says:

    “Your faux superiority shtick is wearing thin.” Dude! This blog is frickin hilarious..

  6. San Mateo Home Sellers in Trouble Says:

    I think in San Mateo the ratio is still around 20 to 30. Oh well, at least inventory is piling up.

  7. madhaus aka guitar hero Says:

    Would be interesting to compare the rent ratio between RBA and non-RBA cities.

    burbed, didn’t I send you this article, too?

  8. madhaus aka guitar hero Says:

    Today’s weekly Dataquick/Mercury News stats are out. I usually link to the SJMN but the DQ stat page is easier to read. But it isn’t updated consistently.

    Zips that are up from last year:
    Community Zip Code Price % Chg* $/SqFt # Sold % Chg*

    Cupertino 95014 $1,055,250 5.5% $663 51 -37.8% not up by much
    Los Gatos 95032 $1,140,000 14.7% $577 21 -55.3%
    San Jose 95129 $886,750 6.8% $557 26 -38.1% oooh, barely makes it
    Santa Clara 95051 $622,500 7.5% $475 40 -27.3%

    Zips that are up in sales volume from last year:
    Community Zip Code Price % Chg* $/SqFt # Sold % Chg*

    Mountain View 94040 $604,500 -36.4% $541 30 7.1%
    San Jose 95131 $560,000 -10.9% $410 26 18.2%
    San Jose 95134 $471,000 -34.1% $434 6 20.0%
    San Jose 95135 $675,000 -32.4% $390 22 22.2%
    San Jose 95139 $510,250 -8.2% $316 9 28.6%

    RBA Zips that are flat or down:
    Community Zip Code Price % Chg* $/SqFt # Sold % Chg*

    Los Altos 94022 $1,955,000 -8.0% $834 16 -42.9%
    Los Altos 94024 $1,598,000 0.7% $780 18 -28.0%
    Los Gatos 95030 $1,304,500 -5.5% $653 9 -40.0%
    Los Gatos 95033 $982,000 -16.1% n/a 7 -36.4%
    Mountain View 94040 $604,500 -36.4% $541 30 7.1%
    Mountain View 94041 $825,000 2.1% $521 8 -11.1%
    Mountain View 94043 $680,000 -2.0% $478 22 -18.5%
    Palo Alto 94306 $1,100,000 -7.1% $795 20 -35.5% (94301 & 94304 are n/a)
    San Jose 95125 $757,500 -7.4% $479 56 0.0%
    Saratoga 95070 $1,500,000 -0.8% $646 37 -7.5%
    Sunnyvale 94087 $999,500 1.3% $624 45 -4.3%

    Who was talking about buying in Millbrae? Not many sales, but up 52%.

    Millbrae 94030 $1,102,000 52.0% $659 8 -71.4%
    Portola Valley 94028 $1,400,000 14.3% $683 6 -45.5%

    Everything else in San Mateo County is flat or down. A couple of San Mateo zips up 3%, which I’d call flat. The only zip with volume up (with more than 10 sales) was San Bruno:

    San Bruno 94066 $585,000 -22.0% $449 29 7.4%

  9. DreamT Says:

    Wasn’t sure where to post this, so I apologize in advance for picking the latest thread.
    Some people on this board know how to find out (online) the outstanding mortgaged amount for a specific property. Can you share your secret?

  10. madhaus aka guitar hero Says:

    Try propertyshark.com, can look up 5 properties per day for free. Not always correct, but worth a look. Will list mortages if they know about them (original amount, not current amount). I looked myself up and it’s 5 years behind on who has my first mortgage. That explains why I keep getting junk mail mentioning a loan I paid off in 2002.

    Also, you can look up info on properties free with online info from Assessor’s office, Recorder’s office, and Tax Collector’s office. Recorder’s office won’t give details on what’s in the documents, just that they exist. So you can confirm there’s a loan but not for how much. Just google the name of the county and the office you want and you should find it. For checking if property taxes were paid, google county name and “Secured Property Taxes.”

    There are better sites that will tell you exactly what you want, but they cost money, the going rate seems to be $50 a month.


Leave a Reply

Please be nice. No name calling, no personal attacks, no racist stuff, no baiting, etc. Let's be nice to each other in the true Bay Area spirit! (Comments may be edited/removed without notice.)