Posted by Kenneth Hocking on May 09, 2008 at 10:11:38:
In Reply to: Further refinement of data posted by Rich-CA on May 09, 2008 at 09:03:57:
A 2/1 with a great Climate Beautiful Views and high income Neighbors. AWESOME
that same 289,000 will get you BRANDNEW 5,000 sqft foot 6/4 enough for 6 families here in Houston If we compressed, Lots of Humdiity and heat during the summers and lots of time to think while in traffic.
Actually Incomes are not that different in Houston only Our top end guys are in Petro chem not IT and or are energy traders.You have made the case many times that many people WANT to live in SF area..
I hope to come up there this month to visit and who knows maybe I will stay there however can you buy a home off the MLS and get 1% or greater in rents
Will that 289,000 2/1 rent for 2890 a month?
Desire to live will drive residential purchasers but for most investors we are required to consider the home a rental if it does not sell.
so for Values falling you seem protected but for cash flows can an average individual Fly to SF area buy a 2/1 or a 3/2 with 20% down and see break even or positive cashflow??? is that possible in Mass quantities in the sf bay area.
If it is not then the Homes are overvalued versus the rental support level and desire to live there will keep things that way possibly but it does not make it a great place to buy investments...
Great debate but my Redneck cowboy math says some folks are gonna start choosing to rent instead own until the media quits talking about forclosures and falling values.. because of the lack of their sophistcation in economics.
Your particular values show that your local economy had to RAISE its salaries (against the 54K state waverage) to support the cost of living/housing.
Interesting that you think that desire to live there will keep salaries high enough to support values.. When in economic downturns salaries tend to flatten or fall while other costs rise.
In 30 months we shall see if I should bought a 289,000 2/1 as a rental in the sf bay area!
Here in Houston you can buy a 4 bedroom 2.5 bath per unit NEW duplex for 230-240K that will kick off 2200-2580 in gross rents. What would a 2/1 for 289,000 produce in rental income as an investment ? Maybe 1400-1500??
Desire that you want to live there does not equate into a good place to put money into investing
RE investing is very very simple
Buy Cashflows or do not Buy!
- I have an even lower price Rich-CA 13:29:22 05/09/08 (0)