The Washington Independent
The Washington Independent

Is It Really a Good Time to Buy a House?

Last updated: 07/31/2020 08:00 | 04/21/2010 07:20
Ceri Sinclair

Today, New York Times economics writer David Leonhardt has a good column on why it might be a good time to buy a home in some unlikely parts of the United States.

Leonhardt shows that the rent ratio — the price of the home divided by the estimated annual cost to rent one like it — in many metro districts has fallen enough to signal that it is a good time to consider purchasing a home rather than renting one. Housing market experts believe that if the rent ratio is lower than 20, a home is of good enough value to consider buying. If the number is higher than 20, a purchaser is counting on real estate prices to rise to make up the higher aggregate cost of paying a mortgage. (During the worst of the housing bubble, homebuyers in places like Ft. Myers, Fla., were bidding on homes with sky-high rent ratios in the 40s.)

Leonhardt’s analysis shows that homes seem to be a decent deal in markets like California’s Inland Empire and Las Vegas — the very markets that stoked the worst of the housing crisis. But those parts of the country are suffering from high, high unemployment and a long real-estate hangover. And Leonhardt’s analysis does not take into account the fact that many mortgage experts believe those markets still have a ways to fall. I took the markets the Times column indicates might be a good deal — with rent ratios below 20 — and overlayed the data with information from RealtyTrac indicating the proportion of houses that received a foreclosure notice last month. In places like Washington, D.C., and Seattle, just one in 1,800 homes received a foreclosure notice. But in Las Vegas, one in 69 did, meaning a whole lot of houses might be coming on the market soon.

Indeed, the foreclosure crisis looks like it might worsen in many already hard-hit markets this summer and fall. The blue line on the graph below shows the rent ratio. The purple line shows the proportion of homes in the midst of foreclosure last month — and indicates markets that look likely to gain some capacity in the next few months.

Home Values1 480x326

So people looking to buy new homes might want to think twice before sinking their savings into one of the markets with a long purple line here, like Las Vegas or Riverside or Miami. On the other hand, the real estate markets in cities like Indianapolis, Dallas and Washington look considerably safer.

Ceri Sinclair | I promote contact between clients, consumers, and companies in order to complete projects. I have over 10 years of experience in management consulting, team building, professional development, strategic execution, and business engagement in both the public and private sectors. I've worked on projects for TechPoint International, Cyberry, and Induster.


Exposing Domestic Intelligence “Fusion Centers” in Michigan

EPA Administrator Addresses Concerns About Oil Spill Waste Management

At a hearing of the national oil spill commission today, Environmental Protection Agency Administrator Lisa Jackson addressed concerns about waste disposal from

E-Verify Mandate Begins Today

The Obama administration today begins implementation of a new mandate to require all federal contractors to check the legal status of their employees to confirm

EPA administrator defends allowing Florida to write its own water pollution rules

The EPA seal (Pic via The Environmental Protection Agency has come under fire for its decision to allow the state of Florida to write its own water pollution rules (known as “numeric nutrient criteria”). EPA Regional Administrator Gwendolyn Keyes Fleming is now firing back, writing that the Agency commends the state Department of Environmental Protection for its draft of a proposed standard. A host of environmental groups filed suit in 2008, seeking to compel the EPA to implement a strict set of water pollution standards in Florida, arguing that the state was in violation of the Clean Water Act.

EPA administrator fires back at critics in op-ed

EPA Administrator Lisa Jackson (Pic by USACEpublicaffairs, via Flickr) EPA Administrator Lisa Jackson penned a new op-ed for the Los Angeles Times , criticizing House Republicans desperately seeking to undermine the authority of the agency they have dubbed a “job killer.” Arguing that the environment affects red states and blue states alike, Jackson writes that “it is time for House Republicans to stop politicizing our air and water.” As head of the Environmental Protection Agency, Jackson has faced harsh criticism from House Republicans and GOP presidential candidates who say the agency’s regulations are an undue burden on businesses that have to cut jobs simply to comply with clean water and air rules. Presidential hopeful Michele Bachmann  has pledged to end the EPA if she takes office. “Since the beginning of this year, Republicans in the House have averaged roughly a vote every day the chamber has been in session to undermine the Environmental Protection Agency and our nation’s environmental laws,” writes Jackson.

EPA Analysis Says Climate Bill’s Cost for Households Would Be ‘Modest’

All the attention on the energy front today is going to the BP spill, but the Environmental Protection Agency quietly released its long-anticipated analysis of

EPA administrator says federal nutrient criteria is a ‘myth’

In testimony given late last week, EPA Administrator Lisa Jackson said that false accusations about her agency’s numeric nutrient criteria to govern Florida waterways are proving to be a detriment to their implementation. # Testifying before the House Agriculture Committee, Jackson said her agency’s work was often “mischaracterized” and addressed several myths surrounding its work

EPA: BP Has 24 Hours to Find a Less Toxic Chemical Dispersant

Thought the massive quantities of oil pouring into the Gulf of Mexico were the only major threat to the country’s southeast coastal waters right now? Think

EPA biologist says fracking may be partly to blame for West Virginia fish kill

New documents obtained by an environmental news service show that an EPA analyst believes that wastewater from fracking may be partly responsible for a fish kill in a West Virginia river. Scientific American reports : U.S

© Copyright 2021 The Washington Independent All Rights Reserved

Terms & Privacy |