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Mad markets
You can use the price-to-rent ratio to find real estate bargains in a crazy market.
From the September issue of MONEY magazine
By Stephen Gandel, MONEY Magazine
NEW YORK (MONEY Magazine) -- Like a P/E for a stock, a price-to-rent ratio can help point you to relative real estate bargains. The lower the better. Check out the ratios in 20 markets below.

Houston, Atlanta and Philadelphia, for instance, still look relatively good, while New York City and San Francisco do not.

Metro area Average
condo price
÷ Average
annual rent
= Price-to-rent
ratio
San Francisco $697,301 $1,532 (x12)
 38
New York City $654,570 $1,495 (x12)
 36
San Diego $431,064 $1,182 (x12)
 30
Phoenix $234,400 $683 (x12)
 29
Seattle $268,786 $816 (x12)
 27
Baltimore $309,090 $941 (x12)
 27
Los Angeles $433,135 $1,321 (x12)
 27
Washington, D.C. $356,715 $1,125 (x12)
 26
Miami $276,904 $900 (x12)
 26
Tampa $227,096 $755 (x12)
 25
St. Louis $192,570 $685 (x12)
 23
Boston $402,241 $1,457 (x12)
 23
Chicago $253,236 $944 (x12)
 22
Las Vegas $185,392 $770 (x12)
 20
Houston $145,442 $648 (x12)
 19
Denver $165,764 $740 (x12)
 19
Minneapolis $202,703 $915 (x12)
 18
Atlanta $159,000 $790 (x12)
 17
Dallas $137,912 $706 (x12)
 16
Philadelphia $171,213 $943 (x12)
 15
Note: Metro-area condo prices and rents reflect transactions for the first half of 2005, except New York and Boston, for which only first-quarter data were available.
Sources: DataQuick, Northeast Apartment Advisors, Torto Wheaton Research, Zip Realty.

More:
• Cuckoo for condos!
• The three myths of condo investing

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