Which one should you do?
Here is a short video before the post regarding Buy versus Rent 2017:
Confused over buy versus rent 2017
Which is better for your clients: accumulating wealth through home equity or renting and investing their savings? That’s the fundamental question that the quarterly Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index aims to answer.
The firm examined 23 of the country’s largest metro areas in the second quarter, home buying still tops renting—but only slightly, and that has to do with prices. Turns out, the picture isn’t a pretty one for many home buyers.
September 2017 house numbers
As the supply of homes for sale continues to decline year over year, homes are selling ever faster, and for ever-higher prices. For-sale housing inventory fell 1% between August and September, and is down 9% from September 2016 (when there was already a considerable decline in inventory from the year before).
The median time on market for properties in September is 69 days—meaning they’re selling 8 days faster than this time last year. And that’s with a median list price of $274,000, which is 10% higher than one year ago!
Local Housing Markets getting tighter
In such a tight market, buyers are running out of options, said realtor.com Chief Economist Danielle Hale. “Days on market and the number of new listings coming to market are lower than we typically see in the fall season, while listing views per property continue to move higher,” she said in a statement. Are you looking as a first time home buyer? Here is a great article I wrote about the home buying experience.
Meanwhile, the effects of hurricanes Harvey and Irma reversed earlier gains in Miami and Houston’s markets, Hale said: “Views per listing in those markets now show declines from a year ago, while just last month, they showed double-digit increases. Recovery will come to those housing markets, but it will take some time.” Jacksonville was impacted far worse by Irma than Matthew in 2016. The City bill to FEMA was 30 million in 2016, and that will likely rise in 2017 with Irma.
Trends in Buy versus Rent 2017
The Detroit, New York, and St. Louis metro areas were the only ones where home ownership trended more favorably than renting. Meanwhile, the indices in the other 20 metro areas on the list moved toward renting to varying degrees, with some cities moving just marginally and others moving more dramatically in that direction.
Four cities are tipping into rent territory of the index are Miami, Pittsburgh, Portland and Seattle. Namely because home prices have risen too high too quickly. Only two cities, Dallas and Denver, saw record index scores favoring renting. But William G. Hardin, index co-creator notes that housing development has not kept up with the massive job growth in these markets. That may change when development catches up, he says.
“The trend is definitely in the direction of renting. Many markets, namely in the Midwest, remain comfortably in buy territory,” says Eli Beracha, co-creator of the index. “Prices in these markets should continue to rise without worry of overheating.”