Hey Cashman, I have an exact opposite experience than you do. I sold my house in 2006 (December) for 2M. I sold for just over what I paid for it 2 years before. My neighbors told me I was nuts to dump it for less than 2.25, but I wasn’t going to jerk around letting people come see my house for a year while it got worse and worse to sell a home.
Here it is 10 months later. The home I am renting is pretty expensive (over 6,500), but it includes gardening, pool maint, and of course all repairs, etc. You may think I’m crazy for spending this kind of money, but the carrying charges (including lost interest on the part not financed, the water, electricity, etc.) were probably about 14K per month. That coupled with the future loss of asset value, made it a no brainer to move. We also had a reason to move, I wanted to be closer to my kids school to avoid an almost 1 hour commute.
This house has built in speakers, a pool, a casita (I just moved my office in there and am saving 1600 / month on office rent for a really nice workspace), and a tiki bar (outdoor entertaining). The location is awesome and the best part is that I am paying 6,700 for a house that is worth 2.6 Million – if they could sell!!! (They can’t at that price). Do you know what 2.6 Million costs to carry? Plus the 100K+ that the house is currently losing in value right now? I am the HAPPIEST GUY ON the planet!
Your problem is that you are renting a piece of crap. As a previous poster said, you are renting a sub 1M property in an urban, major market. What do you expect? My cousins are in real estate (Malibu) and rent places to people for 10-75K PER MONTH! You get what you pay for, but since it is California and we have hit the top of the market, you are getting a severely better deal by renting.
My house is 3,600 feet, has a pool, balconys looking at the ocean, stereos, ect, all remodeled, brand new kitchen with 40 feet of granite counter space, and most importantly, I don’t own it!
My last comment is – whats the deal with your landlord showing the house? Something is fishy. There were a bunch of landlords who couldn’t sell their homes, so they would rent them and leave them on the market (secretly). I stood very clear of those deals. I took a 1 year lease, with a second year option at the same rent. My landlord can’t come over (other than by himself if he needed to see that the place was being taken care of), and he certainly can’t show the property (until 2 months before I give notice)! That is a standard clause in the lease.
It sounds like you haven’t really considered your living arrangements, I am paying a lot of rent, but basically am (even after subtracting the tax benefit I would have had for owning) way ahead 4-5K per month. Now if I felt that the market was going to be soft, but then go gangbusters again, I would be foolish, but only a mad man would think that we are going to have a quick recovery. I think that 5 years from now this place will be sub 2M (or possibly much lower – mid 1.6M if we have a brutal recession), and I wouldn’t mind saving a MILLION dollars over 5 years and buy it then… Meanwhile – don’t be stingy on rent, you are getting double or triple your money back in not losing equity – like your poor landlord!!!!
Just my opinion…. Chilling out in style in La Jolla with all my money in the bank!!!
