This blog is here to point out the price of Bay Area California homes are still way, way too high. You can rent a nice house for about 1/2 of what it would cost you to purchase a house... even AFTER the historic fall in prices already. Still the Bay Area is holding strong to it's misplaced notion that this is the most expensive place to live because it is the best place to live.... Bullshit! Realator and homeowners are still high on the Fed induced credit-bubble drugs they have been given since 2001.
There are plenty of blogs and websites that explain the housing and credit bubble in detail, so I am not going to rehash any of that here. Every once in awhile I wil throw a link or two to some of my favorite sites and articles.
I want this blog to illustrate just how F***ING ludicrous prices still are in the Bay Area compared to the price of rent.
I have held the view that it will be time to buy when the standard mortgage payment of a comparable house in a comparable location are equal. That includes taxes and insurance.
Here are the assumptions I will be making:
*20% down is used for the mortgage and the closing costs are covered. (Not a 3% down FHA approved loan, which is the only way a first-time buyer could ever get into a house in the Bay Area.)
*1.5% property tax on the full purchase price (That is the Santa Cruz County tax I believe)
*I am ignoring the benefits of a tax deduction for interest. That changes over time as less interest is paid and taxes are too dependent on income. (If you want to argue this with me after what I will present to you, feel free and show me some numbers. I will be more than happy to include accurate work by others.)
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