Stories like these make me so happy on this most joyous of days.
I moved to the Atlanta area about 2 years ago. Being a sane person, I did not buy a house here. When I was looking for rentals, I talked to a few real estate agents along the way way. Without exception these experts in the field told me I was crazy to rent. You see, Atlanta is different and so would never experience a housing downturn like the rest of the country. Everyone in the world wants to live in Atlanta and so housing prices will go up up up for the next 10 years. Prices will be at least double in 10 years and even more in some areas.
And the other story the real estate shills were selling was this notion of an Atlanta ghetto renaissance. All this new development would magically transform the ghettos of Atlanta into areas with $500K homes selling like hot cakes. The fact that the median income in Atlanta is $45K, which makes the notion of $500K homes laughable, never entered the minds of the shills. Real estate agents are like a Barbie doll that talks. Pull the string and she says "NOW IS A GOOD TIME TO BUY". Pull it again she says "RENTING IS THROWING YOUR MONEY AWAY". Pull it again and she says "(INSERT CITY NAME HERE) IS DIFFERENT AND IT IS NEVER GOING TO FALL IN PRICE".
Well fast forward 2 years and we get this:
It’s a uniquely intown Atlanta story, where areas once blighted by crime found new life from renovation and construction of an unprecedented level of new infill housing — only to see those same houses fall into abandonment and disrepair as the market crumbled.
And what happened to the prices of those magical new homes that were supposed to double and triple in value over the coming decade?
Cal Wimberly, an Atlanta real estate agent, said there are so many nearly new homes on the market in northwest and southwest Atlanta and so few buyers that new homes now sell for half or less than their original price. He recently sold a nearly new house in the Pittsburg community for $30,000. It had once been listed for six times as much, he said.
From $180K to $30K. I'm not one of them fancy Wall St experts or one of those fancy real estate agents who took a weekend seminar. But to me that seems like a pretty bad investment. And I think that looking back on the past 2 years, renting a house for about 60% of the cost of owning the exact same house has ended up being a good financial move.
Yes, yes I realize I was not as cool as those enlightened intown residents who lost 80% of their investment. Actually more like 100% of their investments since they lost 100% of the down payment. And I also haven't been making $800 a month lease payments on the Range Rover that these same real estate geniuses make. I have nothing but anectodal evdidence for this, but I would imagine next to L.A., Atlanta has to have the highest number of Range Rovers on the road.
Silly me, I make $0 a month payments on the used cars I own outright. The cars that get me from point A to point B as quickly as the Range Rover would. My entire car costs for a year including registration, insurance and repairs is the equivalent to 1.5 months of the typical Atlantan's monthly lease payment.
But then again 90% of people in Atlanta voted for Obama. 'Nuff said.