Posted on 05/27/2014 7:00:59 AM PDT by SeekAndFind
Billy Gasparino and Jenna Dillon-Gasparino were savvy enough to wait out the housing boom of a decade ago as renters. Not until 2010, well into the bust, did they buy a house in the Venice neighborhood of Los Angeles, less than a mile from the beach, for $810,000.
Only four years later, the couple see new signs of excess in the housing market and have decided to go back to renting. They are close to a deal to sell their house – for $1.35 million, a cool 67 percent gain.
“It just seems like the housing market came back so strongly, so fast, that maybe there’s a little bit of a bubble there,” said Mr. Gasparino, 37, an executive with the San Diego Padres.
Their decision reflects a new reality in many of the nation’s largest metropolitan areas. An analysis by The New York Times finds that in the country’s most expensive places, including New York, the San Francisco Bay Area and Los Angeles, buying a home again looks like a perilous investment, based on the relationship between their prices and rents or incomes. And in a longer list of areas, including Boston, Miami and Washington, prices have risen enough that buying is no longer the bargain it looked to be a few years ago.
(Excerpt) Read more at nytimes.com ...
The math didn’t used to be challenging. Its challenging because our society is poorer. In addition, demographic market forces and regulation have pushed prices through the roof. Its not a good sign and the NYT simply portraying it as a “choice” is disingenuous.
Yeah, it’s always better to give your money to someone else, than to build equity. /s
It is only changing if you view your house, first and foremost, as an investment.
If you view your house as a home, then renting isn’t even close to ownership.
Put forth as smart, savvy buying during the bust, yet the picture of the living room shows only a piano for little Jimmy. The Lab lying on the floor likely exhausted from starvation.
They are selling because they couldn’t afford it in the first place, can’t afford the taxes, and they are “close” to a sale netting them a 67% profit. My a$$.
Come see me when the deal is ‘done’ and they’ve paid all those transfer taxes from Obamacare (yes, it’s there), title change fees, seller costs, capital gains taxes, realtor fees, etc. and then tell me 67% profit.
Why would anyone want to be a renter in a free world? You can’t choose who your neighbors are, don’t control your financial situation for more than a year or two, and you can’t even take advantage of whatever tax breaks there are for homeowners any more.
This is just a NYT “it’s all good” article for Obama.
re: hey are close to a deal to sell their house – for $1.35 million, a cool 67 percent gain.
How much of that gain will they have to fork over in taxes when the IRS demands its cut?
For some people renting makes much more sense.
For some people buying makes much more sense.
RE: How much of that gain will they have to fork over in taxes when the IRS demands its cut?
I believe this rule is from the Clinton era and has not been changed — the first $500,000 of your profit from selling your own home is TAX FREE. Anything above that is taxable.
I bought a house here in So-Cal 2 years ago. Best decision I ever made. I will never rent again. And to me it’s not about what the value of the property is, it’s about the value of the HOME for my family.
Not trying to rain on anyone’s parade, but this article is akin to the NYTimes telling everyone how wonderful unemployment is by giving people more time to spend with their family and getting a chance to get to those long lost hobbies.
The Left, always shilling for destruction and calling it great.
“Yeah, it’s always better to give your money to someone else, than to build equity. /s”
I used to be in the same mindset. My view is rapidly changing. Here in PA the real estate taxes, particularly what the school districts extract, are crippling. I’m currently facing a $700 increase over last year which will result in over a $5K check just to the school district; the county and twp get over $2K on top of that.
So there is not such thing as owning a home in PA. You either pay rent to a private individual or pay rent to the school district & county.
Of course. And in this economy it is wise to be able to move around for work. Renting and buying depends on the situation for each person.
Landlords pass those same taxes onto renters.
re: I believe this rule is from the Clinton era and has not been changed — the first $500,000 of your profit from selling your own home is TAX FREE. Anything above that is taxable.
I don’t think that is correct. It has to be far less. The fact that people who short-sale their homes or whose homes are foreclosed on are still hit with taxes on the non-existent “profit” they make tells me otherwise.
Agent commission alone would be approximately $80,000.
I noticed too...a VERY empty room. Something doesn’t add up in their lives.
And if your neighbor sells his home to a jerk?
And stop paying them and see how long yo own your home...
There's nothing wrong with renting. Human's base need for shelter overrides equity.
500,000 tax free for married filers, thought there may be a 3.8% Obamacare tax.
Yes, there’s more here that the NYT won’t divulge. That’s not the point of the story. Good economy, rebounding housing market. NYT was just too stupid to even pick a good case for it.
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