Terrific chart porn from Trulia on the question of whether its cheaper to Buy vs Rent. The answer, like so much in RE, is it depends upon the location:
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click for interactive graphic
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
I was surprised by this chart. But then I considered that you got it from Trulia.
By it’s own description “Trulia is also a tool for real estate professionals to market their listings, view real estate data and promote their services.”
Therefore, it is funded by the industry that sells homes to people. I thought the conflict of interest of the ratings agencies, and the horric results, had taught us all a lesson about accepting investing information from people with a conflict of interest.
Do any of us really believe that only NYC and a small piece of Texas are the only bad places to invest in the country? I mean, really? Chuckle, chuckle. That one doesn’t even pass the smile test.
Even if the chart were reliable, the suggestion that owning might be a better deal at this one point in time says nothing about whether you should jump into a 20 year investment. I would think twice about buying anything right now, and then jettison the idea completely.
Jesse Livermore said prices are never too high to buy, or too low to sell. Having lost millions failing to do so, he also had quite a bit to say about waiting for price confirmation before shorting or picking up bargains. The real estate industry is showing no indication of improving. Where’s our confirmation of a bottom?
Potential buyers know interest rates are going nowhere until the Fed runs out of room with the dollar and the other fiat currencies force Bernanke to make a move and raise rates. Why pick up bargains when you can sit on your hands and get a better deal later? All the risk is to the downside.
When looking at charts, I often start with the basics: “does it make sense?” The “Dallas” blot appears to be directly over St. Louis.
Fail.
Also, does anyone else see the irony in the data being reported in what appear to be bubbles?
Yes, I can buy a house for under $100k in Phoenix… but I wouldn’t want to live there. Didn’t we learn a lesson recently about treating real estate as purely an investment? I know I’m better off paying more renting a house I’m happy to come home to at night in a neighborhood that I enjoy than buying a $75k foreclosure in the ghost-town exurbia.
$200K for a house in San Jose? Hah. And “Probably better to buy” in San Francisco right now? Who are these people?
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