Real Estate Truths: Rent vs. Buy

There is so much news on the health of the real estate market every day. Many people are waiting until the market fully recovers before investing in real estate but some are not waiting. What if experts suggested however that buying a home is actually cheaper than renting?

The newest studies of 50 of the largest cities in America are suggesting that it is a smart decision to buy and cheaper than rent in the same area. Trulia just released a new chart with varying factors that show which of the 50 largest cities is better to buy vs. rent a home. The results boast 39 of those cities are cheaper to purchase property than rent.

Trulia is not the only one spreading the good news however, check out Inman News this week. The news source is reporting that 78% of the major cities in the U.S. it is cheaper to buy real estate than to rent a home.

How does the Tampa Bay Area compare? Tampa, Florida is not one of the top 50 cities by population in the US therefore it doesn’t make most of the list, however using our own knowledge of the Tampa Bay Area we can figure out statistically if it is a better idea to buy your home or rent locally. Using the rent ratio described by the NY Times, a formula created by taking purchase price of a property and dividing it by the annual cost to rent the exact same property. The rule of thumb is less than 20; usually better idea to purchase a property. If the ratio is over 20 you should at least consider renting.

If you look at SI Real Estate’s recent sales, we will compare some of our recent purchases. A South Tampa condo in Cordoba Beach Park (2BD/2BA) just sold for $130,000. The same condo rents for about $1550. So using the rent ratio formula you get 7.0. If you compared a new construction home is New Tampa, a very nice 3 bedroom 2 bath house in a great neighborhood would run about $205,000. Let’s say if it was rented at $1700, the ratio is still only 10.05. Both examples are well below the 20 point rule of thumb given.

If you don’t like math check out this website at NY Times, it lets you plug in your own numbers and see whether purchasing or renting is a better idea. Have fun and when you are ready to start house hunting call SI Real Estate at (813)631-5144 or email us at YourHome@SIRealEstateInvestments.com.

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Real Estate Trends | Spring has Sprung

As the flowers and trees start to blossom, there is another change in the air. With drops in foreclosure filings and a rise in the buying market, could Spring bring a new season for real estate?


According to an article published by Housing Wire, Housing starts rise 7.2 % in March 2011. This is after a long decline of months. The data is collected from Department of Commerce, U.S. Census Bureau, and the Department of Housing and Urban Development every month to compare to previous months and previous years. March reached the highest peak in 16 months.

Another noteworthy statistic to highlight is that RE/MAX National Housing reported that, “Home sales jumped more than 10% in 53 of the 54 metros tracked by RE/MAX between February and March”. This is a huge accomplishment in such a harsh season of retail. In this article it also quotes Freddie Mac in projecting that annual sales this year will be up a total of 5%. Another important thing that Freddie Mac monitors is foreclosure prevention measures and Foreclosure cases. They reported to the Federal Housing Finance Agency that preventions dropped for the fifth straight month in a row and that Foreclosure starts are down 91,000 since last month and 71,000 down from this month last year.

Here in Tampa Bay, we are seeing similar real estate trends. The St. Petersburg Times released an article this week stating, “Sales of previously occupied homes in Pasco, Pinellas and Hillsborough counties jumped nearly 32 percent, from 3,258 in February to 4,296 in March.” That is a spike we haven’t seen in about five years locally. Mark Vitner, senior economist for Wells Fargo stated, “"It's a further indicator that the worst may be over. The bay area economy is modestly improving." In Hillsborough County alone, there was a 33% jump in sales from the previous month.

All of these numbers might be overwhelming at first but they are a huge boost in confidence that the Real Estate Market has strong momentum. Spring is always a high home buying season and this year let’s hope that it really moves the real estate market forward. Confidence in the market is building. SI Real Estate sees new progress every day. If you would like to list your property for sale or start looking to purchase a new home call us today at (813)631-1806 or email us at Yourhome@SIRealEstateInvestments.com.

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