Monday, June 14, 2010

Rent or Buy? The Debate Continues…But in Minnesota, Buying is #1!


Earlier this month the real estate web search company Trulia announced a new rent versus buy index. Topping the list of places to buy rather than rent was the Minneapolis market (yes, this means all of the Twin Cities metro). Trulia made the calculation using the listings on Trulia.com comparing the average rent of a 2 bedroom home or condo compared to cost the list price of a similar sized home. Results show that in this market people may come out ahead if they buy rather than rent.

Now combine that information with the first quarter numbers just released from the National Association of REALTORS® showing that the prices in Minneapolis/St. Paul are still down. In the just released
First Quarter Local Market Report for Minneapolis/St. Paul/ Bloomington the trends for the market indicate that nearly all of the equity from the housing boom has been wiped out. Today’s homebuyer has the ability to buy a home at a price not seen since the late 90’s. This IS a huge opportunity for anyone STILL on the fence about buying a Minnesota home.

Should you rent or buy?

There is an awesome website that helps individuals to answer that question. Ginnie Mae is an organization providing that provides the private mortgage insurance to most government (FHA and VA) loans. Their website provides tips, tools and ideas to help out the first time buyer.One helpful tool is their
Rent versus Buy Calculator. It is simple to use: Enter your current rent, the price of the home you are considering, how long you intend to stay at the home and a few other details. The calculator will provide an indication of where you will stand financially if you make the purchase. It is a good tool because it allows you to adjust the estimated property value increase. (In this changed market, it would be best to consider a 0-1% increase. Or consult with a REALTOR® for an estimate for a particular region or neighborhood.)

Copyright 2010 Teri Eckholm