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Steven Brand

Own a Home or RENT???

Monday, January 31, 2011 - Article by: Steven Brand - Hancock Mortgage - Message

Trulia put this article out on Monday... Here's the details:

Trulia compared the median list price of a two-bedroom home with the median price paid for rent in 50 cities. The company then assigned a price-to-rent ratio to each city, with any number below 15 signifying a homebuyer's market and any number above 21 signifying a renter's market. Any market between those two numbers has more balanced rent versus buy costs.

In the main market I'm in here... the Mpls/St Paul MSA (ok... I'm generalizing because they only list Minneapolis... gimme a break!) which includes St. Croix and Pierce Counties in Western WI lists the Price-to-Rent Ratio at a 15... which puts us in the top section that they classify as MUCH LESS EXPENSIVE TO BUY THAN TO RENT.

EDIT: I'll pull another chart into this blog to confirm a couple comments below. California for example has BOTH EXTREMES of "best to buy" and "best to rent". Again... why its so important for homebuyers to be trusting in Local Experts (you and I, right!) who are keeping up with this so we can explain stats vs "media ramblings"

Now.. lets dig a little deeper. Based on economics of supply and demand... do we believe that RENT PRICES are going to GO DOWN, GO UP or STAY THE SAME? lists a current GRAPH of rental rates for 1BR and 2BR units in the Mpls area with varying directions. They do NOT list 3BR and 4BR units... and as more and more foreclosures are happening we need to assume that these are FAMILIES that are displaced and either renting larger units or Single Family Homes.

The Trulia rent vs. buy index found that it is cheaper to rent than buy in only 8% of markets, including New York, Seattle, Kansas City, Mo.; and San Francisco.

Talk to your 'shoppers' and let them know the stats.

oRents are going up... as demand goes up.
oInventory of prospective homes is going up.
oRates are GOING to go up from where they're at now as the Feds will try to fight Inflation
oMoney IS available with acceptable credit, documentable income and a down payment (get a gift if needed!)
Lets keep home ownership rolling!!!

Steven Brand - NMLS#261849 - iLoan - 612.386.5306

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