Cheaper to rent than buy a house?

[Az]

I sort of agree with Ming. What is the average monthly rent payment, as percentage of the monthly mortgage payment?

[:) Smiley]

I agree with the majority here.

It's not housing prices that are high though, it's land prices. Your typical median priced $500,000 San Francisco Bay Area house is $100,000 worth of house sitting on $400,000 of land.

[GePap]

From:http://www.citysitesny.com/the-manhattan-market.php

Rental
Current Market Averages

* Doorman Studio: $1,823
* Non-Doorman Studio: $1,316
* Doorman 1 BR: $2,254
* Non-Doorman 1 BR: $1,725
* Doorman 2 BR: $3,117
* Non-Doorman 2BR: $2,442
* Doorman 3 BR: $4,445
* Non-Doorman 3 BR: $3,597

To Buy
Market Averages (second and third quarter 2003):
Condominiums

* Studio: $356,000
* 1 BR: $546,000
* 2 BR: $1,028,000
* 3 BR: $2,295,000
* 4 BR: $4,500,000

Co-Ops

* Studio: $232,000
* 1 BR: $416,000
* 2 BR: $818,000
* 3 BR: $2,085,000
* 4 BR: $3,339,000

The sales figures ignore maintenance, which you have to pay living in a building, which can be several hudred a month, if not more.

Except in the stuidio market, it makes a lot of sense to rent, NOT buy.

here is what the site says about the rental market:

In the past year and half there has been a huge listing surplus and the record-low interest rates that made buying an appealing alternative to renting, caused Manhattan rents to fall anywhere from 15% to 25%. But because the Manhattan Sales market has become so tight, it is turning would be buyers into reluctant renters. This is causing higher occupancy rates making property managers happier then they have been in years. The spring will also bring forth a surge of new hires resulting in a shrinking supply of available rental units, confirming further signs of a strong real estate market and improving economy.

[Dinner]

Originally posted by GePap
Well, here in NYC the average price of a new apartment in Manhattan in 1 Million dollars, and that might be in a co-op, where you still have to pay maintenance.

Thank god we haven't reached those levels yet. It costs around $500k to buy a condo downtown in San Diego with your average single family detached home going for around $650k-$750k depending upon the neighborhood. Even way out in the burbs where I bought my house a town house will run you 425k-450k. I don't feel so bad about buying for 395k considering my house only closed last July.

I'm not sure what the average price is for all housing types in the county but I'd guess it's around $500k.

Edit: The county average home price hit $500,000 in 2004 with a whopping 24% increase last year. We've been averaging 9% since 1960 and around 12% since 1990. That's a solid long term performance which isn't likely to change soon since immigration keeps adding to the population but the amount of land never goes up.

[pchang]

Paying rent is not throwing money down a hole. You have to look at the other things one could do with that money. Kid's article does a very good analysis and shows that under these market conditions, it is better to rent. In any case, a lot of the house buyers in the San Francisco area are coming from overseas. Thus, even a bad local economy may not curb the rise in home prices.

[Dinner]

From the original article:

House prices in San Francisco would need to rise by at least 4% a year (2% in real terms) for it to prove cheaper to buy a house.

Here is where the author's argument falls apart. California realestate has averaged much, much, much higher then 4% per year since WW2. Since 1960 the average for the coastal regions has been around 5%-10% depending upon the region with San Francisco leading the high end. That means even in high price SF it is financially smarter to buy then to rent.

[rah]

Yeah, same down near my parents in West Palm Beach.
The prices have risen 50% in less than two years, and show no sign of cooling off. Darn, I had planned to buy a few with my older brother back then, but he couldn't pull the trigger.

[pchang]

Like most markets, it is not timing the market, it is time in the market.

[Flubber]

I know that most of the argument concerns housing as an investment but I tend to like to think of it as more than that. Even if buying costs slightly more, I think you would find many people that would buy since it is creating a "home". I like the idea that I am creating a place for my children to grow up and won't be forced to move when the landlord wants. We bought a house with the idea that we will stay there for as long as we are in Calgary.



-- Buying "freezes" your price at the time of purchase and your only fluctuation is interest rates. Renting in an appreciating market means the liklihood of consistent increases. Note that Calgary has a steady increase in housing prices but that rents have kept pace due to the large influx of people every year . In fact, many people find that their monthly payments go DOWN when they buy a property similar to what they are renting. I do understand and appreciate that buying will be a DISadvantage if the housing market were to crash.

[kittenOFchaos]

Living at home with the folks is the cheapest option yet

[Flubber]

Originally posted by kittenOFchaos
Living at home with the folks is the cheapest option yet

But not recommended at age 36 with a wife and child

[Dinner]

Or at 28 without a wife and child. Think of how that would screw your sex life.

[kittenOFchaos]

Originally posted by Flubber


But not recommended at age 36 with a wife and child

You've never needed baby sitters before...and truth be told, neither have I

[Dis]

Originally posted by Oerdin
Or at 28 without a wife and child. Think of how that would screw your sex life.

though for some, it still doesn't help having your own place

[Flubber]

Originally posted by Dissident


though for some, it still doesn't help having your own place

get a place adjacent to a popular bar---