I guess I'm a bit confused by this statement. How will the market not permit widespread losses on rent? Will owners just hold out and lose money until they can get what they need? Will renters just pay whatever landlords say? There are plenty of places that were bought years ago that don't need to get the kind of rent required to cover recent mortgages.
If the demand is not there at a given rental fee to cover mortgage costs for a certain price paid, then a loss will be generated. Since so many people are buying at inflated prices (economist cites NAR figure of 23% of houses bought in 2004 were for investment purposes), the possibility seems entirely plausible.
― teh Nü and Impröved john n chicago (frankE), Tuesday, 12 July 2005 15:00 (nineteen years ago) link
$315,000. I put 10% down, because I can, and my coworker here says he got a deal from Wells Fargo at 5.5% 30-year fixed.
That's $1,618.20 a month according to Bloomberg.com, not including the condo fee, maintenance, closing costs and all that jazz.
Right now I pay $1250 in rent, plus electricity, and that's it. That affords me the ability to put at least $400 a month into investment accounts which will hopefully weather this bullshit.
Also the building I live in is fucking old as hell, $315K? Fuck that! Sucker even covered up the hardwood with carpet.
― TOMBOT, Tuesday, 12 July 2005 15:14 (nineteen years ago) link
-- geyser muffler and a quarter (right.knewi...), July 12th, 2005.
The Economist had an article maybe 6 months ago saying the exacpt opposite -- that in MANY housing markets, right now, it's cheaper to rent than to buy. Potential rental income may be a large part of what drives value (if there is such a thing), but only supply and demand drive price.
Of course, this is for the reasons stated above -- investors buying lots of properties, property flipping, general market euphoria and/or panic.
Rental incomes are much more tied to reality, I think -- because you're not dealing with mortgage loans, people can only pay what they can actually afford to pay. And investors aren't renting, so there's not all that artificial pressure.
Also, when enough people are buying, it means those same people aren't renting, so less demand for rentals. And vice versa.
― Hurting (Hurting), Tuesday, 12 July 2005 16:07 (nineteen years ago) link
but you'll pay less in taxes if you're paying a mortgage which might more than make up for this difference; factor in the equity you gain in the condo and you could well come out ahead. but I'm not an accountant so maybe not.
― kyle (akmonday), Tuesday, 12 July 2005 16:15 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 16:16 (nineteen years ago) link
I pay less in FEDERAL taxes, but the county and the state could give a shit. If I factored that in, which the bloomberg calculator doesn't, I suspect my ACTUAL monthly payment would be even more.
― TOMBOT, Tuesday, 12 July 2005 16:19 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 16:21 (nineteen years ago) link
― Bnad (Bnad), Tuesday, 12 July 2005 16:41 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 16:57 (nineteen years ago) link
― Brian Miller (Brian Miller), Tuesday, 12 July 2005 17:03 (nineteen years ago) link
― Allyzay knows a little German (allyzay), Tuesday, 12 July 2005 17:05 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 17:37 (nineteen years ago) link
if you have at least 1 functioning brain cell, rent don't buy. let the stuff that comes w/ buying be some other shithead's problem.
― Eisbär (llamasfur), Tuesday, 12 July 2005 17:37 (nineteen years ago) link
― Brian Miller (Brian Miller), Tuesday, 12 July 2005 17:42 (nineteen years ago) link
― Brian Miller (Brian Miller), Tuesday, 12 July 2005 17:43 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 17:46 (nineteen years ago) link
― Eisbär (llamasfur), Tuesday, 12 July 2005 17:47 (nineteen years ago) link
-- carbon (identitymachine...), July 12th, 2005.
Or, in the case of Jersey City, IN the ghetto. $375,000 for a two-bedroom. Not even near the PATH. One of its selling points is "walking distance from HOBOKEN." !!!???
― Hurting (Hurting), Tuesday, 12 July 2005 17:49 (nineteen years ago) link
― Eisbär (llamasfur), Tuesday, 12 July 2005 18:01 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 18:04 (nineteen years ago) link
― Eisbär (llamasfur), Tuesday, 12 July 2005 18:06 (nineteen years ago) link
― Hurting (Hurting), Tuesday, 12 July 2005 18:07 (nineteen years ago) link
HAHAHAHAHAHAHAHAHAHA wtf seriously?
― Allyzay knows a little German (allyzay), Tuesday, 12 July 2005 18:11 (nineteen years ago) link
― kingfish (Kingfish), Tuesday, 12 July 2005 18:15 (nineteen years ago) link
― TOMBOT, Tuesday, 12 July 2005 18:17 (nineteen years ago) link
so i really don't blame those of you who are totally uninterested.
i guess it's just possible here. you really CAN fuck up here too, but it's possible to buy and it not be totally insane. m.
― msp (mspa), Tuesday, 12 July 2005 18:32 (nineteen years ago) link
― teeny (teeny), Tuesday, 12 July 2005 18:42 (nineteen years ago) link
― Mary (Mary), Tuesday, 12 July 2005 18:46 (nineteen years ago) link
― kyle (akmonday), Tuesday, 12 July 2005 18:48 (nineteen years ago) link
It will almost certainly not have a great room, those things kind of skeeve me out.
― teeny (teeny), Tuesday, 12 July 2005 18:49 (nineteen years ago) link
― kingfish (Kingfish), Tuesday, 12 July 2005 18:50 (nineteen years ago) link
― Mary (Mary), Tuesday, 12 July 2005 18:58 (nineteen years ago) link
― teeny (teeny), Tuesday, 12 July 2005 19:09 (nineteen years ago) link
And we didn't buy on speculation, either. We bought because we are having a third kid and we need the living space.
― don weiner (don weiner), Tuesday, 12 July 2005 19:23 (nineteen years ago) link
"Walking Distance To Hoboken" should be a ska song.
it's a good thing that you didn't make this recommendation a few years ago, tombot, seeing as that point there were more ska-bands in the hoboken/jersey city area than there are flies swarming around a freshly-squeezed batch of horse shit.
― Eisbär (llamasfur), Tuesday, 12 July 2005 19:31 (nineteen years ago) link
Does the *shudder* World Inferno/Friendship Society still exist?
― donuty! donuti! donuté! (donut), Tuesday, 12 July 2005 19:35 (nineteen years ago) link
apparently
― Eisbär (llamasfur), Tuesday, 12 July 2005 19:49 (nineteen years ago) link
― don weiner (don weiner), Tuesday, 12 July 2005 20:14 (nineteen years ago) link
― TOMBOT, Tuesday, 12 July 2005 20:18 (nineteen years ago) link
― don weiner (don weiner), Tuesday, 12 July 2005 20:51 (nineteen years ago) link
― donuty! donuti! donuté! (donut), Tuesday, 12 July 2005 21:00 (nineteen years ago) link
― donuty! donuti! donuté! (donut), Tuesday, 12 July 2005 21:03 (nineteen years ago) link
As for hurricanes, we get tons of hurricane effect rain. More yearly inches of rainfall here than Seattle, allegedly.
― don weiner (don weiner), Tuesday, 12 July 2005 21:15 (nineteen years ago) link
― donuty! donuti! donuté! (donut), Tuesday, 12 July 2005 21:19 (nineteen years ago) link
― donuty! donuti! donuté! (donut), Tuesday, 12 July 2005 21:20 (nineteen years ago) link
― don weiner (don weiner), Tuesday, 12 July 2005 21:27 (nineteen years ago) link
I'm thankful I live relatively central to Seattle (renting), but I'm already seeing people thinking about this, and prices of central housing has risen dramatically compared to far-and-away suburbs. I just hope there's a motion/design/architecture present at the time to help centralize and expand those suburbs into their own useful cultural hubs, instead of letting them suffocate and becoming wastelands.. and talk about devalued property.
(hmmm, don't know if that makes sense or not.)
― donuty! donuti! donuté! (donut), Tuesday, 12 July 2005 21:41 (nineteen years ago) link
― h0t h0t h0rsey (Carey), Tuesday, 12 July 2005 22:00 (nineteen years ago) link
Point above being that there are many smart people who think that there is still a lot of money to be made in real estate in the bubble markets. There have been real estate naysayers about this bubble for at least two years, and frankly, there are investors out there who can afford to ride out the bubble even if it bursts.
I might also point out that many people in the 'burbs consider their lifestyles to be full of relevant culture--they see what they do (convenient, quality child rearing, even if it makes for a long commute) as the very definition of their culture. Church, youth soccer, Chuck E. Cheese, and all that shit is their culture. For many of them, it's now multiple-generations deep. Exurbs, suburbs, white flight, whatever--the only reason they even bother associating with the MSA is for the airport, sports teams, and a place of employment.
― don weiner (don weiner), Tuesday, 12 July 2005 22:03 (nineteen years ago) link