Portland Makes the List: Cities Where Renters SHOULD Buy

A client of mine sent me this excellent article earlier today.  Portland is ranked as one of the US cities where renters should really consider becoming home owners.  The article is really interesting because it does not say that owning is cheaper than renting.  In fact, most of the suggested cities actually have quite a premium – the spread between what you’d pay renting and what your monthly mortgage payment would be - on buying.  In San Francisco, for example, a home owner can expect to find a 233% spread premium to own.   Sounds crazy, right?  That’s down from the fifteen year average spread premium of 293%. 

The study looked at today’s spread premium as compared to the city’s fifteen-year average.  In cities where today’s spread was significantly lower than the average, the study went on to look at market expectations for the next five years. 

Portland, for example, usually has about a 62% premium for home owners.  However, that’s down over 16% now.  Additionally, Portland is expected to see home prices jump almost 20% over the next five years.  That represents an excellent investment opportunity. 

The main point is that if you plan on becoming a home owner in the near future, now is the best time to move.  With rental rates inching closer to mortgage payments and the prospect of significant real estate appreciation in the next five years, today represents the best value for home buyers. 

It’s all a matter of timing…

(…and don’t forget about the first time buyer tax credit that’s set to expire in a few months!)

You can find the actual stats here.