This article was originally published by Tyler Durden at ZeroHedge.
U.S. existing home sales slumped for the 13th straight month in March, but the pressures on the national housing market have yet to translate into cheaper rents: To wit, average national rent climbed 3% YoY in April, and 0.3% from the prior month, according to Yardi Matrix data cited by RentCafe.
The national average rent hit $1,436 in April, climbing about $42 from the prior year to $1,436 – which, though still positive, marked the slowest pace of growth in 11 months.
Across major US housing markets, rent in Wichita is the most affordable, averaging $646, followed by Tulsa, at $688. On the other end of the spectrum is the average rent in Manhattan, the world’s most expensive rental market, climbed to $4,130 in April. Behind Manhattan is – of course – San Francisco, with an average rent of $3,647, then Boston ($3,357) then Brooklyn ($2,878), then San Jose ($2,720) and Los Angeles ($2,471), in sixth place. Of the largest metropolitan rental hubs, Indianapolis had the lowest average rent ($861), followed by Columbus, Ohio ($924).
While rents tended to be highest in urban enclaves along the coasts, some large rental markets in the Sun Belt boasted surprisingly affordable prices, including Las Vegas ($1,061) or Phoenix ($1,046).
But in another sign of just how skewed rents are across the US, of the 253 cities examined as part of the study, only 64% have average rents below the $1,436 national average, while the other 36% have average rents above.
I have experienced crushed rents only twice in my lifetime. Once after the 1980s crash; the second time during a third world country crash.
The thing to keep in mind is this: the financial sector has super controller supremacy over the price of assets with the government backing it all up. It is a collusion of interests with both benefiting (tax for government; rents and price increases for the financial sector).
Neither want the party to stop.
The party will only stop when there is a systemic event. Waiting for cheaper rents could be a big mistake.
Having said that, when rents do get crushed, there is a window of 5 to even 8 years that you can enjoy low rents and rising wages from inflation as the economy comes back online. That is the moment to save money like a beast and use that to BUY assets.
The housing market, like the Stock Market, fluctuates.
If you buy a home, you make an investment both financially and personally. You lose the ability to just pack up and go. But you gain stability.
And, if you purchase wisely, your reward for maintaining your investment is that you can sell and profit, or hand down the property to your children.
In Europe, houses and buildings are still being used after centuries. If I were to purchase a home in the USA, I doubt that I could find a house worth buying that is over one hundred years old.
But if I built a house myself, I’d build it to last. Ideally, I’ld obtain enough land to build not only for myself, but for children and grandchildren and so on.
As I said before, owning a home gives you stability. But owning a home with land, and alot of it, gives you even more options.
You can build on land and rent. You can sell off parcels, keeping some for yourself. And you can farm all or part of it.
If you are not ready to buy yet here are some ideas for how you can do it:
Live with your parents, rent a room or live in a trailer; and save the money you make working. Work two jobs or work overtime. Work weekends. Set a goal and stick to it. Save until you have enough to buy.
In the meantime:
Learn the trades; carpentry, plumbing, electrical, welding. Learn how to grow stuff, too.
Good advice. Buying land is the thing to do. A “country pile” has been the secret way Europe’s elites create and keep inter generational wealth. And they are ruthless about it.
Why did so many people end up living in cities in the 18th and 19th centuries? That was because they had been kicked off their land by the elites, made penniless and forced to work for next to nothing in cities. Much of the wealth created in cities was in fact made through the sex trade, in particular the trade of young girls. This reaped vast fortunes that were then used to invest in property development and overseas trade.
You need to get the cash to buy land but that is close to impossible if you earn an average wage and pay market rent. This is because taxes and inflation will eat you alive.
In order to get around that you must not pay tax. That is the best way to rapidly build a nest egg. There are many options: live tax free somewhere that is possible, work for a company that has a deal in a country to not pay tax. But do not pay tax. Organise your affairs like a business. Use family trusts to keep wealth in the family for your kids. Do like the elite do.
I have two Aunts that were very successful real estate agents,
so I have the advantage of world class advice in WA state and So. CA markets.
I have rented at most 2 months in my adult life, after I left military service in 1978.
Never ever rent!!!!!!!!!!!!!!!!!!!!!!!!!
My advice to renters, is learn how to fix cars, buy a good used vehicle, buy some land WAY outside a city, and while suffering years of long commutes, develop the land into a home/farm.
Pay cash or do promissory notes. I paid my last mortgage note in 1988.
Landlords are a pain in the ass, I should know, as I am a landlord.
Buy land, pay for it. In life on this Earth, it is better to “rule in Hell than to serve in Heaven”.
So true! Land is key. But, like you say, start small and pay it whole. Build it up as you acquire more savings. Scout out fast growing cities. Look for where commuter belts will grow. Look for high ground because that is where the rich neighbourhoods will grow. Get a chunk in there. It can just be an old shed in a wealthy neighbourhood. Get a foothold. Use it for your letterhead. In time it will be your base to acquire substantial rich-guy property. By being in the hood you will notice the bargains: the mansion falling apart with the old widower. You shovel her snow, get to know her. Offer to buy so she can not be a burden to her kids.