Was Renting Smarter Than Buying?
"[I]t’s now clear that people who chose renting over buying in the last two years made the right move." See for yourself. It turns out that recent home buyers have faced higher monthly costs than renters and have lost money on their investment. Home prices are still too high to make buying a more attractive option than renting, unless you plan to keep a home for many many years. No matter which way you cut it, the costs of buying a home are much more now than the costs of renting. No wonder then that no houses are selling in Truman Annex.
It is likely to be quite some time before this situation turns around. Meanwhile those in the Annex who want to get out are stuck. Not only is there the problem of the real estate market generally, another factor that inhibits buying in the Annex, by any sane person, is the uncertainty over the path of the litigation TAMPOA is pursuing and its impact on new residents of Truman Annex. Will they really live in a gated community as prospective buyers are being promised? Will the assessments of TAMPOA members continue to spiral out of control? Realtors will have difficulty convincing any wise buyer that there is any certainty regarding the future assessments or the outcome of the TAMPOA litigation. Wise buyers are simply not going to take on those risks when they can easily buy elsewhere.
Who is to blame for this state of affairs? Well, there is enough to go around, and it is useless to finger-point -- enough of that has been done. What we need to realize in the Annex is that while we can't control the general real estate market, we can control one aspect of the effect on it with regard to the Annex. Instead of tolerating a terrible state of affairs, we ought to get busy and fix our problems within the Annex so that our community will not continue to stagnate as it has done for the last four years. At least when the real estate market (if the market) begins to turn around, we'll be able to take advantage of the turnaround instead of watching it go by.
It is likely to be quite some time before this situation turns around. Meanwhile those in the Annex who want to get out are stuck. Not only is there the problem of the real estate market generally, another factor that inhibits buying in the Annex, by any sane person, is the uncertainty over the path of the litigation TAMPOA is pursuing and its impact on new residents of Truman Annex. Will they really live in a gated community as prospective buyers are being promised? Will the assessments of TAMPOA members continue to spiral out of control? Realtors will have difficulty convincing any wise buyer that there is any certainty regarding the future assessments or the outcome of the TAMPOA litigation. Wise buyers are simply not going to take on those risks when they can easily buy elsewhere.
Who is to blame for this state of affairs? Well, there is enough to go around, and it is useless to finger-point -- enough of that has been done. What we need to realize in the Annex is that while we can't control the general real estate market, we can control one aspect of the effect on it with regard to the Annex. Instead of tolerating a terrible state of affairs, we ought to get busy and fix our problems within the Annex so that our community will not continue to stagnate as it has done for the last four years. At least when the real estate market (if the market) begins to turn around, we'll be able to take advantage of the turnaround instead of watching it go by.
Labels: Federal Case, Lawsuit, Real Estate, Truman Annex
posted by Conchette at 9:15 AM
9 Comments:
There are definitely timeframes when renting makes more sense than buying, just as there are times that holding bonds makes more sense than holding stocks.
But over the long haul, more Americans have generated more wealth from home ownership than any of their pure investments. Owning a house also gives homeowners a chance to improve their property, build equity and take a stake in their community.
Renting might work for a while, but a lifetime of renting is not an acceptable alternative for me. Prices are going to rebound at some point and I want to be there for it.
If we can't blame the TAMPOA Board for utterly failing in their fiduciary responsibility to homeowners, then who can we hold responsible?
Actually, real estate has provided only two time periods of real gains: 1) after world war II when the GI Bill enabled a massive number of people to suddenly buy a home, and 2) when rates recently went to record lows while banks completely lost their lending standards and caused a flood of liquidity. This is about to blow in the faces of banks, developers, and anyone who is leveraged and looking for an exit.
The board has thoroughly fulfilled (and has not utterly failed) its fiduciary responsibility to homeowners. Its primary responsibility is to protect the commonly owned property of the members. The board cannot simply give away the private property of the association. (It would require a 100% vote of the membership.) The board's fiduciary responsibility was fulfilled by suing to enforce the legally binding contract signed by the city in 2000. While it might have been more pleasant for some homeowners (who do not live on Southard Street) to let the city steal our private property, not suing to have the cotract enforced would have been the true negligence.
Once again Cayo Dave blasts away at the concept of home ownership. I wish you good luck renting for the rest of your life. I've done very well in real estate, thank you. And I choose to own a sliver of this world rather than be at the mercy of others to charge me what they want to rent their land.
To the anonymous responder to my comment let me just say, "The world does not belong to you. You belong to the world."
Also, your elitism is distasteful. Do you think all your money will buy back your soul?
The fact is, economically there are times when renting is a better investment than owning. Today, in Key West, this is true.
The idea that someone who rents makes them less of a community member versus someone who owns is elitism and antithetical to the Key West I know.
Your philosophy sickens me, even though I support your right to it.
Also, in response to
"And I choose to own a sliver of this world rather than be at the mercy of others to charge me what they want to rent their land."
I say, do you really think anyone owns the land? At best, you may be its keeper for a time. But in the end, you cannot take it with you.
all hail cayo dave. a man who speaks with a foul and forked tongue.
Over a lifetime any investment that is not overly speculative usually results in a gain in this country including real estate.
Over the short term, however, right now real estate does not look too good. Maybe it's just me...?
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