First I consider renting equivalent to owning only now, when houses are at 2x their actual value. I will buy a house when prices correct, and then owning will once again be preferable.
It doesn’t make sense that you say a house is worth much more than a rental. A house must have an intrinsic value, which is the rent-equivalent. You can add 1% or so for the benefit of homeownership, but not 200% or whatever markup you are using. Be honest – your occupation as realtor is causing some blinding to the facts.
I think it sounds rude that you scoff at those who are not in the 28% tax bracket, as being in a “very low tax bracket”, i.e. not as rich as you? My husband earns over 6 figures, but due to deductions, our marginal rate last year was 15% federal. So the tax benefits of homeownership are not as you claim. In our case, the interest deduction is cancelled by not having to pay property taxes. Another thing: with interest rates at record lows, the interest deduction has lost so much of its value. I’m surprised this hasn’t served to reduce housing prices!
Last, where did you get the idea that most homeowners in San Diego are in the 37% tax bracket? Do you even know what the median income is in San Diego? My guess is that less than 20% of San Diegans are in any tax bracket over 28%.
Finally, housing prices have softened 5% – 10% already. And we haven’t even had the bulk of ARMs adjust yet. If we keep going at that same rate of price reduction, we’re in for a 15-20% price drop by the end of 2006.
Geez, I go out for the evening, and I come back to find all this silliness 🙂
Well, I do enjoy the debate sdr. Please don’t feel like you have to defend yourself. You’re in a valid honorable profession, which you can conduct with dignity. You can adapt to the changing market. Just accept the market is taking a nosedive, and adapt. You will be more successful for your openmindedness.
