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Friday, April 1, 2011

Top 6 cities where buying beats renting

ORLANDO, Fla. – March 30, 2011 – Cities hard-hit by the housing market crash now offer some of the best buys in real estate – places where it makes more sense to buy than rent, according to a new report from Deutsche Bank. The study measured affordability by the share of income that residents pay to own a home, as well as the cost of owning vs. renting.

Here six cities that topped Deutsche Bank’s list.

1. Atlanta
Rent as a percent of after tax mortgage payment: 151.2 percent
Median home price change, 2006-2010: -33.2 percent
In Atlanta, the average monthly rent is about 50 percent more than the average after-tax mortgage payment. Plus, home prices in Atlanta have dropped nearly 14 percent year-over-year in February, creating a great opportunity for buyers to cash in.

2. Orlando
Rent as a percent of after tax mortgage payment: 137.2 percent
Median home price change, 2006-2010: -51.3 percent
Orlando saw a larger drop in home prices during the past year than any of Florida’s other metro areas, according to a Florida Realtors® report cited by the Orlando Sentinel.

3. Rochester, N.Y.
Rent as a percent of after tax mortgage payment: 136 percent
Median home price change, 2006-2010: 3.6 percent
While housing prices in Rochester – the second-largest economy in New York State – inched up slightly between 2006 and 2010, the city still favors homeownership over renting.

4. Cleveland
Rent as a percent of after tax mortgage payment: 132.6 percent
Median home price change, 2006-2010: -14.8 percent
It costs about 24 percent less to buy a home in Cleveland than it does to rent.

5. Tampa-St. Petersburg
Rent as a percent of after tax mortgage payment: 131.6 percent
Median home price change, 2006-2010: -41.4 percent
Tampa-St. Petersburg was one of the most overbuilt areas during the housing boom, and it ranks ninth in the country for foreclosures. But it’s still an attractive spot for retirees, and with dropping home prices it’s now more affordable to own than rent here.

6. Las Vegas
Rent as a percent of after tax mortgage payment: 125.1 percent
Median home price change, 2006-2010: -56.5 percent
Empty homes and condos blanket Las Vegas, but a comeback is in sight. More than half of sales in Las Vegas are from cash buyers, signaling investors have re-emerged. A strong rental market also means renting out properties still offer a good return.

Source: “10 best cities for home buyers,” CNNMoney.com (March 28, 2011)

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