Rent vs. Buy Visualization of Top 50 Cities
trulia.movity.com
trulia.movity.com
Thanks for your feedback & questions. Just wanted to chime in and hopefully clarify the methodology that goes into Trulia's Rent vs. Buy Index. To make an apples-to-apples comparison, we only looked at the median list price and annualized median rent for two bedroom apartments, condos and townhouses in the 50 largest U.S. cities based on population. As such, this index does not look at single family homes.
To calculate the actual ratio, we divide the median list price by the annualized median rent. Here's a sample Price-to-Rent Ratio Calculation: ---Median List Price: $140,201.37 ---Median Rent: $1,871.65 ---Price-to-rent ratio: $140,201.37 ÷ ($1,871.65 x 12) = 6
To interpret this ratio: ----Price-to-Rent Ratio of 1-15: It is much less expensive to own than to rent a home in this city. ----Price-to-Rent Ratio of 16-20: It is more expensive to own a home in this city. The total costs of ownership of a home in this city are greater than the costs of renting, but it might still make financial sense depending on the situation. ----Price-to-Rent Ratio of 21+: The total costs of owning a home in this city are much greater than the costs of renting.
By using 15 as our baseline for the interpretation key as opposed to 12 (which would only account for a year's worth of rent), we are able to account for the additional costs such as property tax and homeowners insurance.
Of course, we understand that the decision to buy or to rent is a deeply personal decision based on ones unique financial situation. The Rent vs. Buy Index was designed to be a guide to help folks gauge whether it's more affordable to buy or to rent a home in one of the 50 largest cities.
Feel free to contact us with any additional questions. We love the lively conversation and appreciate everyone's comments.
Cheers! Daisy Kong PR Manager, Trulia pr@trulia.com
Metropolitan statistical areas would've been a more reasonable choice here, since in many cities the city proper (as defined by incorporated bounds) is either vastly under or vastly over-priced compared to where people actually live, not to mention throwing off the relative populations.
As an aside, the way my map renders, Baltimore is north of New York =P. Great job though, and kudos to your developers for not using flash =)
The city itself is only the 42nd largest in the country (population 450K) but the MSA (which includes Fort Lauderdale and many suburbs) is the country's 7th-largest (population 5M+).
By using 15 as our baseline for the interpretation key as
opposed to 12 (which would only account for a year's worth
of rent), we are able to account for the additional costs
such as property tax and homeowners insurance.
Why does 12 account for a year of rent as you say? The ratio is already the price of the house divided by the ANNUAL rent, is it not? Why 15 vs 12 vs 20 vs 30??? Also, additional costs of homeownership like tax and insurance means you should demand a LOWER ratio to truly make the cost of renting and owning equal, not higher as you suggest!
My understanding is the ratio is basically a proxy for the P/E ratio (just like P/E ratio in stocks). It is the price of the house divided by the income you would receive renting it. That ratio can float to whatever the market is willing to pay.
The graphic on Trulia specifically says though that the ratio is the point where renting == buying. How do you get 15?
One metric some people in this discussion are using is the ongoing carry costs of buying vs renting. With borrowing costs at 5% interest rates on 30-year fixed mortgages, along with a 40% marginal tax rate in places like NYC and SF, then the ratio that makes buying and renting about equal is much higher than 15; it has an upper bound at 33, because you can borrow at 3% factoring in tax deduction (1.00 / 0.03), but needs to be adjusted to account for HOA dues, real estate taxes, state income tax, nasty transaction costs, etc.
I'm wondering why they chose 15 / 20 as the cutoff ratios though. I'm a licensed real estate agent in NYC and I've helped a number of clients make purchases where it was actually cheaper to buy than rent (usually a studio or 1BR, or outside Manhattan).
It seems like you can finance a home purchase these days at 5% or less on 30-year fixed. Add in the mortgage interest tax deduction and you are really borrowing at 3.00% (assuming your marginal tax is 40% including state / local taxes, which would be true of anyone buying a $1.3M 2br as referenced in the site).
That seems to justify a break-even ratio of about 33, not 16 or 20. Of course, you do have to add back HOA dues / coop maintenance + property taxes, and the nasty transaction costs for buying and selling. That is somewhat tempered by your rent (and property values) going up with inflation while your mortgage payments are fixed. Therefore, all the usual disclaimers apply that you need to be willing to stay there and own the property for quite some time.
EDIT: clarified that 5% rates are for 30 year fixed mortgages; 15-year amortizations would get 4.25% or so, changing by the day.
EDIT2: The tax deduction is LESS good in other metro areas. When I used to live in Redmond, WA, my marginal rate was not 40% (there is no state income tax in WA and houses are much cheaper). Also far more subtle but often ignored, in Washington most renters would take a standard deduction and only home-owners would itemize their deductions. Itemizing mortgage interest means you lose out on the standard deduction. In NYC, just about everyone itemizes because state / local income tax is already compelling enough to do so, therefore almost all the mortgage interest is deductible except for the amount subject to Pease provisions.
I think this is the main qualifier. As I understand it, the data is comparing prices to rent vs buy on similar 2 bedrooms.
buying: ~$24K
renting: ~$36K
EDIT:
less risky buying option : ~$30K
There are many good replies to this thread, that essentially point out that buying a house is risky, and that my assumptions do not deal with any 'bad case' scenarios. But nor do my assumptions deal with any 'good case' scenarios (house prices being higher in 5 years time in San Francisco - it might just happen..) But the topic of the original article is about costs, not risk, so I kept the topic at parity, and only dealt with costs. If I were advising anyone for real on rent-vs-buy I would strongly encourage them to consider the risk and reward element of the rent-vs-buy decision, in the context the general financial situation.
Summary: buying is riskier than renting, and it can also be substantially cheaper. Right now, with a 30-yr fixed mortgage, it's cheaper. You have to take on the 'house price risk', but that also carries a potential reward, as this is San Francisco..
available now on 5 year ARMs -- you can always go back to
renting in 5 years, and if rates soar then that means the
economy has recovered, which means your house is worth more..
It is hard to bet on when inflation will become a concern and to what level. Banks are already betting on it happening with their 5 year fixed rates increasing before the actual rate has changed.
But it comes back to the point that if rates do skyrocket within 5 years at the end of your fixed term you could be stuck with a house lower in value than you purchased it and monthly rates you can't afford.
>if rates soar then that means the economy has recovered
>the economy has recovered,which means your house is worth more
> 30 year ammortization of loan with a 4% rate (available now on 5 year ARMs)
Summary: what you say is a true statement about part of the reason the US housing economy blew-up. But it's not very relevant to my example about buying a $750K house in SF with 15% down and a mortgage that you can actually afford (the only type you can get today - i.e. $100K in income)
> if rates soar that means the economy has recovered and your house is worth more
I still stand by the original assertion: buying in SF can be cheaper than renting (see the revised numbers), and the risk and reward there entailed is actually pretty small if: buying now (after a recent fall), getting a 30-yr fixed rate, and sticking around for ~5+ years
You mean sell the house? Fees alone would hammer you pretty hard if the value was flat for 5 years. Selling houses costs a LOT of money. Also, you need a 20% downpayment to dodge mortgage insurance, I think.
http://www.nytimes.com/interactive/business/buy-rent-calcula...
That gives a pretty clear picture. The moving parts that matter are interest rate, appreciation of the purchased home, and inflation of rent.
For definitions of "always" where the real estate market never tanks and houses are easy to sell.
I was able to buy last summer, trading in a rented two bedroom condo at $1350/mo for a two bedroom house in the same neighborhood, and I'm paying less than $50/mo more for my 30-year fixed mortgage than I was paying in rent. Yes, I've got more skin in the game with my downpayment, but it's in a growing neighborhood and I'm pretty confident that values in my area will go up in the next 5 years or so (its already appraised for higher than my purchase price).
Plus there are a lot of benefits to home ownership that I can't really assign a dollar value to. When I come home from my tech job and I don't want to sit in front of a keyboard anymore, I hack on my house. I've done a bunch of plumbing and electrical upgrades on the house, and I'm planning on building a backyard office / guest house "shed". And nothing can erase the stress of a long day quite like taking your shoes off and walking around in YOUR grass and relaxing in the backyard hammock.
If that stuff doesn't appeal to you, you'll probably be happier renting anyway. If I'd looked at it in purely financial terms I'd probably be in a rental myself.
It should really be the "Top 50 Cities in the US". The US-centric nature of websites like this is even more irritating when they don't state it up front.
Your "domestic" is not the same as everyone else's.
I also realize that "domestic" depends on one's frame of reference. It is irrelevant to my point. International comparisons of rent-vs.-buy ratios are mostly useless unless you're very mobile or investing in international real estate.
As for it not having US in the title. It is a .com. Technically that means it is in the US. If it was "Rent vs Buy, Top Cities" on Trulia.co.uk, I would not have clicked through becuase I would have known they were not talking about the US.
I don't see why every single time someone posts something they need to qualify it as "IN THE US!" when its on a .com already.
This would also require you to factor in exchange rates, but I guess that's not much of a problem when done as a snapshot view.
Otherwise, I really dig the execution of the map.
EDIT: Cached the filtered screenshot so as to not hit the (relatively slow) colorfilter.wickline.org server.
Consider a grid. On one axis, housing purchases are cheap or expensive. On the other axis, the local economy is vibrant or moribund.
Hence:
* Cheap + Vibrant: Basically doesn't exist.
* Cheap + Moribund: Bad place to buy, you're tied to a high-risk location.
* Expensive + Vibrant: Purchase cost will eat up the advantage of the local economy.
* Expensive + Moribund: Get out ASAP.
Similar logic applies to buying to rent. Why not diversify? Long term rates of return on share indices are competitive with property and do not have mortgage risk. They also don't have local property market risks. Vanguard will set you up with an international share fund, hedged or unhedged, very cheaply and easily.
Neither of these things is binary.
I mean, everyone thinks that they're an above-average driver; people naturally overestimate their own skills. And most people have absolutely zero training or practical experience in assessing either real estate markets or houses. And buying a house is not an emotionally neutral task that most people can remain clinically detached from: most people can't help looking at a house to buy and seeing their future there, visualizing their kids growing up there, etc. So they're likely to be emotionally attached to any house they like well enough to buy, which further reduces their ability to make a rational decision.
My claim is that for every person who is actually skilled at this, there are many more who think they're skilled but really are not skilled at all.
It's like finding a GF. Most people eventually settle on someone. If you start by saying "all the good ones are taken" then you are unlikely to get any where.
Most home buyers are looking for a home into which they'll be dumping the majority of their wealth. They have an incredible amount on the line.
For a 200K non-repeatable investment for someone willing to do the legwork, yes.
Why should we assume that many people know how to correctly do "the legwork"? Is real estate market assessment and pricing covered in school now?
I mean, most people lack the mathematical sophistication needed to understand their mortgages -- let alone whether buying is a good decision.
There is nothing extremely sophisticated about borrowing money. But I heard that some extremely sophisticated lenders have lost their shirt recently, so one cannot be too careful.
If you don't mind the stress and time, and are capable of selling quickly in a falling market, perhaps you should decide to buy when you're more than willing to bear the huge round-trip within 3 years transaction costs (scaled by your estimated probability of this happening).
Maybe the average for downtown San Jose and San Diego are close to 200k, but that is the poorest area of both cities and not what should be used to compare. The green bubble on the point for San Diego should be much much smaller in radius(like miniscule), otherwise you think the 200k number refers to the entire city!
People should not be using this to make informed decisions (obviously).
They should make the size of the bubble smaller to only cover the area of the city like you are saying.
http://www.trulia.com/home_prices/California/San_Diego-heat_... breaks it down better, my domain knowledge of SD ends there, I couldn't tell you whether they're showing an accurate pic of what constitutes most people's idea of San Diego.
The circle is definitely scaled correctly though, the ratio of area of the circle to population (1306300 people per 1809 pixels, or about 722 people per pixel) is within the margin of error for my numbers for new york (about 662ppl/pixel), and LA (about 725ppl/pixel).
I do a lot of work in this domain and the price-to-rent and price-to-income ratios for California look higher by my calculations. Using median sales prices for the broader metro area and income and rent data from the Census, I'm finding California is still quite expensive.
http://www.deptofnumbers.com/affordability/metros
Click on the table heading columns to sort and you see some pretty unaffordable stuff in California. For San Jose the rent ratio is ~35.
Note: In case it wasn't obvious, I'm linking to a site I maintain above.
1. That the value of the property will fall.
2. That you will be offered a better job in another town and it's too expensive to move
Buying a home to live in is a form of un-diversification.
"Mark to mortgage" == vacancy. If you want to successfully speculate on real estate (as any homeowner does, landlord or occupant), you need to be willing to take losses over long periods of time.
NYC is a special case in many ways. For one thing, from a purely financial perspective, your best bet is to find a rent stabilized apartment that is well under market value and then invest your money elsewhere, possibly on buying a property you don't live in in NYC!
In Australia, buying property is a big thing. I'd imagine that in OECD rankings for home ownership, Australia ranks reasonably highly. Interestingly, the Guardian (in the UK) years ago did a study that showed that economic growth in Europe was inversely proportional to the rates of home ownership (meaning the countries with the highest rates of home ownership--eg Spain--had the worst performing economies and vice versa).
This makes a certain amount of sense: home ownership creates a less flexible labour market.
Anyway, in Australia, it's common to not only buy the property you live in but also investment properties. Investment properties are tax advantageous (in that the mortgage interest is a tax deduction) but you pay capital gains tax when you sell (but a good investment strategy will have you never selling; you just free up the equity to buy something else). The home you own is the reverse: mortgage interest is not tax deductible but your principal place of residence is capital gains tax free when you sell.
Now the thing about real estate is that it's a hedge against inflation. For example, 10 years ago you could buy a 3 bedroom house (built in the 70s) 10 miles from the city centre in Perth for <$100k. 5 years later? $350k minimum. There was a structural change in the economy that hasn't since reversed and doesn't look like ever reversing. Part of this was the increase in land cost but part of it is the increase in building cost (where once you could build a house for $80k, now anything less than $150-200k is unrealistic).
So if you'd rented in that time you would've missed out on that huge jump. Thing about real estate growth is that it is never smooth. It'll go through periods of high growth and others of stagnant prices if not negative price growth. So it's a long term investment (typically 7+ years).
But the real estate market in Australia is highly speculative.
I say that because I've also lived in Switzerland, which has an almost planned economy. The tax system stamps out property speculation, arguing that it is in the common good to have affordable housing. This is an opinion that I think has merit. To give you an example, if you sell a property within 2 years of buying it, the capital gains tax is 100% (iirc), meaning the entire gain is taxed.
Anyway, back to NYC. NYC has a lot going for it from a real estate perspective. It's a center for jobs but also land is a finite resource here. Manhattan isn't getting any bigger. Most industrial areas have already been converted to residential (or, more accurately, mixed residential/commercial). Manhattan is mostly gentrified now.
Betting on a limited resource is typically a good plan but the difference between renting and buying is huge here. Like a 1BR that might cost $2000 to rent will probably cost >$500K to buy and have significant ($300-600/month) maintenance fees to boot.
I really don't understand what motivates investors for that kind of return. So something will change in the future but will prices come down (or just stagnate for years) or will rents go up? If it's the former, rent. If it's the latter, buy.
So I'm really torn on whether I should position myself to buy in the future or simply resign myself to renting. At this stage I'll probably rent just because I may move around with my employer (Google) but I must admit: the prospect of owning an apartment in Manhattan is appealling.
without knowing your financial situation, I'd suggest to keep working in the U.S. and invest in housing back in Australia.
Both are great prospects but you might be able to buy 2 houses near the beach in Australia (say Perth / Adelaide) for the price of one in NYC. In a way, it gives you diversification that NYC doesn't. Also buying walking distance from the beach gives you that security that land value will never go down.
I agree about the tax system in Australia. But I like it.
As it happens I do own a house in Australia that is rented out but when you're paid in one currency and your costs are in another you open yourself up to exchange rate risk. So I'm way of overweighting myself in AUD liabilities. It's not a currency I'd be betting against in the next 10 years. Likewise, the USD looks like it'll only get weaker in the short to medium term. Pretty much every government here has a budget in deficit and you may find local and possibly even state governments defaulting in years to come.
The US governments (at every level) seem to have made the same mistake as many individuals: when times are good they simply increase spending to match or exceed revenue. When revenues drop they're in a bad position. The US has this huge Sword of Damacles hanging over its head in the form of Social Security. It's ultimately unsustainable in its present form. Everyone knows it. Nobody wants to do anything about it.
At least in Australia we've been moving towards funding our own retirements for decades. We're not there yet but we're a damn sight better off.
As for buying houses near the beach, not in any capital city I know about (except maybe Brisbane now). Certainly not Perth or Sydney. In Perth you'd have to go 50km+ north of the city to get anything remotely close to the beach for under $500k.
And the idea that property near the beach "will never go down" is exactly the kind of thinking that led to the subprime meltdown.
As for the Australian tax system, mine was't a criticism, merely an observation. Frankly I think any system that encourages people to create homes for others to rent as doing a public good. After all, when someone rents, somebody else by definition has to own that house.
One other difference worth pointing out between the US and Australia is that in Australia interest rates are typically variable. They move mostly in lockstep with the official (Reserve Bank) cash rate. You do get fixed mortgages but they're rarely for more than 5 years.
In the US, mortgages seem to be fixed for the 30 year life of the loan. This actually makes buying in the short to medium term attractive in the US as interest rates can only really go up. 4% fixed for 30 years is a hell of a deal.
All good and well, but land releases have not kept up with demand. A supply of cheap money from the US, the mining boom and negative gearing have lead to massive increases in housing prices in the past 10 years. It's not sustainable, IMO.
We in Australia brag about sailing through the GFC, but if inflation breaks out, the Reserve Bank will hike up rates mercilessly and a lot of people won't be able to cover the interest on their $3-500k McMansions.
This point I've heard too often and it's one I vehemently disagree with.
Australians need to get over this quarter acre with a 250sqm house nonsense. What's more the government should stop subsidizing it to the degree that they are. It's not simply a question of land but all the infrastructure that goes along with it: water, power, roads, schools, etc.
There is no God-given right to build out rather than up.
But that overlooks the fact that overly complex zoning laws, NIMBYist resistance from residents and the odd spot of outright corruption has basically prevented density from increasing.
Density has its costs too. It's cheaper to extend a sewerage and water network in a greenfield project than it is to dig up and replace it in a densely settled area. It's cheaper to maintain small streets than large streets.
As far as stamp duty goes, IMHO that system needs to be abolished. Property taxes should be applied smoothly rather than transactionally. For one thing, stamp duty reduces the flexibility of the labour market.
Consider: someone owns a house in Sydney worth $1 million. They're offered a job in Perth for, say, $150,000. Now to sell up and buy a new house in Perth they'd need to pay $50,000+ in stamp duty before you even get into agents commissions and whatnot. Why should someone take such a huge initial hit? Unless they didn't have a job where they are or the new job was substantially better, they're best off not moving.
As for stamp duty, the states rely on it too much to give it up.
In my opinion, though, what Australia really needs to do is to develop the infrastructure outside the major cities to persuade people to move out there. Australia can easily accommodate another ten million people, but not if they all want to live in Sydney and Melbourne. Why can't Broome and Mildura and Wagga Wagga have two hundred thousand people?
Take my home town Darwin, for example. It is not destined to be one of the world's great cities because it is poorly positioned. There's buckets of water but due to the flatness of the country it's hard to dam. The harbour is large but shallow. The approaches from East and West are not friendly to bulk shipping.
Sydney, Melbourne, Adelaide, Brisbane and Perth are already hogging the best spots for large cities.
Water supply is the major issue in Australian cities, but this can be solved (see Kalgoorlie) if people put their mind to it. I agree that Australia needs to develop the regional areas more.
The factor with Las Vegas and Phoenix are that they are modern growth cities. You don't need a deepwater port to facilitate growth in a modern city, just a good airport, good road/rail links and good communications infrastructure. You could argue that Phoenix is propelled by retirees and golf players and Las Vegas by gambling - but the reason doesn't matter, just the fact that a city can be sustained does.
To cover myself, refer again to my prefatory remark that I was generalising enormously.
Somewhere like Melbourne though, I think things need to become a little less inner city focused. As in new suburbs are popping up but not a lot of employment is close to them meaning that transportation becomes worse as there are ever increasing numbers of people making long trips to work from the outer suburbs. I've always thought it would make sense to stick another inner city like hub somewhere and put high speed rail or something between them, rather than forever branching out from a central hub.
I don't see the tax breaks as a good thing as it skews market forces and inflate property prices. They also throw up a moral dilemma: Why should property investors get tax breaks (offset interest payments against personal tax) and not home owners.
What you start to see some single young professionals in Australia doing is buying an investment property to lease out and then renting another property to live in themselves. This is to take advantage of the government-funded tax breaks. So the flow of money goes a little something like: government tax revenue -> property prices. I can't see this helping the public good at all.
The additional income is treated as taxable income. The additional expense (aka Interest) is treated as a deductible expense.
It's relatively consistent.
Sure, just like all those condos in Miami... There is no economic law that says that properties near the beach can never go down in value!
In midtown, that 1BR will run you ~$2,500 to rent and close to $1 million to buy.
Maintenance fees should also be higher, at least $800.
But think about those numbers for a second. $2500/month is $30,000pa or a 3% gross return, even less once you factor in maintenance. To put that in perspective, 5% gross return seems to be the benchmark in Australia (although in Australia there tends to be a tradeoff between capital growth and annual income).
In London I've seen the gross return be 10% or even higher.
So who would invest $1 million for a <2% gross return? That's nothing but a bet on future capital gains. In other words it's speculative. So the question is: is that sustainable (meaning will rents go up to match) or unsustainable (meaning prices will stagnate or go down)?
On a side note, some may consider it strange that I'm talking about the rent figure as a return. I've certainly spoken to many people who can't look past the speculation but that income is really important as it does relate to the asset price. They simply can't get too far out of whack sustainably.
Commercial or industrial property tends to be judged much more on viewing the property as an asset that generates income (Las Vegas casinos notwithstanding).
I wouldn't say the buildings were falling apart but they did have dated architecture, and not dated enough to be classic. (think 70s/80s).
Likewise, I thought it would be a good time to buy, and there are a lot of 1BR < $600K in those same areas. Also, Upper East Side towards the river had similar "deals." Oddly enough, I feel Morningside Heights is overpriced, probably because there were so many TimeOut NYC style articles about how it's great for gentrifiers.
Maintenance fees were indeed always too expensive, but was more around $600.
Your prices do apply, but more to brand new buildings, or buildings in "hot" neighborhoods.
Also, from just walking around Melbourne and Hobart, it seems that Australian cities are more ownership oriented than major American cities. I've seen maybe 2 "for rent" signs. Am I just not seeing the rentals?
Real estate agents list properties for rent, typically in their windows, on their website, in the newspaper and/or on one or both of the big property websites (RealEstate.com.au and domain.com.au). That's one thing I like: when looking for a rental you only really need to check those two sites.
It's unusual to put a "for rent" (or "for lease") sign up. "For sale" sure.
You can rent something directly from the owner but it's reasonably unusual. Even if the owner finds a tenant they'll typically use a real estate agent to manage the property (do inspections, organize maintenance, take the rent and so on).
So anyway, the lack of rental signs doesn't mean anything. In my experience you only see them in front of larger buildings on the lower end of the economic scale.
It's a lot more common in Australia for people to use property managers, and a lot less common to have large commercial rental properties. I believe gumtree.com.au and housemates.com.au are both popular now.
The reasons are varied, but increased planning laws and high immigration means that the supply of city properties is not keeping up with demand.
And yes, home ownership is very big in Australia.
Australia has managed to inflate their housing market further, thanks to government intervention, and it seems that it needs to pop at some point. Long term, these types of capital gains in housing are unprecedented.
Here's a good summary. http://en.wikipedia.org/wiki/Australian_property_bubble
I agree with you, though, current conditions make it risky. However for the OP now would be a good time to convert some USD into well-located Australian property.
The problem with long-term renting is that, while you can theoretically engineer a better return by allocating as much as the principal component of a mortgage payment to one or more investment classes - most people don't. The key benefits to owning a property are (IMO) * inflation hedge * forced savings (the principal component of your mortgage) * security of tenure * ability to modify the property as needs arise (like extending, remodelling, putting in network cables and server racks!) * access to further credit for other investments after equity is accumulated
These things vary country by country but the list is pretty much constant. The most important thing is to not get carried away and only purchase what you can realistically afford, and to allocate as much money to paying down the mortgage in the first 5-10 years.
As for the yield equation - like value stocks, it's where the story is. Most places at some point or another in their economic cycle will end up where the yield is very attractive, and that's the time to buy. And, as a wise old italian investor who could buy and sell me many times over once told me (after I made my first mistake) : never sell your property. Ever. Buy right in the first place and keep forever. If you find yourself hearing everyone say that real estate is a bad investment and see that rents are approaching mortgage payments, then buy as much as you can as quickly as you can.
The last 50 years has been the story of real estate growing in value. This may or may not repeat over the next 50 years, because demographics, national politics and household formation have all changed in that time. But inflation has been with us since the first clever financier decided to use paper money, and will stay with us while that is still the case. If you purchase with your head and don't listen to anyone else, you'll do fine.
Finally - on the lowest economic growth - in Australia, in the USA - in a lot of places - the cheap credit of the '00s has led to an over-investment in residential property. This takes credit and investment away from other parts of the economy where it could be used productively. And it results in banks being dangerouslly over-exposed to residential property as an asset class. I think this needs to be addressed, and pro-ownership govt programs(see FHMC in USA, First Homeowners grants in Aus) need to be dumped, despite the short term pain this would cause. Because the economy isn't going to get going again until all the bad debts and bad investments are cleared up and swept away.
This was the fallacy that got the US into so much trouble. When real estate rises quickly and consistently, people think it's a guaranteed perpetuity. That's not the case. Any investment can go down in value and almost surely will at some point in time.
They probably should've used metro area, but that might've been a data challenge if they lacked lat/lon for each property.
EDIT: Looks like they're using the wrong Kansas City! That 143K population number is for Kansas city, Kansas, which is much less than half of the total city.
The other half, Kansas city, MO is 482,299, and in the top 50, unlike Kansas City, Kansas.
Probably a bug.
Aside from this little sampling problem, and it's easily fixed, no big deal, I think this site is really cool and a great way to look at affordable places to live.
On a technical note, the information in the hover bubble is mis-aligned; the right side is a space below the left side, at least on this older version of Firefox.
https://secure.wikimedia.org/wikipedia/en/wiki/List_of_Unite...
(Cities vs metro areas, oh the perils of using census data.)
The positions don't even seem to be constant. If you sort by something else, the circle move around, but they don't necessarily move back to the same place.
I have nothing interesting to add about the content of this site; I was too befuddled by its presentation.
It seems to load them in alphabetical order and fits the next one as best it can given the already plotted bubbles.
Sorry if this is confusing! This visualization is a Dorling Cartogram, which sacrifices geographic location accuracy in order to not have overlapping points (the East Coast would be a tight unreadable bundle otherwise, as well as the Bay Area). The basemap is intentionally left as just an outline to provide some visual context.
A great example of this in action is the Olympic Medal count visualization by the NYTimes: http://www.nytimes.com/interactive/2008/08/04/sports/olympic...
I understand and accept that the location is not accurate to the map, but what was so confusing was that the locations didn't seem to be accurate even with respect to other locations, and that the location wasn't deterministic. That doesn't happen on the nytimes example.
If I toggle back and forth between sorting by population and sorting by Rent Price, the bubbles bounce around and end up in... some random arrangement. Sometimes it's reasonable, and sometimes it's bizarre.
Here's a particularly egregious example http://i.imgur.com/ZPAno.png
Los Angeles is SouthEast of San Diego, Oakland is West of San Francisco and San Jose is Northwest of both of them. It's hard for me to avoid being pulled out by that.
It's odd seeing lists like this that focus only on a specific country, ignoring important neighbors. Take Toronto, for example. That city is more important than 40-45 of the cities listed, but since it's a few miles North of some border, it gets completely ignored.
Why not focus on a geographic region instead?
The data is out there and the Canadian real estate sales market could certainly use the shakeup of someone like Trulia.
Interestingly, the meaning of this would typically exclude Mexico and Central America, which by geography it should not.
Whereas in the US, we typically compare things to "America" and exclude Canada and Mexico as a matter of course.
It's a universal rule of Real Estate that good deals never reach the paper, the internet or even the front window of the agency office. In fact they rarely make it past the first page of the agent's buyers contact sheet. Find an agent in the area you want to buy in, make it clear to them you are serious and give a definitive description of what you want to buy. Make it easy for them to do their job. Every agent wants to sell a place on the way back from getting a seller to sign up. Your number must be on the list of people to call. But don't give them a loose description or they will try and sell you the first piece of crud they find. Be very clear on the description and list out factors that will disqualify a property (main road, certain neighbourhood, certain type of construction, etc).
Start making offers. Sooner or later you'll end up with a place.
Personally I think they should've measured by metro areas, although unless they have detailed lat/lon for every property they sell working out that data might've been a mess.
This despite the fact that you are not legally allowed to own property in the first place - and that the average lifespan of a building is 20 years.