Renting now better than buying in Greater Boston?
You are better off renting an apartment in the Boston area than buying a home, Trulia contends.
Of course, that is until still relatively high home prices in Greater Boston fall to a much more affordable level - which I would argue is still a big if.
It's one of the findings of Trulia's latest Rent vs. Buy Index, just released this morning.
As I hinted, I am somewhat skeptical for a couple reasons here, but let's look at what Trulia is saying.
A little explainer first: Trulia's ratio is based on taking the average rent, multiplying by 12, and then dividing the figure into the average home listing price for the metro market in question. The higher the price to rent ratio, the better off you are renting as opposed to buying, according to Trulia.
Boston weights in at No. 10 on Trulia's list of major markets where renting makes more sense than buying right now.
The home price to rent ratio is still a lofty 20 to 1 in Boston, comparable to cities like San Francisco, San Diego and Portland. Nice cities where lots of people still want to live. New York and Seattle, at 35 to 1 and 31 to 1 respectively, not surprisingly top the charts as the best places to rent rather than buy.
By contrast, some of the best metro areas to buy a home in right now, instead of renting, are Miami, with a 9-to-1 price to rent ratio, Phoenix, at 10 to 1 and Detroit at 11 to 1.
Interesting, now isn't it?
OK, now here is one of my big problems with this, and it should be pretty obvious.
Who in their right mind right now would want to buy a home in Detroit, an urban wreck with the collapse of the auto industry, or Phoenix, with its vast tracts of foreclosures?
Conversely, one of the very reasons metro markets like Boston and San Francisco are still very expensive to buy in that they are highly desirable places to live, especially compared to the Detroits of the world.
And while the job market around here is nothing to boast of, it sure beats the prospects in a lot one-dimensional towns built around a single industry, whether it's cars or insurance.
OK, so why not wait until prices finally fall in the Boston area to the point where owning officially beats renting?
Given the incredible pressure prices in Greater Boston are coming under right now from falling sales, it is a safe bet to say we are likely to see home values start to fall again in the next several months.
But home prices, for a number of reasons that stretch back decades, have been traditionally stubborn in the Boston area.
And for that reason, it's hard to see a looming home price collapse that would make Greater Boston as affordable as Columbus or Nashville, now considered great home buying markets by Trulia after steep declines in home prices.
I don't ever see the Boston area becoming a paradise for home buyers, but maybe that is just me.
