Saw this TT post and wanted to share for those looking to buy a house (condo’s are a different story)…https://www.tiktok.com/t/ZTL9XoeVk/
This has always been the case in Bay area
Zoning and NIMBYs artificially inflating house prices
When has it not been? I just started looking into houses and have no idea of how things used to be. Someone please explain?
It may have been true that renting was always cheaper however the difference was much closer. Say 3k rent for something that will cost 5k in mortgage+ property tax. Now it is 5k vs 20k. Also, it was a shorter duration where the appreciation in home value and increase in rent would cause buying to be the better decision in the long run. Now, that duration is probably 20+ years To say it has always been cheaper to rent is true but misleading
Don’t let this prevent you from buying a house, house hack, and pay less than renting.
One thing that is so different is that INTEREST RATES ARE SO HIGH AND MAY STAY THIS WAY FOR A WHILE! In the past, if you had the $1.5M cash down payment, what else could you do with your cash that was low risk? The bank might pay you $1.1K a month in interest — might as well buy a house. But now if you had $1.5M cash in a money market account, you could get 5.4% and get paid $7k a month for the foreseeable future. Economists are now wondering whether 5%+ interest could be the new normal for a while. I still say people should buy but i have to admit getting paid $7K a month for that cash pile is a different calculation than $1.1K in interest.
Cannot agree more… people here almost never mention this, but opportunity cost for down payments is huge now
Yeah that’s what high interest rates mean