Tsaiberspace

First article here.

It was only a matter of time before online web services would be shown to be compromised. TurboTax Online has allowed a user to see lots of juicy information about other online filers, and it was completely inadvertent, not even a malicious attack. See story here.

From the NY Times:

Of course this applet is no substitute for crunching your own numbers, but in the absence of number-crunching, I plugged in the following constants:

• $1995/mo. rent
• $700k house (modest house in San Francisco)
• 20% down
• 6.25% mortgage rate
• 1.00% annual property tax
• 5% investment return

I left everything else alone. To make it “worth it within 15 years” to buy, one of the following things would have to happen:

• Home appreciation would have to be 4-5%. Some reports say that SF appreciation is around 2% right now.
• Rent would have to increase by 10% every year. I have no reference, other than that rent control is 1.7% (we don’t live in a rent-controlled house). A 10% bump sounds plausible, but sounds like a lot.
• Rate of return on alternative investments would have to drop to 0.50%. An ING Direct savings account gives you 4.50%, and it’s not even the highest rate out there.

In short, the “carrot” to buying a home is for housing prices to fall to about $475k (a huge drop), or for home appreciation to rise again. The “stick” to buying a home is for rent to increase by 10% every year, or for alternative investments to be even worse than real estate.

None of these “carrot” or “stick” events appears likely to happen anytime soon.

Update: I forgot to include the roughly $1000/mo. that the downstairs in-law tenant is probably paying. So with a total monthly rent of $2995/mo. for the comparable $700k house, it looks more reasonable to buy.