Owning may be better than renting in Sacramento...

Here's a recent article from the Sacramento Bee.  The article discusses an interesting phenomenon in our area of owning a home is costing less than renting in many scenarios right now.  Over the past year, rents have been inching higher while prices of homes to buy have been inching lower.  Check out the article...

Sacramento Bee article

clear skies,

Doug Reynolds

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July 26 2011 - Sacramento
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Replies (5)

Profile picture for Michael Helton
I was shocked and stunned to read that the Mortgage Broker listed in the article says it makes more sense to buy than to rent.

Seriously though, I wish they would have addressed the fact that since housing prices in Sacramento continue to slide the house that is purchased will be worth less and less.  There is a reason the rental market is so strong.
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July 26 2011
Profile picture for nacho59

Sacramento IS NOT the only area where this is happening.
People have to start doing the math. Renting is becoming more expensive and that is going to be old news pretty soon.

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July 26 2011
Though housing prices drop right now it is still less per month to buy than rent in many cases. If you are thinking about buying contact a lender & find out some REAL numbers. You might be pleasantly surprised!
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August 11 2011
Profile picture for SteadyState
List prices in Sac have dropped by 10.1% over the last year
The home value index for Sac has dropped by over 15% in the last year.

median sale price: $155,000
median income: $37,000

median home price = 4.1 * median income

 With a 20% down
median home price = 3.35 * median income

It is getting close to point where it may make sense to buy but the market is in risk of a further 10% - 15% drops:

* median home price should be around $140K
* the market over correcting

You can work out the numbers for yourselves or trust what some REAs tell you - you decide.


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August 11 2011
Profile picture for shasta_steve
median sale price: $155,000
median income: $37,000

I think your numbers are a little off.  The 37k median income was in 2000.  It is pretty hard to get the exact numer but the best I could find for 2010 was about 47k and Zillow lists the median sales price at just over 150k. 

I am not saying it is a great time to buy a house but in many areas of Sacramento it is quite abit cheaper than renting right now.  In my zip code, Sac County,  the average income is a little over 70k and the average house is about 190k.  It is easy to buy houses for less than 10 times rent. 

Like I said before I don't think it is a great time to buy but for some people I think it make pretty good sense in the Sacramento area.  But I do agree it should be your decision and not what a realtor tells you. 
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August 11 2011
 
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