According to Trulia's quarterly rent versus purchase report, escalating home prices, combined with flat or lower rents are changing the rent versus buy equation in the biggest real estate markets. Its conclusion: although it makes more sense to buy, it’s a close shave.
“The economic benefit has narrowed to the point that in some places, for some households, the decision to rent or buy a home may be too close to call,” Trulia economist Cheryl Young notes.
In the Bay Area, the gap can’t get any narrower. It’s more economical to buy than rent in San Francisco, but just barely – the difference is only eight percent, according to Young.
Only San Jose boasts a worst savings ratio – homebuyers save only 3.5 percent compared to the cost of renting.
The calculations considered median home value, rent and the anticipated monthly costs of home ownership and renting, as well as appreciation, with some allowance for inflation. Keep in mind, Trulia uses algorithms to project home values, and this is not a perfect science.
In an earlier post, we noted that while the median home prices in San Francisco are down overall, the numbers are goosed. A glut of condo sales have artificially drove the median home price index down, while single family home prices are actually rising. At least that’s what the numbers suggest for now. Of course, all things are always changing all the time.
While inevitably, the market will go up and down, there is one constant – Bornstein Law’s fierce advocacy on your behalf in pursuit of your goals. As seasoned real estate attorneys, we serve clients that occupy an entire spectrum of wealth and sophistication, from property owners and international banks, to brokerage firms, investors, real estate professionals and small business owners.
As the founding attorney of Bornstein Law, Broker of Record for Bay Property Group and expert witness, Daniel Bornstein is a foremost and well-respected expert in landlord-tenant disputes and other property management issues with over 23 years of experience in handling real estate and civil litigation related disputes.
CONTACT BORNSTEIN LAW
415 409 7611
Be sociable.
LinkedIn | Facebook | Twitter
Get more insights
Stay in the know and get the latest developments and news in Bay Area real estate, infused with expert guidance from the premier real estate lawyers at Bornstein Law.
VIEW ALL BLOG POSTS »
