Minneapolis Minnesota Real Estate Blog

What is the most important housing statistic for a seller?

One statistic that directly impacts buyer's decisions it is this: the gap between the cost of buying and renting. Buyers don't care about regional trends or median prices. They certainly appreciate government programs that give tax breaks and favorable mortgage terms, but in the end it all boils down to one key calculation: is the monthly cost of buying a home competitive with the cost of renting.

Most renters would prefer to buy if the cost is equal or close. This statement seems obvious but it uncovers some basic facts about housing. Both renters and owners need a place to live but there is both strong emotional and financial value to owning and controlling your home vs renting. If the gap between owning and renting is small this also means investors are more willing to buy homes because the income they can generate from renting will cover or come close to paying their interest costs. In short property becomes competitive with other investments.

For home sellers this information can help in two ways:

   1. Look at comparable rents for your home and mention them in your description, it might stimulate investors to consider your property.
   2. Consider targeting local renters with fliers at near buy apartment building and in Craigslist.org, you might find someone ready to make the leap.

Here is a great calculator from the New York Times you can use to assess your market. Just paste the following link in a browser.

http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1