Buying vs. Renting in BostonMay 7, 2011
In tough economic times, consumers usually favor renting versus buying. This is generally due to the fact that it’s more difficult to sell your house or condo, and it’s challenging to figure out what your next move should be in such an uncertain climate.
There’s a great article in the 4/18 issue of Banker & Tradesman stating that “a whopping number of US adults have debunked the myth that owning a house is the American Dream.” Having lost homes, been foreclosed on, not being able to sell what you own, not knowing what the next move should be – these situations all make the decision of renting most enticing. Also consider that consumers might be thinking of a move, but cannot find their “dream home,” so they may decide to rent for a while until they figure out their next steps.
The rental market gets stronger before it too collapses. The Boston real estate market is very cyclical, and we should always look at the big picture, looking into our crystal ball while not losing site of recent history – putting situations in context is key to understanding the future of the real estate market. The apartment boom can collapse as quickly as it inflates. Any kind of a glut and over-supply in the market place, whether it’s a boom in apartment buildings, luxury condos, high rises, sub-divisions, single family homes, hotels etc., the supply can eventually overcome the demand.
That being said, having seen and witnessed many of these cyclical changes in the Boston real estate market, including rental and sales, buyers should be even more encouraged to purchase property in a down market - value is almost automatically added to your investment. Once the market picks up, you will be sitting on a gold mine.