June 23, 2007

Do you rent or own?


Tell your story here...
This should be good


106 comments:

Roccman said...

.
.
.
.
.
.
.I rent from the bank

Anonymous said...

Renter here in the south Bay of Los Angeles, we pay 2200 per month in a older high end condo high rise on the beach, 1200 sq ft 2 bd 2.5 bth 9th floor 2 level penthouse style unit, ocean view from every room. Downside no laundry hookups, pay laundry next door. The neighbors down stairs just paid, get this $1.3 million. WHY?? Talk about throwing money down the drain.

a.creampuff said...

Still renting. Indefinitely. Drove past some behomoth estate houses today and, though splendidly ostentatious, I can't say I felt a envious. Simply took a nice stroll around the lake, the same stroll people in that high-income high-consumption bracket might take. Despite perfect weather, I had the trails all to myself. Surely those Lords of the Manor are not stuck to the riding mower?

Paul E. Math said...

I rent from a landlord, not the bank. I'm not rich, I don't make a lot of money. But because I rent from a landlord and not the bank I can have a lot of other stuff.

Because I rent from a landlord I can afford a lofted apartment with 2-story windows in my living room overlooking a brook, 10 minutes from Harvard square, 20 minutes from Fenway park and downtown Boston.

Because I rent from a landlord I can put 20% of my gross income into my 401k (international funds, commodity funds). I have another stash of fun money I use for non-retirement investments.

Because I rent I can afford to drive a 2006 audi a4. Sure, it's no bentley but, for me, it's pretty nice.

Because I rent from a landlord I can go skiing every other weekend in the winter and take a week-long ski trip to the rockies and spend summer long weekends on nantucket or the vineyard or the cape.

Because I rent from a landlord I can afford to wear nothing but designer clothes.

I say this not to brag about how rich and successful I am because, as I mentioned, I'm not very rich nor terribly successful. But you don't have to be rich and successful if you're smart enough to know that real estate right now is for suckers.

Now where is that troll that thinks we all live in basement apartments and drive 12-year-old hyundais?

Anonymous said...

1 BR apartment with an office that has the amenities of a condo. 1400/mo. The owner had planned to convert to condos, but that is not likely to happen given the condo glut in the area. Similar ones go $450,000. But rents over the 8 months have been flat. What's the point of buying? Realtwhores really need to answer this question. Neg am? No way. I like saving money, not wasting it!

keith said...

I rent a flat in the heart of Chelsea, London, one of the most expensive (to buy) neighborhoods in the world, for a fraction of the cost of owning

I can move anywhere my business requires, I am not suffering asset depreciation every day, and I'm very glad I did the math in 2005 and figured out that it's the P/E stupid, it will always be the P/E stupid

I take all the money I save renting and plow it into savings and living life

Frank@NeverColdCall.com said...

Rent. It's simple math:

$3,500/month for a house that was purchased for $1.2M. Newport Beach CA, 2 miles from the ocean, 2000 sq ft, 3/3.

So, let's see ... $3,500 renting, or $8,000 "owning" plus all the other expenses that go along with it: HOA, insurance, gardeners, property tax, all appliances, repairs .... that stuff all comes with my $3,500.

At my income level as a single person I don't qualify for the mortgage tax break, so take that into account and I'm coming out way, way ahead renting.

I had a funny conversation with an accountant about all the people who see their tax bill who didn't know that the mortgage deduction gets phased out at higher income levels. Oh well, I guess they should have checked for themselves instead of believing the realtwhore.

However this kind of rent makes for a VERY nice home office deduction!

Haha that same accountant explained that when an "owner" takes a home office deduction they have to pay most of it back when they sell the house ... LOL

Shakster said...

I "own",if you can call it that.

proud of owning said...

I won a bidding war for a 2/2 cottage in Compton. It cost me $600,000 and I'm a better person than you bitter renters living in your mom's basement crappy apartment.

Anonymous said...

I own and wish I rented

Anonymous said...

Rent of course....

4 bedroom with heat/gas included at 25% of what it would cost to own the comparable space in the same neighborhood, and that is not including other expenses (taxes, maintenance...etc).

Only suckers bought in the past 7 years. Although I will consider buying after all the suckers have lost their shirts in the next 2 - 3 years with the pile of cash I've been saving ;-)

Anonymous said...

I rent but I have to admit that there is a difference between buying in a bubble area and a non-bubble area. I pay $800/mo for a 2/2 with an office near a business area where I work. Unless you put lots of money down or bought 20 years ago, you can't beat that with your PITI. The PITI for all the houses around here is at least $1500/mo. I wouldn't even consider buying a condo.

Anonymous said...

I rent. We sold our house in the summer of 2006. We saw the housing peaking and starting to go down. So we sold, and put the money in good CD's at about 6%. And we rent a nice house. We are looking around for a new location. All my friends tell me I was smart because the market has gone down about 20%, and that's if you can find a buyer!

Anonymous said...

I just found this blog. I have been sort of following the housing bubble via James Howard Kunstler's blog but I didn't realize until recently how great it is to be renting in the current climate.

I have no choice as I live in San Diego and am priced out of the market, but am happy to be renting a 2 bedroom/1 bath condo in a central location for $1200.

Anonymous said...

How many homedebtors/flippers who profitted from the bubble ended up plowing their money right back into RE? It's just like the dotcom bubble. A few people came out super rich and the rest gave back everything and then some. Instead of unused fiber everywhere, we have unused McMansions and condo towers. Bankrupt dotcoms are replaced with bankrupt lenders and builders. What has society gained? Nothing. Are we better off or worse off? Worse.

Selling at the the drop said...

I rent a pre-bubble mortgage for 30 years with a 5.375 fixed rate. However, I am hoping to sell my depreciating shithsack to an illegal alien her in SoCal so I can once tak about 200k in the bank and rent a 'new' house for about the same payment I make now and wait for the smoke to clear.

Anonymous said...

>>>Now where is that troll that thinks we all live in basement apartments and drive 12-year-old hyundais?<<<


you must be single......

Mark in San Diego said...

TO: Owning in Compton. . .very good humour. . .yes, my "basement rental" (on the 16th floor) has a great view of the San Diego Bay, 1200 SF, 2/2 with a pool, workout room, and a 5 minute walk to at least 20 restaurants and shops in Little Italy section. . .rent? $2400 mo. . .the place would sell (if they could find a buyer) for 700K. I sold my place in early 2006, put the money in a tax free Calif money market, and use the proceeds (on 600K) to pay my rent. . .no HOA, no property tax, no depreciation. . .drive a 11 year old Corvette (only put 5000 miles on it last year, as I walk everywhere - and lost 10 pounds). . .life is grand. . .what can I say. . .

abby said...

Buy now before interest rates go up

Anonymous said...

Time2Buy

Anonymous said...

My total monthly outlay - mtg, HOA, taxes are less than what I could rent for. I would make a small profit ($200-$400 a month) if used as a rental property. I will own this free and clear w/in 8 years. I am sometimes tempted to cash out and rent, but I don't see how it would make me more money....Not a bitter renter, I am an owner - just not a stupid one.

Anonymous said...

Sold at the Top, now rent. The way I calculated it, I now live in a 3BR/3.5BA instead of a 2BR/2BA for the same amount I previously paid in mortgage, taxes etc.

I also figured out that the owner of the place I am now renting is losing at least $22,000 per year in mortgage payments, property taxes and HOA fees for his "investment".

Anonymous said...

Renter here in the south Bay of Los Angeles, we pay 2200 per month in a older high end condo high rise on the beach, 1200 sq ft 2 bd 2.5 bth 9th floor 2 level penthouse style unit, ocean view from every room. Downside no laundry hookups, pay laundry next door. The neighbors down stairs just paid, get this $1.3 million. WHY?? Talk about throwing money down the drain.

No offense ANON, but if it doesn't have laundry hookups, it ain't high end. 1.3 million for a condo without your own laundry (neighbors). INSANE.

Maison Lunatique said...

Renting since Novermber 2005. Had a nice starter home in a the rougher end of a gentrifying working class neighborhood, but sold it to move to Europe. Being Vancouver it was exorbitantly overpriced for the appalling condition of the house.

I thought the owning a home might make me feel good. However, the cost of owning was just so high that i had little energy and money left over for anything else- like enjoying life.

I rationalised that "at least i owned a home".


Because of the house, i felt that travel, especially to Europe, would never happen. It felt like having a weight on your back. work became drudgery, just to pay the mortgage.

Now i live across the world, rent and my wife and son enjoy a good quality of life.

If you stop caring what other people think, you often act much more sensibly.

Anonymous said...

I rent a 4000 sqft house in Carlsbad, been renting for fourteen months. I bought a house in coastal San Diego in 1998 here for 300k, I thought that was expensive, I sold it in April 2006 for 775k. I have the equity in several FDIC joint accounts with less than 200k in them; I hope the government is good for the money, earning 5+%. I moved to Phoenix after the sale to see what it was like there, we left AZ in March of this year and came back to Carlsbad. Our rent in Gilbert, AZ was $1,900.00 for a house valued at 750k, it worked out fine until the bank posted a notice of default on the door and the “owner” put a for sale sign the yard (he had 5 “investments” in foreclosure). We were planning to return to Carlsbad to live for the summer but decided to sign a year lease when we found our current home. Our new rental is worth 1.2m, it must be, because there is another new home going up for sale every week in this two year old community at that price. Our $3k in rent may seem like a lot until your consider the poor land lord’s plight, he is paying $1,500.00 a month just in taxes, MelloRoos (additional taxes) and HOA fees. It was funny when we filled out the rental application and our land lord ran our credit report, he asked me five times why in the world we were renting when we could buy, I just smiled.

Anonymous said...

I rent a home currently in Atlanta while looking around various areas of town and getting to know the city. Hard to tell what's going on in the market here. Lots of homes for sale, tons of foreclosures. Yet median price is going up and homes are selling. Lots of "sold" signs around. I was hoping prices would be falling but so far no. I have 8 months left on the lease and I'll see what happens then.

If I were to buy the home I'm renting, including the tax deduction on interest the montlhy payment would be about $200 more to own than rent. Unless anything drastic happens in the next 4, 5 months I will start seriously looking for something to buy this winter.

I owned a home in Las Vegas. I sold that house earlier this year. Walked away with a substantial profit after accounting for realtor fees, r/e transfer tax, etc.

I bought in 2003 so I got in fairly early in the boom. I got a 4.25% 5 year ARM. My PITI cost me only $218 more than what I was paying in rent for my apartment before I moved into the home. No helocs or refis along the way so all the appreciation was equity for me.

It took 6 months and 2 price reductions to sell. Final selling price was 89% of origial asking price. Since I sold there has been one other sale in my old subdivison, pretty much the same house as mine and it was sold for $4500 less than mine.

Anonymous said...

damn Chrissy had some nice tits

DMC said...

I "own" a house in the Inland Empire near Los Angeles. My husband and I originally rented in Huntington Beach and in 2000 bought the house we're in now for $190K. I have to laugh because at the time I thought it was just so expensive! At the peak this house was worth about triple that, and now it's probably worth a little over double. I would love to sell this place, pocket the profits and rent again, but my husband actually likes it here. :(

Hpy Babybmr in Glndle AZ said...

I own. I paid off my mortgage from flipping houses that I sold off in 2005 - 2006.

I paid off the vehicles and have absolutely no debt, no loans, no credit card balance but I do pay 3625.00 a year in elevated property taxes because the market went wild.

Gated community, 3200 sq ft + basement, 1 acre, custom home in North Glendale, AZ. Pool, Spa, tennis court, 4-car garage, detached 960 sq ft guesthouse.

Ez on Ez off the 101 Loop. 22 minute commute one way to work.

Maxed out 401 contribution plus 24k yearly into qualified GVUL plan at work. Which are all in Money market accounts right now.

IRAs in cash positions or Gold. CMA accounts all in cash positions and gold.

12 Months of income fund for emergency in 2.8% money market account at the credit union.

Multiple 1 year CDs at 5.7%

Waiting with liquidity for the markets to crash so I can buy your home, which you lost because you were stupid and took out IO or Toxic ARM loans. So I can cycle back through flipping houses and make a killing again in the next bubble.

Working full time, 50 hrs a week building wealth and not spending any money at this time.

I would not even contemplate trading my position for renting.

I could care less if my home drops in value, because I plan on living here in comfort, with the ability to remodel or paint as I choose, for a very long time.

I have absolutely no sympathy for people who lose their house because of their own stupidity or end up paying up the ass for loans they could ill afford. You will be the ones who create opportunities for people like me when the bank liquidates your property for pennies on the dollar in the near future.

See you at the auction.

Anonymous said...

damn, i had forgotten how good those babes looked back then......

cashisking said...

I own!

Bought condo in Scottsdale at $125,000 in 2001, peaked at $280K in 2005, now sits around $230K. Have it rented for $950/month! My mtg. after refinance to about is $172k is even more than that! Ack!

Then bought in Phoenix in March of this year for $305K (it was a spec that was listed at $370K!) - however more bad news on the horizon when the house around the block that is the same exact sold for $286k.

Should have just rented...argh!

Anonymous said...

My girlfriend and I sold our last two houses early last year and now rent. this house is over 2000 sq/ft three car garage with pool. 2,300 a month in Chino Hills Calif. There are three houses on this street on the market for the med 600k. ( not moving )
Do the math!!!!!!!!!!!!!!!!!!!!!!!!1

Anonymous said...

Renting a condo in Atlanta from the bank. Market here isn't as out of whack as other places. Was renting a shithole from a land lord for $800/month, with PITI and association fees, the condo works out to $1500/month. However, it is new, has much better finish out than the old apartment, and is in a more walkable area and is convenient to rail transit. Overall, to me, it's worth the money for a nicer place.

Sixpercenter said...

Rent a great house for $1600. Would cost me $3700 in mortgage (not including, insurance. property tax). And with the Case, Shiller Home Price Index showing a decline in my region for the next yr, who would buy??? Besides fools listening to GED realtwhores!

Shakster said...

Three of the nicest people in Hollywood,and they rented, or bought when prices were really low.

lawyersgunsmoney said...

Bought a condo in 2000, a house in 2002, sold the condo in late 2005, paid off the house loan. The condo has since "appreciated" about another 100,000 so maybe I sold too early, then again I made a bunch of cash, no complaints. Things are still going up where I live (north of the US), sometimes I kick myself for missing that 100K but then again I've got a house in a place I like, and I could work at McDonald's and support my family well enough to survive (no debt at all). A lot of people are leveraged to the hilt here, but since things are still going up in Canada "it's all good..."

The bubble is alive and well in BC and Alberta, we'll see how it plays out long term but houses now cost $800,000 for a "cheap" one, same house rents for $2,000 max. There are "million-dollar" condos around here renting for $2500/month, I don't get it.

I've read this and other blogs for a long time, appreciate personal stories, ideas, don't enjoy the gloating (and don't believe a lot of it) or tinfoil hat style "evil real estate empire" smack. If I were choosing between renting or buying today probably I'd rent, but I think there are a surprising number of people out there who bought four to seven years ago and are doing just fine as a result. Not all buyers HELOCed themselves into debt hell.

I'm very curious how Canada will play out; we don't have as many "junk" loans here in general, but we also don't have long-term fixed interest rates (ten years max I think). I was a kid when Calgary went sideways in the early eighties, but I remember it still, parents had a very hard time. I don't think most people do, even those that were older. Place yer bets.

Anonymous said...

I work as a construction project manager and I'm on the road most of the time. I rent a townhouse in SE Wyoming for $380/mo., no yard maintenance or other upkeep. It's small, about 950 square feet, but really quite nice. The worst thing about it is that it has no dishwasher. Way better than I need for the week a month I'm there, though. My landlord built the place new in the 60's and takes very good care of it. One of the sweetest deals I've ever run into. Renting saves me a couple of extra thousand a month that I put into my land aquisition fund, for the purchase of a small farm when the time is right. I have a company truck so I don't even own a car right now. There's an Enterprise car rental a few blocks away and they always have a good car for me when I need it, at a fraction of the cost of actually owning. I live frugally in most other respects with just occassional treats. I don't eat out much, and I don't buy crap I don't need. It's nice to have financial security. My downfall is that I like to travel way too much.

Anonymous said...

Cashed out of 2 homes last year. Left So Cal forever and I'm not looking back. Took the profits and paid off a modest home on 160 acres in beautiful So Utah. The acreage was purchased years ago at a bargain price. I love being a home and property owner which is not rented from the bank. Many years from now this property will be worth a mint but I plan on staying put and leaving the rest to my kids someday. Lovin' it!

Kerriella said...

We actually just bought our house 2 months ago but our area hasn't been affected much by the bubble and we were so tired of renting after a string of bad landlords that we were thrilled to start paying the bank.

We also sat down and figured out how much we could comfortably pay on a mortgage payment, made sure to stay within our price range and took full advantage of our VA loan to get a good rate and no down payment.

We are actually paying less now than what we were for rent.

BudFox said...

Renting house with a wall of windows overlooking the bay in Mill Valley, CA for $2000/month. The house across the street is selling for 1.6m.

Anonymous said...

San Diego, Ca. Bought in '93, sold in late 2004. I now rent a 1500sqft townhome on a golf course....... how sweet it is!

Anonymous said...

I own my house free and clear. Cashed out previous owner for total of $37,000 for my house and 11 acres in the midwest. No debt, can live on $500-month. Rent = ugh.

jimmytheweasel said...

I own...kinda I have a 4 bed 2 bath in a small town in northern wi. I added 700 sq feet last year and fixed er up nice but I refinance fixed rate 6.25 and now my mortgage is a whopping 530.25 I have 40% equity on the most recent apparaisal, but I don't really care about that as to rent the same house would cost me about 750.00 In 2005 I sold my big house for 250,000 and bought one for 70 K and fixed it up... No regrets and I can eat good and so can my 5 sons


Cheers

Zoe said...

Rent 2BR 2BA apt (with a huge private patio) at $1260.00 mo. in Placer County CA. A complex in a very upscale area that has had some of the highest growth in the country the past 10 years.

I figure to buy it with 20% down would be $2600.00 mo in HOA, Mello-Roos, Taxes and Ins.

Plus I have a new 60' x 30' fitness center that the owners built next to the pool. The grounds have as much lawn/landscaped area as it does buildings. It is like living in a park.

I couldn't buy it even if I wanted to.

tuxedo_junction said...

Sold just past the top, retired shortly thereafter and moved to a lower cost area. T-Bill interest income, after-tax, on cash cleared covers 89% of the rent on a 3/2. Only other expense is electricity. Will start looking to buy in 2009.

Anonymous said...

I rent in the Bay Area. Wife, 3 kids and I have been trying to decide where to buy and settle in the Bay Area just as the bubble exploded. I am a 44 year old professional and most of my family and friends can't understand how I could lack the self esteem such that I won't buy a home.

Bought 5 condos out of state prior to the bubble (1999) and have sold 4 over the past 2 years. Made and saved enough to pay cash for the home I currently rent. Net worth over 2 million.

Just checked Zillow and the home I rent is valued at 800,000. I honestly cannot believe that but that's what it says. I pay 1875 per month in rent. My calculations find that the home I am living in would have to drop to 300,000 for me to buy and be spending the same amount. (That INCLUDES assumed tax saving due to mortgage and property tax deductions but ignores appreciation since I am assuming there won't be any of that for a while)

Anyway, I will pay my capital gains on the condo sales and have dumped it all into index funds as I believe the next temporary bubble will be in the stock market as the Feds try to convince everyone that everything is fine over the next year or two. Then BAM, down the stock market will come once again.

Anonymous said...

While I believe prices will continue to drop, I don't see more than a 40% haircut in the end (if that). Meanwhile, rates will go to 9+% and I will lose overall. Now maybe the time to make the leap from renting. I am in a 2/2 in MI and pay about $700/mo. for spanking new apt complex. Wish the sellers would just suck it up and get it done without waiting for the turnaround that will take longer than they are willing to wait anyway.

Anonymous said...

My wife and I rent in Brooklyn NY $2300 a month 3000 sqft loft with a wonderful view of Manhattan. We own a software company, have an office in Manhatten. Anyone that buys now is down right stupid. We have a few million in the bank waiting for the prices to go down to normal than buy a brownstone...cash. I feel for the the ones that rent from the bank, and think they own their house..losers...lol

Anonymous said...

hey, the tripper was renting too. and what great roomates too. i used to hate it when that schlepping jew , larry came around trying to make time with the babes....

Anonymous said...

>>>Cashed out of 2 homes last year. Left So Cal forever and I'm not looking back. Took the profits and paid off a modest home on 160 acres in beautiful So Utah. The acreage was purchased years ago at a bargain price. I love being a home and property owner which is not rented from the bank. Many years from now this property will be worth a mint but I plan on staying put and leaving the rest to my kids someday. Lovin' it!<<<


my kind of guy.....just don't ever say anything bad about the mormons......

banshee said...

Renter in San Diego, 2500sqft 4br3ba house in a good school district for $2200/month.

Rent 3 houses from the credit union, bought pre-bubble (1992, 1997, 2000), have 15yr fixed mortgages at 5%, net a few hundred a month right now, even after maintenance (roofs, furnaces in a couple of the houses recently). Will own them outright in about 9 years.

your mileage may vary, be careful out there...

Anonymous said...

I can't believe there was a mainstream US popular tv hit about a Ménage à trois setup who were renters

Beautiful

Anonymous said...

>>>I work as a construction project manager and I'm on the road most of the time. I rent a townhouse in SE Wyoming for $380/mo., no yard maintenance or other upkeep. It's small, about 950 square feet, but really quite nice. The worst thing about it is that it has no dishwasher. Way better than I need for the week a month I'm there, though. My landlord built the place new in the 60's and takes very good care of it. One of the sweetest deals I've ever run into. Renting saves me a couple of extra thousand a month that I put into my land aquisition fund, for the purchase of a small farm when the time is right. I have a company truck so I don't even own a car right now. There's an Enterprise car rental a few blocks away and they always have a good car for me when I need it, at a fraction of the cost of actually owning. I live frugally in most other respects with just occassional treats. I don't eat out much, and I don't buy crap I don't need. It's nice to have financial security. My downfall is that I like to travel way too much.<<<


is your job recession proof? just curious what your opinion is right now?? these are strange days we live in now......one cannot depend on the past to tell him how the future will be.....nor can he plan for retirement in the way that americans have done for a long time now........yesterday is gone forever and it is a new day now..

turdly said...

Own two homes side by side.
Owning these homes free and clear costs me over $3300 monthly in unearned interest. Owning free and clear is not what you think it is. I could sell them both, rent and save $2200 a month!
We all have our foibles. Mine are these homes and I can afford the loss

Anonymous said...

>>>> I can't believe there was a mainstream US popular tv hit about a Ménage à trois setup who were renters

Beautiful<<<


naw....strictly platonic.......

JP said...

Rent. I'm a Lazy, unmotivated, underachiever with a Napoleonic complex.

Anonymous said...

I found Janet disgusting yet oddly sexy

Anonymous said...

RENT in northern suberb of Colorado Springs. 5000+ sqft 6 car garage 1900 a month. 1/2 the houses in the division are for sell. One that was on the market over 2 years finally sold for a 400k loss. 2 others are bank owned. Couldn't beat me to own for at least 10 years.

Sequoia512

Anonymous said...

I own and have for the last 15 years..I have owned several diffent homes and always stayed within my comfort zone..never using my home as a ATM..sold at the right time and bought at the right time..moved out of Florida 3 weeks ago, priced right and found a buyer..Happy I own and can understand the pros and cons of it...depends on where you are in life, income and need..

PDXRenter said...

Sold in Mar. '06 a 3000 sq. ft. house (bought in '97) in one of the best Portland, OR West Hills neighborhoods and invested the tax-free windfall at 8-9% annualized (to date) and currently renting a comparable house for ~60% of mortgage cost even after deductions.

Houses in the neighborhood (and in Portland in general) are overvalued versus fundamentals (population, gross state product, income growth) by 45-60%. Downtown condos are overvalued based on fundamentals by 80-120%.

Inventory is up 100% over 5-year average.

Median price is down 7-10% (and 11-12% for comparables).

Houses on market 119 days to sell versus 23 days a year ago.

Sales down 28% yoy versus '06 and down 37% versus '05.

Inventory currently at 11- to 12- month supply.

Realtors are panicking because sellers are being stubborn and refusing so far to reduce list prices in many cases, at least by more than 3-4%.

Also, mid-price mortgagees who would otherwise be buy-up buyers can't sell their houses at list price to have enough to bid for McMansions, due in large part because the low-end buyers no longer can qualify with teaser rates, liar loans, no-down, adjustable, neg-am. loans to move up from starter housing.

The mortgage-equity-withdrawal (MEW) party is over, friends. However, the bankers are desperately trying to push reverse mortgages, but falling house prices and contracting equity will likely mean that this source of credit expansion will be limited.

The best-case return for the vast majority of mortgagees hereafter will be the amount they pay down their mortgages. But, for the vast majority of people who bought in the past 6-7 years with high LTV, in the short run, house price might fall more per year than debt pay down (especially in inflation terms), which, of course, is DEFLATIONARY, resulting in many people realizing that in effect they are renting from their local taxing authority and from their lender, rather than "owning".

Most of my friends think I am an idiot for having sold 15 months ago and rented since, but this bust will likely last until the early to mid-'10s (and perhaps well into the late '10s or '20s in inflation-adjusted terms), so there will be plenty of time for my friends to discover just who the dumb ones are.

Remember the old Wall Street adage: "No one ever went broke selling for a profit."

Peace.

Anonymous said...

I rent a one bedroom apartment in Mountain View, California( Silicon Valley) for $1140 per month which I split 50/50 with my girlfriend. I had originally been thinking about buying a house when either a/ it's 2011 which is when I figure the housing crash should be bottoming out or b/ whenever we reach the point when owning a home is less expensive than renting a home. I'm starting to think that I don't ever want to own a home now. It just seems like a hassle.

Anonymous said...

I rent in upstate New York. For $900/month I rent a
* 3 bed/2 bath 1800 sq ft house
* 10 acres of land
* a barn
And no, I don't have to upkeep the 10 acres of land.
The landlord handles that.

Anonymous said...

We purchased our home in November of 1999 and sold this Northern California home last June. We are now renting a 3br. 2 1/2 ba. home in Dublin, CA for $2,000 per month. I thought it would be really hard to go back to renting after owning, but it has allowed us to save more money than ever and the equity from our home we sold is diversely invested and earning at least 6%. The home we sold has lost over 6% since we sold it according to Zillow. Very happy to be renting right now and feel the housing market and the economy as a whole is in for some interesting times ahead. Best of luck to everyone.

KIP in CA

EconE said...

I rent for about 38% of what it would cost to buy.

And I Bitch...endlessly.

In fact, I will soon be the Co-Bitcher on the 2200life blog here in Seattle. Bitching on behalf of consumers everywhere!

Check it out Keith!

2200life.blogspot.com

Batman said...

I think those were real too.

Drunken UFO Pilot said...

Just renewed - renting for 3rd year in this small crowded apartment far from the fun part of town. But pleased that my financial life is so simple!

Selling at the drop said...

"I "own" a house in the Inland Empire near Los Angeles."

I also live in the 'IE". I have my house for sale even though I bought pre-bubble. Why? Same reason you mentioned: take the equity and run. Expect a 40-50% haircut in the next 2-5 years in this areas. IE will get hit HARD.
You and I will be safe (FAT equity padding) but I feel for the people that recently bought. Welcome to the Valley of the Dirt People..AKA: Foreclosure Land. That will and IS bringing the values down around here. I hope you like your home and area A LOT. We will be here for a while if we dont sell.

Selling at the drop said...

"Should have just rented...argh!"

No, you should have come to this blog long ago! Dozens of posts with data to show PHX was going down.

Keith, I an thoroughly convinced its over. By the bunch of 'new' posters on your blog, it looks like the general population has caught on. Good sign, this rollercoaster has past the big hump and gaining momentum.

Anonymous said...

I am single and own a 550 square foot condo, in a nice building in Manhattan, with a Hudson River view. While I believe prices will fall considerably eventually, two issues deter me from selling now. First, the brokerage fee, transfer taxes and capital gains taxes due on sale would be considerable. Second, finding a comparable apartment now to rent, or later to own should prices correct, is not guaranteed. Manhattan's housing market is notoriously hard to deal with, as rental vacancy rates are 1%, and there is very little for sale property available. If you have a good apartment in Manhattan, you generally keep it whether you rent or own.

BuyBonds said...

We rent. We sold a nice 4 BR 2.5BA and now rent a 3BR 2.5BA townhouse. With the loss of the interest deduction and the interest on the CD’s in the bank, and that interest being taxable, we pretty much break even. We had a low mortgage with plenty of equity. We also save a few more dollars on things that are included with the rent, like landlord-paid associations, garbage pickup, and lawn/gardening bills. It’s all about a wash, except for the loss of an unneeded bedroom. We still have a 2-car garage (like before). We’re not bitter and we’re not in any basement. We have a nice view of the sunset, high on a hill. We are waiting to buy again, but not at these prices. I expect to buy in a few years. I think most sellers are in denial and prices I bubble areas (like here in OC) have just started to come down. I think prices will be lowered when the sellers that really need to sell are forced to lower their price until they have a sale. When banks need to get rid of repo’s, I think they will drop their prices. So we’re waiting. This is much more slow-going than I originally expected, but maybe that’s a good thing. Maybe there’ll be less pain and bloodshed this slow way.

Lee Helm said...

Rent, Costa Mesa, CA. Bike to work. 1550 sqft, with big back yard for the pooch. 2 miles from the beach. 2 car garage. Stones throw to the parks and bike trails. "Recent comp" value of home: $600k. Rent: $1700/mo.

That's pretty hard to beat.

Anonymous said...

JP,

look at the positive side. at least you're not in denial.

Anonymous said...

I live in a nice 2bd 2bath apartment with covered parking, all appliances including laundry. It fronts a very pretty lake in NW Washington State. I can throw a rock from my balcony into the water with ease and go rowing anytime I want. The building is on a 25 acre parcel -- I regularly see deer, herons, osprey, bunnies, beavers, and once, I saw an otter get out and play in the snow. Most of the property is woods and lawn. People practice with their irons all the time. $780/month.

About a half a mile up the street there is a 2bd condo listed for sale at $499,000. The property itself is very small and butts right up to the street. In the same building as that for sale condo, there is a for rent sign for a different 2bd condo -- $1150 per month. Now, the one for sale is a corner unit that is directly facing the beach. The for rent unit may be on the second tier with views of the lake but you'd have to walk an extra fifty feet to get to the water. I'm only guessing on the situation of the units, but even if I'm right, I can't imagine that would amount to such a price differential. Anyway, a random loan calculator says $3000/month at 6% for 30 years to buy.

Magon said...

Own. Bought in '75, paid off mortgage in '93.
Plain, small red brick 3 bedroom 1 bath. Tile roof. Built in '48.
Taxes and insurance less than $250/month. All utilities and phone average less than $200/month.
90% cash in CDs; 10% in metals.
Downtown Phoenix; four houses from a bus line, 1/4 mile from another.

Life is sweet.

Anonymous said...

Damn! That Crissy is one smoke'n hot bitch!!

Anonymous said...

From Massachusetts

Bought 900+ sq ft condo in 2 unit association in 98 for 100K. Close to beach and ocean. Well water which was not drinkable and questionable for cooking.

Wanted to sell in 05 but chose to hang in for personal reasons.

Put house on market 6/06 for 349K. No offers. Took off market 12/06.

Back on market 03/07 for 339K. Two offers, settled for 323K. Close to $350 per sg ft.

Now renting beautiful townhouse in gated community with 98% owner occupied close to work.

Stats below for Wife and I

+200 month (hoa)
+250 month (taxes)
+300 month (gas)
+??? Month (wear and tear on autos)
+40 hours month (not driving)
+20 hours month (not working on home)

Just not sure what to with all my new found time and money

stardust said...

Sigh, I'm emotionally attached to a little cottage by the Gulf of Mexico in Central West Florida. Love at first sight - I bought it as a fixer upper in 2000. At current rate (sometimes I pay more principal) I will payoff in 7 years. The total payments (principal, interest, taxes) are only $175 more than I was paying for renting in a similar yet worse situation (shared w/d in apartment complex, no d/w). I'm only 6 feet above sea level, so a hurricane could wipe me out at any time but I still can't bring myself to part with my postage size piece of paradise. :-)

banana.republic.us said...

I own.

just under 1000 a month of mortgage and taxes where comparable rent would be about 1500. Owning isn't bad if the numbers are right,but they are not right now.

We had contemplatred selling and renting but the wife can't stand losing the security of owning our shelter. My opinion is framed more in economic terms that we will hyperinflate and rents may go up after an initial pull back....I'm talking years here.

If you are renting in the southwest you are ingreat shape as I expect that market to be destroyed over the next coule of years and it may not bottom til 2012. I'm in the north east where zoning has made increasing supply difficult and old infrastructure will not tollerate much more development.

area 51 said...

Rent. Cheap.

Sold out in Aug 2006. Sitting on cash (50%)in E-Loan and Emmigrant Direct getting >5%. Other 50% of $ in stock market. 401k is fat.

Zero debt.

alternate nickname said...

I SQUAT!
I live in the detatched maids house on my Mommys estate. I work at home and bank much of the money I make. I live within 2 blocks of the Post Office, bank, grocery, etc. I'm thinking of selling my Porsche and one of my Mercedes because I dont have time to drive them all. I flipped a couple houses in the country and am waiting for the colapse.
LIFE IS GOOD!

garyk said...

I'm currently renting in a supposedly non-bubble area. I'm renting a decent townhouse for $550/mo. I've owned one house before, and really screwed myself with the timing of when I sold it. If I had held it I could have made more money on it, but that's ok.

To buy the same house now would cost me almost double what I sold it for in '04. By 'roughing it' in a rented townhouse, I'm saving easily $1k/mo versus what it would cost me to buy a similar house to what I sold. Prices are coming down now though, so I'll just wait for the right time to buy.

Just to make sure you didn't miss it...housing doubled in three years in this area and the people here claim there's no bubble here. WTF are these people smoking?

Anonymous said...


Own. Bought in '75, paid off mortgage in '93.


You must be about 70 years old? Congratulations on learning how to use a computer and the retirement.

Frank@NeverColdCall.com said...

I own my house free and clear. Cashed out previous owner for total of $37,000 for my house and 11 acres in the midwest. No debt, can live on $500-month. Rent = ugh.

Congrats on being a true OWNER! My biggest pet peeve is people who are upside down on a 30-yr mortgage, and walk around with a superiority complex calling themselves "homeowners."

Of course these are usually the same people who get a BMW on a 5-yr lease for $199/month.

Anonymous said...

Renting in Shoreditch London for £750 a month. Came here from San Francisco, I rented in Bernal Heights from 2004-2006 for 1850, its a great neighborhoods. Met a girl from Portland, Oregon, and am homesick, and disgusted with real estate market in the UK. Have about 100K in the bank, and want to buy, I do like Portland. I travel for software consutling (Oracle). I have never owned a home, and at 38 feel like its way overdue, but sigh, will most likely rent for another year.

keith said...

shoreditch send me an email... we'll grab a pint

Anonymous said...

Both.

Own a nice little place on acreage in the country and we rent a place in another city when the summer heat hits.

Our country home is cheap, private, pretty. I actually like mowing and gardening. The region never experienced significant appreciation and prices remain stable. I'm paying less than I would to rent.

The city place is small and expensive, but it's a lot of fun.

Home office deduction only has to be reimbursed (in part) if the home sells for over 500k, btw.

Anonymous said...

I just realized - all of you on this site are the scumbags that you always complain about!
A large number of you "Cashed out", "Sold at the peak", "banked my millions" and now rent on the sidelines. At the same time you are all hoping for a crash that will destroy peoples lives so that you can "invest" back in the market taking advantage of families out of house and home and make another quick buck.
You talk about how houses are not investment vehicles out of one side of your mouth, and then you do the exact same thing that you berate others about on the website. And then you moan, complain about, and insult real estate people to push the blame on someone else.
I thought I was one of you, but it is obvious that you are self centered money grabbing people. Shame on you - just as much as should be heaped on those bad real estate agents.

if i'm wrong tell me so, but take a fresh look at the posts to this topic, read between the lines and you will see the truth. What are we - profiteering investors in real estate, or a group looking for a fundamental change in real estate around the world?

Shakster said...

Anonymous said...
I just realized - all of you on this site are the scumbags that you always complain about!
A large number of you "Cashed out", "Sold at the peak", "banked my millions" and now rent on the sidelines. At the same time you are all hoping for a crash that will destroy peoples lives so that you can "invest" back in the market taking advantage of families out of house and home and make another quick buck.
You talk about how houses are not investment vehicles out of one side of your mouth, and then you do the exact same thing that you berate others about on the website. And then you moan, complain about, and insult real estate people to push the blame on someone else.
I thought I was one of you, but it is obvious that you are self centered money grabbing people. Shame on you - just as much as should be heaped on those bad real estate agents.

if i'm wrong tell me so, but take a fresh look at the posts to this topic, read between the lines and you will see the truth. What are we - profiteering investors in real estate, or a group looking for a fundamental change in real estate around the world
---------------------------------
Yep ,That about covers it.Popcorn?

flip that turd said...

To me, this site is about laughing at the morons who bought overpriced homes and are now struggling to make ends meet. It is about the clueless fliptards who bought overpriced shacks and tried to sell them for a profit. It is about laughing at the greater fools who were financially destroyed. It is about the morons who "won" bidding wars. It is about laughing at the realtrolls and mortgage brokebacks. It is about laughing at the lenders who went bankrupt due to their own greed.

If somebody bought a fairly priced home and did not "liberate" all their equity to spend on junk, then that person shouldn't be worried or bothered by HP.

Keyser Soze said...

Anon 7:01 & Shakster,
I sold my townhouse, and everything I had in 2000 and bought 20% of a business...and went $400,000 in debt.
So, I didn't sell at the top!

EconE said...

I just realized - all of you on this site are the scumbags that you always complain about!
A large number of you "Cashed out", "Sold at the peak", "banked my millions" and now rent on the sidelines. At the same time you are all hoping for a crash that will destroy peoples lives so that you can "invest" back in the market taking advantage of families out of house and home and make another quick buck.
You talk about how houses are not investment vehicles out of one side of your mouth, and then you do the exact same thing that you berate others about on the website. And then you moan, complain about, and insult real estate people to push the blame on someone else.
I thought I was one of you, but it is obvious that you are self centered money grabbing people. Shame on you - just as much as should be heaped on those bad real estate agents.

if i'm wrong tell me so, but take a fresh look at the posts to this topic, read between the lines and you will see the truth. What are we - profiteering investors in real estate, or a group looking for a fundamental change in real estate around the world?


no we were just smart enough to see how the system was getting gamed and saw the HOMES that we lived in turning into Dot-Bomb stocks.

What were we supposed to do? Sit around and take it in the shorts because of what the Banks, Realtors, Appraisers and specuvestors were doing?

Should we have said to the person who bought our homes...

"Dont buy now because you'll end up getting screwed"?

I would have gladly kept my home if the RE market wasn't turned into a "Flippers Game"

And if the people that didn't see it coming got burned...well...then maybe they should have

A. Gotten a better education
B. Paid attention during their economics classes
C. Not taken what the media was saying at face value
D. Watched less stupid T.V.
E. NOT Gone on credit fuelled spending sprees at the Mall
F. Learned to cook rather than eating out all the time
G. Paid attention to what's going on in the world with regards to the credit bubble.
H. NOT bought EXTRA homes/condos as "investments"

don't be pissed just because we

A. weren't stupid
B. saw this thing coming from a mile away
C. chose to "get off the dance floor" before the ceiling caved in.
D. looked at homes as HOMES and not ATM's
E. found HousingPanic and talk about the whole mess with some degree of financial security.

Hell yes I'm going to bounce out of a bubble. It's like calling the people who sold their Pets.com stock at the top "vultures" just because they didn't want to lose all their money.

Anonymous said...

>>>if i'm wrong tell me so<<<


you are wrong........

Anonymous said...

Suzanne Sommers and her thighmaster
..............ooohhh!

borkafatty said...

I to rent from the bank

citykitty said...

I purchased a home in the far exurbs of Sacramento in 2002 (it was all I could afford) and sold in 2006 when a) gas prices went nuts; b) I realized that, at the least, housing was not going to appreciate any higher; c) I had enough of fixing up my fixer-upper and d) realized that I am, as my chosen name states, a "City Kitty."

I did not clear the huge amounts that some others in this blog did due to the slowing market and all the fixing up. But I was not upside down like people trying to sell now, thank god.

Now I rent in central Sacramento, within walking/biking distance to work. My apartment is a large unit in a fourplex and I love it. I use my car once a week for errands and keep it in the garage the rest of the time. A couple of weeks ago my apartment needed a small repair and I just called the landlord (happy sigh).

I would like to buy in my current neighborhood IF prices come down far enough and IF it makes sense with my income. I am sure that prices will come down but not sure that they will come down enough. Sacramento is one of the worst areas in the US for home affordability.

Anonymous said...

We sold our Alameda home in late 04', moved to Reno and rented a lovely 2 bedroom 2 1/2 bath single family home behind the Lakeridge golf course for $1,100 for a total of two years. Our landlord loved us, and didnt raise the rent for the two years we lived there.

Now, we just moved back to Alameda, Ca and found a very nice, huge single level L-shaped condo with 2/2 with a huge private patio and spacious two car garage. Originally, the rent was $1850 but when we signed the lease, they dropped it to $1800 a month. No yardwork, or HOA payments, plus we get to use the well-maintained olympic size pool and tennis courts and we received 5 passes to include friends or family
We also have ample street parking afew steps away, and a shopping center within a two blocks.

We love renting right now. All our friends (all of whom own homes) are asking when we are going to buy a house, and we just tell them in a year or two. We're in no hurry to buy!

Anonymous said...

i rent from the bank, 2500 sq ft, nice neighborhood, humongus lot no nosey neighbors (except her) i am painting the trim on the outside of my banks house and fixing up the back yard and planning on painting the kitchen new tile in the entry all for the bank, i bought in last bust in 1993 payments 1300 a mo tax and license cheaper than an apartment. i live in the SF bay area (california for those who don't know) no refi's thank god and when folks tried to talk me into an adjustable rate 2 years ago i told them no i want to know what my payments are going to be every month. they got mad at me.
i towed the line remembered creative finacing of the late 80 and thought this negative amoritization was just some more of the same stuff and I was right the housing god smiled on me.
My friend is a refi junkie, she bought her house for maybe 90k years ago, now she owes 250,000 i think and she is planning on refi'ing again when her contract or what ever is up for a fixed rate. What can you say. You tried to tell em. They don't listen so why bother. She got a letter saying her loan was going up to 1800 if there is another rate increase and guess what she can't afford it she has kids, bills and a love of travel. Ha Ha Ha. Betcha she'll be home alot more often when the chickens come home to roost. Tried to tell her.

Shakster said...

Keyser Soze said...
Anon 7:01 & Shakster,
I sold my townhouse, and everything I had in 2000 and bought 20% of a business...and went $400,000 in debt.
So, I didn't sell at the top!
-----------------------------------
Keyser My stance(s) in this is that it is OK to make a profit in housing.If one can sell at the top good for them,if one sold halfway there then good for them,if one made a small profit before the bubble then good for them.
I have lost most of my sympathy for FBs.They do no due dilligence.This is not to say that all FBs ended up in trouble because they didn't due any due dilligence,there were those that guessed wrong who had alot of knowledge.
I have relatives that can't let go of the so called holy grail that housing is depeicted as.Housing,like gold,the dow,and other investments will burn many people as they cycle through generations,only this time the public have been warned ahead of time.Some warnings were out ahead of the Dot Com crash,but this time we have fast information systems,more experience,and alot of smart people are joining in to warn the country.We didn't have this in the Gold bubble of the early eighties,the SnL crash,early 90s housing,or The Dot Coms.
I lost alot in silver ,and gold,and wheat,and put options on the 30yr bonds.I also learned to take little bites out of the pie because of the experience.Then I made it all back ,and a little more.
People don't listen to warnings in general.Mostly because they are happy ,and hopeful about their decisions,and any warnings sound like criticism to the inexperieced,thats what they sounded like to me.With experience comes attention to pitfalls along with an open mind to advice.
Of course even a good intentioned warning should be met with a grain of salt,and some due dilligence.
Lastly,I am a bonafied TIN Hat wearing Gold Bug with Rabbit Ears.

Shakster said...

Nannu Nannu

BuyBonds said...

“Shakster said...
Anonymous said...
I just realized - all of you on this site are the scumbags that you always complain about!”

I see your point. We sold in order to rent, and we do expect to re-enter the housing market when prices have dropped. We hope this price-drop is as easy as I can be, for people that haven’t sold, need to sell, and everyone else. We are not looking to cause pain, and we are not hoping to profit from someone else’s pain.
What we are doing is looking to preserve our money, and not let it get devalued, if possible. Profit on paper (equity) is not really profit until you put it in your pocket.
With so many people looking to use the equity I their homes to help with retirement, how could we just sit back and watch, when we expect values to go down significantly? This is not an ‘us vs. them’ kid of thing, although it has become that, with the MSM and the bloggers. This is an ‘I want to protect my own stuff’ kind of thing.

Anonymous said...

I rent a good sized one bedroom. Top floor with lots of wildlife and yard. $800 a month and I split that with my girl. I can do pretty much anything I want on my free time cause rent is so cheep. My other buddies jumped into the housing market in the fall of 2005.. they pay out $2,700 a month for just morg/tax

While I'm out having fun and getting away on the weekends.. they are mowing the lawn and wondering why their house is going down in value... i tried to warn them... i give it two years till i jump into the housing mess

Anonymous said...

I own (well, about 44% of my house at this point - the bank owns the rest) my home because it's less expensive than renting, fits my lifestyle better, and there really is nothing remotely comparable that ever comes up for rent in this area. I bought in a non-bubble area with the intent to stay in the home for 10 years, so lack of appreciation does not bother me.

With a large family, I need a larger home - those just don't come on the market for rent in this area. Also, I bought my home in Dec. 2004 for less than it cost to build it, so there is NO downside risk for me. I paid about $52.94 per square foot for a very nice, now five-year-old 7-BR/6-BA log home with high-end fixtures and appliances, assuming in the overall price of the home a $60,000 total land value for the 11 acres, and $25 per sq. ft. for the 3-car garage. Builders/log home dealers will tell you that this home cost at least $100-125 per square foot, turn-key, to build. This same home on a 90% smaller tract of land would have cost me about 5-10 times more in Colorado. Now, THAT's what I call a bubble zone.

If there was even a remote possibility that I could lose money on this home, or that I could find something big enough for my family to rent for the same monthly payment, I would not have bought this home; I'd be renting instead.

Jeff in Florida said...

Homedebtor here...
Paid $223,000 in Dec 2005 for a 2880 sqft 4 Bed 2.5 Bath in a northern suburb of Jacksonville FL, 12 miles from Fernandina Beach. Currently owe $186,000. Peak price for my model with similar options in my subdivision was $269,000 (August 2006). The value is now somewhere in the $240,000 range. I'm a little concerned about the prices dropping but I know I'm not as screwed as some of my neighbors who bought after me at a higher price with 100% financing (already know of a few who are upside down). I have a fixed 30 year at 6%.

PITI - $1500 (easily affordable), probably about the same as renting a similar home.

Anonymous said...

"At the same time you are all hoping for a crash that will destroy peoples lives so that you can "invest" back in the market taking advantage of families out of house and home and make another quick buck.

Lady ( at least you sound like one)...since when was I put on this planet to look after the best interest of others? I do what is best for my family not yours you dumb azz! So what makes sense to a regular guy with 2 small kids sitting on over 300k equity? Watch it disapear at the rate of 10k a month OR cash it out, pay off all debt, pay off college for them, and still make out with 200k in ONE SWOOP. Those opps dont come around in life too often, if you are stupid to NOT see that then you deserve to get burned. Suck it good.

Anonymous said...

One problem that some of the renters here may not realize is that some of the "landlords" you are renting from are your partners whether you like it or not. If the landlord walks away and the bank forecloses on the property, you are in much the same situation as the homedebtors anyway. The bank certainly is not going to let you live in the property and keep paying rent blissfully. Hopefully you have a backup plan....or a smart landlord that is financially strong.....

Anonymous said...

Renting a 2700 sqare foot 5 bedroom 3 bath house mostly surrounded by empty foreclosed homes that aren't selling in Northern California. It's very "surreal" estate to use a bad pun and getting rather scary in my opinion. Where did all those families go? 3 years ago when they built this neighborhood, the people were fighting with each other to get in the sales office. Now nobody wants to touch these homes. Someone needs to go to prison for the fraud that was perpatrated on the previous "owners" here. IMHO.