Tuesday, June 24, 2008
Rent/buy ratio for 46 metro areas
Moody's Economy.com says Orange County home buying is beginning to look like a better deal than renting.
By MARY ANN MILBOURN
The Orange County Register
Comments 1| Recommend 1
Real estate professionals often say it's always a good time to buy, but now Moody's Economy.com has come up with a formula that shows now may just be the time to consider buying in Orange County.
Moody's developed a rent/buy ratio which is determined by dividing the median price of a house by the cost of renting that house for a year. For Orange County the rent ratio in the first quarter was 22.2, down from a peak of 29.7.
"Rent ratios going down mean houses are becoming more affordable to buy," says Arnold Slesers, the Economy.com economist who crunched the numbers.
The bad news is that Orange County is tied for sixth highest rent ratio among the top 46 metropolitan areas, which means things are still expensive here. The metropolitan Washington, D.C. area is a more affordable 16.8.
Where is home buying definitely a better bargain over renting? Columbus, Ohio, at 11.4, New Orleans at 11.5 and Indianapolis at 11.9.
For another way of looking at rent/buy ratios, go to www.hotpads.com, which charts values based on a rent ratio "heat" map.
Most expensive U.S. metro markets
Click on a header to sort this chart.
Metro area Peak 2008Q1 Change
San Jose CA 34.3 30.7 -10.5%
San Francisco CA 34.5 26.1 -24.3%
Los Angeles-Long Beach CA 31.5 24.1 -23.5%
West Palm Beach-Boca Raton FL 31.4 23.4 -25.5%
Miami FL 28.2 22.4 -20.6%
Boston MA-NH NECMA 27.5 22.2 -19.2%
New York 26.8 22.2 -17.2%
Oakland, CA 22.9 22.2 -3.1%
Orange County CA 29.7 22.2 -25.3%
Orlando FL 26.3 21.9 -16.7%
Nassau-Suffolk NY 23.0 21.1 -8.3%
Fort Lauderdale FL 26.7 21.0 -21.3%
San Diego CA 28.3 19.0 -32.9%
Raleigh-Durham-Chapel Hill NC 18.4 18.1 -1.6%
Charlotte-Gastonia-Rock Hill NC-SC 18.8 18.0 -4.1%
Seattle-Bellevue-Everett WA 17.9 17.9 0.0%
San Antonio TX 17.8 17.8 0.0%
Sacramento CA 28.0 17.6 -37.1%
Baltimore MD 18.8 17.6 -6.5%
Tampa-St. Petersburg-Clearwater FL 21.4 17.5 -18.2%
Hartford CT 18.2 17.4 -4.4%
Phoenix-Mesa AZ 22.5 17.3 -23.1%
Las Vegas NV-AZ 24.0 17.1 -28.6%
Jacksonville FL 18.9 16.9 -10.6%
Portland - Vancouver OR-WA 17.7 16.8 -5.1%
Washington DC-MD-VA-WV 21.4 16.8 -21.5%
Milwaukee-Waukesha WI 17.6 16.4 -6.8%
Atlanta GA 18.6 16.2 -12.9%
Riverside-San Bernardino CA 23.9 16.1 -32.6%
Salt Lake City-Ogden UT 16.0 16.0 0.0%
Philadelphia PA-NJ 16.3 15.6 -4.3%
Houston TX 16.1 15.4 -4.3%
Austin-San Marcos TX 15.3 15.3 0.3%
Minneapolis-St. Paul MN-WI 19.1 15.3 -19.9%
Denver CO 17.4 14.7 -15.5%
Chicago IL 17.7 14.5 -17.8%
Oklahoma City OK 15.7 13.9 -11.5%
Pittsburgh PA 13.9 13.6 -2.0%
Cincinnati OH-KY-IN 15.1 13.2 -12.4%
St. Louis MO-IL 15.3 12.9 -15.7%
Dallas TX 15.2 12.8 -15.8%
Kansas City MO-KS 14.4 12.7 -11.8%
Memphis TN-AR-MS 15.6 12.1 -22.4%
Indianapolis IN 13.6 11.9 -12.5%
New Orleans LA 19.1 11.5 -39.8%
Columbus OH 13.6 11.4 -16.2%
Sources: Moody's Economy.com; PPR; National Association of Realtors