The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: XoFruitCake who wrote (63493)	12/24/2006 1:09:17 PM
From: Wyätt Gwyön	Read Replies (1) of 306849

re: rental vs. buying True the number never work in California. But you can always count on appreciation to bail the home owner out in the past. the numbers may not have "worked", but there are degrees of nonworking. i am trying to figure out the average rental ratio in the bay area. it sounds like 1mm house rents for 2000-2500. take the midpoint, 2250, and that is a 2.7% return. even by Clownifornia standards that is ridiculous. maybe the Bay Area average is more like 6-8%. if so, then the 1mm house has to fall to 415K rents have to rise, or some combination of the two. maybe the avg is 5%, in which case you still need the 1mm house to fall to 540K. btw, when i bought my first house in Austin this ratio was 14%, and i doubt i caught the bottom tick. i think the bottom was probably closer to 20%.

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