Redfin has been closely tracking a market shift in San Jose, California, Seattle, and Portland, Oregon, over the past three months. The trends of increasing inventory and declining sales we reported in June and July intensified in August.
In San Jose and Seattle, the supply of homes was up nearly 50 percent year over year. In Portland, inventory increased 25 percent. The increase in inventory is the combination of more people putting their homes on the market as fewer buyers are stepping up to purchase. San Jose, Seattle and Portland saw respective sales declines of 16 percent, 19 percent and 6 percent.
1M home, 800K loan. You pay 35.7K just in interest. Then you paid 1.25% = 12.5K taxes assuming no maintenance.
You paid total of 48K on interest & taxes. Your property is now worth… 1047. You lost money.
This is not what solid growth looks like. This is losing money
Now if you rent the house, story is be different, but only slightly. You could probably pull 2000$/month, making some return. You just get mortgage lever, not much else. That puts your at 248K investment first year 24K return (~10%). But it’s only if you rent the place.
I simplified a lot. You will pay utilities and maintenance for your own home, you will pay electricity in gas when renting. You wont have to deal with pool, yard, etc costs either but yoy can have a pool in an apartment complex.
Rent in rent controlled apartment and you might actually get rich.
I have wasted first 10-12 years without buying home which is a major mistake. I had seen homes selling 350k (cupertino) when I landed, selling now 1.25M in 20 years. Lost is lost.
Assume practically how much you spend on rent and assume how much you spend on home buying, mortgage, inflation, property tax and appreciation.
