Buy or Rent: Buy in Dallas, Break Even in Three Years… in Park Cities???
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I’m bullish on home ownership, even these last few days after I’ve dealt with spewing water pipes. But this report from CNN/Money made me laugh. Out of the top ten metro areas in the nation, it tells us what we already know: Dallas is a great place to buy rather than rent, and with median home prices at $163,100, your break-even time (which they do not define but I am interpreting as the time to recoup a 10% down payment) is just under 3 years.
And no duh: you are better off renting in New York City, San Francisco, Boston and LA.
Back home to Dallas again: that median home price is NOT a downtown condo. And they talk about Westover Hills, in Fort Worth, where it would take you 11 years to break even because of higher home prices. Somehow they managed to miss Highland Park entirely, where I’m guess-stimating a break-even of 12 to 15 years. But that’s what you get when you don’t have boots on the ground reporting.
Do you agree with this report? What is the break-even time on home ownership in downtown Dallas and Highland Park?
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12-15 years?! What calculator/ funny math did you use to figure that one?
It’s probably more like 3-5 for the Park Cities, less when the market is rising like this year. A 3-5 year recoup means annual value appreciation in the 2-3.3% range. Seems more than do-able in HPISD.
Now for someone who bought at the height of the market in 2007-8, it’s probably going to take 7-10 years (we’re already at year 5…) to get back to purchase price + 10%.
12-15 years?! What calculator/ funny math did you use to figure that one?
It’s probably more like 3-5 for the Park Cities, less when the market is rising like this year. A 3-5 year recoup means annual value appreciation in the 2-3.3% range. Seems more than do-able in HPISD.
Now for someone who bought at the height of the market in 2007-8, it’s probably going to take 7-10 years (we’re already at year 5…) to get back to purchase price + 10%.
Good article with some nice stats. How has the market been? on the recovery?
Good article with some nice stats. How has the market been? on the recovery?
OK DGirl, let's show my work: Buy a house in Park Cities for $1,000,000. You will need at least 20% down, or $200,000 to leave you with a mortgage of $800,000 which at today's great rates — even jumbos — could be 4 to 5%. So that's about $5000 a month in house payment, then there's the tax deductions, etc. You are saying annual appreciation of 2 to 3.3% — I think that's a little optimistic, but I will buy it. $200,000 at 3% interest yields $30,000 on your down payment/investment in 5 years. The principal balance would rise by $120,000. So that's $150,000, a tidy sum, but still less than what you shelled out for a down payment. And let us not forget the dang property taxes of at least $25,000 a year. God, talk about Debbie Downer!
Invest that $200,000 at 5% and you'll earn $50,000 over five years. See why I like real estate? Even if you make nothing, nada, on your principal balance, you are not losing money and you are paying off the principal every month.
OK DGirl, let's show my work: Buy a house in Park Cities for $1,000,000. You will need at least 20% down, or $200,000 to leave you with a mortgage of $800,000 which at today's great rates — even jumbos — could be 4 to 5%. So that's about $5000 a month in house payment, then there's the tax deductions, etc. You are saying annual appreciation of 2 to 3.3% — I think that's a little optimistic, but I will buy it. $200,000 at 3% interest yields $30,000 on your down payment/investment in 5 years. The principal balance would rise by $120,000. So that's $150,000, a tidy sum, but still less than what you shelled out for a down payment. And let us not forget the dang property taxes of at least $25,000 a year. God, talk about Debbie Downer!
Invest that $200,000 at 5% and you'll earn $50,000 over five years. See why I like real estate? Even if you make nothing, nada, on your principal balance, you are not losing money and you are paying off the principal every month.
Another great photograph from Shoot2Sell!
Another great photograph from Shoot2Sell!