Pretty Circles Tell You Whether To Rent Or Buy

For those who don’t like math but do like colored circles, here’s a graphic visualizing which cities it’s cheaper to buy in and which it’s cheaper to rent in. The redder the circler, the better it is to rent. The greener, the better it is to buy.

It’s calculated based on the rent to buy ratio, which compares the median list price with the median rent on two-bedroom apartments, townhomes, and condos.

Check the Trulia site for more cities, as well as comparisons based on unemployment, foreclosure and job growth rates.

Trulia’s Q1 2011 Rent vs. Buy Index [Trulia]

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  1. FireJayPa says:

    OK, so it’s cheaper to buy in DC. Who wants to give me $80k for the 20% down payment I’ll surely need.

    • Rachacha says:

      Oh come on, you can get into a 500sf $1.5M condo with no down payment, and an interest only mortgage. The market is solid, you can sell the place in 6 months for $2M, it is not like the bottom is going to drop ou…drat.

    • nbs2 says:

      Just look farther out. We were able to drop 20% by moving to Frederick (and picking up a foreclosure), but we wanted a yard (and thus single family). An older townhouse might have been possible closer to DC.

      • FireJayPa says:

        Right but if I’m all the way out in Fredrick it’ll take me FOR-EV-ER to get into the city. I’d love something in Fairfax/Falls Church/Reston but even there it’s ridiculous

    • Maxamus says:

      FireJaPa, try getting a job and saving money.

  2. Applekid ┬──┬ ノ( ゜-゜ノ) says:

    I’m a fan of both math AND colored circles.

  3. pecan 3.14159265 says:

    You have to look at all of the graphs on Trulia to get a good picture of the contrast. This one graph shows that it’s probably cheaper to buy than rent in DC, however, another graph shows that homes in DC hover in the $400,000 to $500,000 range, making it very difficult for many people to afford a home. Renting might be more expensive, but those of us who want to own a home someday need a place to live while we’re saving up for that downpayment.

    The graphs also don’t account for the cultural context. DC is a city with a lot of transplants and transplants are more likely to rent than own because they might not be putting down roots.

    • FireJayPa says:

      $400k is about what it looks like right now. Also what are their datapoints for the price of rent in the DC Metro Area? I can live out in Gainsville for a lot less than I could than lets say Clarendon.

      • pecan 3.14159265 says:

        Right, and as much as people say they love living in Gainesville, I’ve been there and I certainly would rather live in Clarendon. You can get more space for less money the farther away from the city you are.

        • FireJayPa says:

          Right, the further out you are the more room you have but then you’re driving 30 minutes to get to the Orange Line at Vienna, going 45 minutes to Metro Center and then another 10 minute walk just to get to Jaleo…..

          What’s the price of rent these days in Clarendon, about 2k for a 1 bed 1 bath?

          • Etoiles says:

            From 2008 – early 2010 we lived in a 1bed within walking distance of the Clarendon Metro for $1400. When we moved out we found the rent had gone down and they are now charging $1250 for the same unit and the others like it. (It’s a pre-war building and the living room was 23′ long; the bedroom something like 11′ x 15′.)

            I think the new “luxury condos” with the small rooms and the cheaper materials right by the Metro are more like $1700 but I’ll take a half-mile walk.

            • pecan 3.14159265 says:

              Which building? And what was your square footage?

              • Etoiles says:

                We lived across the street from the Italian Store, on Lee Highway. Lyon Village Apartments. 10-minute walk to Clarendon Metro in good weather.

                I honestly don’t remember the square footage of that apartment; we moved in April so it’s been the better part of a year now. Loved everything about it, though. (It just didn’t suit all of our needs going forward.)

            • FireJayPa says:

              I’m interested in this. I want to move closer to the city when my lease is up…I’m out in the burbs and am tired of the long trek

          • pecan 3.14159265 says:

            Yeah, so the Trulia graph doesn’t take into account all of the tradeoffs, both financial and otherwise. It just doesn’t take into context the reasoning people have for doing one or the other. The prices aren’t the only thing controlling the results.

            A one bedroom one bath in Clarendon is probably around $1,700 to $1,800 now depending on how nice it is, and depending on the square footage. I think you could get roughly 650 to 700 square feet for $1,700 if you’re in a decent complex relatively close to the metro. Clarendon is also very expensive because you’re paying higher prices to be close to the social scene there. I personally don’t care for bars, so there wouldn’t be a reason to pay $300 more to live near one.

          • Harmodios says:

            As I live there I can tell you that a 2 bedroom in Clarendon is between $2500 and $2500 a month.

            • FireJayPa says:

              As I live there I can tell you that a 2 bedroom in Clarendon is between $2500 and $2500 a month.

              Anywhere you would recommend? Looking at reviews online are always skewed at best….looking to be in the Clarendon area, walkable to the Metro.

  4. ARP says:

    This also doesn’t tell you the housing market. For example, it looks like its better to buy in AZ, but there’s no way in hell I’d buy there unless there were a few years of stable housing price increases. If you’re not planning on moving for 10+ years, this might not matter.

    • pecan 3.14159265 says:

      That’s a good point. It also doesn’t take into account the feelings associated with the housing market. I have a friend who chose to buy a house far, far away from the city and his commute was relatively short. He found a new job and suddenly his commute stretched to two hours a day and he couldn’t sell his house. I look at that and say, “there’s no way I’m buying something that far, and for that matter, I don’t want to have that problem if I need to move.” So thus, I keep renting and have no interest to buy a house right now, even if I did have the money for a downpayment.

    • tbax929 says:

      I just bought in AZ and have no regrets. But, as you mentioned, I’m not planning to leave anytime soon; I got a great rate and a great price and am paying less than I did in rent.

  5. rambo76098 says:

    If you paid 100-200 for a 2BR condo in Columbus, you got taken. Bad.

    There’s no way this is median price. Large 4BR houses go for low 100s in new neighborhoods here!

    • Oranges w/ Cheese says:

      BUT IT WAS A *CONDO*

      You should’ve seen how it was in Orlando and the surroudning areas. Suddenly *every* apartment complex kicked out their tenants, got a new name and were sold off as condos. Many of them didn’t even bother to fucking remodel! O_O Talk about market saturation – even so, new ones started popping up claiming amazing ameneties – starting at $190!! FOR A 2 BR CONDO with paper thin walls and single pane windows (in hurricane territory with 100 degree weather). No. Thanks.

  6. ZacharyCachimba says:

    The data’s pretty well screwed. $100-$200k for Denver house prices? And $200-$300k for Kansas City? There’s very little in the Denver metro for south of $200. Conversely, KC’s got plenty for a lot lower than that.

    • moonjest says:

      Agree, I was just looking at the Denver prices as well and balking at the $100-200 K for housing prices.

      • Kibit says:

        Thats how it is in Boulder too. You can barely get a two bedroom small ranch for $450,000 in Boulder, but you can find more outside the city and still in Boulder county. Erie, Longmont, Louisville and Lafayette all have homes for much, much lower than Boulder.

        Maybe thats how the have it worked out for Denver.

        And I saw a list that said Denver has the most foreclosures in Colorado. Are they including those home prices too?

        Its much less for us to rent in Boulder than it is to buy. I would like to have my own home, but saving for a 20% down payment is going to be tough.

    • jesusofcool says:

      I also question the accuracy here since a lot of this is dependent on where you want to live and the size of your place. I can’t find where they mention the size and quality of apartment and house they are comparing. Are they comparing apartments and houses in the same neighborhood? This just doesn’t give a realistic assessment. For example, I live in Boston and the Boston numbers seem like averages, but not the norm.

    • jasonq says:

      As of right now, Realtor.com lists 3,227 properties at or below $200K in Denver.

  7. bibeau2009 says:

    disagree

  8. bsh0544 says:

    Why is the NYC circle gigantic?

    • Necoras says:

      It’s based on population. NY city has a lot of people per square mile.

      • bsh0544 says:

        That doesn’t really convey useful information on whether I should rent or buy, though. All it does is obscure at least 3 states, one of which I may live in soonish.

      • milrtime83 says:

        That picture is with the scale based on housing list price. Houston and Chicago are a lot bigger in the population scale.

    • zigzagdance says:

      Obviously because the rent is too damn high

  9. skwigger says:

    No Orlando, WTF?

    • Oranges w/ Cheese says:

      Buy if you’re in the market for a small home – don’t buy new, those are still selling for $400+ for some reason they THINK they can get that.

      Where in Orlando?

  10. mk says:

    Apparently it’s better to buy in Chicago. But I currently rent for 1200/month for a 2 bedroom with a enclosed sun room we use as an office and a separate dining room and probably close to 1200 sq ft with a parking space in a three flat that has a small back yard. If I want to pay similar price for a condo (in a building with a lot more units) in my neighborhood I get a 2 bedroom, no sun room, a living/dining room combo, no parking, no outdoors space (maybe a tiny balcony) and about 900 sq ft – of course these newly remodeled condos have useless granite in the kitchen and stainless steel appliances and maybe also laundry in the unit (instead of the basement) and a dishwasher. The other option is to move to a neighborhood not as nice as mine (and I by no means live in the nicer neighborhoods in the city) to get the space and amenities.

    All these articles and charts about housing prices and whether it’s cheaper to buy vs. rent do is to compare, for the most part, apples to oranges. There’s so much more that goes into it.

    And as others have said, sure I’ll buy a condo if someone hands me a the 50k down payment.

    • Iroc says:

      While I lease a 3500 sq ft 3 bedroom house with a full basement a fireplace and a heated 2 1/2 car garage on 10 1/2 acres with a barn and 2 sheds for that price.
      Go figure.

      Like they say
      Location, location, location.

      • Alter_ego says:

        And where i am, just under that (I pay 1000 a month) gets me a 400 square foot studio. But at least I have a dishwasher.

    • FatLynn says:

      I think Chicago goes neighborhood by neighborhood. There is still more demand than supply in the hotter areas.

  11. Scribblenerd says:

    Interesting about NYC. I live on the Jersey side, can see Statue of Liberty from my window, house prices in town average 300-400K. I can be at the World Trade Center subway stop within 35 minutes via public transportation, and it’s one of the safest cities in the country.

    • Maxamus says:

      But it’s still in Joisey….

    • jake.valentine says:

      To each his own. The homes in Jersey could sell for even less and I wouldn’t consider them. It would still mean living in NJ which is out of the question. If you’re going to pay ridiculous taxes in a high cost of living area, then you might as well live in southern California so you get the great weather and entertainment options. Why anybody would intentionally stay in NJ any longer than they have to is beyond logical reasoning. ;-) (All in good fun, I grew up there)

  12. Oranges w/ Cheese says:

    Houses here are cheap, as in 5 bedrooms, 2000+ square feet for sub $150k cheap. My only issue with homebuying is the lack of a down payment.

    If I have to wait until I have $20k in the bank and then broke myself to get a house.. well I might just keep on renting.

    • jasonq says:

      FHA loans only require 3.5% down. Closing costs and such will run you another 3-4%, which you ask the seller to chip in for if you’re smart. Toss in a couple grand more for furniture, etc. and you’re good to go. For a $120K house you should be able to get into it for around $10K tops. So unless you need one of those 5-bed houses, you shouldn’t have to save tens of thousands of dollars. For a rough idea of the principal & interest: at 6% every $1000 you borrow equals $6/month P+I. Add taxes and insurance, of course, to get your actual payment.

  13. hotdogsunrise says:

    I understand why the bubble is bigger, but it perpetuates the myth that NYS is nothing by NYC. Boo, NYC. Boo.

  14. Pax says:

    I don’t think the Median is the right number to use. The Mean would probably have given a more accurate idea.

    Sure, if there’s one apartment at $500/month, one at $750/month, and forty-eight apartments at $2,000/month … the median is only $750, but you’ve got only a 4% chance of paying less than $2K/month!

    The mean, in that same distribution, would be $1,945 … which is much more useful, as it’s closer to what you will most likely have to pay.

    • Anathema777 says:

      Your understanding of statistics is on par with your understanding of Massachusetts consumer protection laws.

    • Eli the Ice Man says:

      The mean can also be thrown off as well. They’re both reasonable descriptions of central tedancy.

  15. Warren - aka The Piddler on the Roof says:

    Chart says $1,000 – $1,500 to rent in Portland. Trouble is, many places in this price range (and believe me, I’ve done research) have their own problems: spoiled brat students treating the buildings like frat houses (puking in the halls, goofing around outside at 3:00 a.m. when people are trying to sleep, playing loud music at all hours, etc.), and if it’s a large building with central laundry facilities, laundry theft.

    My place may be small, but it’s also cheap, which allows me to save a lot of money. Plus I only have one neighbor to worry about noise-wise, it’s a small building where tenants look out for each other and it takes me 10 minutes to walk to work. As soon as I can find a nicer, larger place that can meet those needs I’ll pay more. Until then, I’ll stay put.

  16. tinmanx says:

    $3500-$4000 to rent in NYC? That’s a joke right? Maybe in a posh neighborhood in Manhattan.

    • MaliBoo Radley says:

      Well, they are talking about a 2 bedroom apartment/home. Obviously, a studio or 1 bedroom would be cheaper.

  17. trimetrov says:

    Am I blind, or is St. Louis missing altogether from their index?

  18. joncarwash says:

    I’m red-green colorblind and let’s just say that this graphic looks way too much like those colorblind dot tests that I always fail.

  19. MaliBoo Radley says:

    I live in a town where you literally have to be a millionaire to buy a home. Fortunately, I’m happy to rent.

  20. teamgwho says:

    GAH!!!! Can people whop do charts like this understand that a fair amount of people are color blind or color deficient. Shading is useless to someone like me. I pretty much can tell the extremes but all the middle looks practically the same. if you’ve got to use colors, how about 6 distinct colors as opposed to gradients?

  21. idiocrat says:

    Agreed on the colorblindness thing. Ugh, it all kind of bleeds together.

    They probably should have done the chart based on metropolitan areas rather than primary cities. Kansas City proper has 486k, but the metropolitan area has 3 or 4 times as many people. Waaaay different housing market away from the core, too. Highly doubt it’s the only city that way.

  22. sunniapocalypse says:

    I hate graphs and charts that are color coded in the same tones. Sure I guess it makes it looks smoother, but if you are color blind good luck reading it. Beige, tan, green, brown………… ugh….. disabilities suck

  23. areaman says:

    Some people on here mention down payment. Truilia don’t take into account time value of money, opportunity costs, etc.

    I checked out their methodology and it’s shallow. And the posters on here notice it.