Buying VS. Renting circa 2012

Posted by Alex Narodny on Thursday, August 2nd, 2012 at 12:10pm.

To Buy or To Rent? That is the Question.  

After the economic downturn of 2008 many people were far too nervous about the depreciation of realty that buying was out of the question. In recent polls by the home realty site Zillow the popularity of buying is exceeding that of renting in most metropolitan areas. “In more than 75% of the 200 metro areas analyzed, homeowners would reach a “breakeven point” in three years or less”.  All in all this means that financially, owning your home makes more sense than renting if you plan on sticking around for at least a few years. Over the past year (2012) alone rents around the nation have risen 5%. The survey was Zillow’s first buy-versus-rent analysis, incorporating all homeownership costs, including down payments, property taxes, utilities, and maintenance costs, and compared them to rental costs. It also took into account projected home price appreciation and rent increases, as well as tax deduction and inflation. After their thorough research was done, zillow concluded that rising rent prices and record-low mortgage rates along with falling home prices have made homeownership a more attractive option. Zillow’s findings are supported by another article on the subject from CNN.com. CNN maintains that in cities such as Denver, San Jose, California and Austin, Texas home price gains will be better because of slower growing markets that were spared the worst of the bubble and have strong job growth. In cities such as these buying up rental properties would be very prosperous in the long-run. Below are the break-even points for homeowners in 30 major cities of the United States. 

Buy vs. rent in 30 major cities

City

State

Breakeven time in years

New York

N.Y.

5.1

Los Angeles

Calif.

4.3

Chicago

Ill.

2.8

Dallas

Texas

2.1

Philadelphia

Pa.

3

Washington

D.C.

3.5

Miami

Fla.

1.6

Atlanta

Ga.

2.5

Boston

Mass.

4.3

San Francisco

Calif.

5.9

Detroit

Mich.

1.7

Riverside

Calif.

2

Phoenix

Ariz

1.7

Seattle

Wash.

4

Minneapolis

Minn.

2.7

San Diego

Calif.

3.6

Tampa

Fla.

1.6

St. Louis

Mo.

2.5

Baltimore

Md.

2.8

Denver

Colo.

2.5

Pittsburgh

Pa.

2.1

Portland

Ore.

3.5

Sacramento

Calif.

3.1

Orlando

Fla.

1.7

Cincinnati

Ohio

2.1

Cleveland

Ohio

2.4

Las Vegas

Nev.

1.7

San Jose

Calif.

8.3

Columbus

Ohio

2.4

Charlotte

N.C.

2.7

Source: Zillow

 Click for the full articles from Zillow and CNN 

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