[quote=Diego Mamani]Rents for SFHs are falling in my area, which is close to the L.A./Ventura county line. Something to keep in mind!! A house the pencils out as a “buy” based on a rent vs. buy calculation today, may end up being a lousy deal if rents drop appreciably in the next couple of years.
I have to admit that the 3B apartment is a clever proxy for areas where the SFH rental market is too thin to ascertain a market value. Of course, whatever the market 3B-apt rents are, you have to inflate them by some factor. The reason for this is that a 4B or 5B detached house with a nice yard in a quiet neighborhood is much more valuable to me, and possibly to you too, than a 3B apartment.[/quote]
Gosh, if the rents drop further, can you imagine what would the drop in the home prices have to be, in order to really have people jumping back into buying?! TG got a good back-of-the-envelope calculation in my case, and it was $450K at 5.5% vs. rent at $2500 – and that is a 20% drop from the current prices…Lower the rent more and you will get 400K or less…OUCH! Unless they really make the 30yr FMR 3% or something really outrageous, it will be ugly, really ugly!
Scarlett
Yep, a 4 BR detached home w/ yard is probably worth at least 10-15% more than a 3BR apt., perhaps even 20%….
