Buy vs. Rent Redux
We've looked at the issue of Buy vs Rent quite a few times over the years. You can imagine my thrill at seeing the map (below) showing various city ratios of Purchase to Rent prices from around the country.
It is consistent with our main Housing theme: Prices remain way too high for any sort of a bottom to be near. Why? During the 1970s, ’80s and ’90s, the average rent ratio nationwide was between 10 - 14.
It broke out of that historical range in 2003, hitting ~19 when the housing market peaked in 2006.
Where is the ratio today? Pick a city:
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click for larger graphic
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Source:
As Home Prices Drop Low Enough, a Committed Renter Decides to Buy
DAVID LEONHARDT
NYT, May 28, 2008
http://www.nytimes.com/2008/05/28/business/28leonhardt.html
Wednesday, May 28, 2008 | 07:00 AM | Permalink
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Comments
When my wife and I first shopped for a home in 2002 we laughed at that time for what most people were looking for pricewise.
As for the market I'm navigating into already deflated assets; home depot for example. Since lumber and building materials prices have already started deflating this should be a better choice than let's say a home builder.
Posted by: John Borchers | May 28, 2008 7:07:24 AM
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