I'm sure a thousand people have asked this already

[MisterNY]

Here's the article he was referring to, as far as I know.

Most Troubled Real Estate Markets - Yahoo! Real Estate

[MisterNY]

Originally Posted by fauve

As far as buying versus renting, it comes down to what's best for you.

That's what it boils down to. You spoiled it. You should have saved it for last.

Originally Posted by fauve

For me putting the same money into a house generated more "equivalent" income than I would ever be able to generate in the stock market, and then I would also have to pay taxes on it. It would cost me about $2500 a month to rent the place Im in now and that same principal money invested would have only generated around fifteen hundred a month tops. After taxes, that would have shrunk to one thousand. Then, Id also have to worry the market could tank again. At least now I have a roof over our heads. If the housing market tanks some more, we still have a roof over our heads. If the stock market tanks, I risk losing what income I have, which would risk whatever I could rent for a thousand/month - a one bedroom which would be too small for our family of four anyway.

Yes and no. Looking at it from an investor's perspective, you have a point, but looking at it from someone who needs to save money, while putting a roof over their head, renting makes more sense these days. Let's look at some properties in SW Broward, for example.

For a 3/2/2cg, avg rents are about $1600-$1800/month + renter's insurance (optional). Versus the same house going for $250k, if you can find one at that price in good condition (not saying it's impossible).

Financing that house at 6%, you're looking at payments of $1498+ Insurance+ Property Taxes (Between $3.5k-$5k), then HOA fees (where I live, I pay 2 HOA fees; one for Chapel Trail, the other for the subdivision I live in, which includeds basic cable, pool usage etc) + other maintenance (cutting the lawn, rust removal and treatment, Scott's turf/lawn care, exterior pressure cleaning, and painting the house every 5-7 years, just to name a few), etc.
That goes well above the $1600-$1800/month rent costs. As a renter, you only pay your rent, and maintenance rests on the homeowner.

Originally Posted by fauve

If we need to move, I could still rent the place in the overheated rental market for more than Id make in the stock market and be able to live comfortably elsewhere. Everyone's situation is different. I do believe however that the housing market will jog around this level for many years and there is no rush to buy. I would suggest renting if you believe you will be moving shortly . Otherwise, there's no time too soon to begin paying for your house that you will need the equity from once you hit retirement. It comes along a lot quicker than you'd think and not having the expense of housing is essential unless you're very comfortable. Better safe than sorry.

I agree there on just about everything.

Originally Posted by fauve

Also, the inflation in housing rentals has far outweighed the inflation in housing prices. Just think - the housing sales market has returned to 2000 levels, but the rental market has continued to rise steeply. It just amazes me that a one bedroom goes for a thousand a month. With interest rates, the way they are, you can buy a townhouse for that monthly amount.

True, but the other costs associated with homeownership have skyrocketed as well. They have not adjusted to 2000 level, and won't either . (Insurance, constant HOA fee hikes, maintenance, etc). For what these things cost, renting makes sense in many cases.

In theory, most would rather be homeowners than renters, but in these tough times, for many, that theory can be put on hold.

[fauve]

Agreed. If interest rates start creeping up though, all bets are off.

[granitelady]

Fauve, You are SOOOOOO RIGHT!!!! Ditto

[Nolefan34]

Housing prices will continue to decline or remain low until demand meets supply. Supply is much greater than demand right now. Too many people continue to lose jobs or remain unemployed. That means they cannot buy so houses remain vacant. So for the short term, I do not see how housing prices can do anything but drop or remain low. At some point, the population will grow big enough to stimulate a demand for housing. At that point, the housing market will rebound.

As far as mortgage rates, you have no idea what they are going to do or when or IF they will go up. That is all hearsay from news networks. I do not trust anything that Forbes magazine says. They want you to invest your money so badly that they will say anything to get you to buy. Sounds like a scare tactic to me. It is like watching MSNBC 2 years ago when they were telling people to "buy now" when the stock market was plummeting. Of course they will tell you to buy now, because they wanted your money! They were losing money hand over fist and investors were jumping ship! They needed to scare people into buying stocks, so they used the old trick "you better buy now or you'll miss out!"