So every now and then I get this bug to buy a condo. And so I e-mail my friend Stefan (and my friend Matt), and they spam me with news stories and analysis and commentary on why the real estate market is total shit right now and why it would be a horrible waste of my money to buy. Even though there's this cool LEED-certified building going up a block away called Arterra. :( [Guess I'll be waiting on that one.]
The basic argument is simple. Housing prices are dropping. So if I buy, not only am I carrying 6%+ on my mortgage, but I'm losing 10% on the value of the house. So that's a 16% loss on my money, vs. ~10% if I were to invest in the stock market. Since the costs of buying (property tax, mortgage interest, etc) exceed the cost of rent, it's completely a net losing prospect.
And then Stefan forwards me this article, which states that the existing home sales aren't down just 9%, as reported by the National Association of Realtors. Oh no, it's down 22%!!!! And California's home sales are down not 24%, but 37%!!!! Holy crap. So yeah, prices will continue to plummet as long as this trend continues, until the supply and demand curves reach their new equilibrium point. When will that be? I dunno... but if Stefan figures it out he's promised to tell me, and I'll tell all of you. But not till after I close on my green apartment. =D
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment