Tuesday, August 5, 2008

Welcome to Portland- Where It's Still Better To Rent

Hat tip to Sara for finding this article last week.

From MSN:

A few years back, buying a home was sold as a no-lose proposition. But the housing bust has demonstrated that renting is often the more financially prudent decision, a new study finds.

Using a rule of thumb that truly affordable homes cost no more than 15 times their annual market rent, the study found that prices in 34 of the largest 100 metro areas still have a lot of room to fall and would leave their owners with negative equity were they to sell in four years.

In San Francisco, you stand to lose around $254,000 in the next four years, according to the study; in Honolulu, $115,000; in Seattle, $108,000; in Washington, D.C., $81,000; and Boston, $28,000. That's not to say prices won't eventually recover. But you could be courting disaster if you need to sell before they do recover. "In these places, if you buy in now you've got to do so with your eyes wide open," warns Pelletiere. "Now is the time for extreme caution."