My daughter’s husband has a job that requires he move the family once every two years. This August, they’re leaving the East Coast for an assignment in West Texas. They were trying to decide whether they should rent or buy and asked me for advice.
I called several agents in the city to which they’ve been assigned and Googled as much information as I could to determine trends in the area. When I talked to agents I got lots of opinions, but no facts. I asked two agents about statistical comparisons of year-to-year sales from their MLS and you would have thought I was asking them to explain bacterial flagellum. They neither had such information available nor were they willing to provide a little research. All I could get was comments like “Our market is very stable,” or “We haven’t lost any value in the past year.”
So I searched the internet for as much information as I could find. I determined that in a good year appreciation levels in this area are 2% to 3% percent. In 2005 and 2006 property values increased about seven percent in the 24 month time frame. I found that 2009 sales are down from 2008, inventory is up and foreclosures are accounting for a greater number of sales.
I advised the kids that if they found a steal (aka, foreclosure) priced 15% to 20% below recent sales, then purchasing was a good idea. Otherwise, it made no sense to buy in a market that is flat, at best, and then incur selling costs of 7% to 8% in 24 months.
If you were looking to purchase real estate here in Bluffton or on Hilton Head Island, I would tell you the same thing. And rest assured I would have statistical data to show you why or why not a property is a good buy.
