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patientrenter
ParticipantIf home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.
As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.
It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.
ParticipantIf home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.
As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.
It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.
ParticipantIf home prices do correct a little bit closer to the underlying economic value, calculated as if there were no government aid such as mortgage interest deductions, nor government guarantees for mortgage investors, nor any of the dozens of programs designed to feed taxpayer money into housing, then buying makes a lot more sense than renting.
As long as you don’t buy near a peak, the limitless quantities of money that the government is willing to use to push home prices up will make it a better deal than renting. If you want a lot of water, put your bucket under the faucet, not the drip.
It’s only buyers who bought near this last incredible record-breaking price peak who are sure to lose compared to renters.
Participant[quote=EconProf]It always was the most ignorant advertising slogan ever.
For one month’s rent, the tenant got to sleep under a roof, hot water, flush toilets, several rooms, a kitchen, maybe a garage, and someone to call when something went wrong with any of the above. Considering the alternative to paying that month’s rent, this is a bargain.
As current events unfold, it will be apparent that the tenants are the lucky/smart ones.[/quote]I disagree, EconProf. For the many people who put very little of their own money into buying a house, and who got mortages with low initial payments, it was a wonderful deal. Some will have paid less than rent, others will have paid more but will still be ahead because they bought a few years ago at lower prices than today’s. Even those who paid more than rent, but who put down just a small downpayment, will have gotten a very low cost call option on house prices that didn’t pan out, but was definitely sold to them for less than its value at the time of purchase.
About the only home buyers who have any justification for complaining are those who bought recently and made very large downpayments. (Even there, the deal was no worse than for buyers of stock or any other asset, but I listen with more sympathy.)
Participant[quote=EconProf]It always was the most ignorant advertising slogan ever.
For one month’s rent, the tenant got to sleep under a roof, hot water, flush toilets, several rooms, a kitchen, maybe a garage, and someone to call when something went wrong with any of the above. Considering the alternative to paying that month’s rent, this is a bargain.
As current events unfold, it will be apparent that the tenants are the lucky/smart ones.[/quote]I disagree, EconProf. For the many people who put very little of their own money into buying a house, and who got mortages with low initial payments, it was a wonderful deal. Some will have paid less than rent, others will have paid more but will still be ahead because they bought a few years ago at lower prices than today’s. Even those who paid more than rent, but who put down just a small downpayment, will have gotten a very low cost call option on house prices that didn’t pan out, but was definitely sold to them for less than its value at the time of purchase.
About the only home buyers who have any justification for complaining are those who bought recently and made very large downpayments. (Even there, the deal was no worse than for buyers of stock or any other asset, but I listen with more sympathy.)
Participant[quote=EconProf]It always was the most ignorant advertising slogan ever.
For one month’s rent, the tenant got to sleep under a roof, hot water, flush toilets, several rooms, a kitchen, maybe a garage, and someone to call when something went wrong with any of the above. Considering the alternative to paying that month’s rent, this is a bargain.
As current events unfold, it will be apparent that the tenants are the lucky/smart ones.[/quote]I disagree, EconProf. For the many people who put very little of their own money into buying a house, and who got mortages with low initial payments, it was a wonderful deal. Some will have paid less than rent, others will have paid more but will still be ahead because they bought a few years ago at lower prices than today’s. Even those who paid more than rent, but who put down just a small downpayment, will have gotten a very low cost call option on house prices that didn’t pan out, but was definitely sold to them for less than its value at the time of purchase.
About the only home buyers who have any justification for complaining are those who bought recently and made very large downpayments. (Even there, the deal was no worse than for buyers of stock or any other asset, but I listen with more sympathy.)
Participant[quote=EconProf]It always was the most ignorant advertising slogan ever.
For one month’s rent, the tenant got to sleep under a roof, hot water, flush toilets, several rooms, a kitchen, maybe a garage, and someone to call when something went wrong with any of the above. Considering the alternative to paying that month’s rent, this is a bargain.
As current events unfold, it will be apparent that the tenants are the lucky/smart ones.[/quote]I disagree, EconProf. For the many people who put very little of their own money into buying a house, and who got mortages with low initial payments, it was a wonderful deal. Some will have paid less than rent, others will have paid more but will still be ahead because they bought a few years ago at lower prices than today’s. Even those who paid more than rent, but who put down just a small downpayment, will have gotten a very low cost call option on house prices that didn’t pan out, but was definitely sold to them for less than its value at the time of purchase.
About the only home buyers who have any justification for complaining are those who bought recently and made very large downpayments. (Even there, the deal was no worse than for buyers of stock or any other asset, but I listen with more sympathy.)
Participant[quote=EconProf]It always was the most ignorant advertising slogan ever.
For one month’s rent, the tenant got to sleep under a roof, hot water, flush toilets, several rooms, a kitchen, maybe a garage, and someone to call when something went wrong with any of the above. Considering the alternative to paying that month’s rent, this is a bargain.
As current events unfold, it will be apparent that the tenants are the lucky/smart ones.[/quote]I disagree, EconProf. For the many people who put very little of their own money into buying a house, and who got mortages with low initial payments, it was a wonderful deal. Some will have paid less than rent, others will have paid more but will still be ahead because they bought a few years ago at lower prices than today’s. Even those who paid more than rent, but who put down just a small downpayment, will have gotten a very low cost call option on house prices that didn’t pan out, but was definitely sold to them for less than its value at the time of purchase.
About the only home buyers who have any justification for complaining are those who bought recently and made very large downpayments. (Even there, the deal was no worse than for buyers of stock or any other asset, but I listen with more sympathy.)
ParticipantI think barnaby gave some good advice here. Give yourself an 18-month timeout from your movement to buy in Oz, or at least 12 months if you’re impatient.
I realize it’s hard to resist a lower price than you’re used to, but think also about the absolute price you’d be paying. If you can’t see it being likely that you would be able and happy to pay that much cash for the same home at some time in the next 10 years or so, then the price is probably still too high. Otherwise you’re relying on the “greater fool” theory or you’re planning to never retire or do many other things with your future earnings.
ParticipantI think barnaby gave some good advice here. Give yourself an 18-month timeout from your movement to buy in Oz, or at least 12 months if you’re impatient.
I realize it’s hard to resist a lower price than you’re used to, but think also about the absolute price you’d be paying. If you can’t see it being likely that you would be able and happy to pay that much cash for the same home at some time in the next 10 years or so, then the price is probably still too high. Otherwise you’re relying on the “greater fool” theory or you’re planning to never retire or do many other things with your future earnings.
ParticipantI think barnaby gave some good advice here. Give yourself an 18-month timeout from your movement to buy in Oz, or at least 12 months if you’re impatient.
I realize it’s hard to resist a lower price than you’re used to, but think also about the absolute price you’d be paying. If you can’t see it being likely that you would be able and happy to pay that much cash for the same home at some time in the next 10 years or so, then the price is probably still too high. Otherwise you’re relying on the “greater fool” theory or you’re planning to never retire or do many other things with your future earnings.
ParticipantI think barnaby gave some good advice here. Give yourself an 18-month timeout from your movement to buy in Oz, or at least 12 months if you’re impatient.
I realize it’s hard to resist a lower price than you’re used to, but think also about the absolute price you’d be paying. If you can’t see it being likely that you would be able and happy to pay that much cash for the same home at some time in the next 10 years or so, then the price is probably still too high. Otherwise you’re relying on the “greater fool” theory or you’re planning to never retire or do many other things with your future earnings.
ParticipantI think barnaby gave some good advice here. Give yourself an 18-month timeout from your movement to buy in Oz, or at least 12 months if you’re impatient.
I realize it’s hard to resist a lower price than you’re used to, but think also about the absolute price you’d be paying. If you can’t see it being likely that you would be able and happy to pay that much cash for the same home at some time in the next 10 years or so, then the price is probably still too high. Otherwise you’re relying on the “greater fool” theory or you’re planning to never retire or do many other things with your future earnings.
Participant4826, I don’t know any details about Aussie RE, but I have kept vaguely aware of its movements for the last 20-30 years.
My definite impression is that Australia went into a bubble every bit as inflated as So Cal, and maybe even more in some places.
If I were you, I’d look for a good long-term house price series for Australia, like our own Case-Shiller. After looking at it, and comparing to something like per-capita GDP, you’ll have a better idea where current Australian prices are in the up-and-down cycle, relative to the last 20-40 years.
Patience and logic!
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