Real estate tips: Does renting make more sense than buying? | Rogersville

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The temptation to rent for people who have recently retired or will soon be retiring is understandable. The market is hot. So it makes sense to take the opportunity to take advantage of all of these equity increases. Renting is fine in some cases. But the longer an early retiree rents, the riskier it becomes.

When the pandemic raged last year, some locals opted for early retirement. Others were pushed into retirement or lured away with buyouts. At the time, it was possible to rent for less than the average mortgage payment, according to Realtor.com’s quarterly hire purchase analysis.

But that was before the demand for existing and new single-family homes drove prices into double-digit increases. Many landlords observed the trend and increased rents – in some cases by double digits.

Fast forward to the current situation. The hectic search for rental properties is almost the same as looking for properties for sale. And the development of new apartment complexes has increased, although the multi-family trend shows that rents are stabilizing. And Realtor.com hasn’t updated its national rent-to-own research since the first quarter.

Regardless of whether you are a retired person or a prospective first-time owner, owning a home makes more sense than long-term tenants. But there is an if at the end of this statement. It makes sense if you plan to stay in place for at least five to seven years and keep up with basic grooming. This is usually how long it takes for the cost of buying and selling the property to amortize. And while today’s appreciation rates are at record levels, don’t trust them to remain the norm.

As interest rates rise and inventories become plentiful, home prices begin to stabilize. We haven’t had a balanced market of five to six months of inventory in the area of ​​NETAR monitors for a long time. The last time we had a balanced supply-demand level was in November 2018. Since then, things have increasingly shifted in favor of the seller side.

That begs the question. How long will it take for the market to stabilize and supply and demand to balance? Though opinions differ, the truth is that we will know when it happens. This is not an answer like a weasel-of-an-answer – just a statement about reality.

Builders bring new houses to market as soon as possible. But new homes, condos, and townhouses aren’t a quick fix given the amount of time it takes to get new homes to market. Inflation and an improving economy are nibbling on the added purchasing power of basement-level mortgage rates buyers had during the peak years of the pandemic. Nibble away means slow downward pressure on home prices that will put pressure on sales in equal measure unless there is a boom in job creation and wages.

Most real estate experts predict that 2022 will be a stabilization year that will still be a seller’s market, but with slower price growth. That means another year of ups and downs for both buyers and sellers. It is the continuation of a market climate that most rewards those with the best local market knowledge and a network of professionals who can quickly and efficiently deal with the complexities of a changing market.

Partnering and working with a professional local REALTOR is the best time and results tested way to achieve this.

NETAR is the voice for real estate in northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region and represents over 1,500 members and 100 affiliates involved in all aspects of the world the residential and commercial real estate industry.


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