Friday, March 10, 2006

Hoboken Bubble Sitters Sit Pretty

From ABC News:

Should You Buy or Rent?

Bubble Sitters' Sell High and Rent Low

Jordan and Linda Celkupa were first-time homeowners who got into the real estate market at the right time. The young couple sold their apartment of four years for a 65-percent profit, and since then, they've been renting and waiting for the housing market to cool down.

"If you look at the amount of money we spend every month, it's just substantially cheaper to rent than own this place," Jordan Celkupa said.


The Celkupas are among a small number of "bubble sitters," who sell their homes for a high profit and rent, hoping the market will come back down when they buy again.

Video of this piece is available as well:

Homeowners Who 'Bubble Sit'

Caveat Emptor!
Grim

12 Comments:

Anonymous Anonymous said...

"As for those thinking of buying for the first time, Corcoran recommends buying now rather than waiting. The American dream never gets cheaper, she said, and the best stimulus to saving money is having to pay a mortgage payment."

Dayam! George Orwell gives that a big thumbs up!

3/10/2006 07:05:00 PM  
Anonymous Anonymous said...

Agreed. What a sleezy Leni Riefenstahl of the Realt-whores. She says an interest payment is a savings! WTF? At the end of the mortgage do your lenders give you all the interest back!? Then there's the classic propaganda about a house being a "home" and not an investment. Exactly. If houses had stayed _homes_ and not investments for flippers, they'd be at least 50% less expensive in most markets.

3/10/2006 08:24:00 PM  
Anonymous Anonymous said...

Am I mistaken or is Jordan Celkupa our own chicagofinance? Nice pad, chicago.

I think Corcoran was mainly saying it would be imprudent to cash out and rent only to realize a profit if indeed you are happy in the house you currently own (i.e., have a mortgage on). She deftly avoided addressing the fact of the bubble or whether *first-time buyers* should buy or rent.

I thought I read in a previous article that chicago & wife sold because they ultimately wanted a bigger place and the one they were in was not going to be adequate for ten years to come. But maybe I am misremembering.

On the other hand, I have heard of a number of very wealthy people unloading their manses in order to bubble sit. All depends on your own situation and, of course, your tax bracket.

Personally, I sold my house for a boatload of cash not because I was try to do a reverse flip but because a job change necessitated a move. Am I rushing to buy a new house now that I have sold my old one. No way. I'm renting.

3/10/2006 09:06:00 PM  
Anonymous Anonymous said...

I did the same thing in Hoboken last year. What made it a no brainer for me is the interest I get on my profit from the property sale. The interest pays for one third of my monthly rent at todays rates and my interest income increases every time the fed raises rates.

Needless to say, the rent versus buy equation keeps pretty much make buying a stupid idea for me at this time in a pure economic sense.

3/10/2006 09:35:00 PM  
Blogger chicagofinance said...

Linda Celkupa is a babe ;)

Yes, we wanted a bigger place, and there are also many good reasons we rent beyond the obvious, but it is a long story, and requires some scotch. There was much uncertainty.

For the record, Corcoran’s commentary disappointed me. I thought she did not represent herself well.


Assuming a standard amortizing mortgage, we are saving roughly $1500 a month over owning from the point we moved.

However, based on prices today, the number is closer to $2500.

If you approach this issue straight by the numbers, we broke even right up until about early 2005. The run up last summer kind of put this scheme in the red.

However, from a quality of life perspective, we are worry-free, cash-rich, and really enjoying ourselves.

Plus I have had a chance to correspond with all of you.

chicago

3/10/2006 10:29:00 PM  
Anonymous Anonymous said...

Will Corcoran make a written guarantee to first time home buyers?

3/11/2006 08:44:00 AM  
Anonymous Anonymous said...

"The interest pays for one third of my monthly rent at todays rates and my interest income increases every time the fed raises rates."

I'm in the same boat.

Nice to have an interest subsidy on rent!

3/11/2006 01:53:00 PM  
Anonymous Anonymous said...

That lady is such a shill -- shame on ABC News for not having a balanced panel for the discussion.

At least she provided some entertainment value by calling the host "rich."

3/11/2006 02:01:00 PM  
Anonymous Anonymous said...

Nice "list," Barbara. Scum. "Paying the money to yourself." Lowlife.

3/13/2006 12:08:00 AM  
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