i was always raised believing that a house is the “best investment” and that renting is “throwing money away” or that you’re “just paying the mortgage for the landlord who is getting rich off of the renter”….
when you look at today’s prices however, you have to adjust your thinking.
when i talk to neighbors who tell me they have 10 year interest only loans…I think “you aren’t a homeowner” you are a renter just like me, only you rent with additional costs like HOAs and propety taxes. Plus I can pick up and leave if i want..and you have to pay a realtor 6% to sell your house…
in most so cal markets, I bet it is substantially cheaper to rent. the excess money you save can be spent on toys and increase your lifestyle…or you can do the smarter thing and save/invest it…and effetively live in that same nice house, with a smaller monthly payment, and have a diverse investment portfolio…
there will come a time to buy houses….when the cost to buy is similar to the cost to rent..and the tax benefits start to make buying more attractive than renting..but right now, buying is just stupid.
i’m no expert…but it sure souns like 2007 is going to be another eyar of price drops…if rates hold steady, the peole who can/do buy will get even more for their money in the future.
i figure the only way you can get screwed…is if prices were to only fall a small amount, but interest rates skyrocketed…… but if that happened..wouldn’t prices fall even more… i mean at some point…houses can only sell for what people can afford to pay…and what peole can afford to pay is basd on their incomes.