SPDR S&P 500 (SPY)

[learningboutinv]

OT - Thanks, CJ. I was eyeing a few of your posts. It's bothersome to me, because my wife and I both want to buy a house and start a family. (We've been married for 2 1/2 years and I'm turning 33 soon.) Anyhow, I know now is not a good time to buy, but I'm pretty sick of renting for the past year. (Moved from Wash D.C. owned a home for 3 1/2 years and now am renting.) Finally in Seattle houses are starting to drop. But not by much. YOY changeis only -3.5%. Houses peaked in July 2007, and currently houses in Seattle are only down 7% from that peak.

From what I can gather, in the past rents typically = mortgages and when the two become out of whack one must correct and the other must go up. Right now it is so cheap to rent vs to buy. So rents probably will increase while houses decrease in value.

http://www.housingtracker.net/affordability/

Seattle's ratio is 1.55. Meaning it is 55% more expensive to buy than to rent. I can rent a 3br/2ba for about $1500-1700, but yet to buy you're talking about $2500-3000 with PITI, and these are houses in the same neighborhood within blocks of each other and with similar sq ft, etc.

What is scary to jump in is all the people with negative equity in their homes. I guess this is not a Seattle only phenomenon.




There are a couple more interesting charts on Zillow...
http://www.zillow.com/quarterlies/QuarterlyThumbs.htm?msa=Seattle+Tacoma+Bellevue+WA