The following story says the trailing 15 year premium-to-buy for the San Francisco metro area is 296% but it was down to 233% in 3rd quarter 2009.
http://www.forbes.com/2010/01/21/buying-versus-renting-lifestyle-real-estate-homes.htmlThe local news stories are quoting and declaring it's time to buy, buy, buy! Crazy isn't it -- either rent for $1000/mo or own for $2333/mo. And $2333 sounds like a bargain to San Francisco residents because they have been used to $2960/mo.
But despite my cynical talk, I'm not immune to this crazy thinking either. I bought a foreclosure last year in South San Francisco as an investment property. My rental income is $1700/mo while my equivalent no-down total monthly expense is $2489/mo for a premium-to-buy of 142%. (Market rates were $1900/mo when I started looking but dropped to $1700/mo due to the economic downturn in the 2 months it took to close -- it would have been 131% at the original rental rate.)
The only thing I can offer in defense is I'm hedging against the possibility of the U.S. printing dollars like crazy to pay for trillions in bank bailouts. Plus my purchase price/income ratio was only 1.35 so it's a rather minor risk I'm taking.
(Filed in housing)
Housing is cheap...er...
Posted by Mossy
January 26, 2010 6:00 PM
http://www.forbes.com/2010/01/21/buying-versus-renting-lifestyle-real-estate-homes.html
But despite my cynical talk, I'm not immune to this crazy thinking either. I bought a foreclosure last year in South San Francisco as an investment property. My rental income is $1700/mo while my equivalent no-down total monthly expense is $2489/mo for a premium-to-buy of 142%. (Market rates were $1900/mo when I started looking but dropped to $1700/mo due to the economic downturn in the 2 months it took to close -- it would have been 131% at the original rental rate.)
The only thing I can offer in defense is I'm hedging against the possibility of the U.S. printing dollars like crazy to pay for trillions in bank bailouts. Plus my purchase price/income ratio was only 1.35 so it's a rather minor risk I'm taking.
(Filed in housing)
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