Wednesday, September 23, 2009

3 Metrics to Consider Before Investing In a House

Mish mentioned the first 3 metrics to consider when investing in a house:

1) How much are home price out of whack with rental prices? (i.e. What does it cost to own vs. rent a similar house? Keep in mind maintenance, property taxes, etc.)
2) How much above the trendline growth in price appreciation are home prices selling? (Was there an unexpected or unwarranted acceleration in prices over a number of years?)
3) How much have home prices appreciated vs. wages

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