Homeownership cheaper than renting nationally

To piggy-back on my last blog, this is another take on the subject, which fascinates me, in this area where most real estate seems so expensive for a lot of people.

Trulia’s Summer 2012 Rent vs. Buy Report, which provides information on whether buying a home is more affordable than renting in America’s 100 largest metropolitan areas, found that homeownership is cheaper than renting in all of the 100 largest U.S. metros by a wide margin.

However, relative affordability depends largely on location. Buying a home is 24 percent cheaper than renting in Honolulu, 28 percent cheaper in San Francisco, and 31 percent cheaper in New York, but is 70 percent cheaper in Detroit. However, the actual dollar amount reveals that despite a low 28 percent difference in buying versus renting in San Francisco, the monthly dollar savings is big ($899) because rents and prices are so high in this region.

Note: Cost of homeownership assumes that the home is sold after seven years and includes closing costs, maintenance, insurance, property taxes and other costs. Cost of renting includes security deposit and renters insurance. Monthly costs are based on net present value of costs averaged over seven years, and based on the average across all properties listed in the metro area, including those for sale and those for rent, in summer 2012.

More info on this article from Trulia.

Thanks for reading, your comments are always welcome!
Francis

Silicon Valley Real Estate

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Buy, or rent in the Valley?

Nationwide an interesting study by Fannie Mae (link below) indicates that most Americans still aspire to be homeowners. More than half (51 percent) of current homeowners and renters say that the housing crisis has not affected their overall willingness to buy a home, according to the study. However, while homeownership aspirations are high for the long-term, Americans have near-term doubts about buying. For the shorter terms, 59 percent of renters said they would continue to rent in their next move, compared with 54 percent in January 2010.

In our area, the Silicon Valley, and more particularly around Palo Alto, Los Altos and Mountain View, but of course including Sunnyvale, Menlo Park and surrounding areas, the activity that I see at week-end open houses and what is reported in my weekly office meetings indicate that there is a strong demand for homes of all types. This area is doing a lot better than most due to the economic landscape and the high number of hiring companies. It is very common to see many, many visitors at the open houses that agents hold (even under heavy rain) and people are pre-approved and ready to buy the right property.

What I do see too is that the demand is more selective and there is pressure on prices.
The whole study on American homeownership aspirations.

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