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In Chicago, for the past 2 decades, you are better renting than buying. But I think Chicago is relatively unique among the major metro areas in this country. Even the Southern states and Texas, you would be better off buying.
If you were in the Seattle burbs especially one of the more middle class ones, your house would have tripled in those 15 years. Anyone who sold in Seattle at any time the past 15 years to rent would be kicking themselves.
I think my worry about Chicago is it's homes don't seem to appreciate much compared to other markets?
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Originally Posted by TheTimidBlueBars
The ordering of the West Coast metros surprises me. I would have thought the intense protests, graffiti, trash, and homelessness would be slowing down Portland's growth, but it's the highest of any of them. Maybe the kinds of people who care about that tend to be homeowners.
Meanwhile, it's disappointing that Seattle is still the second-highest despite all the construction, around the new/upcoming Link stations and elsewhere. Even famously NIMBY SF has lower rent growth than we do. Though maybe the migration of tech workers out of the Bay Area (some of them to Seattle, where there's still a tech scene but for a somewhat lower price tag) is playing a role there.
With the strict controls in Seattle preventing landlords from evicting tenants, they have to somehow make up for the loss of revenue over the last year+. At this point, it's actually better to have higher rent and vacancies than to have low rent and tenants who don't pay, without the opportunity to get them out. The last extension of the moratorium was to 2/14, I'd be willing to bet that it will be extended again.
In Chicago, for the past 2 decades, you are better off renting than buying. But I think Chicago is relatively unique among the major metro areas in this country. In West Coast, Mountain West, New England, Northeast, Southern states, Florida and Texas, you would be better off buying.
If you were in the Seattle burbs especially one of the more middle class ones, your house would have tripled in those 15 years. Anyone who sold in Seattle at any time the past 15 years to rent would be kicking themselves.
Probably right. Some other markets have gone way up and way down over the last 20 years, and it really depends on market timing. It's really easy to say that owning was great when looking at a bubble moment. There have been huge crashes in places like AZ and FL over this period.
Chicago hasn't really ever had a fast rise, but the falls are tempered as well. It's more of a slow and steady thing here.
It's going to pop eventually. I mean we came from the North so when we left paid $1300 for our apartment the going rate is $1700 for that apartment. The minimum wage is creeping up to $15 an hour in that state.
Where we live now pay $1600 split among 3. Wife and I make the same we made up North as I dropped in pay and Wife got a bump.
Now with that said rents are about $1000 for a 1 bedroom, $1200 for a 2, and $1400 for a 3 bedroom. With average pay around $12 ro $15 an hour.
We were looking at Florida and rents spiked almost $300 on everything within a 12 to 18 month period.
Not sure what will stop this.
The housing market is on average $300K for a 3 bed 2 bath. You are litterally paying more than a a mortgage a month.
I mean really need to consider in that you made 12 to 24 month good payments on a rent into loan not just DTI.
Owning v renting really depends on where you live and your situation.
We owned a home in the Chicago suburbs for 15 years, and poured 10s of thousands into it, only for it to go up all of 20% total in those 15 years. It was not a good investment at all
This I don’t understand. Even in this scenario, you recouped and then some what you paid out. It would be the equivalent of renting for 15 years, leaving, and then being told here is all your monthly rent checks back.
Renting can work for people. The most common camps are those who can afford to pay out a monthly premium to avoid hassles they don’t want to deal with. The other is those that can’t afford the down payment and all that goes into it. There are other reasons to be sure (short-term stay, building credit/nest egg, etc), but that’s the gist.
This I don’t understand. Even in this scenario, you recouped and then some what you paid out. It would be the equivalent of renting for 15 years, leaving, and then being told here is all your monthly rent checks back.
Renting can work for people. The most common camps are those who can afford to pay out a monthly premium to avoid hassles they don’t want to deal with. The other is those that can’t afford the down payment and all that goes into it. There are other reasons to be sure (short-term stay, building credit/nest egg, etc), but that’s the gist.
Um, no. That's really bad math.
I had to pay something like $2200/m in mortgage, taxes, and insurance on the house for 15 years. Most of that was interest and taxes.
2200x15x12 = about $400,000 in payments made.
We made like $60,000 in profit on the house over that time, and had maybe $40,000 in additional equity - the rest of the equity was used to make improvements to the house. But some of that $100,000 was burned by paying a realtor, a lawyer, closing costs, repairs getting the house ready, etc. We made $400,000 in payments after maybe a $20,000 down payment, so $420,000 in payments and we walked away with about $65,000 back.
Another way to look at is is that we invested $20,000, paid rent every month, spent cash on repairs, fixed up the place (which was probably another $20K over the time we were there), and walked away with $65,000 15 years later.
I think the really concerning part of this phenomenon is that there really aren't any more affordable areas of the US left, or at least affordable areas that are livable and provide good employment prospects. It's no longer just a big, coastal city problem. There's literally no more places to "escape" to for affordability.
And it's going to get worse before it gets better.
The rising prices are primarily inflation. Our economy recessed substantially during the pandemic. We printed a bunch of money to mask this, but it's still showing up in rising prices for houses, cars, food, labor, etc.
I personally don't think it's a bubble. In Austin for example there was a massive flood of 200k, 300k, 400k, etc tech jobs over the last 2-3 years (in a city that's quite small mind you). It's no surprise to see housing prices go up along with that.
Not too surprising that St. Louis and Kansas City have the lowest increases given the low in-migration numbers and slow economic growth. It is odd that they are that divergent compared to the rest, though.
In 20 years, I imagine the wealth gap between those who owned a house pre-pandemic and those who did not will be studied in great detail.
I was lucky enough and bought a house in 2019 a few years after I moved into the area after having moved multiple times in a ten year span.
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