Considering how crazy expensive accommodations have become the last couple of years, concentrated in the hands of greedy corporations, landlords and how little politicians seem to care about this problem, do you think we will ever experience a real estate market crash that would bring those exorbitant prices back to Earth?
No.
I never wanted to be a homeowner personally, but earlier this year I noticed that four AirBNB’s had materialized just on my little block in America, so I bought a condo. I paid $40,000 more than it cost ten years ago, but it’s beautiful, I like it, and it gives me the ability to stay where I want to long-term, so here we are.
The Federal Government is not going to act on the forced scarcity of housing, so expect the issue to be handled similar to the way states handled COVID. Some states had good policies. Most had shitty policies, but overall, the outcomes were negative to some degree, and that’s almost certainly what will occur with housing over time.
Sadly, the only way to essentially secure/stabilize your housing costs (with the exception of taxes) is by buying your home. Then with equity, assuming relatively similar markets, it allows you to move from one place to another regardless of land price increases.
Renting doesn’t really make financial sense because you’ll just get squeezed harder and harder by owners forever.
It used to make sense depending on your area and intended time you were going to rent for. This assumed that rent was significantly less than a mortgage and you were able to save or invest at least some of the difference. That gap has long since evaporated in desirable areas. In many cases, rent is as much as a mortgage. The problem here is that it prevents people from saving for a down payment (which alone could buy a home twenty years ago), and even if they could, homes are being snapped up with all cash offers from investors or corporations… So they can be rented at a profit. It’s insane.
Financially it may not, but done people like their lives to be uncomplicated, and renting lends itself to that kind of person.
Is it less complicated? With renting you still have leases, weird rules, lack of control, rent/fee increases, creepy landlords, and the futility of trying to get security deposits back. Less paperwork, maybe. And it is kind of expensive to buy/sell if you plan on moving often.
Renting made sense for me basically when I either didn’t expect to stay long, or before I could afford to own.
I think it’s way less complicated.
I paid my rent and in return I got peace. I didn’t have to worry a sudden plumbing or heating bill. I didn’t have to furnish a house-sized space. It was just an easy life, but the only way I could guarantee that I’ll be able to stay where I want to be was buy purchasing, so here we are.
To be honest, I never saw myself buying anything. But when rents were raised a whipping $500-600 in a single year in my area, I got concerned for the future. I bought a small condo that I could afford (still at a cost far above what it was worth pre-2020…around $40k like yours) because I was terrified at what would happen if rents continued to skyrocket at suck a rapid trend. Never in my life have I seen that happen before.
Idk if I made a good financial decision or not, but it seems both of us took a similar path). We’ll see what the future holds.