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The Masked Tulip

Something 'crazy' Is Happening In The Southern California Housing Market

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Something 'Crazy' Is Happening In The Southern California Housing Market

Monthly payments on a house are now cheaper than monthly rents on a similar house in most of North San Diego and Southwest Riverside counties, according to an analysis of county-supplied and Realtor data by the North County Times.

"I don't think this has ever happened before," said G.U. Krueger, a principal economist for HousingEcon.com.

"It's a function of the huge housing price collapse which has left a lot of people in the lurch."

Or, as Carlsbad real estate agent Tyson Lund put it: "This is crazy."

Read more: http://www.businessinsider.com/something-crazy-is-happening-in-the-southern-california-housing-market-2012-4#ixzz1rSbXO9be

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"I don't think this has ever happened before," said G.U. Krueger, a principal economist for HousingEcon.com. "It's a function of the huge housing price collapse which has left a lot of people in the lurch."

Read more: http://www.businessinsider.com/something-crazy-is-happening-in-the-southern-california-housing-market-2012-4#ixzz1rSiXVAtu

surely the whole reason behind BTL is that the rent is more than the mortgage?

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I thinks it's comparing if you buy now to if your renting a place someone bought years ago.

Given that houses were being sold in places like Detroit for 10s of dollars, this isn't news.

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By that measure, does that mean property prices in the UK are cheap? :unsure:

Umm, when I bought in 1996 in the SE this was exactly the situation. Was £50 to £100 cheaper p/m to buy a 2 bed house rather than rent and that was with first time buyer mortages @ 7% IR and £1k mortage indemnity payment.

M

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"Monthly payments on a house are now cheaper than monthly rents on a similar house"

So the first time ever renting out a house has made financial sense.

Crazy times.

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Don't forget that lots of places in the US have rent controls. For that reason rents may not be fair market rents, i.e.: unfairly low.

Er... similar here, exept that rents here are kept high by HB.... so not fair market rents, i.e.: unfairly high.

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Further to this anecdotal, both houses have now been sold and have new OOs in them, both of whom bought in the $140s. So in San Bernadino County at least (50-100 miles north-east of the places mentioned in the OP's article), prices appear to be creeping up a bit, albeit from spectacular lows compared to the 2007 peak.

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In the 80s upto mid 90s repayment mortgage payments were cheaper than rents all over the UK.

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In the 80s upto mid 90s repayment mortgage payments were cheaper than rents all over the UK.

I think thats normal, now is not. This is why its stupid to get into BTL now, without capital appreciation you're sunk. Doesn't stop many from doing it though.

Im a little confused as to why a reversion to actual sense is now 'crazy'.

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