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Don’t buy in Boston? Huh?

Business Insider says Boston is one of the cities where people are better off renting than buying homes.

The conclusion relies on Zillow’ newest metric – the so-called “break-even horizon.” As BI puts it: “The break-down horizon refers to the number of years after which buying a home is more ‘financially advantageous’ than renting one. So, with a longer breakeven horizon it makes more sense to rent. Unlike the price-to-rent ratio this metric includes a whole range of possible costs including mortgage payments, property taxes, utilities costs etc.”

Well, OK. Makes sense. Sort of. But has anyone recently analyzed Boston’s soaring rents? See the post immediately below. Rent prices are quickly getting to the surreal stage here.

Maybe the break-even-horizon formula needs some updating or tinkering. It sure doesn’t feel right amid today’s rental prices.

2 Responses to Don’t buy in Boston? Huh?

  • I’ve seen rents soaring 200-400 in the last two weeks due to the globe running an article on “high rents” (on new luxury apartments), which led to landlord (with non-luxury apartments) to increase their prices, which cause the cable new programs to run stories on high rents.

    All just in time for the Sept 1 student season.

    Anyways, $10k bet they crash back in a few months in the off lease season. The current frenzy is laughably ridiculous, if it wasn’t screwing over so many tenants.

  • I’ll buy more properties in downtown Boston whenever I can. Obviously, the price paid is key. Also, how much cash you have is key too. I don’t want a lot of debt even at low rates.

    One 2BR I have was (is) rented out at $2900.00 per month. My RE guy told me to move it higher to $3100 or $3200.

    In January, 2012, I told the tenants that the new rent was going to be $3000.00 starting in Sept. 2012.

    Prime Boston RE is better that cash in the bank.

    And cash in the near future can trigger good buys as the economy spins downward in the next few years.