[FoRK] Does this real estate boom remind you of the dot-com boom?

Damien Morton fork at bitfurnace.com
Tue May 17 16:28:34 PDT 2005


The economist had an article on this a while back.

They basically said that you could rent an $800,000 house in San Fran 
for $2000/mo, and that given that balance, and using average figures for 
rent/housing/wage appreciation, that youd come out $150K ahead after 8 
years of renting, compared to buying.

Now theres a good investment.

> Sateesh Narahari:
> 
>> 4. By historical measures (who knows what they are), the housing 
>> market is still way underpriced.
> 
> 
> The chief measure I know is the one that any investor
> makes: does the rent cover the taxes, mortgage, and
> upkeep, and provide enough positive cash flow on top
> of that to justify the initial investment? By that measure,
> it's hard to justify home values in many areas today. You
> might be able to get $1,200/month rent from a $300K
> home, which after taxes ($6K/year or more), upkeep,
> and other expenses, is pretty small gravy from such a
> large investment. Now, yeah, homes in nicer residential
> areas long have demanded a bit of a premium over
> their rent value. But when that premium keeps getting
> bigger and bigger, and not just for the nicest neighborhoods,
> but for any and all, real estate no longer looks like such
> a good investment.
> 
> Of course, for the new breed of investor, it's all about
> appreciation.
> 
> 
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