A real estate agent would never tell you this

[Valuist]

Great article on the housing market. Despite what agents say, sometimes you just have to say nope.

http://patrick.net/housing/crash.html

[iceknight]

Great article on the housing market. Despite what agents say, sometimes you just have to say nope.

http://patrick.net/housing/crash.html:ThmbUp:

[plainolebill]

Great article, the rent/own calculations are slick. Thanks for posting it.

[reckless]

A generally OK article but flawed when using a financial calculator to determine what's better, owning or renting a house.

The author did not mention, much less factor in the thesis, the importance of the cost of local school taxes.

As state and local budgets (with corresponding increasing and unfettered spending) explode in many municipalities, there are actual risks in buying a home with the real probability of annual growing of property and school tax burdens.

[delayjf]

Here in CA, newer or developing communities will often have a Mella-Roos or community tax. My wife's daughter pays @400 a month in Mella-Roos, which I understand goes to the schools, which is fine for them as they have three small children who will be using those schools. I, on the other hand do not have small children, and therefore would not live in that community for that reason alone.

[Dave Schwartz]

First, I loved the article. Saying that we should live in a house that was equivalent to 3x annual income but most people are at 6x is excellent.

The author did not mention, much less factor in the thesis, the importance of the cost of local school taxes.

As state and local budgets (with corresponding increasing and unfettered spending) explode in many municipalities, there are actual risks in buying a home with the real probability of annual growing of property and school tax burdens.

You make very good points. :ThmbUp: :ThmbUp:

Some years back we were looking for a house in Saratoga. LOL - We found an unbelievable house for the money. Believe it or not, 8,700 sq feet + a 5,500 sq ft basement (completely finished). I had dreams of taking the downstairs and partitioning it into 8-10 sleeping cubicles for all my friends to visit during racing season.

Pool and pool house, beautiful amenities. just a killer value.

Zillo listing (http://www.zillow.com/homedetails/18-Summerfield-Ln-Saratoga-Springs-NY-12866/32406966_zpid/)

The cost of this house (at the time) was only $800k. WHY SO CHEAP? Saratoga is almost entirely Victorian style homes. They call this house "the Miami Vice House." It is the laughing stock of the neighborhood. LOL - It looked like a drug dealer named Scarface should live there.

... but it is a beautiful house.

We do not fit in a home like this. Beth (logically) hated the house. But the price made all the others we looked at pale by comparison. Like 3,400 sq ft for $1.3m, which was the closest thing we found (and out of our price range).

Back in August the real estate agent wrote to me saying that the house was back on the market for $900k.


The point: The property taxes were over $2k per MONTH! (Correction: $1k)

So, you purchase a house for $800k and the first 1.5% goes to taxes! How does the house ever appreciate?

[delayjf]

Not to mention the NY state income tax that goes along with the move from NV to NY.

[onefast99]

Owning is a much better proposition for anyone why? You still get your mortgage interest deduction each and every year and for many that keeps you in a better tax bracket.
The article seemed to be more about the high price of homes rather than the rental vs owning comparison. I wonder where patrick was when homes doubled and tripled in value, probably renting!

[lamboguy]

Owning is a much better proposition for anyone why? You still get your mortgage interest deduction each and every year and for many that keeps you in a better tax bracket.
The article seemed to be more about the high price of homes rather than the rental vs owning comparison. I wonder where patrick was when homes doubled and tripled in value, probably renting!
there is a good chance that if and when the republican's get the presidency they are going to do away the mortgage interest deductions.

http://www.investmentnews.com/article/20120821/FREE/120829982/shaky-platform-gop-wont-protect-mortgage-tax-deduction

[TJDave]

there is a good chance that if and when the republican's get the presidency they are going to do away the mortgage interest deductions.


If voters ever believed this republicans would never win the presidency.

[Overlay]

I think that many people too easily decide to buy far more house than they actually need. (Of course, living in an area where prices are hyper-inflated doesn't help, either.) After I retired in Alabama in 2013, my wife wanted to move to be close to at least one of our kids (who live in Ada, Oklahoma, and Cambridge, Massachusetts). Guess which one we chose. :)

[ReplayRandall]

If anyone is thinking of buying Real Estate for investment/flip purposes, I highly recommend you buy only ranch format homes. The huge Baby-Boomer population is looking to downsize, they definitely don't want to climb stairs in their golden years. BTW, if you can get a deal on a cul-de-sac lot, grab it, as they are the quickest and most desired properties......

[Valuist]

Owning is a much better proposition for anyone why? You still get your mortgage interest deduction each and every year and for many that keeps you in a better tax bracket.
The article seemed to be more about the high price of homes rather than the rental vs owning comparison. I wonder where patrick was when homes doubled and tripled in value, probably renting!

The only problem is one has to itemize. Apparently nearly half the homeowners don't itemize, and aren't able to take advantage of it.

http://www.fool.com/investing/general/2014/05/06/two-overrated-rebuttals-for-why-housing-is-a-good.aspx