
It's better to rent than to buy in today's housing market - pseudolus
https://www.cnbc.com/2018/09/05/its-better-to-rent-than-to-buy-in-todays-housing-market.html
======
isostatic
If all you care about is increasing wealth, sure. If you care about a stable
home, no.

You can sign up for rent at $2k a month, get the kids into school etc, then a
year later the owner decides to sell, or increase the price by 50%, and you're
stuck trying to find somewhere else to live near the school, subjecting
yourself to the cost and stress of moving.

Moving across town every year when you're in your 20s is easy, rent a u-haul
and you're done in a weekend. Owning a house when you are changing jobs every
year or two like many people now is a ball-and-chain.

However later in life when you want stability, and want to stay in the same
home for a decade plus (average time in a given house in UK is 21 years),
owning is very beneficial. You only move when you want to move, the landlord
can't kick you out on a month's notice.

~~~
ikeyany
Although no one enjoys moving, it's not exactly common enough to factor in a
decision between renting vs owning. The bigger factor is not having to spend
any time doing maintenance or yard work. Those tasks can take up weekends or
entire weeks.

~~~
philwelch
I think a lot of that depends on whether you have kids. If you're single, or
even married, moving is a hassle, but so are yard work and maintenance. But
after you have kids, yard work and maintenance don't actually get any harder.
Moving does.

Yard work and maintenance can also be fulfilling, either in the sense of "this
is my home and I'm putting work into it to benefit my family", or in the sense
of, "riding lawnmowers around is a decently fun way to spend a couple hours
outdoors". Hell, I volunteered for that chore when I was a kid (and was old
enough to safely operate the lawnmower).

I kind of miss yard work now. At least some parts of it. Chainsaws are fun.

------
village-idiot
One of the things that I believe is that decent homes in established areas
shouldn’t change in price substantially, at least compared to inflation,
without major external events that adjust the desirability of said
city/neighborhood.

Watching home prices skyrocket in CA while the state’s population has leveled
off has me very concerned.

~~~
phendrenad2
What do you think is causing it?

~~~
fipple
The supply curve is ~0 due to homeowner capture of laws, so the price
elasticity is huge. Very basic stuff.

~~~
village-idiot
Can you explain more please?

~~~
fipple
Homeowners create laws that benefit them at the expense of non homeowners. The
two biggest are refusing to expand supply and Prop 13 (they enhance each
other’s effects which is why the California situation is the worst).

~~~
village-idiot
I’m familiar with both of those, prop 13 in particular has made a landed
gentry in my area with million dollar run down bungalows.

What I’m more interested in is this elasticity thing. Are you saying that the
effective 0 supply has unmoored the price and it can wander, or is it that 0
supply sends the price up into the stratosphere?

------
yardie
Full disclosure, I am a homeowner and while I agree with the overall message I
can also, fully say, it depends. We bought our apartment in a building where
75% of the residents are renters. We live in an Alpha- city [0] in a one of
the few affordable buildings you can still purchase in. Everything else is
luxury flats starting in the $500s with $1k+ building charges. For the last
year renters have paid less than us after PITI + building charges. This
changed in the summer and now the renters are paying more than we are in
housing.

The city we just moved from I would say is better to rent. Even our city I
would say is better to rent. But renting does not prevent buying. While
renting, put in the footwork and find something to buy. if you are buying to
rent be able to purchase 4 or more units.

I'm worried less about the missed investments than the rising cost of living
in major cities.

[0]
[https://en.wikipedia.org/wiki/Global_city](https://en.wikipedia.org/wiki/Global_city)

------
acconrad
That's a very broad statement. Owning vs renting is dependent entirely on the
local market. It hasn't been a good time to own in Detroit for a long time. It
hasn't been a good time to rent in San Francisco in a long time.

~~~
hashkb
It's a good time to own in SF. Spoken like a true 0.1%er.

~~~
jdmichal
It is a good time to own, assuming you bought like 5 years ago.

2013, average home was around $850k, with monthly PI payments around $3450 (30
years, 20% down, 4.5% rate). [0] Meanwhile, average rent around that time was
around $4000 for a two-bedroom. [1] Now, average rent is around $4500 while a
house is closer to $1300k or $5270 PI... Certainly does not look like buying
_now_ is a good idea at all.

Unless you expect rent to break that $5270 mark. But, considering that gap is
larger than the one seen in the past five years, with all the craziness that
has involved... Seems like a pretty risky bet to me.

[0] [https://sf.curbed.com/2018/4/5/17201888/san-francisco-
median...](https://sf.curbed.com/2018/4/5/17201888/san-francisco-median-home-
house-price-average-2018)

[1] [https://www.rentjungle.com/average-rent-in-san-francisco-
ren...](https://www.rentjungle.com/average-rent-in-san-francisco-rent-trends)

~~~
sjg007
$5270 seems possible. It's 2 techies in a nice two bedroom where a one bedroom
is $3-4k. You might get 4 people in there. I've noticed that 1 bedrooms
typically price at over half of the equivalent two bedroom rent.

~~~
jdmichal
But why would you pay $5270 for the priveledge of _owning_ the house, rather
than _renting_ it for $4500? Also keeping in mind, that number is only PI
(principal + interest). You still have all the nice incidentals of ownership
like insurance, property taxes, and maintenance that are _included_ in that
$4500 rental.

~~~
sjg007
Well, you could possibly rent out part of the house. Same as splitting an
apartment with a roommate. You would want a situation where your total cost is
less than $4500. You have the option of selling later at a higher price (it is
a risk though).

