REAL ESTATE
Miami top big city to buy home now
It makes more sense to buy a home in Miami rather than to rent, according to a new report from Trulia, which ranks Miami as the nation's top buyer's market.
BY TOLUSE OLORUNNIPA
TOLORUNNIPA@MIAMIHERALD.COM
Is there any upside to having a sky-high foreclosure rate, double-digit unemployment and a tight credit market? According to a respected real estate firm, these elements help make Miami the top market in the nation to buy a home rather than to rent.
Miami has moved up two spots since last year to become the nation's most attractive market to become a homeowner rather than renting, a new report by real estate research firm Trulia found. The study, released Monday, compared home prices and rental rates in the nation's 50 largest cities to determine where homeownership made the most financial sense.
Potential buyers are starting to take note of South Florida's shifting buy-vs.-rent dynamic. Arden Shank, director of Neighborhood Housing Services of South Florida, said first-time homebuyers from Broward and Miami-Dade counties are flooding his office.
``We have more families coming through the homebuyers preparation process than we have ever had,'' he said. ``A lot of people who were priced out of the market before can now afford to buy a home.''
Trulia came up with the ranking by comparing the cost of buying a median-priced 2-bedroom, 2-bath home with the cost of renting a similar property for a year. Cities were ranked as either ``buy'' or ``rent'' based on the ratio of buy-to-rent costs.
For example, the median-priced 2-bedroom in Miami costs $140,201, according to the website. To rent a 2-bedroom apartment for a year would cost $22,459, resulting in a buy-to-rent ratio of 6 (Trulia rounds to the nearest whole number). In other words, renting a home for six years would cost about as much as buying a home free-and-clear. The markets where it makes the least financial sense to buy -- places like New York and Seattle -- have buy-to-rent ratios as high as 31. Any ratio below 15 was considered a buyer's market.
The report factors in costs associated with homeownership like interest, insurance, and property taxes. Even with the additional costs, buying a home is more affordable than renting in 72 percent of the nation's largest cities. The cities where homeownership is a particularly desirable option are places struggling with high unemployment and foreclosures -- areas like Phoenix, Jacksonville and Fresno.
Trulia found in the midst of the buyer's market, renting is becoming more popular and more costly at the same time.
``Since the start of the `Great Recession,' many former homeowners have flooded the rental market. Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets,'' said Pete Flint, CEO and co-founder of Trulia, in a statement.
Read more: http://www.miamiherald.com/2011/01/25/2032762/miami-top-big-city-to-buy-home.html#ixzz1C4xYgIzf
Daniel Fornes
www.sellingumiami.com
Tuesday, January 25, 2011
Saturday, January 8, 2011
Rent vs. own ratio to flip in 2011? - Fortune Finance
Rent vs. own ratio to flip in 2011? - Fortune Finance
Rent vs. own ratio to flip in 2011?
Posted by Nin-Hai Tseng, writer-reporter
January 4, 2011 1:41 pm
Many Americans are content to rent after witnessing the crumbling housing market in recent years. But with rents on the rise and home prices continuing to fall, a reversal is in sight.
It wasn't hard for many homeowners to bid adieu to 2010. It was the year where, in many metropolitan areas across the country, rents surged as home prices fell, leading a growing chorus of skeptics to question the so-called American Dream of homeownership.
Perhaps not surprisingly, it makes more financial sense to rent than buy today in many U.S. cities, according to the latest data from Moody's Analytics. After declining during the depths of the latest recession, prices for rentals nationwide increased modestly by about 3% in 2010, partly driven by a record number of homeowners looking for new digs after foreclosing on their homes. In Moody's latest list of rent ratios (which is the price of a typical home divided by the annual cost of renting that home) for 54 U.S. metropolitan areas, 39 fell into the 'better to rent' category -- roughly the same level it's been for the past year.
But that may finally be about to change. Moody's chief economist Mark Zandi expects the trend to reverse this year in many major cities. This would be a positive development, as a healthy housing market typically puts renting and owning at more equal footing.
"By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country," Zandi says.
A few factors will be at play. For one, home prices are expected to fall further, with some economists expecting a 15% to 30% drop this year. This might be bad news for household finances and current homeowners fearing that their most prized asset stands to lose more in value. On the flip side, this makes homes more affordable and might finally spur more home sales, especially at a time when the rate of home construction has been the lowest since before the Second World War.
Just last week, the S&P/Case-Shiller index of property values reported a 0.8% fall in prices from October 2009 – the biggest year-over-year drop since December 2009. Eighteen of 20 cities showed a drop in prices in October. This was led by a 2.1% decrease in Atlanta, followed by a 1.8% drop in Chicago and Minneapolis. What's more, six markets, including Atlanta, Miami, Tampa and Portland, Ore., reached their lowest levels in October since prices started to retreat.
Indeed, the housing market continues to suffer from too much supply. Though rent prices are generally expected to continue rising modestly this year, the overhang will probably help keep prices from rising too much. "Expect more declines in home prices and more rent stability," Zandi says.
Still, the comparative costs between renting and buying will largely depend on individual market conditions. For instance, cities in Florida and Arizona, which continue to experience high foreclosure rates, falling home prices and widespread unemployment, will be areas where homeownership will likely be more affordable than renting, says Daisy Kong at Trulia, a San Francisco-based real estate data provider. Meanwhile, renting will probably continue to make more financial sense in national and regional job centers such as New York, Omaha and Seattle, she says.
And while it could become more attractive to buy than rent this year, it's anyone's guess how long it could take before a flurry of home sales transpires. Household finances have improved only modestly and are still quite a mess. Also, lending standards for new mortgages have tightened considerably and many economists have said a housing rebound will likely fall mercy to the unemployment rate, which is expected to improve some but still hover over 9%.
Will the American Dream return to your town?
Location Price-Rent Ratio
Atlanta, GA 12.82
Austin, TX 21.08
Boston, MA 17.71
Baltimore, MD 17.42
Charlotte, NC 25.98
Chicago, IL 15.09
Cincinatti, OH 13.74
Cleveland, OH 11.43
Columbus, OH 15.61
Dallas - Fort Worth, TX 16.98
Denver, CO 22.08
Detroit, MI 12.32
East Bay, CA 35.06
Fort Lauderdale, FL 15.19
Hartford, CT 18.52
Honolulu, HI 34.72
Houston, TX 16.01
Indianapolis, IN 14.68
Inland Empire, CA 14.75
Jacksonville, CA 15.12
Kansas City, KS 14.4
Las Vegas, NV 13.89
Long Island, NY 21.09
Los Angeles, CA 14.99
Memphis, TN 17.92
Miami, FL 14.57
Milwaukee, WI 22.36
Minneapolis, MN 14.04
Nashville, TN 23.88
New Orleans, LA 15.66
New York, NY 15.43
Norfolk, VA 19.88
North - Central New Jersey 24.69
Oklahoma City, OK 16.11
Orange County, CA 27.14
Orlando, FL 13.1
Palm Beach County, FL 16.64
Philadelphia, PA 15.94
Phoenix, AZ 12.35
Pittsburg, PA 11.71
Portland, OR 25.74
Raleigh, NC 24.39
Richmond, VA 22.18
Sacramento, CA 15.85
Salt Lake City, UT 18.05
San Antonio, TX 17.77
San Diego, CA 21.75
San Francisco, CA 27.17
San Jose, CA 32.27
Seattle, WA 26.96
Bridgeport, CT 18.49
St. Louis, MO 14.04
Tampa, FL 13.08
Washington - Northern Virginia - Maryland 18.48
Manhattan, NY 28.34
Metropolitan Area Average 14.85
U.S. 10.42
Source: Moody's Analytics, price-rent ratio for third quarter of 2010. As a general rule of thumb, you should often buy when the ratio is below 15 and rent when it's above 20. If it's between 15 and 20, lean toward renting.
Rent vs. own ratio to flip in 2011?
Posted by Nin-Hai Tseng, writer-reporter
January 4, 2011 1:41 pm
Many Americans are content to rent after witnessing the crumbling housing market in recent years. But with rents on the rise and home prices continuing to fall, a reversal is in sight.
It wasn't hard for many homeowners to bid adieu to 2010. It was the year where, in many metropolitan areas across the country, rents surged as home prices fell, leading a growing chorus of skeptics to question the so-called American Dream of homeownership.
Perhaps not surprisingly, it makes more financial sense to rent than buy today in many U.S. cities, according to the latest data from Moody's Analytics. After declining during the depths of the latest recession, prices for rentals nationwide increased modestly by about 3% in 2010, partly driven by a record number of homeowners looking for new digs after foreclosing on their homes. In Moody's latest list of rent ratios (which is the price of a typical home divided by the annual cost of renting that home) for 54 U.S. metropolitan areas, 39 fell into the 'better to rent' category -- roughly the same level it's been for the past year.
But that may finally be about to change. Moody's chief economist Mark Zandi expects the trend to reverse this year in many major cities. This would be a positive development, as a healthy housing market typically puts renting and owning at more equal footing.
"By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country," Zandi says.
A few factors will be at play. For one, home prices are expected to fall further, with some economists expecting a 15% to 30% drop this year. This might be bad news for household finances and current homeowners fearing that their most prized asset stands to lose more in value. On the flip side, this makes homes more affordable and might finally spur more home sales, especially at a time when the rate of home construction has been the lowest since before the Second World War.
Just last week, the S&P/Case-Shiller index of property values reported a 0.8% fall in prices from October 2009 – the biggest year-over-year drop since December 2009. Eighteen of 20 cities showed a drop in prices in October. This was led by a 2.1% decrease in Atlanta, followed by a 1.8% drop in Chicago and Minneapolis. What's more, six markets, including Atlanta, Miami, Tampa and Portland, Ore., reached their lowest levels in October since prices started to retreat.
Indeed, the housing market continues to suffer from too much supply. Though rent prices are generally expected to continue rising modestly this year, the overhang will probably help keep prices from rising too much. "Expect more declines in home prices and more rent stability," Zandi says.
Still, the comparative costs between renting and buying will largely depend on individual market conditions. For instance, cities in Florida and Arizona, which continue to experience high foreclosure rates, falling home prices and widespread unemployment, will be areas where homeownership will likely be more affordable than renting, says Daisy Kong at Trulia, a San Francisco-based real estate data provider. Meanwhile, renting will probably continue to make more financial sense in national and regional job centers such as New York, Omaha and Seattle, she says.
And while it could become more attractive to buy than rent this year, it's anyone's guess how long it could take before a flurry of home sales transpires. Household finances have improved only modestly and are still quite a mess. Also, lending standards for new mortgages have tightened considerably and many economists have said a housing rebound will likely fall mercy to the unemployment rate, which is expected to improve some but still hover over 9%.
Will the American Dream return to your town?
Location Price-Rent Ratio
Atlanta, GA 12.82
Austin, TX 21.08
Boston, MA 17.71
Baltimore, MD 17.42
Charlotte, NC 25.98
Chicago, IL 15.09
Cincinatti, OH 13.74
Cleveland, OH 11.43
Columbus, OH 15.61
Dallas - Fort Worth, TX 16.98
Denver, CO 22.08
Detroit, MI 12.32
East Bay, CA 35.06
Fort Lauderdale, FL 15.19
Hartford, CT 18.52
Honolulu, HI 34.72
Houston, TX 16.01
Indianapolis, IN 14.68
Inland Empire, CA 14.75
Jacksonville, CA 15.12
Kansas City, KS 14.4
Las Vegas, NV 13.89
Long Island, NY 21.09
Los Angeles, CA 14.99
Memphis, TN 17.92
Miami, FL 14.57
Milwaukee, WI 22.36
Minneapolis, MN 14.04
Nashville, TN 23.88
New Orleans, LA 15.66
New York, NY 15.43
Norfolk, VA 19.88
North - Central New Jersey 24.69
Oklahoma City, OK 16.11
Orange County, CA 27.14
Orlando, FL 13.1
Palm Beach County, FL 16.64
Philadelphia, PA 15.94
Phoenix, AZ 12.35
Pittsburg, PA 11.71
Portland, OR 25.74
Raleigh, NC 24.39
Richmond, VA 22.18
Sacramento, CA 15.85
Salt Lake City, UT 18.05
San Antonio, TX 17.77
San Diego, CA 21.75
San Francisco, CA 27.17
San Jose, CA 32.27
Seattle, WA 26.96
Bridgeport, CT 18.49
St. Louis, MO 14.04
Tampa, FL 13.08
Washington - Northern Virginia - Maryland 18.48
Manhattan, NY 28.34
Metropolitan Area Average 14.85
U.S. 10.42
Source: Moody's Analytics, price-rent ratio for third quarter of 2010. As a general rule of thumb, you should often buy when the ratio is below 15 and rent when it's above 20. If it's between 15 and 20, lean toward renting.
Wednesday, November 3, 2010
Tuesday, November 2, 2010
A buyer's market
Real estate: A buyer's market -http://money.cnn.com/video/news/2009/05/29/news.052909.crnrcent21.cnnmoney/
Daniel Fornes
Realtor & Mortgage Broker
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