Depends on when/where you buy. Just pull up some listings on Redfin and look at the historical sale prices. Plenty of examples on there of people who bought at a peak and waited 10-20 years just to sell it for what they bought it for…or less. You can hope for inflation to dig you out, but it doesn’t seem like inflation is happening anytime soon with 12% unemployment, record national and state budget deficits and massive and accelerating currency destruction taking place due to foreclosures…then again, who knows? Maybe Big Ben and the boys from the Fed can pull us out. Seems like a lot of risk to me as it has for the last several years. There are definitely some people out there making money, but there are some sharks making money in Vegas too.

When you do this, home prices start to make more sense. Let’s assume that this house ultimately sells for $720k, it means that it makes more sense to keep renting at $2,750 UNLESS you can live there for longer than 3 years. Of course, this assumes that home prices will keep up with inflation (3% per year) which may not be the case. But even then, it just lengthens the time horizon for how long you have to live in a house before buying makes more sense than renting.

The x10 formula would put my Newport Coast, stunning ocean, catalina island, edge of hillside, city lights, canyon view 3700 sq ft, large lot jaw dropper home (that’s the reaction I get) at around 1.2M which is around $500k cheaper than the 2001 price. That would be quite amazing since the land alone would be nearly that and the cost of rebuilding the home is 1M+.

Those houses peaked around $1m and sell for about $800k now. Rent is around $3000. The rent/price ratio is higher now (was 200, now 266), but interest rates are lower too.

For sure, renting is better in the short term, particular considering realtor fees. But if you plan to stay for 10 years or more, buying can still work out. Certainly I wish I had the means to buy that house back in 1992.

Basically who wants us to believe this basically “sh**box” of a house is worth $700K is your representatives to congress… people such as Nancy and Barb and Henry, etc. They made millions (now offshored in hard currencies [they hope]) from the subprime mortgage companies by misrepresenting themselves to Californians by making you fine folks think they were working for you.

They weren’t.

This trash house (and I live near Boston where are really horrible 1950s style never updated cape of 1.5 baths and 1,100 sq ft is still selling for $400K) is only worth its rental value (same as here)… capped at 9% (Patrick will allow 6%) that is around $300K