Best Places to Live 2010: Buy, Sell, Hold, or Rent?

Should you join the ranks of the homeowning? Is now the time to sell that too-small condo? The completely unsatisfying answer to that question is…it depends. If you’re sitting on a condo in Jamaica Plain you’ve owned for a decade, it’s a great time to trade up. Of all Boston sellers, J.P. residents came closest to getting their asking price last year, taking only 2.4 percent less, on average. But if you bet on East Boston or Everett at the peak, you should probably sit tight (single-family homes in those areas are down 45.5 percent and 35.7 percent, respectively, since 2005).

[sidebar]First-time buyers are in the best position. Looking to capitalize on the max $8,000 tax credit and interest rates that hovered near historic lows, the newbies incited bidding wars this spring in Cambridge, Melrose, J.P., Framingham, and elsewhere. Even though the tax credit ended on April 30, plenty of first-time buyers will continue to look, says Timothy M. Warren Jr., CEO of real estate tracking firm the Warren Group. It’s also likely prices will continue to rise — the number of homes on the market had dropped for 23 straight months as of February, when the state’s median home price rose 7.7 percent compared to a year earlier, to $271,950. So if you’re a seller with a starter home in good condition — particularly in a ’burb with easy city access like Arlington (where houses sell in 52 days, on average) — it’s a good time to list.

For buyers, the best values are almost universally at the top of the market, whether you’re looking in Westwood or Manchester-by-the-Sea. “If you plan to stay a decent amount of time — five years plus — now is an amazing time to sink your teeth in,” says Mark Pearlstein, owner of Metro Realty in Brookline.

What about renting? Sure, it’ll give you some freedom and flexibility, keeping your cash liquid for investments and other pursuits. But don’t expect to find bargains. Between people pushed out of homeownership, steady student demand, and the fact that fewer people qualify for mortgages, rents are near all-time highs, says Barry Bluestone, director of the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern.

Nicolas Retsinas, director of Harvard’s Joint Center for Housing Studies, is glad to see homebuying moving away from investment equation to life choice. “It’s a complex decision,” says Retsinas. “But it should come down to some pretty simple fundamentals: Do I want to live here, and can I afford it?”