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i turn REALTY into REALiTY

To Rent or to Buy, that is the question…

A recent press release put out by Trulia, a real estate site, detailed where it was more beneficial to buy a home rather than renting. I found the results to be very interesting, and while I do question the accuracy and/or the methodology of the report, it does get me (and I’m sure many other readers as well) thinking about it, given the current economy.

I decided to replicate their analysis, but scale down the area to my specific city of Woodinville. I know that the smaller the sample size, the greater the margin of error (I remember a little from my college days and statistics courses). But, what I’m going for here, is a broad overview to see if the data from Trulia could be used to measure the affordability index in Woodinville. Here are my findings, based on their methodology:

There are 6 homes (condos) for sale in Woodinville, with a median price of $88,200. These condos are 2 bedroom, 1 bath units. The median rent for a similar apartment unit is $1,022/mo (which I think is a bit high, but that’s what I got off the Trulia site.

Using their calculations ((median price / (median rent*12)) = 7.19

So, going by their calculations in their report, it would be better to BUY in Woodinville, than to rent.

There are many flaws in my research data to be sure, but remember that this is a “Broad Overview”. Interested? Drop me a line…

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