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Why the rich are renting

By Judy Martel · Bankrate.com
Tuesday, July 3, 2012
Posted: 7 pm ET

Sales of luxury homes are rebounding, but a growing number of the ultra-rich are still renting, even if they can afford to buy. Real estate brokers say it's another indication that the housing market has changed in ways they're still trying to grasp.

Some of the reasons for renting among the rich are typical to the broader market: Potential buyers who purchased a home during the boom have been rendered gun-shy by the housing bust. And with mortgage rates predicted to remain near historic lows for the next year, there's no sense of urgency to buy immediately, giving buyers time to be choosy while home prices settle.

But there are additional reasons for renting that are specific to the luxury market. High-end rental properties have become more plentiful, as investors in luxury properties choose to rent them out while waiting for prices to rebound. In New York City, agents are reporting that the rich who own property elsewhere are opting for the low-maintenance lifestyle of renting in the city.

CNBC reports that mansions in tony areas like Miami, Beverly Hills and Manhattan are renting for more than $100,000 a month. Of course, for that price, you get square-footage, primo views of the city skyline or the yacht docks and plenty of amenities like tennis courts and even private discos.

Since the housing bust, have you become more committed to renting or do you still hope to buy a home?

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33 Comments
Jeff Wilson
July 13, 2012 at 4:41 pm

I agree with Michael but it's not the whole story. Research the history of the national debt starting with Eisenhower Thur Carter. + 1% or 2% or minus 1% or 2% of GDP. Reagan Plus 20% 1st term Plus 10% 2nd term. Bush1 Plus 10%. Clinton Plus 10% first term. Balanced budget ( not paid for yet! ) and a surplus cash balance. Bush2 Plus 30% first term, Plus 40% the second term.
2 unpaid wars, 20% reduction in taxes for wealthy American. ( approximately 2 trillion dollars uncollected revenue )
Deregulation allowed banks to get in bed with wall st. spread contaminated loans all over the world.
Obama guesstimates 12% first term. Stop-ed the worst run of unemployment in modern history within 3 months and stabilize
the economy Passed the health care bill he campaigned on. and Killed Osama bin Laden. Not Bad For 3 1/2 Years. Think of what we might have had if the president had just 1 republican who wanted him to succeed???????

ALK
July 13, 2012 at 4:15 pm

REALITY

Too bad your morals are bankrupt! You sound like a corporate CEO who feels it's O.K. to pay someone (possibly a child) $10 per day in wages rather than a decent, honorable wage s.a. the $34.50 per hr you mention. I have news for you. Even in the U.S., there are many people working in factories (even unionized) who don't make anywhere near your example of $34.50 per hr. I, myself, was a unionized teacher's assistant and never made over $10 hr, since that was the ceiling for that job. We're talking children's education here and, yes, I had to have several hrs of college towards a teaching degree for that $10. Mine was in special education. This country was doing just fine until businesses took to outsourcing. Those who outsource are cold and greedy! That $34.50 will also get you a much better product than the cheap junk from China! This nation's sense of pride has been outsourced by big business!

Ingrid V
July 13, 2012 at 3:58 pm

Chech this out

Tim
July 13, 2012 at 3:53 pm

Jeanna
That's a nice story but unfortunately, it didn't happen. Contract law would not/does not allow unilateral changes to a contract. You may not have read or understood what mortgage documents you signed but whatever it was you signed, it clearly spelled out how it all would work. There is a simple solution to not ever being subject to a bank though - pay cash for the house. The borrower is slave to the lender. Don't be a slave.

Al D
July 13, 2012 at 3:43 pm

- It's so easy to blame unions, but it's not all their fault. Could you live on $10.00 an hour in the U. S. Without unions you probably would have to!
- Unions are probably the reasons that your parents and grandparents were able to buy a house and sustain a decent life style.
- Without unions you would probably still be buying at "company stores" and living in "company housing."
- Maybe you should reserve some of your anger for the banks and mortgage companies who "jury rigged" applications so that people they knew could't afford it got mortgages.
- Maybe you should be angry that the banks who did this got a $775,000,000 bailout to stay afloat and no one went to jail.
- The unions may be part of the problem, but they are far from all of it!

Reality
July 13, 2012 at 2:36 pm

Michael

The reality of this is the greedy UNIONS who demand ridiculous wages and benefits. The Result ,,,Your job get's outsourced. Let's see, Pay a union worker in the good old USA $34.50 per hour or someone in China $10 per day for the same work.

You lose.....Boo Hoo

CJL
July 13, 2012 at 2:26 pm

Jeanna: Your mortgage never changed unless the original mortgage documents allowed for it; ie, your rate reset because it was an ajustable rate mortgage (ARM) or pay option ARM, or some other type of non-conforming loan that allowed for changes. Stop blaming others for your inablity or unwillingness to read and comprehend documents you signed (mortgage). Stop blaming banks/lenders and look to your elected officials and those beurocrats that write/create regulations/laws like the CRA (Community Reinvestment Act).

Jeanna
July 13, 2012 at 1:46 pm

I agree with Bea. I spent so much money on repairs & maintenance of my house that there was never any left - and of course, much of the repairs were emergency & not planned! My mortgage was bought out several times, & each time the price increased & the contract changed. The last 3 years in it were one big long nightmare, due mostly to the latest mortgage holder (Household Finance, as it was called then)! They wouldn't let me make partial payments - actually returned the money to me - but then kept adding late fees, etc. Finally, I just reached my limit of sanity, was in such financial distress from the mortgage payment being more than doubled, that I let them have the house. I now rent a much nicer house, on a lake, have great landlords, just make a phone call when something goes wrong, & have money for me & my family. It's great! I will NEVER own a house again! :)

libertarianqman
July 13, 2012 at 1:32 pm

How about the insatiable greed of the government that buys off moronic voters with impossible promises? The debt that government has laid at the feet of its citizens is the real crime here.

michael hernandez
July 13, 2012 at 12:54 pm

the old american dream is no longer a dream. it is almost a curse and nightmare.
but whose fault is it really? is it the large companies that have outsourced almost all the work that the u.s. was at one time proud of doing and most willing to do for that american dream. or is it the large corporate ceo's greed and wall street giants that have dug us a hole that we and our grandchildren will never be able to climb out of. I say both because the small working man has no control over these issues. we have to wait for the decisions of corporations to plan our lives while they know what to expect for theirs.