A great comparison study done by Trulia shows the financial benefits of buying vs. renting in various cities around America. While New York and LA are places that one should rent, Honolulu falls nicely into the "BUY" section.
Why? Simple - because rents are so high here. Trulia explains their method:
calculates the price-to-rent ratio for the 50 largest U.S. cities using
the median list price compared with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com.
Sample Price-to-Rent Ratio Calculation:
Median List Price: $140,201.37
Median Rent: $1,871.65
Price-to-rent ratio: $140,201.37 Ã· ($1,871.65 x 12) = 6
While cities like Las Vegas and Miami are the best places to buy (as opposed to renting,) Honolulu looks pretty solidly in the buying category as well.
â€œAlthough owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers,â€ said Tara-Nicholle Nelson, Consumer Educator for Trulia. â€œFor example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of long-time homeowners are finding themselves tenants â€“ some by choice and others by necessity.â€
Read more at Trulia.