Is there a more serious housing market crash looming?
Friday, January 22nd, 2010 at
7:03 pm
I was looking at a graph on zillow showing how much property values have risen over the last 10 years. It has been ridiculous how high some housing price have risen over the years in my area (Eastern PA). I see alot of areas where prices are crashing but this areas as well many others seems to not have really readjusted.
I pay 700 to rent a 2 bedroom apartment. It would cost me 1300 to buy a similar condo. 2000 to buy a descent house in this area. I honestly cant see how people can afford it.
I have heard people deluding themselves with tax savings, but you are only save so much in taxes plus when you factor in the 2000-4000 property tax in this area as well insurance, It is ghastly what it costs.
I know more and more people are opting to rent rather than buy.
I am 33 and make about 50K per year so I could afford a place but I would be house rich, cash poor like so many others.
Repossession
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Filed under: property crash
I know more and more people are opting to rent rather than buy.
You do realize that landlords are not renting at a loss. I’ve never understood why people say they would rather rent a house than buy one when they can buy it cheaper than renting it. But, that only really applies to houses as in most areas you can’t rent/buy a house for cheaper than apartment rent. I’m still to this day amazed at the number of people who rent houses because they think they can’t afford to buy one. Trust me, the landlord is not renting to someone at a loss.
But, yes, I see the housing market dropping quit a bit in the future, even in areas that have not seen much of a hit yet. It will eventually trickle over the entire US. But, that’s ok, that’s one more house I can buy up and then rent out at a profit. Folks have to live somewhere.
You pose an interesting question. There has been recent research that indicates investment in the stock market is better than owning a house. Money invested in the market over a 30 year period will return more than the appreciation of real estate (including the tax benefits). Try a google search for some of the research.
My own thought is that when the baby boomers start to retire and move to smaller homes or rent in retirement villages then housing prices for more expensive homes will fall even more.