Heat Maps Equate to Hot Property
I recently made the decision to continue renting as opposed to rushing into home ownership. Of course, my ultimate goal is to own my own home and I've been tenaciously working towards this goal for over a year. However, the more I research renting versus purchasing a home, the more resources I find that confirm I've made the right choice. Three great online sources of information I've found offer maps that use "hot spots" or "heat maps" to determine the average price of homes in a city, county, or state: Trulia.com, FinestExpert.com, and HotPads.com.
Finding the Truth with Trulia
One benefit to using Trulia is that it lists properties all over the country, not only in large metros like some competitor sites. From Maine to California, Trulia lists properties for sale and rent. The feature I like the most is their "Heat" map. I might be a bit biased on this particular feature given that I love staring at maps, but the color coding overlay helps determine an area's affordability. For example, in Los Angeles County, dark red areas indicate homes priced from $654K and up, where a dark green patch equates to homes below $280K. In contrast, in Mesa, AZ dark red color coding indicates homes above $198K and dark green color coding show homes below $85K. Obviously, the color coding prices change based on a city's median home price.
Trulia also compares rental prices and median purchase price of homes of individual cities and determines which is a better financial option in their Rent-Vs.-Buy ratio report. Their most recent report shows that owning a home in Minneapolis, Phoenix, Sacramento, Long Beach, Fresno, and San Antonio is a better option than renting. However, it makes more sense to rent in Omaha, Seattle, Portland, San Francisco, and New York. The Rent-Vs.-Buy index is based on a 2-bedroom condo/townhouse/or apartment.
FinestExpert Is Just Fine for Me
FinestExpert was created specifically with real estate investors in mind. However, anyone in the market for purchasing a home or renting could benefit from the information they've gathered. Once you type in the specifics you are looking for, square footage, bedrooms and baths, and the city, a map appears (hosted by Microsoft Silver Light software) that lists color-coded tear-drop shaped icons specifying homes for sale. Each color represents an FE code (Finest Expert code). Dark red tear-drops represent a good investment, meaning it's a home that could be fixed up, then used as rental income or resold. Where as dark blue tear-drops represent a "dream home," a home an investor would want to live in instead of resell. The higher the score, the better the investment opportunities. In my experience, their map is a bit quirky. For instance sometimes it takes a while to load and other times it gets stuck on an area. It's also not easy to find the definitions of the FE color coding. The site is still in its Beta testing mode and I think it still needs to work out some of the bugs. However, it's worth checking out to view data.
HotPads Is on Fire
While trying to find a site I stumbled upon and now can't find (so frustrating!), I found HotPads that offers a rent vs. buy calculator and yet another interactive map. In my opinion, this map rocks the other maps by far. It's not nearly as quirky as some others I've found and it compares rent to purchase price right there on the screen. Trends and charts are easily available at the click of the mouse for a quick city overview. It also hosts a "heat map" index by state, county, and city; the color codes indicate real estate markets hardest hit by foreclosure rates, the "hotter" color indicates states with more foreclosures. I found this map to be quite insightful.
If you're looking to move, using any of these tools to help gauge your local market could be helpful. Not only could these maps be used to help negotiate a better purchase price, but it also helps determine if renting is a better option in the short-run or long-run.