Berkeley CSUA MOTD:Entry 38253
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2025/04/04 [General] UID:1000 Activity:popular
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2005/6/23-25 [Politics/Domestic/California/Prop] UID:38253 Activity:nil
6/22    Rent or buy? You decide:
        http://tinyurl.com/9ll3u (cbs news)
        \_ The calucalator does not take Prop 13 into account, so the numbers
           are way off, especially near the end of 30 years.
           \_ I assume the calculator is National, not CA.  How do you
              think prop 13 should skew it?  Doesn't prop 13 hold the tax
              rate steady? You can set the rate on the calc.
              \_ It locks the tax to a percentage of the purchase price, not
                 the current assessed value.
Cache (2090 bytes)
tinyurl.com/9ll3u -> www.cbsnews.com/stories/2005/06/22/earlyshow/contributors/raymartin/main703518.shtml
He shares some interesting insight as part of his regular appearance on The Early Show. For more and more people, renting may be a better financial option than b uying, mainly because the average cost of owning a home has increased at a faster pace than the average cost of renting. Over the last year, housing prices increased more than 12 percent, while rents increased by less than 2 percent. In some of the bubble areas (suc h as Seattle and San Francisco), rents have actually fallen. Also, according to the Census Bureau, rental vacancy rates remain near th e record high of more than 10 percent, the highest since they began to c ollect this data in 1960. Since before the mid-'90s, the increases in the housing price index and t he CPI rent index have tracked closely to each other. But over the past eight years, there has been a significant divergence, where the costs of owning a home have literally sprinted ahead of the pace of increase in rental costs, rising more than 20 percent more. In both cases, this was followed by periods where the housing price inde x declined in relation to the CPI rent index. Typically, the housing price index and CPI rent index move at a similar p ace. The Center for Economic and Policy Research explains it this way: if the cost of buying a home rises sharply, as it has in recent years, it would be expected that this would get passed on in higher rents, as own ers of rental units attempt to recoup higher purchase prices from their tenants. "Similarly, if rents begin to fall, or at least not keep pace with inflat ion, it is reasonable to expect that this would eventually exert downwar d pressure on home prices. As tenants are able to get better deals on re nt, they will be less anxious to rush out to buy homes. Also, potential homebuyers who are interested in renting out housing units would be will ing to pay less for homes as rents drop. On The Early Show, financial advisor Ray Martin discusses whether thi s is the time to be buying or renting a home. Martin says that the cost of owning a home is the same or more than renting.