Better to Buy or Rent in this "Perfect Storm?"

With housing prices down significantly in many parts of the country and interest rates low, it may be an affordable time for twentysomethings to buy that first home.

 Kimberly Walsh, a 27-year-old Human Resource Representative in Camden County, NJ., purchased her first home in August. She were able to capitalize on what we call a "perfect storm" -- job stability, a desire to settle down, a surge in home foreclosures and the $8,000 tax credit for first-time buyers. Kim felt her buying experience in this market gave her "a lot of options. There was always something new to choose from, and I found the perfect one."

Still, the move was not without its concerns. "Would I be able to afford this home comfortably?Do I have enough for a down payment? Do I have enough for moving? It's really nerve-racking when you're first doing it," said Ms. Walsh..

Here are some questions to consider when deciding if buying or renting is the right choice for you:


1. How long do you plan to stay in your home? "There are high transaction costs associated with buying and selling" a house. Home buyers should plan to stay put for at least four to five years to make it worth their investment.

2. Can you handle the monthly expense? While a monthly mortgage payment may be comparable in some cases to a monthly rent, there are other expenses to consider. To help with this a buyer consultation with your realtor and meeting with a reliable Mortgage Representative is critical. Knowing your fees upfront will relieve a lot of worries down the road.


3. To get a feel for the financial burden you'll be taking on -- and to see if you can handle it -- "practice" making payments. Each month, set aside projected mortgage and property-tax payments, maintenance costs, utilities and any other home-related expenses into a separate savings account.

4. What's the price-to-rent ratio? Home prices have come down significantly in some areas of the country, but "nobody knows what tomorrow's going to bring in the housing market".

To determine whether it makes more financial sense to buy or rent in your area, compare home sales prices with the cost of renting a similar place.


5. What is your job and relationship status? Twentysomethings are still getting a grasp on their futures and a constantly changing lifestyle might require the flexibility of renting. But "if your career stability is strong, you are comfortable doing what you're doing … and you are committed in some form to your lifestyle, buying a home becomes a more attractive option."

Are you ready to take advantage of the "perfect-storm?"

Cheryl Daigle & Daniel Mauz
DealsInNJ.com

Keller Williams Realty Ranked #1 In Customer Satisfaction

Keller Williams ranked first among home buyers in the annual J.D Power and Associates 2009 Home Buyer/Seller study. The study measures customer satisfaction with the largest national real estate companies. The most significant factor is the buyer/seller experience with the practitioner.

Other factors include overall experience with the office and satisfaction with special services offered, like referrals to inspectors and lawyers. Home sellers also rate marketing. The 2009 Home Buyer/Seller Study includes more than 3,100 evaluations from 2,801 respondents who bought or sold a home between April 2007 and June 2008.

Among the related findings:

Home sellers report that, on average, 3.2 open houses were conducted for their property in 2009, compared with 4.5 in 2008.


Approximately 64 percent of home sellers used a Web site listing to market their home in 2009, up from 61 percent in 2008.

Here are the home buyer rankings on a 1,000-point scale. (The home buyer average score was 791.)

1 – Keller Williams, 806
2 – Coldwell Banker,
3 – 801 RE/MAX, 798
4 – Century 21, 795
5 - Prudential, 781
6 - ERA, 744
7 - GMAC, 731

Here are the home seller rankings on a 1,000-point scale. (The home seller average score was 786.)
1 – Coldwell Banker, 815
2 – Keller Williams, 801
3 – RE/MAX, 784
4 – Century 21, 770
5 – Prudential, 753


(NOTE: ERA and GMAC were included in the study but not ranked due to a small sample size.) Source: J.D. Power and Associates (07/30/2009)