I recently won the IPO lottery--went from nearly zero net wealth to a solid seven figure net wealth. I could buy a house in the bay area and give up > 50% of my cash for it, or I could give up 15-25% of my net wealth with a down payment on a a mortgage and pay (PITI) 110% or more of what I could pay in rent for a similar home.
Or I could continue renting and put that 15% - > 50% of my net worth in appreciating assets and income producing investments. Even better: I could move my family to a place where people aren't paying $2M for a home that's worth $250k.
The housing market here is suited best for people with absolutely no money sense at all, or those VHNWI and UHNWI who can buy into genuine investment grade real estate out here. It makes zero sense for the vast majority of people to buy here, especially people who more or less win a lottery with some options from a company that makes an exit. In almost every case their money would be put to better use renting here and investing elsewhere (assuming they're tied down here, e.g., due to work).
Or I could continue renting and put that 15% - > 50% of my net worth in appreciating assets and income producing investments. Even better: I could move my family to a place where people aren't paying $2M for a home that's worth $250k.
The housing market here is suited best for people with absolutely no money sense at all, or those VHNWI and UHNWI who can buy into genuine investment grade real estate out here. It makes zero sense for the vast majority of people to buy here, especially people who more or less win a lottery with some options from a company that makes an exit. In almost every case their money would be put to better use renting here and investing elsewhere (assuming they're tied down here, e.g., due to work).