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by mihoda
1061 days ago
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The math is simple. In the East Bay right now the cash flow (mortgage + prop tax + maintenance) alone for home ownership is 2.5x my rent for an identical property. It comes down to 2.2x when factoring in mortgage interest deduction and rises back to 2.3x when considering opportunity cost of capital. I did a broader analysis and came up with 1.75-2.25x for other homes. For a rational actor to buy a home right now, it implies a 5-6% expected return on the home price every year for an average of 10 years. |
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