You know, I get a kick out of the real estate news lately. “Expert” after “expert” comes along to pontificate on the future of the real estate market (even yours truly has taken a stab or two recently) each with his or her own reasons why what they’re promoting is “the truth.”
Last week I reported on a new brochure by the National Assn. of Realtors which states that renting is seven times more expensive than buying. We talked about the smoke and mirrors they used to make their point. Today in USA Today, Noelle knox quotes a study by Marcus and Millichap which indicates that the median mortgage in the good ol’ USA is $1,687 — nearly double the median rent which is $868. They say the price in the major cities is even more out of whack. I have to admit I’d like to see what our “seven times more expensive” friends would say to that.
Like I said last time. This is a cash issue. If I could buy for $2,000 or rent for $1,000, I’d have to give serious thought to renting (especially if I didn’t have the $2,000.)
I would have to say that I believe the disparity between mortagage payments and rent payments will decrease as the real estate bubble deflates and the market right sizes itself. The article in USA Today also states that rents in San Francisco have gone up substantially in the last two months (narrowing the gap.) While I’m not suggesting (and never would) that you run right out, sell your house and begin renting, it’s not hard for me to see why some people in some markets are doing so.
Again, your crystal ball is as shiny as anyone else’s. What does yours tell you about what’s happening now, and what will happen in the future. Post a comment and let us know.
If you would like to read the whole text of the USA Today story, it can be found here:
USA Today: For some, renting makes more sense
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