Today Trulia announced America’s Top 10 Cities to Buy vs. Rent and the Top 10 Cities to Rent vs Buy. Trulia calculated the price-to-rent ratio using the average list price compared with average rent on 2 bedroom apartments, condos and townhomes listed on Trulia.com. To create the list, Trulia analyzed the largest 50 cities in America, by population.
Top 10 Cities to Buy vs. Rent City
Price-to-Rent Ratio
1.Minneapolis, Minnesota
8
2.Arlington, Texas
8
3.Miami, Florida
8
4.Fresno, California
8
5.San Antonio, Texas
8
6.Mesa, Arizona
9
7.Jacksonville, Florida
9
8.Phoenix, Arizona
10
9.El Paso, Texas
10
10.Las Vegas, Nevada
11
“At the peak of the real estate bubble, cities like Miami, Phoenix and Las Vegas were not affordable for many. Now the opposite is true,” said Pete Flint, co-founder and CEO of Trulia. “Home sellers in these hard hit areas are forced to lower their prices to compete with all the foreclosures on the market. As a result , these unattainable markets are so affordable it makes better financial sense to buy than rent.”
Top 10 Cities to Rent vs. Buy City
Price-to-Rent Ratio
1.New York, New York
33
2.Omaha, Nebraska
26
3.Seattle, Washington
25
4.Portland, Oregon
22
5.San Francisco, California
22
6.Oklahoma City, Oklahoma
21
7.Kansas City, Missouri
20
8.San Diego, California
20
9.Cleveland, Ohio
20
10.Dallas, Texas
19
“It is not a surprise to see cities like New York and San Francisco on the ‘Rent’ cities but I was surprised to see areas like Omaha, Oklahoma City and Kansas City on our rental list, “said Flint “We’re not suggesting that it’s unwise to buy in these areas, though - just that it’s significantly more expensive than renting. In many of these cities, even though home buying is much more costly than renting, prices are still much lower than they have been in a long, long time.”
Price-to-Rent Ratio of 1-15: It is much less expensive to own than to rent a home in this city Price-to-Rent Ratio of 16-20: It is more expensive to own a home in this city are The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation. Price-to-Rent Ratio of 21+: The total costs of owning a home in this city are much greater than the costs of renting.
Definitions: Total costs of home ownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase and ongoing HOA dues and private mortgage insurance, where applicable. Total costs of homeownership include an offset for the tax advantages of homeownership, including mortgage interest, property tax and closing cost deductions.
A forum for advice, thoughts, rants, and raves about the Northern Virginia real estate market.
Tuesday, June 15, 2010
Thursday, June 3, 2010
Market Update through April-May 2010
The real estate market in Northern Virginia has rapidly expanded this spring with most areas selling about twice as many homes in April as were sold in February. This is partly due to the spring...The real estate market in Northern Virginia has rapidly expanded this spring with most areas selling about twice as many homes in April as were sold in February. This is partly due to the spring selling season that happens annually, but it was a larger jump in sales this year than we see most years. This was mainly due to the combination of the April 30 tax credit deadline that many buyers were trying to meet and the low interest rates that were available.I believe we would have had a strong spring without the tax credits. We will see the May numbers when they come out to see how much the tax credits were effecting the number of sales. May numbers almost surely will not be as high as April. There were clearly some buyers that would have taken there time and wrote offers in May that hurriedly went under contract at the end of April. But I also think there were buyers in May that did not qualify for the tax credit (or thought the market was overpriced due to it) that waited until the deadline had passed before negotiating their purchases. People who have bought in the last year and a half are above water and people who bought the several years before that have lost money on their homes. As prices rise and time passes, more and more owners will have the ability to sell without losing money, which will encourage more inventory on the market. Currently, most owners who bought or cashed out on a refinance from 2004-2008 and want to sell now, either need the cash to cover their losses or are short selling their houses. Many people see neither of those as good options, so are staying in their homes to wait out the market.
Tuesday, May 25, 2010
Tips on Buying Foreclosures.....
Distressed sales, including foreclosures and short sales, accounted for about 45% of total home sales for the nation in the fourth quarter of 2008 and the first quarter of 2009, according to the National Association of REALTORS®. Because of the influx of these properties on the market, qualified buyers have new opportunities to obtain affordable pricing, low mortgage rates, and financial incentives such as the $8,000 federal tax credit available to first-time homebuyers.
“Buying a foreclosed home can be a complex process. We want to help consumers be aware of what is involved and of ways they can make that process go smoothly,” said Paul Valentino, president, Greater Washington, DC. “It is important to work with a professional - experienced in distressed sales who can help you make use of the current incentives while they last.”
To help consumers navigate through this type of purchase, Coldwell Banker Residential Brokerage in Greater Washington, D.C. has released its list of Top 10 Tips for Buying a Foreclosed Home in the Greater Washington, D.C. Region:
Banks like all-cash deals. Large down payments can also help you win your bid. Lenders and government agencies are more likely to choose a buyer who can close quickly.
Be patient. It can be a long and complex process up to four months or longer and negotiations must be expertly managed. Buyers should work with full-time REALTORS® who understand this unique process.
You might have to do a little work. Some homes are ready to live in and some homes need work, but the latter usually offer a better deal if you’re handy. If a home needs energy efficiency-related repairs (i.e. new roof, insulation), it may qualify for more than $6,000 in additional funds to make the repairs via a federal Energy Efficient Mortgage. The FHA 203K loan is another option; this program allows you to purchase the home and incorporate the cost of repairs into the loan amount. Keep in mind though – a cash deal will beat out your financed offer almost every time!
Negotiate a one-year home warranty. You want a warranty that specifically covers foreclosed properties and any undetected defects. The home you're purchasing may have been vacant for a long time. A lot can happen to appliances during that vacant period.
Be aware of current buyer incentives. There are many financing options today and many first-time buyers are eligible for an $8,000 federal tax credit, which you can file for this year as soon as you close on your home. Be aware - there is a time limit on this tax incentive.
Act Fast, Great Deals Don’t Last. If you need a loan, work with a lender to get pre-approved for a mortgage and interest rate so you can act as quickly as possible when you find a home. Great deals on foreclosures are gone almost as fast as they appear. Be prepared to make your offer as soon as you can. Delaying a day can literally cost you the purchase.
Be realistic about the discount on foreclosures. The perception that foreclosures offer good value is often true. Final sale price depends on the condition and location of the property, how long it has been on the market, and the number of interested buyers. With many active buyers, don’t expect a big discount off the asking price.
Know what title you hold. A Marketable Title is the best title to have as it ensures all liens on the property have been released with a certificate of satisfaction. If you have an Insurable Title, it means there are unreleased liens on the property. You are covered by the insurance, but should you sell or refinance the home, the unreleased liens will have to be properly recorded and may incur additional costs or even delay the transaction.
Know your rights. In Virginia, the bank is responsible for paying the Grantor’s tax. In Washington, D.C., both the bank and buyer share the cost of the Grantor’s tax; in Maryland the tax is paid 50/50 by the bank and the buyer. Some sellers (lenders) try to pass the entire tax bill along to the buyer.
Read the fine print. Most banks draft and require buyers to sign an addendum. Read the fine print and understand what you are signing. For example, a bank addendum could contain language that makes the buyer liable for liens filed on the property after it goes under contract and before it closes. Be aware that contractors have 30-45 days to file a lien for non-payment of services rendered. So, a lien for work done before the contract was signed could still end up being the buyer’s responsibility.
“Buying a foreclosed home can be a complex process. We want to help consumers be aware of what is involved and of ways they can make that process go smoothly,” said Paul Valentino, president, Greater Washington, DC. “It is important to work with a professional - experienced in distressed sales who can help you make use of the current incentives while they last.”
To help consumers navigate through this type of purchase, Coldwell Banker Residential Brokerage in Greater Washington, D.C. has released its list of Top 10 Tips for Buying a Foreclosed Home in the Greater Washington, D.C. Region:
Banks like all-cash deals. Large down payments can also help you win your bid. Lenders and government agencies are more likely to choose a buyer who can close quickly.
Be patient. It can be a long and complex process up to four months or longer and negotiations must be expertly managed. Buyers should work with full-time REALTORS® who understand this unique process.
You might have to do a little work. Some homes are ready to live in and some homes need work, but the latter usually offer a better deal if you’re handy. If a home needs energy efficiency-related repairs (i.e. new roof, insulation), it may qualify for more than $6,000 in additional funds to make the repairs via a federal Energy Efficient Mortgage. The FHA 203K loan is another option; this program allows you to purchase the home and incorporate the cost of repairs into the loan amount. Keep in mind though – a cash deal will beat out your financed offer almost every time!
Negotiate a one-year home warranty. You want a warranty that specifically covers foreclosed properties and any undetected defects. The home you're purchasing may have been vacant for a long time. A lot can happen to appliances during that vacant period.
Be aware of current buyer incentives. There are many financing options today and many first-time buyers are eligible for an $8,000 federal tax credit, which you can file for this year as soon as you close on your home. Be aware - there is a time limit on this tax incentive.
Act Fast, Great Deals Don’t Last. If you need a loan, work with a lender to get pre-approved for a mortgage and interest rate so you can act as quickly as possible when you find a home. Great deals on foreclosures are gone almost as fast as they appear. Be prepared to make your offer as soon as you can. Delaying a day can literally cost you the purchase.
Be realistic about the discount on foreclosures. The perception that foreclosures offer good value is often true. Final sale price depends on the condition and location of the property, how long it has been on the market, and the number of interested buyers. With many active buyers, don’t expect a big discount off the asking price.
Know what title you hold. A Marketable Title is the best title to have as it ensures all liens on the property have been released with a certificate of satisfaction. If you have an Insurable Title, it means there are unreleased liens on the property. You are covered by the insurance, but should you sell or refinance the home, the unreleased liens will have to be properly recorded and may incur additional costs or even delay the transaction.
Know your rights. In Virginia, the bank is responsible for paying the Grantor’s tax. In Washington, D.C., both the bank and buyer share the cost of the Grantor’s tax; in Maryland the tax is paid 50/50 by the bank and the buyer. Some sellers (lenders) try to pass the entire tax bill along to the buyer.
Read the fine print. Most banks draft and require buyers to sign an addendum. Read the fine print and understand what you are signing. For example, a bank addendum could contain language that makes the buyer liable for liens filed on the property after it goes under contract and before it closes. Be aware that contractors have 30-45 days to file a lien for non-payment of services rendered. So, a lien for work done before the contract was signed could still end up being the buyer’s responsibility.
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