Posted on 08/31/2014 7:53:15 PM PDT by SeekAndFind
Between 1970 and 1990, the population of Philadelphia shrank by a quarter, dropping from 1.95 to 1.59 million. Like many American cities, it seemed caught in a downward spiral.
Since then – like many American cities – Philadelphia has stabilized. The population now appears to have bottomed out at the millennium, and has been regaining residents over the past decade. But as it rebounds, Philly is becoming a different kind of city.
In the two most recent decades, which comprise the bounce of the city’s population curve, owner-occupied housing dropped even more steeply than in the ’70s and ’80s. Between 2000 and 2012, the percentage of Philly houses and apartments inhabited by owners dropped from 59 to 52, the second-sharpest decline among big U.S. cities during that time.
Meanwhile, renter-occupied housing exploded. More units are rented today in Philadelphia than in 1970, despite 400,000 fewer residents. According to a report from Pew Charitable Trusts, the size of the Philadelphia rental stock has grown by 37,000 since the millennium — a gain of more than 10 percent.
Philadelphia is a concentrated case of a larger trend in American housing: We are increasingly renting instead of buying our homes. Rental household growth is rising at double the rate it has in previous decades. Developers are building more multi-family units than they have in years. Last month, the homeownership rate fell to a 19-year low, down to 64.7 percent from a peak of 69.2 percent in 2004.
(Excerpt) Read more at salon.com ...
Housing is expensive and comes with upkeep, utilities, taxes and maintainance.
Renting is stress-free and the difference is you pay a landlord to take care of all the things you don’t have time to do.
In our fast-paced and busy lifestyle world, that is very attractive.
this article is bs
Cities like Philadelphia have already cut property taxes to help longtime homeowners (who, by the way, stand to make a windfall off gentrification) stay put in their neighborhoods. But help for renters remains politically charged, in part because renting is still seen as a transitory stage — a life-step to be tolerated but not encouraged.
no one has cut my taxes ever. The only tax cuts here are for the rich. anyone buying a newly constructed 2,000+ square foot house with garage for $400,000+ gets a tax abatement for 10 years. My neighborhood has built hundreds of these houses in the last few years. none of the older houses sell because the yuppies buy the tax free ones and get a bigger house for the same mortgage. I’m waiting to see what happens when they try to sell. it will be a rude awakening at the realtors office. say bubble.
total bs article. and there are a lot of rental units in center city.
Massive rent increases to continue
The average annual increase of 3.9% is outpacing inflation and income growth. Will renters be priced out of many cities?
http://realestate.msn.com/massive-rent-increases-to-continue
Selling a home is difficult and the reality is you will never get back for you paid for it, even with appreciation.
With home ownership, the bank owns the place instead of a landlord and you pay the bank interest on a mortgage every month. Its a good deal if you have a family and need room for every one to spread out. Single people and childless couples are better off renting.
In some places, demand exceeds supply. Especially if every one wants to live close to good schools, parks, stores, restaurants, etc.
Desirable urban living comes at a price.
and, you left one out, more and more people are on part time jobs in the Obama/Pelosi/Jarrett/Reid economy ergo they cannot qualify for a loan and MUST rent!
I quit reading when I saw it was Salon!
Yup. Your name may be on the contract but the bank holds the loan.
If you default, it can legally sell “your” property to recoup the balance owed.
I remember reading a fascinating article during the depths of the recession a couple of years ago (in Forbes magazine, I think) about the link between underwater mortgages and the nation's unemployment rate. They estimated that the unemployment rate at the time could have been 0.5% to 0.8% lower, but there was huge number of unemployed people who were ready, willing and able to relocate for a new job ... but were stuck living in a home because they didn't have enough cash to buy their way out of an underwater mortgage.
Yawn. Once again the failures try to convince us that the steaming pile of poop they left for us is actually prime rib.
Owning a home is hardly a con game. I moved around in the military, but I lost $2K on one home and made $40K on another. Buy using a 15 year mortgage, and the interest costs are not bad at all.
Fools who buy using 30 year mortgages and who then move every 3-4 years are suckers, but home ownership is not. It is a financial decision, and buyers need to consider how likely they are to stay put, the cost of homes in the area vs the wages, etc.
If I had to sell right now, I’d probably make less than I put in (and I own my home outright). But if I sold now, it would be to move to a smaller house on more land farther from the city, so I’d be paying a lot less. In essence, money gives me the ability to swap homes and pocket the difference in values.
However, this house is building up a lot of memories of kids and grandkids, so we might stay. Those memories can disappear quickly when you rent - but then, there are fewer stable families today, too.
The mortgage itself is the heart of the problem. Most people never really buy a home at all ... they buy a mortgage. And there's nothing wrong with that, if they look at it as a purely financial decision and separate it from the idea of "home ownership."
In most metro areas people who "own" a home pay a steep premium to do it. There's an easy way to see how much of a premium they're paying just by doing a little research. Find a typical home that is up for sale in any given town and calculate the costs of "owning" it with no money down -- including insurance, repairs, etc. Then contact a realtor in that same town and see what an identical home would cost as a rental. There is usually an enormous difference between the two numbers, which tells me that the person who decides to "own" the home is getting shafted on that deal.
Too many people are buying houses they can’t afford. If someone is making a half a million or less year, they have no business buying a home that costs a million and a half. People owned their homes outright when they didn’t go into debt to buy a house they couldn’t pay for. Simple as that. If someone makes 40k a year, they have no business buying a house that costs 500k. The main problem is living grossly above your means.
I’d also point out that for many of the reasons you mentioned, home ownership is likely to end up limited to two types of people: those who are independently wealthy (and therefore don’t have the same anxieties about paying their housing costs as the rest of us), and those who are government employees (because they’re the last group of workers who are unlikely to get laid off and rarely get transferred to a place that would require them to sell the home).
Exactly. But the entire market is priced to encourage living beyond your means. That’s what makes it a con game, in my opinion.
Good point, but there are ways to avoid it. Just live in a nice middle class non-posh area and tell anyone in the family who has grand ideas of a lifestyle to go stuff it. I do wonder, what on holy earth is driving up prices.
1. Interest rates that remain at historically low levels.
2. A government -- and an entire financial system -- that recognizes the need to keep the housing bubble inflated because it's basically become a Ponzi scheme that's likely to collapse after the last cohort of people can sell their homes with enough equity to retire.
I rented most of my life. Owning is better!
Thanks; to me, you can buy a small house and build as you need it and avoid getting soaked in debt. Frankly put, this whole housing issue has contributed to the collapse of the economy.
You know, I really dislike how speculation has been seen as a legitimate means of making money. This isn’t supposed to be a form of a career and it’s only once or so a decade that there is every any kind of real estate boom. Half the over-development plaguing this country is due to endless speculation.
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