Apt rent Sunnyvale vs MtnVw (to rent, new house, prices)

[80skeys]

Originally Posted by roadwarrior101

Yes, but so does the house appreciation....that could come in very handy if you plan on relocating elsewhere in a few years.

Only if appreciation occurs.

[80skeys]

Originally Posted by roadwarrior101

Well, we bought a new townhouse in Mtn View 2 years ago at a depressed price. The new ones in our complex are now selling for about $100k more than we paid for ours and they're having no trouble selling.

That's nothing more than luck. You can't guarantee, or even put a high probability on that type of thing happening. Actually, if you were to make your business of buying and selling property, you would probably find that any appreciations on some properties would be even'ed out by depreciations or losses on other properties. Or worse: you would find your total losses more than your gains.

[roadwarrior101]

Originally Posted by 80skeys

That's nothing more than luck. You can't guarantee, or even put a high probability on that type of thing happening. Actually, if you were to make your business of buying and selling property, you would probably find that any appreciations on some properties would be even'ed out by depreciations or losses on other properties. Or worse: you would find your total losses more than your gains.

Sure, it was luck. We were lucky in timing the market very well and picking a location in the middle of Silicon Valley where new housing stock is very limited and people are drawn to the area based upon being central to jobs, good schools and a nice community. However, I do think that some of this analysis that my wife and I did up front helped out as well.

[TheGreatCurve]

Originally Posted by roadwarrior101

Well, we bought a new townhouse in Mtn View 2 years ago at a depressed price. The new ones in our complex are now selling for about $100k more than we paid for ours and they're having no trouble selling. Yeah, it wasn't easy for us to get in (and my wife and I aren't rich), but a FHA loan helped out.

Good for you, but the only thing that matters is what the price is when you sell it. Ask the people who didn't sell their house in 2006 but waited until 2010 to sell it.

It's like buying stocks. It doesn't matter how much the price of the stock goes up while you're holding it. What matters is what the price is on the day you sell it.

[roadwarrior101]

Originally Posted by TheGreatCurve

Good for you, but the only thing that matters is what the price is when you sell it. Ask the people who didn't sell their house in 2006 but waited until 2010 to sell it.

It's like buying stocks. It doesn't matter how much the price of the stock goes up while you're holding it. What matters is what the price is on the day you sell it.

Unless you're flipping houses and plan to sell in this area within a couple years, it is a pretty safe bet. Housing stock is extremely limited, the area is very centralized for jobs and prices are continuously driven up by newfound dot.com millionaires. Just look at the long-term trends for the past 30 years here.

[TheGreatCurve]

Originally Posted by roadwarrior101

Unless you're flipping houses and plan to sell in this area within a couple years, it is a pretty safe bet. Housing stock is extremely limited, the area is very centralized for jobs and prices are continuously driven up by newfound dot.com millionaires. Just look at the long-term trends for the past 30 years here.

Those reasons you've listed are exactly why many companies choose to expand elsewhere, where land and real estate are much more available and less expensive. For example, although Intel is based in Santa Clara, they have more employees in Oregon. Once Silicon Valley gets to the point where it's too expensive for the majority of employees to live here, companies will start leaving. We may be near that point already.

Remember the first lesson on investing? "Past results are not an indicator of future performance?" Dot.com bubbles always burst. Detroit was once a hot area to invest in real estate, too.

[roadwarrior101]

Originally Posted by TheGreatCurve

Those reasons you've listed are exactly why many companies choose to expand elsewhere, where land and real estate are much more available and less expensive. For example, although Intel is based in Santa Clara, they have more employees in Oregon. Once Silicon Valley gets to the point where it's too expensive for the majority of employees to live here, companies will start leaving. We may be near that point already.

Remember the first lesson on investing? "Past results are not an indicator of future performance?" Dot.com bubbles always burst. Detroit was once a hot area to invest in real estate, too.

Yes, that's why I've qualified that statement by indicating that we may take our equity and relocate within a few years.

Silicon Valley not Detroit, lets face it. The former is part of the old rust belt that has been the epicenter of decades of decline. The latter is the pee-eminent hub of innovation globally. I'm not saying that it it won't eventually peak, but you don't flip a switch and turn into a wasteland overnight.

[80skeys]

Originally Posted by TheGreatCurve

It's like buying stocks. It doesn't matter how much the price of the stock goes up while you're holding it. What matters is what the price is on the day you sell it.

It's also like stocks in the sense that it's not predictable. The only difference is scale of time: housing prices move slower. Either way, your ability to make money is based on luck and very little else.

[TheGreatCurve]

Originally Posted by roadwarrior101

Yes, that's why I've qualified that statement by indicating that we may take our equity and relocate within a few years.

Hopefully, you'll be able to relocate before housing prices head downwards.

Originally Posted by roadwarrior101

Silicon Valley not Detroit, lets face it. The former is part of the old rust belt that has been the epicenter of decades of decline. The latter is the pee-eminent hub of innovation globally. I'm not saying that it it won't eventually peak, but you don't flip a switch and turn into a wasteland overnight.

True, but Detroit didn't turn into a wasteland overnight, either. It took decades of decline.

[TheGreatCurve]

Originally Posted by 80skeys

It's also like stocks in the sense that it's not predictable. The only difference is scale of time: housing prices move slower. Either way, your ability to make money is based on luck and very little else.

Another difference between stocks and houses is that you can unload your stock in a split-second with the click of a mouse, whereas unloading a house is a time-consuming, painstaking process which may take years depending on the market. It also costs you only a few dollars in broker commissions to sell your stock but it'll cost you tens of thousands of dollars in broker commissions to sell your house. The bottom line is that stocks are a liquid investment while houses are an illiquid investment.