Tag: homeownership

70% of Americans think housing crises continues, 51% say renting is more appealing #Multifamily

A MacArthur Foundation survey conducted by Hart Research Associates shows that 70% of Americans polled think that the housing crises isn’t over and 19% think the worst is yet to come, good for apartment building investment I believe. As reported by the Wall St. Journal in an article titled: Allure of Homeownership Slumps Amid Worries of Continued Crisis  the worst is yet to come figure is unchanged from last year, which may reflect a segment of the population that has been deeply scarred by collapse of the lending and housing bubbles. The still in the crises figure is down from 77% a year ago but it is still a big number that’s having a positive effect on apartment demand:

51% say renting is more appealing; positive for apartment building investment

Referencing the chart above, the article stated that 51% of those polled said renting was more appealing than in past decades which is definitely positive for apartment building investors. Note that while urban apartment demand and development has been getting a lot of action, 35% of suburbanites think renting is Continue reading 70% of Americans think housing crises continues, 51% say renting is more appealing #Multifamily

My Challenge to Zillow on repair and maintenance costs in their rent vs. buy comparison.

The Fiscal Times had a piece the other day reviving the good old rent vs. buy meme. The new angle was that Zillow has updated its method for comparing the costs of renting and the costs of buying and uses it to produce what it calls a ‘Breakeven Horizon.’  Besides sounding vaguely like the title of an old sci-fi movie, beyond the breakeven horizon is where buying a home makes more sense than renting and in theory the less time to the horizon, the more the market is tilted towards buying.

Now I have to admit I was intrigued with the thought that Zillow had re-examined their methodology because as I have written about earlier, their previous calculation ignored the real costs of maintenance, repairs and saving up for replacing big expensive things like the roof, the furnace and the driveway and that is a pretty big chunk of money over time. Industry figures for repairs and maintenance on single family housing run from one to three percent of the home value.  Have a look at the chart* below to see how much a relatively modest 1.5% adds up to over time.

The Myth of Home Ownership as an Investment Debunked
Click for full screen chart view.

 

Surely I thought, Zillow had been convinced Continue reading My Challenge to Zillow on repair and maintenance costs in their rent vs. buy comparison.