Renting beats owning a home in California and many other markets

rent 2Even though owning a home is still cheaper than renting nationally there are many markets where it is still cheaper to rent than own.  One of those markets is all of California!  This is rentaccording to a Deutsch Bank housing survey cited in an article posted on-line in SmartMoney.  With housing price declines and record low-interest rates it should be cheaper to own real estate but in California and the northeast and elsewhere it is still in fact cheaper to be a tenant.

According to the same article homeownership is slipping.  It is down from a high of 69% in 2004 to a low of 65% and it appears to be still falling.  More and more people seem to have caught wind of this fact and they are becoming tenants.  Apparently one-third of all rentals are single family homes as the number of single family homes for rent grew by 2 million from 2006 to 2010.  There are currently a total of 13 cities where it is cheaper to rent than own now.

So don’t despair if you don’t have a piece of the American dream.  Don’t worry if you have been foreclosed on and you now must rent.  If it is cheaper to rent then maybe renting is a good idea for a while.  It is doubtful that their will be any meaningful appreciation in housing anytime soon so why buy?  When you add in the costs of maintenance, insurance, mortgage, and taxes it is very expensive owning a home.  Let the landlord worry about that stuff and be happy renting!

Now may also be a good time to clean up those debts yo have accumulated over the years too.  Paying rent is always easier without paying for all those credit cards, personal loans, auto deficiency balances, and medical bills.  Try bankruptcy to eliminate those old debts and get a fresh start.

I am a San Diego bankruptcy attorney.  For further questions please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation or for any other advice about bankruptcy or debt at (619) 702-5015. Call now for free credit report and analysis!

For a free e-book on “13 things to do to prepare for your bankruptcy filing” please e-mail me at farquharesq@yahoo.com.

 

For rent photo courtesy of Billy Alexander.  Houses for rent photo courtesy of cdsessoms.

Shiller says housing prices won’t rebound for a generation. Are we headed for a society of permanent tenancy?

In an interview with Reuters Yale economics professor Robert Shiller (creator of the Case/Schiller housing index) has expressed his concern that housing prices may not rebound for a generation.  He says that the combination of high gas prices, a weak labor market, and a general sense of unease among consumers have all combined to keep housing prices low for the foreseeable future.  He apparently added in the interview that he was worried that we would not see a housing rebound in our lifetimes.

If this is true could it mean that our generation is doomed to low housing prices?  Will we really not see increases for the foreseeable future?  What effect will that have on future home sales?  Don’t people buy homes because they are a good investment and because they will increase in price in the future?  Will they now stop?  Won’t this radically affect our whole economy and what about all of the people who work in the real estate industry?

These are just a few of the questions I had when I read this.  I hope this economist is wrong but if he is right then we could see a whole different society in the future.  It could be one where people won’t invest in real estate anymore.  People could merely rent their home or apartment and not buy because they have little hope of getting any appreciation or equity out of their investment.  This could mean the end of the American dream of home ownership.

It is well-known that there are kids who are staying longer and longer at home.  Much longer than they did in previous generations.  These are the “failure to launch kids”.  According to CBS fully 70% of children under 30 still live with their parents. These people will probably not buy homes until much later if at all unlike previous generations when people usually left home at 18 years old.

This factor combined with the recession, the foreclosure crisis, and the failure of housing appreciation is creating a different kind of nation.  One where real estate is not purchased nearly as often.  I believe that there could be a future for America where people don’t invest in real estate.  One where they rent and don’t own ever. One where they are tenants for life.  This will be a different society than the one we know now.  Some realtors I know claim that the whole economy is so dependant on real estate that it cannot climb out of this recession until real estate does.  (See here for my blog on how foreclosures are predicted to increase in the near future).

I hope the realtors are wrong and I hope Schiller is wrong.  I personally don’t want to see our country abandon the American dream of homeownership and trade it or a society of permanent, lifetime tenants.  It sounds too much like medieval Europe to me.  I don’t foresee good coming out of us becoming tenant/peasants who have not hope of owning homes.  I believe housing prices must rise again in the not too distant future if we are to avoid an unraveling of society and a return to a more slavish tenant existence.  This would not be good for anyone and a departure from everything were moving towards up until this point in our history.

I am a San Diego bankruptcy attorney.  Please visit my websites at www.farquharlaw.com or www.freshstartsandiego.com for more info. about any of these topics.   Or call my office for a free consultation at (619) 702-5015.  Call now for a free credit report and analysis!

For a free e-book: “13 THINGS YOU SHOULD DO TO PREPARE FOR YOUR BANKRUPTCY FILING” please send a request by e-mail to: farquharesq@yahoo.com.

Will my landlord be notified of my bankruptcy and can he evict me if I file?

(See my blog with an update to landlord notification and bankruptcy here: http://bit.ly/IAaaQc .)

No!  Your landlord will probably not even know that you filed and if he did you are protected by law.  A landlord cannot legally evict a tenant for filing bankruptcy.  If you file bankruptcy and then try to move in a landlord can keep you out only if he has a policy that every prospective tenant has to follow where he will not rent to bankruptcy filers.  But if you are already in your rental unit and you then file bankruptcy then you are protected by law and the landlord cannot evict you for filing.

Probably though he will never even find out that you filed for bankruptcy.  It is only if you have a unexpired lease for any amount of time that he would be notified of your filing.  If you are month to month then your landlord won’t be notified.  But if the landlord somehow finds out about your bankruptcy or he is notified directly because of an ongoing lease he still cannot evict you.   If your landlord tries to evict you after a bankruptcy and because of the bankruptcy then you can fight the eviction in California.  I believe other states have similar defenses to unlawful evictions.

Remember that you have a federal legal right to file for bankruptcy.  No landlord can challenge that or take it away or discriminate against you for exercising your legal federal right to get a fresh start with our debts!  If the landlord is smart he will see that you can now pay rent more easily as you will have discharged your credit card, medical, deficiency balance, and other debts in the bankruptcy which will free up more income to pay for rent and your other necessities.  You may get a landlord that does not care or even is happy that you filed.

But either way don’t be intimidated by a landlord who threatens an eviction.  You can fight the eviction and win if the reason he is evicting you is because you filed for bankruptcy.

I am a San Diego bankruptcy attorney.  For more information please visit my website at www.farquharlaw.com or www.freshstartsandiego.com.  Or call my office for a free consultation at (619) 702-5015.  Call now for free credit report and analysis!  If you are considering bankruptcy then get my Free e-book; “13 Things You Should D to Prepare For Filing Bankruptcy” by e-mailing me at farquharesq@yahoo.com.