After the subprime mortgage crisis, there is lot of questions in the buyers mind these days.

1. Whether it’s the right time to buy?

2. If I buy a house now, is it going appraise or chances of going down?

3. Is it better to stay rented instead of getting locked in one place during high unemployment condition? 

4. With real estate market still struggling, is it truely a buyer’s market now? 

5. Is it worth taking the pain to become a homeowner?

All these questions are really legimate and need to be thought out well in advance by taking each buyers market area into consideration.

Many lenders have the made case even worse by making it harder to get loans because of all the rules and regulations shutting down even eligible buyers to realize their American dream. Even a willing and interested buyer lose their interest after going through the loan process to get approved for their loan with stronger and harder approval process.

It is Buyers market because more supply vs demand not because many buyers are buying. There are more homes to sell than more buyer which created this buyer’s market scenorio. Because of the tough economic condition, mortgage rates are low but still not many interested buyers. One other reason being, Unemployment. It also plays a major role in the real estate market. With all the parameter impacting one’s decision in buying a house, it surely a hard one to make at this point.

I have seen many prospective home buyers just couldn’t decide whether they really want to get a house and call it a home. It is a big  and tough decision and it got worse in the past few years with bad economy, high gas and food prices adding oil to the fuel. As a consumer or buyer, you can only decide for you. You need to go back to basics and try to analyze whether it’s good idea to buy or just continue renting out depending on your financial situation. I know it might seem easy to just stay put in apartments or rentals and don’t worry about mortgages but sometimes it does make sense to buy a house at this time taking advantager of buyers market condition.

Your analysis should depend on lot of parameters including income, expense, future growth potential, market area and so forth. Trulia has an interactive tool which they update every quarter to help you on the decision making process by bringing bigger picture little bit close to you in a visual way.

The below Trulia Rent Vs Buying index for 2011 Q2 period gives an easy understandable ratio in 50 cities around US for people to make smart decision on their home buying. The price-to-rent ratio is calculated using the average list price compared with average rent on two bedroom apartments, condos and townhomes listed on Trulia.com.

Interpretation Key:

Price-to-Rent Ratio of 1-15: Owning a home is much less expensive than renting in this city.
Price-to-Rent Ratio of 16-20: The total costs of homeownership in this city are greater than the costs of renting, but it might still make financial sense to buy depending on the situation.
Price-to-Rent Ratio of 21+: Renting in this city is much less expensive than owning a home.

To know learn more about their analysis, check out the details at  info.trulia.com 

You can also check out the interactive tool for this quarter at Trulia.com and learn different things like Median List price for an house, Median Rent and so much more for your particular city by clicking the tabs on the top. In the bottom, they figures in the horizontal bar charts for Job growth, unemployment, List prices of homes and much more to get broader picture.

Taking Houston from the report for example,

Rent vs Buying Ratio: 11-15

Media Home Price: 100k – 200k

Job growth: 4%

Unemployment: ~8%

The above figures all favors for home buying instead of renting in and around Houston. Even during the bad real estate market conditions, Houston didn’t see a big slump in the appraisal values in many areas around Harris county district. At the same time, it also never appraised more during the real estate peak period. It clearly shows that Houston market is really not prone to hyper active market conditions and always try to maintain the balance which is good for a buyer to reap the rewards at this buyer’s market.

Many surburban areas around Houston like Northwest Houston – Cypress, Spring, Tomball, Woodlands are really expanding and adding new communities to support the growth of the Houston Job market. The prices in these new communities are really affordable and surely attractive for a new home owner.

Are you convinced yet to buy your dream home? If not, talk to me.

About Vijaianand Thirnageswaram

I am a Proud Realtor of Texas, trying to guide and help clients to find their dream home and educate them to buy them for right price. I am also a Candidate for CFP who has more financial knowledge which allows me share and educate clients in any financial decision making process.

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