[quote=BGinRB]I don’t know the area. I am looking at the numbers only. $2.2K rent for $285K place is not sustainable. Some piece of data is missing.
A renter with $10K down can get an FHA loan and pay $1.5K/month. With taxes, insurance, PMI, maintenance it is still likely cheaper to buy than to rent.
I suppose you could rent to people who cannot qualify for FHA, like day laborers, but the balance cannot depend on that.
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I think that was kind of the point. You know you’re in “overshoot” territory once you start seeing houses that would cost less to buy than they would to rent on a month over month basis.
This happened in pretty much every housing boom/bust – for example, in the last one, from somewhere around mid 1996 to late 1997 it was cheaper to buy.
It’s no guarantee that prices will not continue to fall, but it is reasonable to assume that once we cross that point, that the bottom is not too far off – as investors will make certain of that.
