Category: Real Estate

If Zillow is right about inflation, is everyone who rents stupid?

by philg

The Zillow August 2021-August 22 forecast:

Zillow expects home values to grow 11.7% between August 2021 and August 2022, and to end 2021 up 19.9% from December 2020.

The September 2021-Sep 22 forecast:

Zillow expects home values to grow 13.6% between September 2021 and September 2022, and to end 2021 up 19.5% from December 2020.

The 10-year mortgage rate is about 2 percent. If Zillow is right, even for someone who wanted to live in a place for only one year, it would be cheaper to buy a house, pay the cost of capital, pay property tax and insurance, and pay a realtor 5 percent at the end of the year to sell the house than to pay rent (since the preceding scenario will yield at least a small cash profit).

So…. either (1) everyone who rents is stupid, (2) nobody who rents can qualify for a mortgage, or (3) Zillow is wrong about where the price of a house to purchase is going.

(Since we are renters and I am stupid, I am going to bet on Explanation 1!)

Note the pasted-on price adjustment in the chocolate alligator for sale below (PBI):

Related:

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Flush toilets in New York City for $60 per hour

by philg

Our mole inside the New York real estate industry told us about a newly available career path: toilet flusher. “The office towers are empty and if you don’t have someone go in and flush toilets and run sinks, you’ll get Legionnaires’ disease. Even when the sinks and toilets are electronically controlled, nobody ever envisioned a time when buildings would be vacant for months or years. So there is no way to program them to run themselves automatically every few days. We’re paying people $60 per hour to go in and flush toilets.”

Why isn’t it $20 per hour? “There’s government funding for this so it has to be prevailing wage,” he replied. “Union wages start at $60 per hour.”

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