Comments on: Counterparties: Even more bad job market news http://blogs.reuters.com/felix-salmon/2012/05/04/counterparties-even-more-bad-job-market-news/ A slice of lime in the soda Sun, 19 May 2013 20:32:21 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: TFF http://blogs.reuters.com/felix-salmon/2012/05/04/counterparties-even-more-bad-job-market-news/comment-page-1/#comment-38718 TFF Mon, 07 May 2012 07:17:01 +0000 http://blogs.reuters.com/felix-salmon/?p=13736#comment-38718 Yet another article (in the WSJ this time) on the imagined economic efficiencies of renting. It explains quite neatly how the homeownership frenzy of 2005-2006 didn't work out, then jumps to the conclusion that owning your home must be a Really Bad Idea. Two problems with that: * If you intend to pay $12k a year of rent in retirement, rather than the $6k it might cost to own that property, you will need to arrange an additional ~$8k of income (necessarily adjusted for inflation). At the present payout rates, we're talking hundreds of thousands of dollars of additional savings, just to pay the rent. Is your typical renter saving that kind of money? * Renting isn't really cheaper than owning long-term, or landlords would all go broke. Most calculators skew the results by assuming an ownership period of less than a decade (over which time the buying/selling costs dominate). Also, rented properties are generally inferior to those that are owner-occupied. E.g. the "cardboard bungalow" cited in the article. Yet another article (in the WSJ this time) on the imagined economic efficiencies of renting. It explains quite neatly how the homeownership frenzy of 2005-2006 didn’t work out, then jumps to the conclusion that owning your home must be a Really Bad Idea.

Two problems with that:
* If you intend to pay $12k a year of rent in retirement, rather than the $6k it might cost to own that property, you will need to arrange an additional ~$8k of income (necessarily adjusted for inflation). At the present payout rates, we’re talking hundreds of thousands of dollars of additional savings, just to pay the rent. Is your typical renter saving that kind of money?

* Renting isn’t really cheaper than owning long-term, or landlords would all go broke. Most calculators skew the results by assuming an ownership period of less than a decade (over which time the buying/selling costs dominate). Also, rented properties are generally inferior to those that are owner-occupied. E.g. the “cardboard bungalow” cited in the article.

]]> By: dWj http://blogs.reuters.com/felix-salmon/2012/05/04/counterparties-even-more-bad-job-market-news/comment-page-1/#comment-38703 dWj Sat, 05 May 2012 19:20:32 +0000 http://blogs.reuters.com/felix-salmon/?p=13736#comment-38703 "Voter rolls typically shrink in non-presidential election years and registrations among whites fell at roughly the same rate" Is it just me, or does this take most of the air out of the rest of the story? “Voter rolls typically shrink in non-presidential election years and registrations among whites fell at roughly the same rate”

Is it just me, or does this take most of the air out of the rest of the story?

]]>