Buying Beats Renting: Especially in the PNW

At a certain point, we all take a look at our living situation and wonder, “For where I am in my life right now, is it better to rent or buy?” The answer to this question depends on two main factors:

1. Do you plan to stay in one place?

CNN Money recently published this article on Buying VS. Renting that says buying beats renting- but it’s best to plan to own your house for 7 years. The New York Times says plan to own for 5 years. Neither publication has a crystal ball, but it’s logical that if you’re going to buy a house you should plan to hold on to it for at least 5 years.

2. Are homes in your area appreciating?

While the housing crisis has left home sales (and price appreciation) flat in most areas of the country, look at the historic home price appreciation rates and the job prospects and population trends in your area. This can help you make an informed decision about whether or not homes in your community will be appreciating over time. According to CNN Money, these factors bode well for housing prices in the Pacific Northwest:

Of the 23 cities Beracha and Johnson looked at, Seattle is the best place to buy right now. When renters invest in portfolios that include stocks, the appreciation rate required over the next eight years there is 4.84% and the area’s historical average is 6.06%.- “Buy VS Rent: These Days Buying Wins” -CNN Money

Another factor that goes hand in hand with home price appreciation is rent price increases. The New York Times created this handy slider for weighing those two factors in your Rent vs. Buy decision!

When making the decision to buy a house, each person has to evaluate their own situation and take a look at the data in their own market. In the Pacific Northwest we are seeing that long term trends for housing look good, and rents are going up- which bodes well for homeownership. If you’d like to find out if homeownership makes sense for you, contact us!