NEW LISTING - UNDER CONTRACT WITHIN 2 WEEKS AND SOLD!!!!

Buying a Home 38% Cheaper Than Renting – But How Risky Is It?

Though the gap is narrowing, buying costs less than renting in all 100 large U.S. metros. But uncertainty about future home price appreciation means buying isn’t always a safe bet.

Jed Kolko, Chief Economist Jed Kolko, Chief Economist February 26, 2014 Homeownership remains cheaper than renting nationally and in all of the 100 largest metro areas. Rising mortgage rates and home prices have narrowed the gap over the past year, though rates have recently dropped and price gains are slowing.

Now, at a 30-year fixed rate of 4.5%, buying is 38% cheaper than renting nationally, versus being 44% cheaper one year ago. The rent versus buy math is different in each local market. Buying ranges from being just 5% cheaper than renting in Honolulu to being 66% cheaper than renting in Detroit. 

But even for a specific market, the cost of buying versus renting depends on how much home prices rise (or fall) after you buy. Our model assumes conservative home price appreciation, but – as we all know after the last decade – home prices can unexpectedly rocket or plummet. This edition of Trulia’s Rent vs. Buy Report focuses on how different home price assumptions can affect the math for someone deciding to buy or rent today.  

To read entire report click here

SALT LAKE REALTORS MAGAZINE FEBRUAR 2014

CHECK OUT PAGE 28

Salt Lake Realtor Magazine

Publish at Calameo or read more publications.

US DEBT CLOCK

SMALL INVESTMENT . BIG RETURN

Doing some upgrading before selling your home?

Consult with your agent first

Twice recently I have been called by sellers who will be listing their homes and have been asked for advice on improvements they want to make.

This is a smart, proactive move on the sellers’ part as they want to make their homes as marketable as possible but do not want to over-improve and get little in return for their investment.

Real estate agents are in the trenches, see many, many homes, and are in sync with what appeals to buyers.  Where can you get better advice on what might be done and how it should be done to 
maximize the return on the investment made?

Two examples that came to mind were sellers I helped — one who made mistakes in upgrading and the other who did everything right.

Big investment, small return

The work was already done when I was called for the listing appointment.
The kitchen had been upgraded with high-end cabinetry, granite countertops, custom tile flooring and a SubZero refrigerator and Viking 6-burner cooktop. A dream kitchen for the owner.

However, this kitchen belonged in a house twice the value of their house. The house sold, but the sellers only recouped a small fraction of their kitchen investment.

Small investment, big return

A condo had a kitchen that was tired and worn out.
I recommended a kitchen makeover which cost $6 thousand; including stainless appliances.

The owner really thought there should be granite countertops.  I advised not to spend the money, but to get a laminate that had the faux granite appearance.
The kitchen came out beautifully and the condo sold quickly, for $20 thousand more than a comparable unit that had an original kitchen.

So, if you are thinking of selling your home and possibly making some improvements prior to listing, please contact a real estate agent FIRST who has a handle on the local market and knows the inventory.  It will be the best advice you can get and will likely put money into your pocket instead of taking it out.


by Barbara Altieri on Feb 17, 2014 • 7:05 am
SECB.com