Why is now a good time to buy? We are the Caleb and Jodi Moore Team of Moore and Co. Realtors. Let us know how we can serve you with your Real Estate needs. Happy St. Patty's Day!

1. St. Patrick’s
Happy
Day
Study Calls Today’s Market a
Good Time to Buy
On February 13, 2012, in appreciation rate for a particular market, sense in some instances, at least in the short
then it makes sense to buy, because future run, if renters invest all of their savings over
Breaking News, by Robert property appreciation should be such that a period of time in an instrument that
Freedman an individual will, on average, create more generates a yield comparable to what they
Researchers from several universities wealth through owning rather than renting. would earn in appreciation on a house in
have just completed a paper that looks at On the other hand, if today’s hurdle rate is their market. But since few renters could
what they call the hurdle rate. This is the higher than the average past property realistically invest all of their savings from
point at which it’s equally smart to rent or appreciation for a particular market, then renting, it’s more appropriate to assume
buy if your only criterion is to build wealth. this is a sign that ownership can be a drag renters don’t invest all of their savings. And
Based on today’s hurdle rate, it’s a better on wealth creation. in these cases, owning is the
time to buy than to rent, because you can “It’s not a perfect reason to buy, it’s overwhelmingly better investment over the
build more wealth owning than renting. just a test,” says Ken. H. Johnson of Florida holding period.
study looks at what they call an International University in Miami, one of the
indifferent renter. This is someone who is authors of the study, called “The Rent vs.
just as happy renting as buying depending Buy Decision,” released about two weeks Reasons to buy now
on which choice is better at building wealth ago. “But it’s a good sign that the market’s
turning.” 1. The worst of the price declines is
over a holding period, in this case eight
years. The study assumes the renter puts the The paper is part of a series Johnson likely over.
savings from renting into an investment to and some other researchers have been 2. Mortgage rates are at historic
earn a return. doing on the rent vs. buy decision. This
lows.
The hurdle rate is the point of paper just looks at the narrow topic of the
equilibrium between renting and buying hurdle rate; other papers look more 3. Qualifying for a mortgage is likely to
where it’s a wash in terms of wealth broadly at whether it makes sense to rent or get harder, not easier.
building. If today’s hurdle rate rate is lower buy based on financial considerations. In 4. Less competition
than the average past property one earlier paper, renting can make more
From Caleb and Jodi Moore Funny St. Patrick’s Day Liners: Moore and Co. Realtors
1. A leprechaun is a short, cuddly little guy -- sort
Team of a Danny DiVito with a brogue. 103 W Parkway
“How Can We Serve You?” 2. My wife always serves broccoli on St. Patrick's Cell: 479-857-3409
Day. But she can't convince me that it's fat Office: 479-968-3300
Whether buying or selling, we’d love
shamrocks in cheese sause.
help assist you in your real estate needs, 3. The boss's secretary wore a green dress. She
calebmoore33@gmail.com
please give us a call. looks like a tree. www.cmoorerealestate.com