8500 Sq Ft 1.1 Acres
01/13/07 $4,480,000
04/15/07 $2,750,000
Los Lagos
MLS# 70004804
(Look at that KINGS court)
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8500 sq ft 3.1 acres
05/07/07 $7,900,000
04/14/08 $6,490,000
313 Days On The Market
Los Lagos
MLS # 70049117
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Center for Economic and Policy Research
Comparison of Ownership vs. Rental Costs Demonstrates that Rental Options Should Be a Consideration in Housing Proposals
For Immediate Release: April 3, 2008Contact: Alan Barber, 202-293-5380 x115 (CEPR);Taylor Materio, 202-662-1530 x227 (NLIHC)
WASHINGTON, D.C. - As Congress debates solutions to the mortgage meltdown and ever more homeowners find themselves facing foreclosure, a report released today by the Center for Economic and Policy Research (CEPR) and the National Low Income Housing Coalition (NLIHC) shows that in many bubble-inflated markets, homeownership remains a costly and risky proposition.The study, "The Cost of Maintaining Home Ownership in the Current Crisis: Comparisons in 20 Cities," evaluates the median house price and fair market rent, as determined by HUD, for 20 major metropolitan areas. The findings of the report reveal that the ratio of homeownership to rental costs varies substantially from market to market, and as such, public policy must go further than a one-size-fits-all solution to the current housing crisis."This is not just a homeownership crisis," said Danilo Pelletiere, NLIHC Research Director and a co-author of the report. "Data shows that nearly 40 percent of foreclosures affect rental properties and in many areas, homeownership markets remain highly uncertain. Any policy to address this crisis must recognize the rental market as part of the solution."According to the report, which analyzed data from the Census Bureau's American Community Survey (ACS), the most inflated markets currently see monthly homeownership costs outpacing rental costs by as much as 300 percent. This creates a substantial and unnecessary drain on household income, especially for middle- and lower- income families."This could mean that families may have to forgo health insurance or quality child care as they struggle to make their mortgage payments, " said Dean Baker, Co-Director of CEPR and an author of the study. "Furthermore, since prices are still falling in these markets, many homeowners won't ever accrue any equity."The study projects that in the bubble markets, most homeowners will leave their homes with large amounts of negative equity. For example, it projects that in New York, homeowners will have $179,000 of negative equity and in Los Angeles, the shortfall would be $277,000. In these, and other bubble markets, households would benefit from proposals that attempt to provide affordable rental options as part of policy solutions.For cities where the costs of owning are much closer to rental costs, it is likely that a small amount of equity will be accrued. In these markets, policies that keep owners in their homes, possibly through some form of government-guaranteed mortgage, are preferable.###The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.NLIHC is a membership organization dedicated solely to ending America's affordable housing crisis. NLIHC educates, organizes and advocates ensuring decent, affordable housing within healthy neighborhoods for everyone.
