Thank you to a reader of the blog for passing along the links below to a story from KTVN Channel 2 news reporter, John Potter.
In Reno-Sparks Home Prices Challenge the Rental Market, John Potter reports that the apartment vacancy rate in Reno is down to a low of just 6.5%, and the average monthly rent is $822.
But with house prices at record lows, as John reports, “At this point, if you find a good deal on a house, buying is cheaper than renting.” See the video below.
Also, for an in-depth report from Johnson-Perkins & Associates on Reno apartment vacancies and rental costs, broken down by neighborhoods, click here: Apartment Survey Q4 2011 [Note: this 34-page report takes a while to load.]
booch221
I’ll be renting an apartment in Reno starting in April. Never been there before.
I hope it’s not always as W I N D Y as is the video clip!
Walter
Booch221, depends on the time of year. We get a lot of weather. Sometimes all in the same day.
Kelly Anderson
The rule in Reno is, “If you don’t like the weather, wait 10 minutes.” It can change THAT fast! If you don’t like wind, rain & snow, avoid NW Reno: the storms hit here first but often peter out by the time they travel to SW Reno or even Sparks. Also, ALWAYS carry a coat in your car… temps can drop as much as 50 degrees from day to evening. It can also snow in June. Welcome to Reno, we love it here!
Matthew
Buying may be cheaper than renting but only because buyers are getting taxpayer-subsidized loans with near zero down.
Maybe my memory is fuzzy… haven’t we been here before?
dbCooper
I bought a nicely remodeled, simple little condo here in Reno back in November of 2010. I paid about $3k more than it originally sold for back in the early 80’s when it was first built. The monthly mortgage and HOA combined is a good chunk less than what I would have paid had I just kept renting.
booch221
Matthew,
Thank you for getting us back on topic, after my weather diversion. The mortgage interest and property tax deduction gets you only so far–25 cents of each dollar spent–if you are in the 25% tax bracket.
I certainly wasn’t cheaper to buy than rent at the peak of the bubble in spite of these deductions.
I do think it’s cheaper to buy than rent now, if you want to be an owner, which not everybody does.
Check out this article on buying verses renting:
http://patrick.net/housing/crash1.html
Move to Reno
Right now, in Reno, it is cheaper to buy than to rent. That’s not considering any tax advantages of buying. Of course, if you buy you are assuming the risk that you will not have to move in the short term.
Reno Ignoramus
Back in the early days of this blog, we had a lot of conversations about the rent v. buy question. We talked a lot about the traditional standard of 200 times rent as being the sensible measure of whether it made financial sense to buy. If one could rent a house for $1000 a month, it made little sense to buy that house for $400K, which was the case with many houses on the market back in 06-07. 400 times rent was an absurd price to pay for a house.
Now, if one can rent a house for $1000 amonth, or buy it for $150K, it makes sense to seriously consider buying that house. 150 times rent is a sensible amount to pay. The traditional measure was that it makes sense to pay up to 200 times rent. I suggest that measure still makes sense.
So it still does not make sense to pay $500K for a house one can rent for $1500 a month, but at the low end buying may now well make sense.
NOTE: As some people here have noticed, there has been an imposter putting up comments under my name the past several days. I have been in touch with Guy about it and he has removed the phony comments of the past several days. The imposter is attributing to me comments that I think houses are going to appreciate 10% a year forever from here on out, and that everybody ought to go out a leverage themselves to the hilt to buy houses, and other similar nonsense. Really, can anybody who has read this blog for any amount of time think that I would ever say such things?
booch221
I tried to read the Apartment Survey, although anything that starts out with “STATEMENT OF METHODOLOGY”, makes my eyes glaze over. The only thing I could take away from this report was that the vacancy factor increased increased by 1.18% from 3rd Quarter 2011 to 4th Quarter 2011 and the average rent dropped 2.14%.
Does one quarter make a trend?
If anyone out there is qualified to write an Executive Summary of this document, (like one paragraph) please do.
Gabriel Torres
But the question is, can this people come up with the down payment? For people that have bad credit history and no money, there is no other option than renting.
TestaDura
Yes Gabriel you are correct. If you don’t have the down and/or you don’t have the FICO score ( if you need to finance), you cannot buy at any price.
Which raises a question for me that perhaps somebody can answer. What is the impact on a person’s FICO if they experience a foreclosure? Or a short sale? I’m sure that these have negative impact on the FICO, but for how long? How long would a person who had a foreclosure and/or a short sale have to wait to reacquire a good enough credit score to again be able to qualify for a loan in today’s lending environment?
Perhaps a loan officer out there who could respond? Or anyone with knowledge?
Thanks.
Derrick
testa dura if you have a foreclosure I think you have to wait for 7 years. Short sales are less at 3 years.
Perhaps Guy could clarify
Trust me
You can qualify for an FHA mortgage after just 3 years following a foreclosure.
Derrick
I recently heard that banks or going to start going after people for judgements. is this true guy?
Guy Johnson
TestaDura,
In answer to your question, check out today’s post: How long do you have to wait after a short sale or foreclosure to get a new loan