The decision to rent an apartment or buy a home is never an easy one. That holds especially true when you had your heart set on buying in a certain area and you come to find that the median sale price there is above $1M, like it is in Newton MA. Many at this point would give up and push out their dreams of being a homeowner, but there’s hope yet. Real estate data serves to not just warn us of potential threats, but also to alert us to potential opportunities.
Newton MA Median Sales Prices
Newton, MA has long been one of the premier suburbs in Metro Boston. In terms of real estate, everything’s bigger in Newton. That includes home sizes, acreage, and prices. Homes do not come cheap in Newton, but you get a lot of space for your dollar. The 1 year median price of homes for sale in Newton is $1.61M, which is more than double the median single family home price of Boston ($723K). However, Newton’s price per square foot ($508) is considerably less than that of Boston ($724). The median sales price for Newton condos is $894K, almost $200K higher than Boston’s median condo price of $699K.
Average Rent Prices in Newton
The average rent price for Newton apartments ($2,425) is 4th highest among Boston’s suburbs, but still less than the average for Boston apartments ($2,532). Apartment availability has recently contracted in Newton after months of apartment inventory glut caused by the pandemic.
Newton MA Rent vs. Buy Breakdown By The Numbers
To calculate the financial advantage between renting and buying in Newton, we’re simply finding the difference in the estimated monthly housing costs of renting (average rent price) and the estimated monthly cost of a standard mortgage, taxes, insurance, and maintenance.
Condos vs. Single Family Homes
|Property Type||Median Sales Price||Monthly Owner Cost||Avg. Rent Price||Rent vs. Buy Comparison|
|Newton SF Homes||$1,622,278||$6,309||$2,425||$3,884|
By property type, the data suggests that the cost of owning a home in Newton exceeds that of renting by significant margins. The estimated monthly cost of owning a single family home in Newton exceeds that of renting by $6,309 per month. In terms of Newton condos, an owner will pay $3,849 more each month on average than they would renting an apartment.
Newton Rent vs. Buy By Property Size
So it appears that the property type data didn’t reveal any opportunities for Newton home buyers, but a look at property size data does. If you breakout median sales prices by number of bedrooms, you’ll find that 1 bedroom and 2 bedroom properties are priced relatively low compared to larger properties in Newton. In fact, Newton’s median sales price for 1 bedroom properties ($462K) and 2 bedroom properties ($675K) are both lower than those of Boston ($585K and $716K respectively) by sizable margins.
|Property Size||Median Sales Price||Monthly Owner Cost||Avg. Rent Price||Rent vs. Buy Comparison|
By applying the same math to 1 bedroom and 2 bedroom properties, we find that it’s actually $36 cheaper per month to own a 1 bedroom home or condo in Newton than renting a 1 bedroom apartment. We also see that it costs $494 more per month to own a 2 bedroom property vs renting a 2 bedroom apartment in Newton. Bearing in mind that these are only averages and that each property presents a unique opportunity, we can now see that if we are in the market for a smaller property, there are plenty of cases where it would make sense to buy in Newton rather than rent an apartment.