As much as we like to think we have a great wide audience, we pale in comparison to The Wall Street Journal, and one of our very frequent commentators, “James” has pointed us in the direction of the age old debate that just never seems to die, to rent or own. We thought we’d point you there too in order that more people might be able to confuse your thinking, or clear some things up.
–“If Homes Cost Too Much, Is It Okay To Rent Forever?” [The Wall Street Journal]
so far this is one of my favorite comments on that board:
Manhattan is a world city and there are different fundamentals for the sale market and rental market. The rental market will be cheaper than the sale market because it caters to Americans, but the sale market is global. Land in small Manhattan is a real asset like gold. Foreign economies are booming building wealth and they have strong currency too. If the sale price in Manhattan fell far enough, a buyer from Tokyo or Moscow would step in.
Comment by ohionick – December 14, 2007 at 12:08 pm
i feel the same way about real estate here in san francisco, the original gold rush. prices may fluctuate from time to time but a good piece of real estate is worth it’s weight in gold to me.
i can’t wait till we see some manhattanization type prices around here, hopefully before i retire.
just look at Millenium Towers, the St. Regis, 4 Seasons, Ritz prices. $1,000+/sqft for the lower end prices is already manhattanized.
European buyers are everywhere. Just got to $1mil+ open houses.
i don’t think so resort. manhattan prices are 2k+ per square foot.
;)
plenty of room to grow if we ever figure out a way to get rid of the homeless and clean up this town.
Off Topic Alert
I was wondering what advice Alex and the other experienced realtors on this blog would give to someone considering joining the business. I have my broker’s license (I am a lawyer so I took and passed the test last year). I am employed fulltime but considering making the switch late next year (primarily due to my interest in real estate). One thought I had was to work with Ziprealty for a year or two. I realize that the commission split would not be very attractive but they have an extensive training program and they generate leads for their brokers so it might be a good way to get some transactions under my belt before heading to another brokerage. Thoughts?
5201.
I’m going to go ahead and put this on the front page.
For San Francisco, I think the answer may well be “yes,” so long as you have protection against the dual risks of (1) being evicted due to change of ownership or (2) being constructively evicted by rising rents over time. If you are in a rent control apartment and have some protected status, renting ’til you die might work, assuming you also can finance a comfortable retirement using investments other than housing equity appreciation.
I suspect, though, that these conditions apply to only a minority of renters in the city.
that reminds me of a great quote from the donald. not many are, so here goes:
At 100 Central Park South, many tenants were fighting to protect the ultimate in New York real estate: beautiful apartments with great views-at an unbeatable location. Most important, with rent control and rent stabilization, they were enjoying one of the great windfall subsidies in the free world.
Rent control is a disaster for all but the privileged minority who are protected by it. As much as any other single factor, rent control is responsible for the desperate housing crisis that has plagued NYC for the past 20 years. Like a lot of failed government programs, rent control grew out of a decent idea that ended up achieving exactly the opposite of its intended effect.
Unlike most developers, I don’t advocate eliminating rent control. I just think there ought to be a means test for anyone living in a rent-controlled apartment. People with incomes above a certain sum would be given a choice between paying a proportionally higher rent for their apartment or moving somewhere else.
Source: The Art of the Deal, by Donald Trump, p.167-69
imagine being 40, and living in the same crappy rent controlled apt since u were 28. Life is too short.
The tech and internet companies of today vs. 2000 are making billions and billions of profits a year, compared to negative profits in 2000. This is a big difference, and it is feeding into the Bay Area economy and SF and high end burbs in particular. Add to that low interest rates, and a weak USD attracting foreigners, you can see why prices continue to march higher.
More like, imagine being 75 and being in the same crappy rent controlled apartment you’ve been in since you were 45. That’s everywhere in this town, albeit many of the apartments aren’t crappy.
Loving this blog. You guys interested in a Blogroll with us (http://condoDomain.com/blog).
And to this post…No, it shouldnt be ok to be a renter for life. Unless, you want to be mobile all the time…I think you are cheating yourself and not keeping up with inflation.
hey anthony,
very nice scoop on the iphone support from realtor.com
Been out of town, but I’m back now….
As someone else has said, I’m all for eliminating rent control if they eliminate prop. 13 while they are at it. But in both cases it’s a pipe dream, and neither law is going anywhere. So, you know, keep dreaming.
Latest studies show the wealthy are getting wealthier at the fastest rate ever, and the gap betweent the wealthy and the poor is the widest ever, so I’m not losing any sleep over the oh so terrible burden landlords/developers are carrying with regards to rent control. You guys are often quick to tell folks to move to another city if people can’t afford to live here. So here’s some back atchya: if you can’t deal with rent control, don’t buy the building.
you can’t afford to live here because of rent control keeping 1000 places off the market. it’s a joke. imagine what would happen if all of them came back on the market?