Homes by Bill and Katie
  BK Homes Management
  • HOME
    • ABOUT US
    • NAPLES OFFICE
  • RENTAL OWNERS
    • PROPERTY MANGEMENT
    • Prepare your Vacant Home
  • RENTAL TENANTS
  • ANNUAL RENTALS
  • VACATION HOMES
    • BEACHES
  • RENT MY HOME
  • Investor Sales
  • PREFERRED VENDORS
  • HOME VALUATION
  • COMMUNITIES
  • TRAVEL INSURANCE
  • CONTACT
  • BK Homes BLOG
  • TESTIMONIALS
  • Changes in Naples

In the buy vs. rent battle, ‘buy’ is winning

6/7/2016

0 Comments

 
In the buy vs. rent battle, ‘buy’ is winning BOCA RATON, Fla. – June 6, 2016 – The latest national index produced by Florida Atlantic University (FAU) and Florida International University (FIU) faculty indicates the United States housing market as a whole is moving deeper into buy territory, suggesting that, on average, residential housing markets around the country are sound.Based on numbers from the end of the first quarter, the latest Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index comes on the heels of the latest S&P/Case-Shiller Home Price Index, which found home prices nationally climbed 5.4 percent since March 2015."This appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds," says Ken Johnson, Ph.D., a real estate economist, one of the index's authors and an associate dean of graduate programs and professor in FAU's College of Business.The BH&J Index measures the relationship between purchasing property and building wealth through a buildup in equity versus renting a comparable property and investing in a portfolio of stocks and bonds. It examines the entire housing market in the United States and isolates the markets of 23 major cities.In terms of wealth creation, the U.S. housing market, when considered as a whole, has swung marginally more in favor of homeownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds. Overall, 16 of the 23 metropolitan markets investigated moved in the direction of buy territory.The metro areas of Boston, Chicago, Cincinnati, Cleveland, Detroit, Milwaukee, Minneapolis, New York, Philadelphia and St. Louis remain solidly in buy territory."These cities should have room for price growth without much worry of overheating," says Eli Beracha, Ph.D., co-author of the index and assistant professor in the T&S Hollo School of Real Estate at FIU. "This is especially true for Chicago, Cincinnati, Cleveland and Detroit."Cities such as Honolulu, Kansas City, Los Angeles, Miami, Pittsburgh, Portland, San Diego, San Francisco and Seattle are hovering around what the index's authors refer to as the "indifference point" between buying versus renting. In almost all of these metro markets, however, the BH&J Index score for the quarter moved in the direction of ownership."This movement suggests that most consumers in these markets appear to have learned from the real estate crash and now understand that residential property prices can get too high," Beracha said. "This is a good sign for future housing price stability in these markets."Meanwhile, two hot housing markets, Dallas and Denver, continued to move deeper into rent territory but at a slower rate than earlier quarters."Strong economic support within these two markets should make for a soft landing in terms of slowing property price growth, increased marketing time for properties and lower probabilities that sellers will actually transact and close during a given marketing effort of their property," Johnson said.One particular market, Houston, continues to cause concern. Houston was already deep into rent territory, and its recent BH&J score plummeted significantly toward buy territory – a scenario that has foreshadowed noticeable property price declines in the past."A perfect storm seems to be developing in Houston," Johnson said. "I expect a lot of folks in Houston to be on the safe side and opt for renting over ownership."Johnson's collaborators in this ongoing independent research are Beracha and William G. Hardin III, Ph.D., director of the T&S Hollo School of Real Estate at FIU's College of Business. Investments Limited of Boca Raton sponsors the BH&J Index and other FAU real estate activities. The index is produced two months after the end of the quarter.© 2016 Florida Realtors®  ​
0 Comments



Leave a Reply.

    The Official Blog of Homes By Bill and Katie

    Stay tuned for the latest in the Naples area and Real Estate tips/tricks!

    Archives

    October 2019
    September 2019
    December 2018
    June 2018
    May 2018
    April 2018
    March 2018
    January 2018
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    August 2016
    July 2016
    June 2016
    May 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    June 2015
    May 2015
    April 2015

    Categories

    All
    Bonita Springs
    Buy
    Buying
    Community
    Ecosystem
    Florida
    Home
    Homesbybillandkatie
    Homes By Bill And Katie
    Listyourhome
    Lovehgtv
    Naples
    Newhome
    Northnaples
    Oceans
    Paradise
    Pool
    Realestate
    Real Estate
    Realty
    Riverstone
    Sell
    Selling
    Sellyourhomes
    Shark
    Sharks
    Swfl
    Team
    Walls

    RSS Feed

William Archer or Katie Scheiber Archer
Office: 239-325-8038
Direct: 239-324-9845
Katrina Scheiber Associate Broker 

E-Mail homesbybillandkatie@gmail.com
BK Homes    Powered by KW Naples
877 Vanderbilt Beach Rd
Naples,FL 34108
HOME  LISTINGS  RENTALS  COMMUNITIES
ABOUT  CONTACT   
BLOG