5 ms·

No? In San Francisco median rent is much lower than equivalent monthly cost would be on median home. You are correct that rent includes all the costs plus mar

No? In San Francisco median rent is much lower than equivalent monthly cost would be on median home. You are correct that rent includes all the costs plus markup. But a big factor is that housing costs (esp in california) remain pretty steady once you buy. So that rent does include the housing cost...from 10, 20, x years ago. Alternatively a developer builds a building and rents out the unit instead of marking up and selling units. So the cost isn’t as high as market price. An example: I recently rented a 1 bedroom in a desirable neighborhood for $3500 per month. Equivalent condos are over $1m dollars in that area. But it certainly didn’t cost the developer of my building $1m to build my unit.

gambiting 7y ago
Isn't SF an outlier in literally every financial question though? I'm currently in the process of buying a house in the UK and our mortgage payments are going to be a lot less than we were paying for rent in the same area. Like, 40% less. If you have any kind of stability and are not planning to move in 2-3 years it's crazy not to buy.
- oarsinsync 7y ago
  London's also a bit of an odd one in that regard. You either need half a million+ for a shoebox or to live way out of town, and run the risk that the foreign-investment-fueled housing bubble collapses off the back of Brexit, leaving you with more mortgage than equity. (This is why I'm still renting...)
  - TeMPOraL 7y ago
    At this point one has to wonder, who's making money off Brexit situation still being unresolved...
    - Veen 7y ago
      People like me who live in the UK but work remotely for US companies benefit from a weak pound. But I don't think people like me are pulling the strings: it's just a political mess.
    - pjc50 7y ago
      You could work backwards by looking at how the "Brexit party" managed to split and regenerate from UKIP to run a campaign across all the Euro election seats in a matter of months. Where did that come from? They claim to have raised ""£750,000 in donations online, all in small sums of less than £500" in their first ten days"; given that Farage is currently under investigation for his funding https://www.theguardian.com/politics/2019/may/21/eu-investigate-nigel-farage-failure-declare-expenses-arron-banks https://www.theguardian.com/politics/2019/may/21/eu-investig... , it might be worth considering alternative explanations.
    - foldr 7y ago
      The current situation is perfectly comprehensible without recourse to conspiracy theories. Brexit hasn't happened because there is no Parliamentary majority for any specific form of Brexit. Meanwhile, one of the main architects of Brexit doesn't appear to be too worried about the financial implications: https://www.theguardian.com/politics/2019/may/29/matt-hancock-lays-into-boris-johnson-over-brexit-business-f-word-tirade https://www.theguardian.com/politics/2019/may/29/matt-hancoc...
- gabrielhoch 7y ago
  London is similar to SF, as an example I rent a relatively nice 2-bed flat for £1850/m, but after looking at what it would cost me to buy my mortgage would be at least in the region of £2500 + the maintenance fee from the building + repairs which I don't have to pay for as a renter. This pattern is really common in high cost of living cities.
  - flukus 7y ago
    > London is similar to SF, as an example I rent a relatively nice 2-bed flat for £1850/m But what will the price be in 10 years? The mortgage will go down, especially if you pay above minimum repayments, your wages will go up (theoretically) helping you make those payments. The mortgage price will go down, bottoming out at $0 while the rent will always increase.
- consp 7y ago
  It's about the same here (Netherlands, excluding Amsterdam). Rent is about 30-50% more than mortgage payments before taxes and after taxes it's even cheaper (due to weird rules giving tax breaks to home owners). You definitely pay a premium. note: Amsterdam an outlier like SF.

gambiting 7y ago

Isn't SF an outlier in literally every financial question though? I'm currently in the process of buying a house in the UK and our mortgage payments are going to be a lot less than we were paying for rent in the same area. Like, 40% less. If you have any kind of stability and are not planning to move in 2-3 years it's crazy not to buy.

oarsinsync 7y ago
London's also a bit of an odd one in that regard. You either need half a million+ for a shoebox or to live way out of town, and run the risk that the foreign-investment-fueled housing bubble collapses off the back of Brexit, leaving you with more mortgage than equity. (This is why I'm still renting...)
- TeMPOraL 7y ago
  At this point one has to wonder, who's making money off Brexit situation still being unresolved...
  - Veen 7y ago
    People like me who live in the UK but work remotely for US companies benefit from a weak pound. But I don't think people like me are pulling the strings: it's just a political mess.
  - pjc50 7y ago
    You could work backwards by looking at how the "Brexit party" managed to split and regenerate from UKIP to run a campaign across all the Euro election seats in a matter of months. Where did that come from? They claim to have raised ""£750,000 in donations online, all in small sums of less than £500" in their first ten days"; given that Farage is currently under investigation for his funding https://www.theguardian.com/politics/2019/may/21/eu-investigate-nigel-farage-failure-declare-expenses-arron-banks https://www.theguardian.com/politics/2019/may/21/eu-investig... , it might be worth considering alternative explanations.
  - foldr 7y ago
    The current situation is perfectly comprehensible without recourse to conspiracy theories. Brexit hasn't happened because there is no Parliamentary majority for any specific form of Brexit. Meanwhile, one of the main architects of Brexit doesn't appear to be too worried about the financial implications: https://www.theguardian.com/politics/2019/may/29/matt-hancock-lays-into-boris-johnson-over-brexit-business-f-word-tirade https://www.theguardian.com/politics/2019/may/29/matt-hancoc...
gabrielhoch 7y ago
London is similar to SF, as an example I rent a relatively nice 2-bed flat for £1850/m, but after looking at what it would cost me to buy my mortgage would be at least in the region of £2500 + the maintenance fee from the building + repairs which I don't have to pay for as a renter. This pattern is really common in high cost of living cities.
- flukus 7y ago
  > London is similar to SF, as an example I rent a relatively nice 2-bed flat for £1850/m But what will the price be in 10 years? The mortgage will go down, especially if you pay above minimum repayments, your wages will go up (theoretically) helping you make those payments. The mortgage price will go down, bottoming out at $0 while the rent will always increase.
consp 7y ago
It's about the same here (Netherlands, excluding Amsterdam). Rent is about 30-50% more than mortgage payments before taxes and after taxes it's even cheaper (due to weird rules giving tax breaks to home owners). You definitely pay a premium. note: Amsterdam an outlier like SF.