Upcoming SlideShare
×

# Trulia Spring 2012 Rent vs. Buy Index

35,114 views

Published on

Published in: Real Estate, Business
7 Likes
Statistics
Notes
• Full Name
Comment goes here.

Are you sure you want to Yes No
Your message goes here
• In some areas buying a house is easier in terms that rented houses are not available easily. Though buying house is rather a better decision than living in a rented house as it requires one time paying of lump sum amount.

Are you sure you want to  Yes  No
Your message goes here
• Estou gostando, para poder trocar impressões com outras pessoas.

Are you sure you want to  Yes  No
Your message goes here
• While the Rent vs. Buy decision is clearer than ever, homeownership is down nationally relative to days gone by. Clearly, real estate is on sale. If ever there was a good time to buy, it is now.

Are you sure you want to  Yes  No
Your message goes here
Views
Total views
35,114
On SlideShare
0
From Embeds
0
Number of Embeds
13,333
Actions
Shares
0
101
3
Likes
7
Embeds 0
No embeds

No notes for slide

### Trulia Spring 2012 Rent vs. Buy Index

1. Cheaper to Rent or Buy a Home?Winter 2012
2. What Does The Rent vs. Buy Index Tell Us? Trulia’s Rent vs. Buy Index tracks whether it is more affordable to rent or to buy a home in America’s 100 largest metropolitan areas.2
3. Calculating a Metro’s Price-to-Rent Ratio The Winter 2012 report is based on asking prices for rental and for-sale homes on Trulia.com between Dec 1, 2011 and Feb 29, 2012.Trulia calculates the price-to-rent ratios for 100 major U.S. metros, after adjusting for attributes of the properties and their locations, to reflect the relationship between sales and rental prices for units with similar attributes in similar neighborhoods. Sample Price-to-Rent Ratio Calculation (after adjusting for property attributes and neighborhood attributes): • Asking Sales Price: \$200,000 • Asking Monthly Rent: \$1500 • Price-to-rent ratio: \$200,000 ÷ (\$1,500 x 12) = 11.13
4. Interpreting a Metro’s Price-to-Rent Ratio • Price-to-Rent Ratio of 15 or less: Buying a home is a better deal than renting for people planning to live in a home for at least five years. However, if the buyer is planning to live the home for less than five years, buying could be a better deal if the index is 10 or less, depending on moving and closing costs. • Price-to-Rent Ratio of 15 to 20: Renting or buying a home could be a better deal, depending on a prospective homebuyer’s tax bracket and if they plan to itemize their tax deductions. • Price-to-Rent Ratio of 20 or more: Renting is a better deal than buying a home, except for people planning to live in a home a very long time (fifteen years or more). Note: These interpretations take into account estimates of the additional costs of homeownership or renting, such as insurance, maintenance and so on.4
5. National Rent vs. Buy Trends5
6. Buying Trumps Renting in 98 Out of the 100 Largest Metros6
7. Top 10 Metros Where Buying Is Most Affordable Relative To Renting Buying a home is much cheaper than renting in slow-growing places with high vacancy rates and land to spare, like Detroit and Cleveland, where prices are unlikely to improve much in the future # U.S. Metropolitan Area Price:Rent Ratio 1 Detroit, MI 3.7 2 Oklahoma City, OK 4.3 3 Dayton, OH 4.8 4 Warren-Troy-Farmington Hills, MI 5.4 5 Toledo, OH 6.0 6 Grand Rapids, MI 6.1 7 Cleveland, OH 6.2 8 Atlanta, GA 6.5 9 Gary, IN 6.7 10 Memphis, TN-MS-AR 6.87
8. Top 10 Metros Where Renting is Most Affordable Relative to Buying Metros where homeownership is expensive tend to have stronger long-term economic growth and little room to build new homes, like Boston and the SF Bay Area, where people expect home prices to increase over time. # U.S. Metropolitan Area Price:Rent Ratio 1 Honolulu, HI 17.0 2 San Francisco, CA 15.5 3 New York, NY-NJ 14.5 4 San Jose, CA 14.3 5 Orange County, CA 13.5 6 Los Angeles, CA 13.0 7 San Diego, CA 12.7 8 Colorado Springs, CO 12.0 9 Boston, MA 12.0 10 Albuquerque, NM 11.98
9. Local Rent vs. Buy Trends9
10. Where Buying Beats Renting in the New York area While priced-out Manhattanites have bid up home values in Staten Island and Brooklyn, owning a home is still cheaper than renting in Queens, the Bronx and nearby suburban counties. Borough or County Price:Rent Ratio Manhattan 20.0 Brooklyn 15.7 Staten Island 15.3 Queens 13.6 Bergen, NJ (Hackensack) 12.5 Hudson, NJ (Jersey City) 12.1 Nassau, NY (Long Island) 11.8 Bronx 10.9 Westchester, NY 9.310
11. Where Buying Beats Renting in the San Francisco Bay Area Homeownership is most expensive relative to renting in San Francisco, the Peninsula (San Mateo County) and in the South Bay (Santa Clara County). In the East Bay (Alameda County and Contra Costa County), where vacancies are higher and foreclosures more common, buying looks even better relative to renting than in the rest of the Bay Area. County Price:Rent Ratio San Francisco 17.2 Santa Clara (San Jose) 14.5 San Mateo 14.0 Alameda (Oakland) 12.1 Contra Costa 10.811
12. Where Buying Beats Renting in the Los Angeles area Buying a home generally becomes cheaper relative to renting in Southern California as you move away from the coast. The big exception: Pasadena and the San Gabriel Valley, where buying is expensive despite the long drive to the beach. Area Code Price:Rent Ratio Westside LA / Beaches / Coast (310 / 424) 15.8 Pasadena / San Gabriel Valley (626) 15.8 Orange County South (949) 14.4 Central LA (213 / 323) 13.4 Orange County North (714 / 657) 12.8 Long Beach (562) 11.9 San Fernando Valley (818 / 747) 11.7 San Bernardino (909) 10.2 Riverside (951) 9.812
13. Where Buying Beats Renting in the Chicago area In Chicago, homeownership is much more affordable relative to renting when compared to other major metros like New York and San Francisco. Even downtown, in the Loop and Near North Side, buying is more affordable relative to renting than in many suburbs of New York, San Francisco, and Los Angeles. Area Code Price:Rent Ratio Loop and Near North Side (312) 11.4 Chicago except downtown (773) 8.0 North/Northwest Suburbs (847 / 224) 7.7 Western Suburbs (630 / 331) 7.5 South Suburbs (708) 5.013
14. Why Bedroom Size Matters in Rent vs. Buy Debate In most major metros, the price-to-rent ratio is lower for smaller homes, so buying seems even more affordable relative to renting for a one-bedroom or studio home than for a home with three or more bedrooms. U.S. Metropolitan Area Price:Rent Ratio 1 Bedroom 2 Bedrooms 3+ Bedrooms (includes studio) New York, NY-NJ 13.7 14.7 15.9 Los Angeles, CA 11.6 12.5 14.1 Chicago, IL 7.1 8.0 8.5 San Francisco, CA 13.1 14.8 18.2 Washington DC-VA-MD-WV 9.9 9.9 12.6 Miami 9.5 10.1 10.414