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July 27, 2005
Real estate bubble or not?, Wed., July 27, 2005, 5:06 PM
An interesting discussion on CNBC as to "Bubble or not?" revealed that the biggest price moves have been in Boston, Long Island, and San Diego, followed by three other California cities.
Another interesting data point was that yields from rental real estate have fallen to a range of 3 pct to 5 pct.
I suppose as long as the owner is prepared to accept a 3 pct yield, which I presume is before maintenance and (possibly) taxes, then there may never be a popping of the bubble.
But why would you invest in rental real estate when you could get a risk-free 4 pct net net net return on a short-term U.S. Treasury bond? And what happens when that bond goes to a 5 pct yield, or higher?
Posted by Posted by Bill Cara on July 27, 2005 05:08:27 PM | Category: Cara Today in the Market
Average rental yield (net rents/property value) for my neighborhood in South San Diego, California on a single family dwelling (net of costs - re: insurance, property tax, etc.) is around 2%.
-Ben Green
Posted by: Ben Green at July 28, 2005 12:05 AM [link]