Tuesday, December 26, 2006

David Lereah Watch Mentioned in The Wall Street Journal

In today's Wall Street Journal in an article titled 'Renters Gloat Over Housing Slump,' my other blog, David Lereah Watch was mentioned and I was interviewed.

David Jackson, a 26-year-old information-technology specialist, has been railing against the housing industry for two years -- ever since he made a vain attempt to find an affordable town house or condo in Silver Spring, Md. Unable to understand why prices were so high, he began researching the real-estate market and, he says, "came to the conclusion that there was a massive housing bubble." So Mr. Jackson decided to remain a renter. He pays $645 a month for part of a townhouse.

Now that the housing market is slumping, "I feel vindicated," Mr. Jackson says. "But I'm not looking forward to the coming recession." He believes that the housing slowdown and the effects of "a mountain of debt" on consumers will pull the entire economy into a slump.

Mr. Jackson blames what he calls "the housing industrial complex" in general and Mr. Lereah, the Realtors' economist, in particular. Since last year, Mr. Jackson has maintained a blog (davidlereahwatch.blogspot.com) devoted entirely to vilifying Mr. Lereah.

The blog recently offered a $75 cash prize for an essay containing "the most scathing criticism" of Mr. Lereah. Sample submission: "Dr. Lereah is a lying snake with the ethics of a dope-dealing pimp."

Mr. Lereah says he doesn't object to the blog. "There are people who believe it's the end of the world" for housing, he says. "They blame me for being positive."

Mr. Lereah resorts to putting words in my mouth when he says, in reference to my blog, that "There are people who believe it's the end of the world" for housing. I have never claimed it is the end of the world for housing. I claimed that from peak the "Prices declines in the bubble markets are very likely to vary between 20% - 65 in real dollars."

By putting words in my mouth, Mr. Lereah, attempts to make me out as a housing extremist. He uses a straw man (Fallacy Of Extension) argument. Mr. Lereah cannot be trusted because of his history of deception and wrong predictions.


  1. Great article David. You are wiser than your 26 years.

    Nice response to Learduh. Anyone that questions the BS propaganda put out is a housing extremist.

    25-50% correction in INSANE house prices is NORMAL!


  2. Give em' hell. The bums....

  3. I look forward to the stuff you put out on this blog....check it almost everyday....very useful.

  4. These new bio details tell us a lot. What made you think that at age, what - 24? - you should be able to afford a house in a major city, with what I can only assume was an entry level job? Was your price range $600-700 a month? What did you think you'd find? I'd be interested in hearing a bit more about your perspective.

  5. Thanks david for getting the mesaage out. If I listened to the overpaid mouthpieces would be in debt slavery right now.
    Unite and send these turds a message.

  6. "These new bio details tell us a lot. What made you think that at age, what - 24? - you should be able to afford a house in a major city, with what I can only assume was an entry level job? Was your price range $600-700 a month? What did you think you'd find? I'd be interested in hearing a bit more about your perspective."

    Seriously. David, yeah, the market was probably too high. But it will never ever ever collapse to the level at which you must have believed yourself entitled to own real estate. I can't believe this - you ARE a bitter renter!

  7. anon 5:22,

    I know you asked David the question, but I believe what David was trying to say is that he was looking for something...ANYTHING!...that would be in his price range. Even the crappiest little condo in Silver Spring was priced too high, or at least at a price that David wasn't willing to make a stretch to buy.

    Bottom line is that prices should at least be in the ballpark of rents after adjusting for the mortgage tax deduction. David's bio is irrelevant when placed in the context of the disparity between buy vs. rent prices.

  8. It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

    Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

    This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent.


  9. Anonymous. A lot of folks used to be be able to own their own home at 24... even earlier if they got married at 18, 19, and 20.

    The sad truth is that even if you make around 130k a year, you can't afford anything but a 1960's garden apartment coverted to condos in Cullmore if you chose to live within 75 miles of the city.

    That's a symptom of something very serious wrong in the monetary system.

  10. I wasn't trying to buy a single family detached house but rather interested in a condo or a townhouse (which I would rent out a room to a friend).

    At that time I was earning significantly above a entry level proffesional income.

  11. "you ARE a bitter renter!"

    No, I am not bitter. Actually, I am very happy to rent for now as I am saving lots of money (645$ a month rent).

  12. what a loser. 27 years old and renting part of a townhouse? get a life. do you even have a girlfriend?

  13. "prices should at least be in the ballpark of rents after adjusting for the mortgage tax deduction. "

    No they shouldn't. This is maybe the most common false premise on this site.

    When you own the place, you can lock in your payment over 30 years. Can you get a 30-year lease on an apartment? Never mind the expected appreciation over that period, which even the staunchest bubble believer has to admit will be significant..

  14. "No, I am not bitter. Actually, I am very happy to rent for now as I am saving lots of money (645$ a month rent)"

    Well, you told the Wall Street journal that you started your blogs because you were upset when you found out you couldn't afford to buy anything. I'll go with what you told them.

  15. I couldn't buy in close-in neighborhoods in the mid-90's when I was in my late 20's, and I was earning above the median household income for Arlington and Silver Spring.

    I bought in Loudoun county at the age of 31 and sold several years later to move inside the beltway in 2001.

    Looking back, I recall being angry that I couldn't afford anything "close-in". I also realize now that my expectations were too high for my age at that time.


  16. David, let me share the realities of the fiscal and demographic impacts on my life since I was your age. In 1968, at the age of 27, I purchased my first home in the suburbs of San Diego, for $17.5K, it is currently appraised at $485K, at the time the population of San Diego County was 300k, it is now 3M+.The truth of the times, in which we both live, consists of both a deep and continuous decline in the value of the $US and an uncontrolled explosion in the population of the nation(which has gone from 125M to 300M+ in my lifetime). Like you, I once "fought the economic and demographic tides" of my times, however, at this stage of life my advice to all young people today is; first, hedge your bets with all the diversified real estate the lenders will finance for you, constantly seek higher levels of personal income, leverage all of your investments and savings and most importantly recognize that yes, in the long, long run you may well be totally correct, all bubbles will deflate, but never forget in the short run all things are relative and in a nation with questionable fiscal and demographic policies the example of real estate and demographics in California are a model worth paying attention to. Best wishes in your journey.

  17. it's all going to work itself out one foreclosure at a time, everyone should just relax.

    also, interesting article in the Post today about immigrants leaving NOVA b/c the housing market's tanking and they can't find work. isn't that one of the pillars of the new paradigm? or were they only referring to rich immigrants that don't care about falling prices?

  18. David-

    Congratulations on a well-deserved write-up!

    A Redskins fan

  19. I agree with David's view, bitter or not, but it sounds like the rest of you are quite bitter also, just because David started this successful [and truthful] blog.

    Anyhoo... I was 27 when I bought my first house in '92 in Virginia Beach. Housing was in a major slump then (some condos in half decent areas were selling less than 30k!). I had a decent job (also in the IT field) and I still had to buy the smallest, crappiest house on the block, a HUD repo that needed a lot of work. It took years for the value to exceed what I put into it.

    My point, I can totally see why a 24 year old guy wouldn't stretch himself to no end to buy INTO a topped out market. It appears that because the RE 'professionals' can't keep convincing suckers to do so, they find someone like David to blame it on.

    The party is over.

  20. Wow. Now it becomes clear why David has been so angry and bitter for the past 2 years. The rants on this blog are the exact same as they were 2 months ago, 6 months ago, a year ago, etc. It's all about how unfair it is that some people have done very well in real estate and how come others have missed the train? I see the exact same discussion week after week: the bubble is collapsing, renters will be vindicated, those following the Bubblehead Creed will finally be proven right, the real estate industrial complex is orchestrating all the moves, etc. I can understand the bitterness.

    When I was a wise man of 24 years, I too was quite upset that I couldn't afford to buy a nice house or townhouse in DC. And then I got over it, bought a condo, got married, earned more money and have led a bitter-free life.

    If I were stuck renting a townhouse and had to deal with housemates day after day as I trucked off to a suburban cube farm, I would be pretty damn grumpy too. I might even start a website where I could commiserate with other chaps who had also missed the boat as I had.

    And I might even start another website where I would obsess constantly about how one man is responsible for convincing tens of millions of people to buy real estate in the past decade and how the huge rise in housing prices is all his fault. And how it's becuase of him that I can't afford to buy a nice place with no housemates on my 24-year old's salary.

    There are several constants on this site:

    * bitterness at watching others succeed financially;
    * a Linus-like optimism that the Great Pumpkin of a housing collapse/depression/"severe recession" is just around the corner;
    * constant complaints about how everybody else is greedy, whereas renters are pure-hearted;
    * cherry-picking intelligence to support the preconceived notion of a housing bubble, while ignoring or discounting any opposing evidence; and
    * never-ending complaints about how it's just not fair.

    This site used to be better because it had more interesting commentators who were not all adherents to the BubbleHead faith. But then it got mentions in the press. And it became more and more ideological and silly. More members of the Bubblehead faith came seeking confirmation of their beliefs. And the site became even more silly.

    It's hard not to read that WSJ article - and David's rather hysterical reaction to Lereah's pretty benign quotes - and just not feel bad for David and others in the same boat as him.

    I'm sorry you missed the boat on housing. I'm sorry you think that at your age you are entitled to a particular kind of house or living style. I'm sorry you have to share your home with a bunch of people in order to pay the rent. I'm sorry you've spent the past 2 years of your life fostering and nurturing bitterness and resentment. Life is too short to be so bitter.

    This is my last post on this site. I'll probably check in and read again from time to time. But reading David's quotes and his responses really makes me feel bad about where he is in life.

    This blog used to be interesting. But now it's just sad.

    Best of luck to you and your unending wait for the appearance of the Great Pumpkin.

  21. When a house sells for $600k in 1999 and goes for $1.3 mil in 2005, something is seriously out of whack. It is not normal for houses to more than double their value in 6 years. That's why people are "angry and bitter." With our salaries and savings, my husband and I can afford a $600k 30 year fixed mortgage. Although in order to get 3 bedrooms and 2 baths in North Arlington, the houses are in the $700k range. In 2000 these houses all sold in the low $300k range. I don't think my expectations are too high. The used to be "starter homes" are all over $700k in the neighborhood I would consider buying in b/c it is close to work and has good schools. 5 years ago they were less than half that, at a price I could have easily afforded now. That's the problem. Therefore, we are renting now and waiting till 2008 when both of our incomes will go up $20k a year. I refuse to move out to Loudoun County and commute 4 hours everyday to my job in DC. It's not like I want a mansion. The houses we look at are less than 2000 square feet. No one can sit there and tell me that they had a hard time affording a house when they were 30 b/c when you were 30 ten years ago, housing prices had not more than doubled in six years. This price increase is unlike anything we have ever seen or hopefully will see again.

    -go ahead, call me bitter.

  22. Alot of bitter realtors and bagholding owners in over their heads posting here.

    Renting - saving a fortune and loving the lower home prices each and every month.

    Thanks David, you have ruffled a few feathers in the REIC.

  23. "-go ahead, call me bitter. "

    It sounds like you *are* bitter. North Arlington is spitting distance from the center of the nation's capitol. OF COURSE the houses are expensive there. Even the small ones. You may not WANT to move to Loudon County, but guess what? THAT'S WHAT YOU OUGHT TO BE ABLE TO AFFORD.

    Sorry you're stuck renting.

  24. Homeowners are realtors think they are entitled to make a profit on their house.


    Bitterness grows among delusional homeowners and forked tongue realtors.

    You are having a positive impact and helping many young people.

    Ever see a cornered dog it lashes back. You got them (REIC) on the defensive....

  25. "Rents Rise as Apartment Market Is Squeezed"


    "Rents are already rising rapidly, and the completion of luxury towers and new shopping centers will put pressure on landowners to hike rents further or convert buildings to condos."


    "In trendy Adams Morgan, in the midst of a protracted eviction battle this fall, came the broken windows, cut electrical lines, a death threat from strangers pounding on doors and a brazen arson that caused a fleeing tenant to fall from the second story and break her leg."

    "Tenants have accused management of orchestrating a campaign of fear and violence to get them to give up their rent-controlled apartments to make way for extensive renovations that ultimately would generate higher rents from new tenants."


    "Inflation fell or rose at a slower rate for most categories of goods and services. Housing was the exception, with prices up 0.4% on hefty gains in hotel fares, rents, and owners' equivalent rent. The CPI excluding shelter fell 0.2%."


  26. David - Looks like Lereah recruited his underlings to pay a "visit" to your blog.

    The fact that you rent, have roommates, or didn't want to stretch to buy a shack two years ago really have no bearing on the real issue here - namely, that homes are seriously overpriced compared to fundamentals.

    All of these attempts to divert the focus of the argument tell me that the REIC and permabulls are floundering like fish out of water. They know they are done, but are trying in vain to obfuscate the issue one last time.

    You should take diversionary posts like those as a sign of your blog's effectiveness.

  27. Congrats on creating a successful blog.

    The housing bubble may or may not burst, but you're at least learning a valuable skill.

  28. David just wanted something decent for a decent price (on par with his income) and couldn't find it.

    You guys think you see an opportunity where David left his guard down, but that clearly is not the case. While I have been reading his blog, he has always come across as forthright and candid, not a crybaby.

    Anyone complaining, such as Fritz 'a wise man of 24', when was that? [when were you 24?] and what kind of market conditions were prevalent then? Had housing doubled in your area in a matter of 3 years? How would you feel if you were 24 right now and had a family, wanting a piece of the American pie and it was so far out of your reach that you would never get a piece (even a one bedroom 600 sqft condo to raise your kids in?). And furthermore, if the housing heads are/were right, and the market just kept going up, and the only slim glimmer of hope you had was to go for a suicide loan that would reset in a few years, resulting in a payment you couldn't afford. Yeah, that's the reality, and yes it's out of line with economic fundamentals and needs to adjust accordingly.

  29. Hey Fritz,

    So how did you feel about gas going to $3 a gallon? Any animosity towards the oil companies? Or did it just make you feel really great and give you a warm fuzzy feeling?

  30. Wealth will always travel from weaker to stronger hands... the fed will ensure that this occurs...

  31. The reason why gas is so high is not the gas station owners fault but the oil companies fault.

    Along that same line of thinking, the reason why prices are so high is not Realtors fault but home owners fault.

  32. With affordability at or near all time lows it makes sense to buy anything right now. Rent and save and let the other recent house slaves pay the piper.

    Lereah and his cohorts are on the defensive now. they seem to be aware of the blogs challenging their BS.

  33. "It sounds like you *are* bitter. North Arlington is spitting distance from the center of the nation's capitol. OF COURSE the houses are expensive there. Even the small ones. You may not WANT to move to Loudon County, but guess what? THAT'S WHAT YOU OUGHT TO BE ABLE TO AFFORD."

    How is that what I ought to be able to afford? Without getting into too many details, I can afford a $600k 30 year fixed mortgage. (That's maxing out.) Our income is well above the median income (we're both attorneys.) 6 years ago starter homes in North Arlington were in the high 200s and low 300s. Even if prices had gone up 50% in six years, I could have easily afforded a very nice starter home now. But since prices went up 110% in six years, I have not been able to buy a decent starter home. It's not like I am looking at houses that were $600k six years ago and are now $1.3 million. I am looking at small 3 bdrs that need work. I will not compromise on the neighborhood b/c location is what is most important to me. I will not have a long commute or crappy schools for my kids, so we are renting a very nice 3 bdr townhouse for $2000/month and putting $2000 into our savings account each month until we can afford to buy what we like. That's today's reality and anyone that sits there and says that everyone had is this way back when they were trying to buy 10, 15, or 20 years ago is full of crap b/c prices back then did not go up 110% in six years. Think about it.

  34. Uh...

    I don't see what point you tried to make (btw, I didn't say it was the gas station owners fault anyway).

    My point was that it was reasonable [to homeowners] for house prices to go up [even though the fundamentals are not there to sustain those prices], but not okay to them for gas prices to go up because they had no vested interest in that commodity. To state another way, since some people who owned their homes for at least 3 years are so smug about others missing the boat, and that the boat-missers are crybabies, well I was wondering how those same people felt about another area where they had no control or a big 'paper profit', and if they could admit being crybabies about that, or think it was due to greed of those in control (which I know they won't!)

  35. Very strong November home sale numbers:


    "New homes sold at an annual pace of 1.05 million, up from the revised annual rate of 1.01 million in October. Economists surveyed by Briefing.com had forecast that home sales would rebound to a 1.02 million pace.

    The median average home price came in at $251,700 in November, up from the $248,500 level in October. The median price, that is, the point at which half the homes sell for more and half sell for less, had shown declines earlier in the fall because of a glut of homes available for sale on the market.

    The supply of completed new homes available for sale continued to creep up, setting yet another record at 169,000. But all new homes available for sale, which includes those with permits but not yet started as well as those under construction, was slightly lower. That took the inventory of new homes on the market down to an estimated 6.3 months' supply in November, compared to 6.7 months in October and 7.2 months in July, when new home sales slowed to a crawl.

    The median price is now back to the second-highest level on record, trailing only the $257,000 level reached in April of this year.

    And while the pace of home sales is down 15.3 percent from the white-hot sales rate of a year ago, it's up nearly 7 percent from the trough hit in July of this year, when revised figures put the annual sales pace at just below a million.

    The pace of sales in November would have been a record high as recently as December 2002, before the building boom seen in 2003 through 2005."

  36. Anon 9:52 said:
    "You are having a positive impact and helping many young people."

    And if David is wrong? New housing starts came out today. I was listening to Bloomberg Radio today .... All the economists they interviewed said that this was "further confirmation that the worst of the housing slump was over."

  37. "I will not have a long commute or crappy schools for my kids, so we are renting a very nice 3 bdr townhouse for $2000/month and putting $2000 into our savings account each month until we can afford to buy what we like."

    This is obviously flame. for $4000/month you could do a heck of a lot better than $600k. Nice try.

  38. where's lance? on vacation??

  39. Lance..you may see a little upward swing in the market until interest rates start going back up. When rates rise far enough, most will be unable to sell their homes...period! oh' I forgot about those attractive exotic loans. didn't lying Lereah write a letter to the FED chairman begging him not to raise the overnight rate, or the housing market would crash harder than it is now?

  40. "Anonymous said...
    where's lance? on vacation??"

    No, he's likely out trying to re-fi his home loan.

  41. "Lance..you may see a little upward swing in the market until interest rates start going back up."

    They'll go down before they go up.

  42. Recession clouds darken 2007 outlook
    Most economists expect slower growth and no downturn, but some recent signals are flashing red.

    The recent trend of slower growth is not expected to be reversed any time soon. Home building and the broader real estate market are both already in a recession by most accounts and are expected to stay there well into next year.


    "We don't think there'll be a recession, but the risks have risen," said David Berson, chief economist of mortgage financing firm Fannie Mae. He now estimates the chance of recession at 35 percent for 2007, up from a 25 to 30 percent chance a few months ago.

  43. This is obviously flame. for $4000/month you could do a heck of a lot better than $600k. Nice try.

    A $600k loan for 30 years at 5.75% interest rate would yield a montly payment of $3500. That's without insurance and property taxes.

    I guess you are talking about one of those toxic teaser rate negative equity loans.... Nice try but David is smarter than that.

  44. "A $600k loan for 30 years at 5.75% interest rate would yield a montly payment of $3500. That's without insurance and property taxes."

    And that's also without any down payment or factoring in any tax deduction. Nice try.

  45. "You say that like it's a good thing! lol Of course if you really want to and are able to stay in the same place for 30 years and don't mind being under water for 10 or 15 years on your mortgage, Lance is right-- prices will eventually catch up. But I think people in their 20's would be very unwise to tie themselves down like that."

    It's one of a bundle of rights you get by owning that you don't get by renting. Of course buying is going to be more expensive.

  46. "As for the idea that rents are normally much lower than mortgages on comparable places-- nonsense! Only 6 years ago we bought in a close in part of Alexandria for less than 3 times our joint, very modest incomes. The PITI on the 2 bedroom townhouse we bought was almost exactly what 2 bedroom apartments were renting for in our building."

    That, not this, is the abnormal situation. You get a lot more as an owner than as a tenant, so it costs more. This isn't rocket science.

  47. "A $600k loan for 30 years at 5.75% interest rate would yield a montly payment of $3500. That's without insurance and property taxes."

    Zero down payment? No tax deduction? Hahaha, nice try.

    Oh, and we're not talking about David. We're talking about a 2-income household.

  48. novasold said:
    "Why get hysterical towards David if you can easily afford what you have and continue to save towards retirement?"

    Novasold, you are correct about no one needing to get hysterical. However, I think what bothers more than a few of us HHs is that unlike in previous times when publishing and disseminating "information" required more than the simple ability to do an on-line free blog, today the illusion of legitimacy and substantiated knowledge can be created almost at will. None of us deny David his feelings about the state of the housing market or the difficulty that he is facing just like every other 24/26 year old has faced since time immemorial. And to the blogger who asked how we would have felt had we seen prices double in a 3 yr period before, I want to remind him that we did. Actually, we probably saw much worse. When interest rates went from 7% to 17% almost overnight while prices concurrently nominally doubled in the same period (late 70s/early 80s) we MORE than saw our monthly housing costs double or triple overnight. But we survived it. Just like you will. And that is why us HHs are on here. I can understand people wanting to commiserate and needing a place to do it. But lacking those of us with experience and knowledge to provide some background and counterbalance, this blog would otherwise become simply a place where people preached to the choir.
    So, I agree that there is no reason for anyone to be hysterical ... and this includes the blind hysteria that BHs exhibit when they blindly engage in patting each other on the back ... instead of engaging us HHs in meaningful dialogue. And, as so many of you BHs have pointed out, by and large, us HHs don't have anything to take out of this blog ... other than the satisfaction of knowing that we may have saved at least one of you from yourselves. I honestly hope one of those saved from themselves will in the end be David.

  49. terminator-X asked:
    "Why wouldn't one chose to rent and invest the savings until either rents spike or prices decrease?"

    Simple ... by the time you know it's "the right time to act", the window of opportunity will have passed. i.e., As we are already seeing, both prices AND rents are increasing ... Leaving those still out there waiting for "their break" in an even worse condition than they were in previously ... and obviously wishing they could go back in time. They can't. And hence the seeds of bitterness which manifest themselves eventually in blaming others for their own failure to just simply act!

  50. "You are having a positive impact and helping many young people.

    On the contrary, I feel that David is actually not helping anyone at all. These young people could have bought in areas like Prince George's county and still had their houses increase in price the past year. But instead they come here with the hope of this great big collapse. Waiting, waiting.

    I read a post from a couple of days ago, where a property David profiled was listed at $529K. He goes on to say that in the 20 minutes he visited the property no one came. So that means that its overpriced. And he had people who commented that the property was worth $180K. Well, an agent wrote in that the property sold for $517K. It seems to me that he is just deluding people into thinking that prices will drop. Not everyone is 27 and can rent out one room. Some of us have a wife and kids. Now that rents are rising, I wish that just bought a place in PG county last year instead of listening to you.

    The Realtor economist might be overly optimistic, but you are on the other spectrum. I wish there was someone who would just give the facts instead inserting their own agenda, and its clear from that WSJ article, and these nice ads you have on your site, that you have your own agenda.

  51. "but renters, unlike owners, need not pay for insurance and maintenance"

    And they also don't pocket any of the principal. And they don't get a tax deduction. And they don't own any of the principal used as a down payment.

    I repeat, you can do a lot better than a 600k dollar mortgage for $4000/month.

  52. "And they also don't pocket any of the principal. And they don't get a tax deduction."

    Put your numbers in a mortgage calculator, which takes the tax benefit into account.

    "And they don't own any of the principal used as a down payment."


    I repeat, you can do a lot better than a 600k dollar mortgage for $4000/month.

    That range is correct, though they can suffer for a bigger mortgage. However, they noted that there was no reason to suffer.

    Repeating nonsense doesn't make it true.

  53. Anon 6:19 doesn't seem to have anything of substance to say. it's pretty obvious that the posters objecting to the statement that $4000/month buys more than a $600k house were wrong.

  54. Hey sarah, don't bother to respond to the substance of the post. Just tell the guy he's in his mid-20s. That ought to take care of it.

  55. I have bought and sold two houses since 98 when I was 27 and made money on both. I thought the price was inflated when I bought in 98!

    I am renting now for about 600$ less than a mortgage would cost on the house. Sorry homeowners but the one that's coming is without lube.

  56. sarah, jeez ... like the other guy said, it's not rocket science to know that you are buying more than just a place to live in defined time span when you purchase vs. rent. it really can't be that hard to understand that you're going to pay a premium for the right to lock in your expenses and tenancy (freehold estate) for all time, is it?