Yesterday, CNN Money released a report that stated that buying a home is cheaper than renting in 74% of the county’s largest 50 cities. The report did not identify the specific cities, but it did say that in 12% of the cities, New York, Seattle and San Franciso to name a few it reported that it was still cheaper to rent than to buy. In 14% of the cities it noted that the cost of renting was still cheaper, but it was very close to buying.
I am not a statistical expert but my guestimate would be that the Greater Nashville area would be in the area that it was cheaper to buy than to rent – at the worst case scenario it would be close. But that would take us to the next level. The value of home ownership is usually measured by the cost; maintenance; tax breaks, etc. The value of homeownership is also determined by the pride of ownership, the commitment to community and the security of knowing what your mortgage will cost for many years, especially if it is a fixed rate as opposed to waiting for the letter announcing that your rent is going up.
Even though the real estate market has taken a hit in the last few years, the dream of homeownership is still alive and well. It is an intregal part of the American way of life – one that is seldom matched anywhere else in the world. I am many times amazed at what people in other countries go through to buy a home. This is brought to life on House Hunters International (one of my favorite shows).
I recently heard from a friend in Florida who started out by telling me that he and his wife sold their house in Florida and took a $40,000 “hit”. He complained a little about the market, but then went on to say that they bought the house of their dreams for a lot less that they would have imagined. Although I am not a CPA, I am pretty sure that when the market starts to turn around, and it will, his net worth will increase more than the $40,000 he lost in the sale of his home.
Not everyone is in a position to take that kind of a hit, but it is something to be aware of and consider if you are looking to move up to a larger home or to your dream home. Now may be the time to make the move. Homes have taken a beating in the last few years and the cost have come down, as we all know. But the home that you may be looking at moving up to has also come down and that could work to your benefit. To sweeten the pie, interest rates continue to remain low.
As always, if you have any questions about real estate, please feel free to contact me. If it involves specific questions about mortgages, I can get you in touch with someone who can answer your questions.
I look forward to hearing from you and helping you with all your real estate needs.