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FIND YOUR DREAM HOME OR APARTMENT
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Does this article make any sense?
"...it takes 2.5 years for buying to be more financially advantageous."
Which means unless you're buying/selling a house EVERY 2.5 years, buying is still better. Home ownership is a long-term thing, it's not instant. What an idiotic article.
These days if you rent, you're likely a placeholder until the market improves and then the place is sold out from under you.
First, as a practicing real estate attorney for over 25 years and one who has completed closings in every Mid Atlantic State, I have to state that in my experience Zillow is god awful. Their value estimates are so flawed I seriously question where and how they obtain their information. From my perspective, take the Zillow valuation of a property and add at least 20-25% to obtain a more realistic number.
Secondly, with the upfront costs of a home purchase, there will ALWAYS be a "lag" period wherein it takes the buyer a period of time to reach their breakeven point and thereafter, start to recognize savings. The savvy buyer understands this and realizes that they have to start somewhere. If you were to take the Zillow approach and rent for 3 years in any of these cities where will you be? Well, you will be three years further down the road with home prices over 30% higher than they are now (assuming the quoted appreciation rates stay close to where they are now). With closing costs approximately 6% of the purchase price (generally), this will result in higher closing costs of $1800.00 per $100,000.00 of purchase price, plus the opportunity cost of having missed out on the past 3 years. In other words, in three years with a purchase you will be at the point of gain recognition. In three years with the Zillow "rent now" philosophy, you would be left with much higher home prices, higher closing costs and only the commencement of your waiting period to achieve break even status, which according to Zillow's current stats, would be another 3 years for a total of 6 years out. It is a no brainer. Unless you believe that home prices have reached the top of the ladder and that there is little chance for further appreciation, you need to purchase rather than rent.