4 ms·
The housing boom of the last few decades is a 'very specific unusual market condition'. Is it realistic for housing prices to keep rising at their current rate?
by andreilys 7y ago
The housing boom of the last few decades is a 'very specific unusual market condition'. Is it realistic for housing prices to keep rising at their current rate?
Also in your cost calculation did you include the rate of return you would've made of your principal by putting it into equities? I imagine if you bought in 2006 and held you would be very happy right now.
- Spooky23 7y agoI'm talking about living in a stupid place, like in the 75 mile radius from San Francisco as an unusual market condition. From a cash flow perspective, I'm spending about $20k in housing related costs annually. Given that it was 2006, I did a 15 year 105% ltv fixed mortgage. Renting, I would have saved a few bucks for a few years. Right now, renting a 3 bedroom in a neighborhood acceptable to me would add about $750/mo in costs. Total cash in hand with market returns would be around $10k. Meanwhile, the house will be free and clear in a few years. When we move in 5-7 years, we'll be recovering the original equity, plus capital gains, which will likely be in the $50-150k range depending on the market timing. If the choice was between have near zero housing costs and living on property my family owns or buying a house as an investment, I would agree you that the market is a lower cost, likely higher return investment. Unfortunately, I don't have that choice!