Today on Good Morning America, Zillow.com was referenced for a recent report they released where they analyzed the data in over 200 US metro areas and 7,500 cities to determine the actual time frame it would take to come out ahead if buying rather than renting. Unlike most analysis which typically only looked at price to rent when considering buying versus renting; Zillow new report factors in data such as taxes, tax deductions, down payments, utilities, appreciation/depreciation, maintenance, opportunity expenses and fluctuations in the rental market. These type of calculations would very extremely difficult for most people to accurately calculate with a high degree of accuracy (including even someone like myself) for a couple of reason, the most significant being ready access the large amount of data necessary to make the analysis meaningful and this is in fact where sites such as Zillow, Trulia etc have much to offer.
Earlier this year I posted a couple of blogs specifically on this subject 2012 Buy or Rent Part 1 and 2012 Buy or Rent Part 2 and since then interest rates have come down nearly 40% while rents have remained as high or in some cases gone up making the argument for buying over renting if you are convinced you'll be here for at least another 4 -5 years even more compelling. In reading through Zillow's report what struck me was that for a significant area of the country Zillow felt the break even point was less than 3 years.
After reviewing the report, let me know what your thoughts are. Is now a good time to buy or are you still planning on renting for the next few years?
Posted by Larry Tollen on
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