Renting vs. buying: Zillow says it takes four years in Seattle to break even on costs – Puget Sound Business Journal

In comparing the costs of buying a home versus renting, it takes a an average of four years of living in a home in the Seattle metro area for buying to be more advantageous financially, according to an analysis by Zillow, the real estate web site.

The analysis compares the long-term costs of owning versus renting, and it factors in the potential payoff of building home equity against the added costs of owning as opposed to renting.

Seattle’s “breakeven horizon” is higher than in much of the country. Residents in more than 75 percent of the country only need to live in a home they own for three years in order to break even versus renting.

In the Seattle area itself, there were wide disparities in the break-even points among different communities, ranging from 20.7 years in Hunts Point to 2.3 years in Spanaway. (See below for a detailed breakdown.)

Zillow used a wide variety of costs in its analysis, including down payment, mortgage and rental payments, transaction costs, property taxes, utilities, maintenance costs, and tax deductions. Figures were adjusted for inflation and included projected appreciation in home values and rent.

In areas of the U.S. where home values fell dramatically during the recession, it takes even less time to reach the break-even point. In the Miami-Ft. Lauderdale metro area, for example, homeowners can break even after living in a home only 1.6 years. The longest break-even horizon in the U.S. is in the San Jose metro area, where a buyer must live in a home for an average of 8.3 years before breaking even

via Renting vs. buying: Zillow says it takes four years in Seattle to break even on costs – Puget Sound Business Journal.

Posted on August 2, 2012 at 9:21 pm
Leah Pham | Category: Uncategorized

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