You are leaving out a few other inputs that I would include.
Taking CA as an example we all know that the state and cities are having some serious issues with funding. Are you sure that the state/city won’t raise property taxes to help make up the shortfall in the next few years? How would that effect your rent vs buy calculation.
Or what if they decide to raise income tax. If I am a renter I have the flexibility to downsize very easily to reduce my costs to weather the storm. What if the buyer has a job loss in the next couple of years? As a renter I have the flexibility to relocate to find another job.
I know most people out there believe this will be short and shallow, but if this turns out to be worse then that, holding off and not buying in the next couple years will insure you don’t set yourself up for pain. This housing correction will not be a V shaped bottom. We will bounce on the bottom for many months. It isn’t going to be hard to wait and buy within a few percent of the bottom. Be patient and protect your wealth from being put at risk.
