Why Rent when Studios are now $300,000?

There are a glut of studio apartments on the market right now and its driving prices down to levels we haven't seen in a while. When you calculate the monthly cost of a mortgage and carrying costs on one of these properties it hardly makes sense to pay rent.

If now is a good time to buy a studio, the converse must also be true: its not a great time to be selling one, especially if the seller hopes to get a high price. Its been years since studios in prime neighborhoods were priced this low.

What caused this? When the market crashed two years ago buyers that had been looking at studios were suddenly able to afford a one bedroom, no one was buying studios and so inventory began to rise. Now that prices have come back across most of the market there is still a large number of studios for sale.

Renters are suddenly becoming first time buyers and with any luck, as inventory shrinks prices will rise. After all, the real estate market more so than most industries is all about supply and demand.