Cities are as expected
I have no problem with renters.
.
Houses are still way overvalued and have not given back the huge price spike at the beginning of Covid.
Ha! It’s much cheaper to buy then rent in the Salt Lake City area and has been for years.
In or around any metropolis area prices are ridiculous. I lived in Los Angeles. Home prices are $1 million+ for a shack or a condo, $2-$3 million for modest home, $4 million and up for a nice home if you want to buy. It’s up 30%-40% since Pandemic which only makes sense because taxpayers subsidized such inflation. In the suburbs, it can be a tad lower (like in the center of the San Fernando Valley) but not dramatically lower.
30 minutes north of L.A. you can buy a decent home for $700,000, or a very nice home for $1.5 million. A lot of them are newer - but not much land generally. Tract homes. But new or fairly new.
Now do the math on the property taxes. $20,000 per year for a $1.25 million house. $50,000 per year on a $4 million home. For people who are in their homes a long time and have a low cost basis (California has Proposition 13 which prevents property taxes from rising more than 2% per year from your cost basis, so if you bought a home in 1988 for $250,000 you are paying $4k a year in taxes, but if you sold it for $2 million the new owner will be paying $30,000 a year in taxes!). So if you own the home or even still paying a refinance on it at that low basis - you never have to sell. You can rent it out for $5k-$10k a month and retire on that income. It costs you one month’s rent to just rent it out.
I’ve got family who are leaving and going to Georgia and Tennessee. They have equity in their homes and lower cost basis to tax but they still can’t justify the property tax, raise 3 kids etc. I’ve got other family been in LA for decades, they have very low cost basis and property tax. The younger generation - it’s impossible to survive.
I am trying to convince the missus we should move to Kentucky. I used to live part time out there. I’ve seen online beautiful property we can buy, and lease space to move our business to would be 66% cheaper than what we are paying now.
The cities on the graph are nearly all in coastal states. Meaning people would be better moving elsewhere if they wanted to buy.
WOW! Comparing mortgages to rents is valid only if the value of your home falls to $0 after you purchase it!!!
All hugely effing dangerous places to live...
Apples to oranges.
Buying a home is an investment, renting is just permission to stay there temporarily.
Some areas are good places to invest, some are just plain losers. Buyer beware.
If it’s cheaper to buy a home rather than to rent, that means people expect the home will be worth less in the future. duh
What the common denominator here? Liberal, democrat cities.
How do those rental rates accrue equity and pay the renter a profit when it’s time to move on?
If you can’t afford a home, rent. Put your surplus funds in other investments if you wish. Anyone who calls for government policies to encourage subsidized single family homes or banning investors from buying said homes is essentially promoting conservative socialism.
Median Home Prices
Southern California
Existing Detached Homes by County, 1990-2023
http://www.laalmanac.com/economy/ec37.php
See the average home price. This are generally single story, no basement and small 1/4 acre lot with a wall around it.
You could buy 3 or more bigger better homes in other parts of the country!!