- Studio from $1429
- 1 bedroom from $1985
- 2 bedroom from $2246
Did I mention that they're also offering 2 months free rent and no pet deposits/fees for the first year?
As a public service to those of you who may be considering purchasing a unit at K or L at CityVista [assuming any are left], I thought I'd run the numbers to see whether renting a unit from V at CityVista would be better [ignoring the advertised incentives]. I based my analysis on an L at CityVista unit [2/2, 825 square feet] that sold for $430,900 in June 2008. I extrapolated condo fees using information from my friends at UrbanTurf.
I used the NY Times' rent versus buy calculator to perform the analysis. My input to the calculator: 10% down, 30 year note, 6% interest rate, $345 condo fee, $3663 annual property taxes, 0.46% home insurance / 1.32% renters insurance rate. The trick metric was guessing future home appreciation rates. My instinct is that prices will go down this year (in fact, the District's 2009 assessment for the condo in question is $393,150, 8.7% less than the purchase price), so I tested -1%, 0, and 1% growth rates.
Results. Assuming rents grow 3% annually, at an annual appreciation of:
- -1%, renting beats buying for 14 years.
- 0%, renting beats buying for 9 years.
- 1%, renting beats buying for 4 years.
See the graphic below.
- Home values may rise sometime in the future. The NY Times' model doesn't account for the ups and downs of home values.
- There's an intangible psychological aspect to buying one's own home. It's great to have the freedom to paint a bedroom chartreuse.
- There are tax benefits to home ownership. Assuming the buyer is in the 20% bracket, owning that condo will reduce taxes by about $4600 / year. However, the opportunity cost of the $43,000 down payment is a trade-off to consider.
However, I have to go with renting at V a CityVista versus buying, at least for the near future. I may be too conservative, but right now I prefer to have $43,000 in the bank than in an asset that may decline another 8.7% this year.