I bring up pt. loma because that is one of my favorite neighborhoods. It would probably sell for a smoking deal of 500k. By that math you would have to own for 20 years before it was better financially speaking to buy. That is assuming of course your rent goes up 3% annually and home appreciation goes up 1%. But if you think home prices are going down and going down for a while then it is even worse. I haven’t even mentioned maintenance. In todays market it may make sense to buy in a select few markets especially in a select few markets that have gotten killed. But in an area like pt. loma it makes no sense at all.
Let me say this another way. If it is cheaper to rent the home than rent the money (interest) to buy the home, you will ALWAYS loose by buying. Unless of course you think the boom years are back and homes are zooming up.
Surely a house like that would go for at least 1.3 mil…But that would put your buy is better period at never even assuming 3% appreciation.
So maybe in temecula (actually probably in temecula) it is better to buy. But in the coastal established neighborhoods, I don’t see how this is possible. Rent is just so cheap compared to home prices. Renting the home is cheaper and without all the terms that renting money to buy a home holds.
One other note. If you have tons of equity there are probably safer better producing asset classes than coastal real estate. In which case it is still cheaper to rent than pay the opportunity cost of tying up that money in a risky non-performing asset. Again this is just my opinion and that is from the perspective of today. Tomorrow is a whole other day.
BTW I would love to see some counter examples from NCC. Especially Pt. Loma to Luecadia (oceanside mine as well be on the moon) if you got em I would love to see em.
note: here is the calculator you have all seen that I used.
