If you are having trouble deciding whether to buy or rent, you are not the only one. This decision can be based heavily on financial considerations, but can be personal in nature as well. Since most emotional reasoning is difficult to measure (and not normally advisable for any financial investment) an analytical approach for determining your decision is definitely the best course. This is a seemingly obvious statement, but years ago achieving the "American Dream" Â by owning real estate wasn't necessarily the correct decision for many. Continuing to rent might have been the right course of action (as many have learned the hard way).Â
A recent study by Case-Schiller, one of the most widely recognized and published authorities on housing data, indicated that if market conditions continue as forecasted, renting in 2013 may not be the best option for many people.
Here is a quick snapshot of rent prices over the past 5 years.
2009 Average rent of $1,750
2010 Average rent of $1,762
2011 Average rent of $1,830
2012 Average rent of $1,945 (up 6% from 2011)
2013 Average rent of $2,042 (Projected)
Source: RealEstateTrends Â by the Policy Development & Research Division of the City of Boston Department of Neighborhood Development & Axiometrics and Property & Portfolio Research
If you plan on residing in one of the more sought after areas of Boston, rents will be drastically higher. Consider the following average rent prices:
Seaport District - $2,720
Waterfront - $2,454
West End - $2,409
North End - $2,199
Back Bay - $2,092
South End - $2,180
Brookline - $2,599
Source: Rentjuice & MLSThe current rule of thumb in the world of real estate is that the break even point Â for renting versus buying in the greater Boston area is five years.Â Â The break even point is defined as the amount of time required to live there before selling that will result in breaking even on the cost and added expenses of buying it.Â Keep in mind the Boston housing market is one of the most expensive and competitive markets in the country. Â Depending on where you are looking to purchase your new home, this "break even point" may fluctuate from eight years to less than two. You may also want to consider other contributing factors such as down payments and move dates which can affect a purchase price. This is precisely why enlisting the help of a real estate professional with this decision is essential. With still historic low interest rates, rebounding housing prices, and escalating rents, now might be the perfect time buy.
For further information please email Jason@AllAccessBoston.com