Car Talk 6: Best of times and Worst of Times

[Tar]

Thought about it … not going to do it… too much work to deal with this… and I wasted too much time dealing with cars. Gotta figure out if I’m selling my house

Its too late to sell the house, you've badly missed the peak IMHO.

I think we're halfway down to the bottom, that other 12%

For me personally, buying and selling anything will destroy 10% right off the bat so peak sale would be the only sale I'd accept.... And even that is only on my non-residence asset. Max and BAEZN are sans kids, so they're a lot more nimble and I really have no idea what's in store for Commiefornia in the near future... Maybe things are far worse there than here. Our housing market demand is primarily driven by immigration which is apparently only going to be accelerating in the coming years. Dot com boom busts are big news in the Pay Area and should be considered if living there I guess.

[max225]

Thought about it … not going to do it… too much work to deal with this… and I wasted too much time dealing with cars. Gotta figure out if I’m selling my house

Its too late to sell the house, you've badly missed the peak IMHO.

I may have missed the peak … but the question is more around the bottom. And we’re no where near it

[golftdibrad1]

Its too late to sell the house, you've badly missed the peak IMHO.

I may have missed the peak … but the question is more around the bottom. And we’re no where near it

sure, but you will still have to live somewhere, unless you take up van life.

IDK this calculus is way harder in CA than other places because the appreciation is so insane. Good luck with your math but unless you are ing from CA the best thing IMHO is to stay put

[max225]

I may have missed the peak … but the question is more around the bottom. And we’re no where near it

sure, but you will still have to live somewhere, unless you take up van life.

IDK this calculus is way harder in CA than other places because the appreciation is so insane. Good luck with your math but unless you are ing from CA the best thing IMHO is to stay put

Cali is no more than anywhere else. Every place in this country appreciated by an ungodly amount thanks to wfh madness. Only some random places stayed in the single digits. Other than that I don’t see what didn’t go up 40% since 2020

[golftdibrad1]

sure, but you will still have to live somewhere, unless you take up van life.

IDK this calculus is way harder in CA than other places because the appreciation is so insane. Good luck with your math but unless you are ing from CA the best thing IMHO is to stay put

Cali is no more than anywhere else. Every place in this country appreciated by an ungodly amount thanks to wfh madness. Only some random places stayed in the single digits. Other than that I don’t see what didn’t go up 40% since 2020

I mean, it went up stupid here too but 'only' like 20% unless you had a premo property. And when talking percentages 20% gain on 200k vs 700k is two very different numbers to consider in the context of a major live upheaval like selling your house.

[max225]

Cali is no more than anywhere else. Every place in this country appreciated by an ungodly amount thanks to wfh madness. Only some random places stayed in the single digits. Other than that I don’t see what didn’t go up 40% since 2020

I mean, it went up stupid here too but 'only' like 20% unless you had a premo property. And when talking percentages 20% gain on 200k vs 700k is two very different numbers to consider in the context of a major live upheaval like selling your house.

Well yea the base is higher that goes without saying. But the point being made was that everywhere saw massive appreciation. California in general wasn’t that bad … I’d be weary of Austin, Boise, Phoenix and most of Florida though.

[Tar]

I mean, it went up stupid here too but 'only' like 20% unless you had a premo property. And when talking percentages 20% gain on 200k vs 700k is two very different numbers to consider in the context of a major live upheaval like selling your house.

Well yea the base is higher that goes without saying. But the point being made was that everywhere saw massive appreciation. California in general wasn’t that bad … I’d be weary of Austin, Boise, Phoenix and most of Florida though.

Another consideration to factor in is the value of money. How much did the monetary base expand? Why are you valuating your assets on 2019 prices?

[ChrisoftheNorth]

I mean, it went up stupid here too but 'only' like 20% unless you had a premo property. And when talking percentages 20% gain on 200k vs 700k is two very different numbers to consider in the context of a major live upheaval like selling your house.

Well yea the base is higher that goes without saying. But the point being made was that everywhere saw massive appreciation. California in general wasn’t that bad … I’d be weary of Austin, Boise, Phoenix and most of Florida though.

Yep, it's like vehicles. EVERYTHING got more expensive, regardless of actual demand or suitability. Cars that used to depreciate badly will again, so buying something with historically high residuals and demand is the smart way.

Same goes with where you live. There's always been demand for Nor Cal, and there always will be. But areas that got blown up for no reason are going to tank when reality sets in for folks. Whether it's forced return to office, or realizing that it sucks to live in an area experiencing rapid growth that it's not set up for, or even just Phoenix, Austin, and Florida absolutely BLOW in the summer and that'll get old. There's a major readjustment coming for the real estate market, and I think these "boom" areas are most setup for

My area included. Makes zero sense how expensive it is here and there's absolutely nothing to sustain it. I got in low, so when it comes crashing down, I'll still be fine. But many others will be in trouble.

[D Griff]

Well yea the base is higher that goes without saying. But the point being made was that everywhere saw massive appreciation. California in general wasn’t that bad … I’d be weary of Austin, Boise, Phoenix and most of Florida though.

Yep, it's like vehicles. EVERYTHING got more expensive, regardless of actual demand or suitability. Cars that used to depreciate badly will again, so buying something with historically high residuals and demand is the smart way.

Same goes with where you live. There's always been demand for Nor Cal, and there always will be. But areas that got blown up for no reason are going to tank when reality sets in for folks. Whether it's forced return to office, or realizing that it sucks to live in an area experiencing rapid growth that it's not set up for, or even just Phoenix, Austin, and Florida absolutely BLOW in the summer and that'll get old. There's a major readjustment coming for the real estate market, and I think these "boom" areas are most setup for

My area included. Makes zero sense how expensive it is here and there's absolutely nothing to sustain it. I got in low, so when it comes crashing down, I'll still be fine. But many others will be in trouble.

Remember the areas that were hit hardest in 2008? Las Vegas, Phoenix, remote suburbs of FL, TX, and other southern markets... seems like that is still the case.

I do agree that we're far from the bottom though. My property here (which tracks the general trend in the area) went up by about 50% from our purchase in Q4 2019 and has dropped by maybe 3% off peak as far as I can tell. Now, that said, that peak is a bit conservative, I think some of the bidding war took houses around here even higher at points, but not really consistently.

The question remains is how much will things fall. Just inflation since that 2019 price must be at least 50% of the 50% 'appreciation'.

To me, the risks of selling the house outweigh the possible beneshits - if prices don't fall a ton more and level out, well, most of us here would be giving up epic interest rates we won't see again for a long time, lower monthly overhead, a bunch of money to some tool bag 'real estate professionals', and most importantly the comfort and convenience of our homes.

I'd say if you want out of a car or house right now for non financial reasons (like you don't like it anymore), today (or yesterday) is the day, otherwise, strap in and ride it out.

Just my opinion.

[ChrisoftheNorth]

Yep, it's like vehicles. EVERYTHING got more expensive, regardless of actual demand or suitability. Cars that used to depreciate badly will again, so buying something with historically high residuals and demand is the smart way.

Same goes with where you live. There's always been demand for Nor Cal, and there always will be. But areas that got blown up for no reason are going to tank when reality sets in for folks. Whether it's forced return to office, or realizing that it sucks to live in an area experiencing rapid growth that it's not set up for, or even just Phoenix, Austin, and Florida absolutely BLOW in the summer and that'll get old. There's a major readjustment coming for the real estate market, and I think these "boom" areas are most setup for

My area included. Makes zero sense how expensive it is here and there's absolutely nothing to sustain it. I got in low, so when it comes crashing down, I'll still be fine. But many others will be in trouble.

Remember the areas that were hit hardest in 2008? Las Vegas, Phoenix, remote suburbs of FL, TX, and other southern markets... seems like that is still the case.

I do agree that we're far from the bottom though. My property here (which tracks the general trend in the area) went up by about 50% from our purchase in Q4 2019 and has dropped by maybe 3% off peak as far as I can tell. Now, that said, that peak is a bit conservative, I think some of the bidding war took houses around here even higher at points, but not really consistently.

The question remains is how much will things fall. Just inflation since that 2019 price must be at least 50% of the 50% 'appreciation'.

To me, the risks of selling the house outweigh the possible beneshits - if prices don't fall a ton more and level out, well, most of us here would be giving up epic interest rates we won't see again for a long time, lower monthly overhead, a bunch of money to some tool bag 'real estate professionals', and most importantly the comfort and convenience of our homes.

I'd say if you want out of a car or house right now for non financial reasons (like you don't like it anymore), today (or yesterday) is the day, otherwise, strap in and ride it out.

Just my opinion.

[max225]

Well yea the base is higher that goes without saying. But the point being made was that everywhere saw massive appreciation. California in general wasn’t that bad … I’d be weary of Austin, Boise, Phoenix and most of Florida though.

Another consideration to factor in is the value of money. How much did the monetary base expand? Why are you valuating your assets on 2019 prices?

I am confining the valuation conversations to the house. The house will COME DOWN from an epic peak. I don't care about interest rate.. sure I am at 2.3% sure that's great. If I can't afford a house no one else can either so the prices will continue dropping until people can again or interest rates will come down also. It's simple economics really. But riding this out is key.

But it is a drop in the bucket for when my house devalues at 10-20% per year for the next 2 years. I will come out on top. The question is... What's the current market value... Which I am having a tough time with as things have SO RAPIDLY stopped out here that it is impossible to tell if it is 2M or 1.8M for ex... and that 200k is nothing to sneeze at.

That said I may have missed the boat here. And having in tow who I have finally convinced of this decision won't help much either... I don't want be in the same pressure cooker as everyone else and sit on a house devaluing at 20% while pointing at interest rates and thinking it isn't Major money can be made right now if you're willing to get of your ass and do some moves. And yes they take time/effort and energy.

I look at the house thing how I look at my car thing, no one understood why I had 5 cars over the last 12 months, but frankly I got PAID for doing that for the first time in history. And I pretty much loved every min of it. You can do something similar with real estate. But it requires short term sacrifices.

[golftdibrad1]

I scored a set of solid lifters for the Kiata for 75 bucks, yus. Need shims tho.... they can be expensive when you need all 16...

[ChrisoftheNorth]

Another consideration to factor in is the value of money. How much did the monetary base expand? Why are you valuating your assets on 2019 prices?

I am confining the valuation conversations to the house. The house will COME DOWN from an epic peak. I don't care about interest rate.. sure I am at 2.3% sure that's great. If I can't afford a house no one else can either so the prices will continue dropping until people can again or interest rates will come down also. It's simple economics really. But riding this out is key.

But it is a drop in the bucket for when my house devalues at 10-20% per year for the next 2 years. I will come out on top. The question is... What's the current market value... Which I am having a tough time with as things have SO RAPIDLY stopped out here that it is impossible to tell if it is 2M or 1.8M for ex... and that 200k is nothing to sneeze at.

That said I may have missed the boat here. And having in tow who I have finally convinced of this decision won't help much either... I don't want be in the same pressure cooker as everyone else and sit on a house devaluing at 20% while pointing at interest rates and thinking it isn't Major money can be made right now if you're willing to get of your ass and do some moves. And yes they take time/effort and energy.

I look at the house thing how I look at my car thing, no one understood why I had 5 cars over the last 12 months, but frankly I got PAID for doing that for the first time in history. And I pretty much loved every min of it. You can do something similar with real estate. But it requires short term sacrifices.

So the plan is to sell the house and rent something in your same area for a ??? period of time until you can buy a bigger thing for a better deal?

Cars are easy to swap, houses not so much.

[Tar]

Another consideration to factor in is the value of money. How much did the monetary base expand? Why are you valuating your assets on 2019 prices?

I am confining the valuation conversations to the house. The house will COME DOWN from an epic peak. I don't care about interest rate.. sure I am at 2.3% sure that's great. If I can't afford a house no one else can either so the prices will continue dropping until people can again or interest rates will come down also. It's simple economics really. But riding this out is key.

But it is a drop in the bucket for when my house devalues at 10-20% per year for the next 2 years. I will come out on top. The question is... What's the current market value... Which I am having a tough time with as things have SO RAPIDLY stopped out here that it is impossible to tell if it is 2M or 1.8M for ex... and that 200k is nothing to sneeze at.

That said I may have missed the boat here. And having in tow who I have finally convinced of this decision won't help much either... I don't want be in the same pressure cooker as everyone else and sit on a house devaluing at 20% while pointing at interest rates and thinking it isn't Major money can be made right now if you're willing to get of your ass and do some moves. And yes they take time/effort and energy.

I look at the house thing how I look at my car thing, no one understood why I had 5 cars over the last 12 months, but frankly I got PAID for doing that for the first time in history. And I pretty much loved every min of it. You can do something similar with real estate. But it requires short term sacrifices.

You can come out on top if the drop in your asset (house) value between now and the time you buy back in is greater then the total cost of the transaction to sell and buy back in. I'm sure its similar in your area and you can expect to be hit with some kind of land transfer tax (we have this and it's usually like $25k on a typical 1MM house), RE fees ($50-70k on 1MM), moving/storage costs ($5k), closing costs like lawyer ($5k) etc... So the dip out cost is about $100-110k is it not? If the house drops $200k at the time you buy it back you'll be up. What if the sheer amount of RE pessimism has you looking at offers that are $100-200k below asking price, will you still sell it? I think trying to sell it now is already too late and people are pricing in scenarios or walking. You might as well try to list it and see what kind of offers you're dealing with, it can't hurt.

[D Griff]

I am confining the valuation conversations to the house. The house will COME DOWN from an epic peak. I don't care about interest rate.. sure I am at 2.3% sure that's great. If I can't afford a house no one else can either so the prices will continue dropping until people can again or interest rates will come down also. It's simple economics really. But riding this out is key.

But it is a drop in the bucket for when my house devalues at 10-20% per year for the next 2 years. I will come out on top. The question is... What's the current market value... Which I am having a tough time with as things have SO RAPIDLY stopped out here that it is impossible to tell if it is 2M or 1.8M for ex... and that 200k is nothing to sneeze at.

That said I may have missed the boat here. And having in tow who I have finally convinced of this decision won't help much either... I don't want be in the same pressure cooker as everyone else and sit on a house devaluing at 20% while pointing at interest rates and thinking it isn't Major money can be made right now if you're willing to get of your ass and do some moves. And yes they take time/effort and energy.

I look at the house thing how I look at my car thing, no one understood why I had 5 cars over the last 12 months, but frankly I got PAID for doing that for the first time in history. And I pretty much loved every min of it. You can do something similar with real estate. But it requires short term sacrifices.

You can come out on top if the drop in your asset (house) value between now and the time you buy back in is greater then the total cost of the transaction to sell and buy back in. I'm sure its similar in your area and you can expect to be hit with some kind of land transfer tax (we have this and it's usually like $25k on a typical 1MM house), RE fees ($50-70k on 1MM), moving/storage costs ($5k), closing costs like lawyer ($5k) etc... So the dip out cost is about $100-110k is it not? If the house drops $200k at the time you buy it back you'll be up. What if the sheer amount of RE pessimism has you looking at offers that are $100-200k below asking price, will you still sell it? I think trying to sell it now is already too late and people are pricing in scenarios or walking. You might as well try to list it and see what kind of offers you're dealing with, it can't hurt.

So $100K in transactions PLUS $3-10K/month rent for an unknown amount of time PLUS unknown interest rate on the back end when things are (hopefully) lower cost.

A house equivalent to mine here is $3K/month rent and my house would transact at about 25% of Max's it sounds like (Bay Area versus NC, makes sense), so I assume rent would be significant.

It seems like a pretty large risk but I guess the best investments often are. It's just like shorting stocks (which I don't really get the mechanics of) but with a more physical asset.

[D Griff]

Actually just looked a bit out of curiosity and rents in SF Bay Area are pretty similar to CLT while purchasing is like 4X the price. Seems like it may make sense to just rent indefinitely there.

[ChrisoftheNorth]

Actually just looked a bit out of curiosity and rents in SF Bay Area are pretty similar to CLT while purchasing is like 4X the price. Seems like it may make sense to just rent indefinitely there.

I guess if you assume housing will never increase more than inflation there. But then you better like moving or dealing with crappy landlords/rentals. Sure, you don't have to deal with things, but when the water heater that's 10 years past replacement and has band-aided 10 times finally shits the bed, it'll be fun getting the landlord interested in replacing it in a timley manner. will love no hot water for a while.

I don't get the obsession with renting. It's not that great for me. I like being in control of my own domain. That's just me, I guess.

[D Griff]

Actually just looked a bit out of curiosity and rents in SF Bay Area are pretty similar to CLT while purchasing is like 4X the price. Seems like it may make sense to just rent indefinitely there.

I guess if you assume housing will never increase more than inflation there. But then you better like moving or dealing with crappy landlords/rentals. Sure, you don't have to deal with things, but when the water heater that's 10 years past replacement and has band-aided 10 times finally shits the bed, it'll be fun getting the landlord interested in replacing it in a timley manner. will love no hot water for a while.

I don't get the obsession with renting. It's not that great for me. I like being in control of my own domain. That's just me, I guess.

Definitely valid points. I would give buying at $2 million some deep thought though, when it seems like you can rent something fairly decent for like $4K. The reality is I couldn't afford either of those

[max225]

Actually just looked a bit out of curiosity and rents in SF Bay Area are pretty similar to CLT while purchasing is like 4X the price. Seems like it may make sense to just rent indefinitely there.

I guess if you assume housing will never increase more than inflation there. But then you better like moving or dealing with crappy landlords/rentals. Sure, you don't have to deal with things, but when the water heater that's 10 years past replacement and has band-aided 10 times finally shits the bed, it'll be fun getting the landlord interested in replacing it in a timley manner. will love no hot water for a while.

I don't get the obsession with renting. It's not that great for me. I like being in control of my own domain. That's just me, I guess.

You have no idea how strong the rental protection laws are here. You bet your ass if something isn’t working and land lord isn’t fixing … they will get sued and they will lose. My buddy is a slumlord here and the amount of times he has been sued out of rent for years is insane.

Shit needs to be tip top. Also I’m not exactly looking to rent a pos place. So I doubt I’ll be dealing with more issues than with my own 1974 house

[ChrisoftheNorth]

I guess if you assume housing will never increase more than inflation there. But then you better like moving or dealing with crappy landlords/rentals. Sure, you don't have to deal with things, but when the water heater that's 10 years past replacement and has band-aided 10 times finally shits the bed, it'll be fun getting the landlord interested in replacing it in a timley manner. will love no hot water for a while.

I don't get the obsession with renting. It's not that great for me. I like being in control of my own domain. That's just me, I guess.

Definitely valid points. I would give buying at $2 million some deep thought though, when it seems like you can rent something fairly decent for like $4K. The reality is I couldn't afford either of those

$4k for what...a condo? An actual multi-bedroom house that two people could work and live in seems like it would be a lot more than that. I guess if condo life isn't too cramped it could work...

[max225]

I am confining the valuation conversations to the house. The house will COME DOWN from an epic peak. I don't care about interest rate.. sure I am at 2.3% sure that's great. If I can't afford a house no one else can either so the prices will continue dropping until people can again or interest rates will come down also. It's simple economics really. But riding this out is key.

But it is a drop in the bucket for when my house devalues at 10-20% per year for the next 2 years. I will come out on top. The question is... What's the current market value... Which I am having a tough time with as things have SO RAPIDLY stopped out here that it is impossible to tell if it is 2M or 1.8M for ex... and that 200k is nothing to sneeze at.

That said I may have missed the boat here. And having in tow who I have finally convinced of this decision won't help much either... I don't want be in the same pressure cooker as everyone else and sit on a house devaluing at 20% while pointing at interest rates and thinking it isn't Major money can be made right now if you're willing to get of your ass and do some moves. And yes they take time/effort and energy.

I look at the house thing how I look at my car thing, no one understood why I had 5 cars over the last 12 months, but frankly I got PAID for doing that for the first time in history. And I pretty much loved every min of it. You can do something similar with real estate. But it requires short term sacrifices.

So the plan is to sell the house and rent something in your same area for a ??? period of time until you can buy a bigger thing for a better deal?

Cars are easy to swap, houses not so much.

It is much more difficult and costly but the upside is also much higher.

[max225]

Lets just do a rough hypothetical scenario:
1.3M house now valued at 2M with a 1M mortgage.
2M sale price
150k to scum realtors
1M to mortgage
850k in the bank.

That 850k is now making 3.5% per year... Because that's the treasury yield which is expected to go UP in September with the next rate hike... 100% safe
That's $29750 per year... or $2500 a month.. that the house is currently NOT paying, because the money is TIED UP.
Prop taxes avoided of 20k per year
Repair and maintenance of 5k per year (prob too low)
Interest is $23000 a year
Total is around 73k per YEAR in cost avoidance. $6000 a month. So I can RENT for 6k a month to BREAK EVEN on the house.

On top of that... say the house will devalue at 150k a year for the next 2 years... that's $12,500 a month... so the all in NET deficit is $18500....

I was planning on renting at $6000-7500 for the next 2 years and the delta can clearly be seen above... you can throw in one time moving expenses of 5k or what not... (we would stay in the area) and things are really completely misbalanced.

Now all that shit goes out the window if the house is "now" worth 1.6... then you stay put like a cuck and pray to the interest rate gods.

[Tar]

You can come out on top if the drop in your asset (house) value between now and the time you buy back in is greater then the total cost of the transaction to sell and buy back in. I'm sure its similar in your area and you can expect to be hit with some kind of land transfer tax (we have this and it's usually like $25k on a typical 1MM house), RE fees ($50-70k on 1MM), moving/storage costs ($5k), closing costs like lawyer ($5k) etc... So the dip out cost is about $100-110k is it not? If the house drops $200k at the time you buy it back you'll be up. What if the sheer amount of RE pessimism has you looking at offers that are $100-200k below asking price, will you still sell it? I think trying to sell it now is already too late and people are pricing in scenarios or walking. You might as well try to list it and see what kind of offers you're dealing with, it can't hurt.

So $100K in transactions PLUS $3-10K/month rent for an unknown amount of time PLUS unknown interest rate on the back end when things are (hopefully) lower cost.

A house equivalent to mine here is $3K/month rent and my house would transact at about 25% of Max's it sounds like (Bay Area versus NC, makes sense), so I assume rent would be significant.

It seems like a pretty large risk but I guess the best investments often are. It's just like shorting stocks (which I don't really get the mechanics of) but with a more physical asset.

It's a tough sell for people with a lot of stuff like my household of four, moving is one of the most stressful life occurrences for most people and up there with funerals, weddings, etc. Max and BAEZN might be a different story and moving wouldn't be too stressful. I don't look at my primary residence as an investment, the cost of ownership is fortunately low enough that I can just enjoy it until the kids are all grown up. I've also never experienced the crazy price drops that Max experienced in 2008/09, my house went down like 10% and by 2011 was up like 50% from the absolute low. We upsized from a semi-detached home to a fully detached home only to see that go up another 25% and stop again for two years. Then up again... Then down a bit.... Then we upsized to a nice area to raise kids in and here we are... Up another 50% and down whatever it ends up being, thus far I'd say we probably lost 15% and can expect another 10-15% which is still above what we paid. HOWEVER.... All it's going to need is a rate hike freeze and it'll become a sellers market again in the spring (probably not but who knows).

[D Griff]

Lets just do a rough hypothetical scenario:
1.3M house now valued at 2M with a 1M mortgage.
2M sale price
150k to scum realtors
1M to mortgage
850k in the bank.

That 850k is now making 3.5% per year... Because that's the treasury yield which is expected to go UP in September with the next rate hike... 100% safe
That's $29750 per year... or $2500 a month.. that the house is currently NOT paying, because the money is TIED UP.
Prop taxes avoided of 20k per year
Repair and maintenance of 5k per year (prob too low)
Interest is $23000 a year
Total is around 73k per YEAR in cost avoidance. $6000 a month. So I can RENT for 6k a month to BREAK EVEN on the house.

On top of that... say the house will devalue at 150k a year for the next 2 years... that's $12,500 a month... so the all in NET deficit is $18500....

I was planning on renting at $6000-7500 for the next 2 years and the delta can clearly be seen above... you can throw in one time moving expenses of 5k or what not... (we would stay in the area) and things are really completely misbalanced.

Now all that shit goes out the window if the house is "now" worth 1.6... then you stay put like a cuck and pray to the interest rate gods.

I suppose that checks out (assuming prices do indeed shit the bed). I certainly don't see them going up much if at all over the next year or two, certainly a drop seems likely to continue.

I think the difference in purchase price versus rent as compared to other areas changes the game. As mentioned your property prices are 4X here and yet rent is maybe 2X or less. Carrying costs are also way higher given they're largely based on price/value (interest and taxes).

One question I would have is how do you know when to dive back in?

[ChrisoftheNorth]

Lets just do a rough hypothetical scenario:
1.3M house now valued at 2M with a 1M mortgage.
2M sale price
150k to scum realtors
1M to mortgage
850k in the bank.

That 850k is now making 3.5% per year... Because that's the treasury yield which is expected to go UP in September with the next rate hike... 100% safe
That's $29750 per year... or $2500 a month.. that the house is currently NOT paying, because the money is TIED UP.
Prop taxes avoided of 20k per year
Repair and maintenance of 5k per year (prob too low)
Interest is $23000 a year
Total is around 73k per YEAR in cost avoidance. $6000 a month. So I can RENT for 6k a month to BREAK EVEN on the house.

On top of that... say the house will devalue at 150k a year for the next 2 years... that's $12,500 a month... so the all in NET deficit is $18500....

I was planning on renting at $6000-7500 for the next 2 years and the delta can clearly be seen above... you can throw in one time moving expenses of 5k or what not... (we would stay in the area) and things are really completely misbalanced.

Now all that shit goes out the window if the house is "now" worth 1.6... then you stay put like a cuck and pray to the interest rate gods.

Yep, as we've discussed in other threads, this is highly situational. In this case, it makes a lot of sense if you're willing to deal with moving. You're talking about clearing more than my house could hope to be worth in total in the next decade. Completely unique situations.