Sunday, September 25, 2005

Housing Bubble Benefits

G. Pascal Zachary, a journalism fellow at the German Marshall Fund, writes in today's San Francisco Chronicle that it's better to rent than own in today's Bay Area market:
I'm making a killing in the housing market -- as a renter.

After 15 years as a homeowner in the Bay Area, I've cashed out and taken advantage of a bizarre situation: Homes that sell for a fortune are available to rent for as little as $1,500 a month, less than half the cost of ownership, even after factoring in the tax benefits from the federal mortgage-interest deduction.

Of course, homeownership remains the American Dream, but the reality is that renting is a better deal, especially in the Bay Area, where the cost gap between being an owner and being a renter is probably the largest in the country.

The disparity stems from an unprecedented occurrence: As home prices have soared in the Bay Area over the past four years, rents have fallen an average of about 15 percent and sometimes much more.
Be sure to read the entire story at this link

— The Boy in the Big Housing Bubble