Prudent Bear Renter Savings $70,000
With the aberration of housing prices rising as they did last month, renter savings dropped a little month on month, but are still extremely strong at over $70,000 since June last year.
A drop in interest rates also benefits bears.
Congrats prudent bears, you've managed to save over $70,000 by not buying the RE-industry rhetoric, sticking to your guns and waiting to buy a home on your own terms. Here's a quick break-out of your savings since June of 2006:
Savings on Purchase Price $ 47,300
Total Closing Costs $ 7,705
Rent Benefit $ 22,844
Investment Income $ 1,742
Tax Benefit ($9,254.13)
Total: $70,337 dollars.
For the details click here.
In an interesting turn of events interest rates for "typical" home also dropped an eighth of a percent, meaning that if we were to buy today, (which no one is planning to do, right?) we would also have saved tens of thousands on the life of the loan. So all things considered, the savings we've incurred are actually up month over month. More good news for bears.
As we go through the transition in buyer demographics, prices for the homes being sold may make it appear as though they are heading up from time to time. It's an aberration causing by demographics and the tiny number of homes being sold. Remember inventories are up and sales volumes are down and things are about to get a lot worse for sellers.
Irvine Renter, a fellow OC blogger, posted a great article on his blog regarding how the credit crunch is going to affect real estate demand side, while loan resets are going to create more supply. It's a must read.
Vivo los Osos!
3 comments:
Oh yes, I'm saving the cash... My rent's $20k/yr and I've watched nearby condo prices slide 2x that amount in the last twelve months. It hasn't really shown up in the comps simply because not much is selling around here.
I'd believe it. Doesn't seem as though a heck of a lot is selling at the moment.
Houses by us are down about $50K to $60K since June. My neighbors, however, are pretty sanquine about the whole thing; none of them is planning on leaving any time soon.
They keep asking if we'd like to buy the house we rent, but polite conversation precludes me from saying "Sure, when I can get it for another $100K+ less."
Can someone explain this me...my husband says that because we don't own (we can't afford to yet) we are losing $7 or $8k in tax write offs since we don't have mortgage interest to write off. So, if you're a renter, how do get any tax benefits?
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