[quote=jpinpb]I think if units in this complex were close to rent then I’d buy, but right now rents (2 different units, not counting mine) are much lower than what people are asking for sale in this complex, coupled w/the fact there are NODs, I would think prices will decline further.
There are condos in UTC that are now selling close to what rents would be. Wasn’t there a rent chart somewhere that Rich posted? Rents have been pretty stable and in line w/incomes.
I don’t expect a great increase in rents, particularly in light of unemployment being as high as it is. Maybe you might see a decrease in rent. I’ve seen some decreases, enough to make a difference, but not drastic. There does seem to be more rental units available from my recent looking. [/quote]
If you’re paying less than $1900 in rent, then it’s probably still cheaper to rent.
I assumed a $375K price and a 5% mortgage, financing the entire balance (to avoid having to think about the opportunity cost of the down payment). I get an interest component of the mortgage payment at $1563 (tax effected at 20% down to $1250), property taxes of $313 (tax effected at 20% down to $250), and a $375 HOA. So, that gets us to $1900 after tax. I’m assuming that this is a long-term hold – long enough such that the price 10 years down the road will be nominally above the current price, so that your principal payments are like putting the money in a very low-yielding (perhaps no-yielding) bank account.
Anyhow… just a few numbers to toss around, although I’m sure you’ve already done this analysis.
