[quote=HenryPP]I think you are leaving out several important costs from your purchase calculation.
For example, 4S has quite high Mello Roos (especially for north 4S). Unless you plan to pay that off early, you have to add that in (in addition to the HOA, which is reasonably low in 4S). Also, the various costs of home ownership.
I looked at 4S pretty extensively a couple of years ago (I work in one of the tech companies nearby and I like the area). I ended up buying elsewhere, but I might still buy in 4S in a couple of years (good schools, etc).
But I seriously doubt that I would be able to find such a deal on a purchase that it would be $1,000 less than renting.[/quote]
I actually plugged in a 1.5% tax rate so I already factored that “cost” in so to speak…Del Sur is a bit more expensive tax wise (maybe as much as 1.9%), but you don’t have to live there to make the numbers work I don’t think…HOA is $85/month I believe.
Again, people need to do the math and all that to see if it makes sense for them, but it’s easy to say the numbers don’t work just because of Mello Roos when the cost of the home is already factored in (lower for MR houses)…To me at least, the numbers don’t really lie and it seems like it’s not as bad as I read about where people think everything is a bubble.
Also, anyone who can buy an 800k place with a 20% down I assume, usually is 1 or 2 professionals pulling in close to MINIMUM 150k a year (this doesn’t sound like a lot IMO). That puts your tax rates at the marginal bracket at 28% – 33%. You factor in CA state at a massive 9.3% or more and you’re in the 37-42% bracket.
Without a large mortgage as a tax deduction, you’ll also get killed in income taxes so most buyers are able to deduct that huge amount. Add in property tax including the MR and you’re able to save a ton of dough compared to purely renting for that 3.5-4k price.
I don’t know if you are married or have kids, but I think people who buy to live tend to care less about it MUST being lower, but with guaranteed or controlled housing cost and your own place, I think people are willing to pay more if they like the area/schools, etc…
Just do your own numbers of course, but to me at least, the math isn’t that insane with rents at these levels IMO.
