Tuesday, March 28, 2006

Price-to-Rent Ratios

A good series of posts on the housing bubble here and abroad can be found at this blog. Here is an interesting chart that I found there:

11 Comments:

Blogger sf jack said...

I just read this today. Simple and sweet, really.

My new mantra for the bubble naysayers:

"It is dumb to buy overpriced assets with low interest rates."

Mar 28, 2006, 1:22:00 PM  
Blogger sf jack said...

Ah!

A cycle of SF Bay real estate comes to life with another informative graph!

Realtors must be cringing.

13x in 1990 (top); 10x in 1997 (bottom?).

22x in 2004; ?x in 2012

(that was '04 above! two years ago - what is it now?)

Any guesses for now?

How about for 2012 or 2013?

Mar 28, 2006, 1:30:00 PM  
Blogger fredtobik said...

"It is dumb to buy overpriced assets with low interest rates."

Homes are not assets.

Mar 28, 2006, 1:50:00 PM  
Blogger sf jack said...

OK fred, I'll modify just for you.

"It is dumb to buy overpriced homes with low interest rates."

Mar 28, 2006, 3:44:00 PM  
Blogger Marinite said...

And I would further change it to "It is dumb to buy overpriced homes with ARMs with low interest rates."

Mar 28, 2006, 3:49:00 PM  
Blogger Athena said...

"It is dumb to buy overpriced homes with ARMs and low interest rates, and even dumber to buy with a negative amortization loan"

(my contribution)

Mar 28, 2006, 6:59:00 PM  
Blogger B. Durbin said...

How about "It's dumb to buy what you can't afford"?

Mar 28, 2006, 9:37:00 PM  
Blogger Athena said...

ooh... that's a good one b.durbin. LOL... what a quaint old fashioned idea. Do you think it will ever catch on?

Mar 28, 2006, 10:09:00 PM  
Anonymous Anonymous said...

It's interesting that the chart is through 2004. Given the runup in prices during 2005 (at least the first 3 quarters), my guess is that things only went more "vertical" in 2005

Mar 29, 2006, 11:39:00 AM  
Blogger sf jack said...

And fred -

It seems to me that homes had become assets when you bragged that your home was up 40% in "value" over the last three years?

Mar 29, 2006, 12:28:00 PM  
Blogger fredtobik said...

"It seems to me that homes had become assets when you bragged that your home was up 40% in "value" over the last three years? "

I was joking when I said that, if you want to be accurate with my quote I think i reffered to my golf swing in that post as well. I'll try to annote my sarcasm and attempts at humor in future posts.

Apr 2, 2006, 8:49:00 PM  

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