If you guessed buy, you’d be wrong. According to the new Trulia Rent vs. Buy index, it makes more fiscal sense to rent in this farm city due to the huge gap between rental and purchase prices.

Until recently, the perennial real estate question of whether to rent or buy was dead. During the boom years, the question was largely irrelevant as people rushed to pay ever increasing prices for already expensive real estate. But now that national home prices have slid substantially and potential buyers are being more cautious, the debate has been reinvigorated.

Many people hunting for a home these days are considering both alternatives, according to Tara-Nicholle Nelson, a spokeswoman for Trulia, the real estate website. “We did a survey of site visitors and found that 30% of them were thinking either of buying or renting,” she said.

In response, on Thursday the company will launch a Rent vs. Buy index for 50 major cities.

To determine which option is better, Trulia compares the costs of buying a two-bedroom condo with the costs of renting one. Then, Nelson said, the results can be extrapolated to other classes of homes, such as larger single-family houses.

Another factor, of course, is price stability. Unlike home prices, rents tend to rise or fall just a few percentage points each year. Even 2009’s record decline in average rents was a paltry 2.9%, according to Reis Inc, which tracks the rental market.

On the other hand, the national median home price jumped 12.2% in 2005 and fell nearly 20% in 2008, according to housing, according to housing groups.

Minneapolis was the city on Trulia’s index where it makes the most sense to buy. The average listing price for a two-bedroom there was about $150,000, while the average annual rent for one came to about $20,400. Buying, therefore, costs less than eight times the annual cost of renting. Economists generally hold that anything below 15 times the annual rent is a buyer-friendly city.

Manhattan, on the other hand, renting is a much better deal. The price-to-rent ratio of 33 was by far the least favorable for buyers, seven points higher than the runner-up city, Omaha, Neb.

That’s despite very high rents, an average of more than $42,000 for a two-bedroom apartment. Gotham selling prices are so astronomical — $1.38 million for a two-bedroom condo — that it still makes more sense to rent.

Seattle, Portland, Ore., and San Francisco were also much more expensive to buy.

These stats cover the costs of buying vs. renting; they don’t take into account future price appreciation or depreciation. If, for example, prices rapidly decline in Minneapolis, the total cost of ownership could exceed rental cost, especially when the transactional costs, such as real estate broker commissions, taxes and mortgage origination costs are factored in.

On the other hand, soaring home prices have made New York a good place to buy in the past, and it’s possible, although unlikely, that it could again.

More likely though, is that prices in many cities will remain sluggish for a number of years; home price appreciation should not be a strong consideration when deciding whether to rent or buy.

These analyses are also just a general guideline; individual circumstances matter, too. People in higher tax brackets, for example, may get more bang for their purchase buck because they’re able to deduct more interest costs and property taxes.

And, once people purchase, their home-buying costs tend to be fairly stable. Fixed-rate loans don’t go up ( although taxes and maintenance costs can.) Rents usually do.

There are also many intangible benefits for both buyers and renters, according to Trulia’s Nelson. Buyers often feel more invested in their communities, more likely to put down roots, make friends and join local organizations. Home ownership often brings them pride and joy.

Renters, on the other hand, may not want the responsibilities of home ownership or being tied down. If another place comes along that suits them better, they can easily move. They’re also freer to pursue employment opportunities in other cities without worrying about selling their old homes and buying new ones.

The new index addresses none of those intangibles, but Nelson said it’s still a useful tool for consumers: “You have to make the decision on whether you want to buy based on your lifestyle choices more than anything else.”

Original article by Les Christie, staff writer June 3, 2010: 11:10 AM ET

Sort through the chaos

First, toss or donate everything your family doesn’t use. Group the rest by theme: yard tools, sports equipment, beach toys, and so on. Stow the small stuff in translucent, stackable, snap-top bins ($5 to $23 at thestoragestore.com) so you can see what’s inside.

Can’t bear to face the mess alone? For $200 to $1,000 you can hire a professional organizer to help (find one at napo.net). Or bribe a neat-freak friend to dig through the clutter with you. To keep a lid on the chaos for good, you need a real organizing system; your best choice depends on your space and budget.

The simplest solution is to put freestanding shelving, such as the 48-inch-wide, five-tier Real Organized system ($90 at lowes.com), on the back wall. You can also hang shelves high enough on the side walls so they don’t interfere with car doors. The Elfa Utility (at the Container Store) offers a range of shelves, bins, and tool hooks that attach to horizontal strips. One-wall systems start at $250.

If space is seriously tight, put up shelves that hang from the rafters (about $70 at hyloft.com). Or install simple pulley systems that hoist bikes and kayaks out of the way ($15 to $70 at Amazon.com). You can also hire a handyman to cut an opening in the ceiling, install a pull-down ladder, and lay a plywood floor on top to create a hayloft-like storage area (about $600 to $1,000).

If you’re lucky enough to have a wall at least three feet away from the nearest vehicle, it’s worth spending extra money on an attractive storage system that you can also modify to suit your needs. For example, Gladiator Garageworks makes a line of rugged steel cabinets, workbenches, racks, and tool drawers that sit on locking casters– no installation needed ($100 to $800 apiece at sears.com).

The best-looking, most flexible option is to cover the walls with horizontally grooved paneling onto which you can slide various shelves, racks, cabinets, hooks, ball caddies, and golf-bag racks. A single wall of GarageTek’s product costs $2,500 to $3,500 (garagetek.com). That’s a splurge — but it’s money well spent to turn your garage into useful space, gain control of your stuff, and put your cars back where they belong.

Clean it up, it’s not always what you add but what you take away that makes a good first impression.

• Remove any tree limbs near or touching the roof.
• Clear rain gutters and chimneys. Check for needed repairs.
• Kill mold on sidewalks, roof, and patio.
• Check all areas of grass for moss build up.
• Pressure wash siding, porches, sidewalks, and decks
• Remove leaves and weeds; mow and edge lawn. Finish with bark dust.
• Put away garden equipment and tools. Check side of house where these things gather.
• Clean windows so they shine and glimmer. Repair shutters and touch up paint if needed.

Create atmosphere and welcome home feeling.

• Pay attention to where people may park when they tour the home and make sure they have a clear path to the door.
• Place flowers in large pots entryway. Grasses and heat hardy plants and flowers are best and lowest maintenance.
• Try to avoid adding flowers to the landscape it’s self, many are seasonal and won’t last through the hotter months.
• Freshen paint, especially on the entry door or surrounding architectural features.
• Add new door hardware and make sure the numbers on the home are visible and it good shape.
• Make sure to check light fixtures and door bell. All should be up to date in style. Replace if needed.
• Add texture and a welcoming invitation to your entry with a chair and pillow if room.
• Add river rock for a dry creek bed or a berm to add texture and height to your yard.

This is the first time that has happened in the history of the report, which goes back to January 2006.

But the number of homes repossessed during April is at an all-time high of 92,432. That is a 45% increase over April 2009. If repossessions continue at this pace, more than 1.1 million homes will be lost in 2010.

“There were two important milestones in the April numbers that show foreclosure activity has begun to plateau, but at a very high level that will not drop off in the near future,” said RealtyTrac CEO James Saccacio.

Saccacio said he expects the pattern to become the norm for many months, with the overall numbers of filings staying high, but not increasing, and repossessions remaining at record levels.

The reason that repossessions can rise while filings hold steady is that lenders are working through a backlog of delinquent properties, taking more of them through the entire process to repossession, rather than letting them linger in limbo.

The numbers of repossessed properties, also called real-estate owned or REOs, have been boosted by a spike in the number of homeowners voluntarily giving up their homes because their the value has dropped so precipitously.

These “strategic defaults” now account for nearly one in three foreclosures, according to a recent report from the University of Chicago Booth School of Business and Northwestern’s Kellogg School of Management. That’s up from 22% 12 months earlier.

Some homeowners walk away when they are “underwater,” owing far more than the value of their home, because they realize that they will never recoup the losses. The further homeowners fall underwater, the more likely they are to leave.

About one in four U.S. homeowners is underwater, according to CoreLogic, a financial data provider. Nearly 5 million of those borrowers owe mortgage debt that exceeds their property values by 25% or more. The total of negative equity in these deeply underwater borrowers is a whopping $655 billion.

Nevada continues to rank as the worst-hit foreclosure state, with one of every 69 households receiving some kind of filing. That’s nearly six times the national rate which is one household for every 387 receiving a filing.

Where does your state fall?

Arizona had the second highest rate; Florida the third; and California the fourth. California, the largest state in the union, had nearly 70,000 filings, more than any other state. Michigan, where the vast number of foreclosures can be traced to job losses and economic turmoil, recorded more than 19,000.

Oregon is at 6.46%

The metro area market that recorded the highest rate of foreclosure filings in April was Las Vegas, where one of every 60 homes was delinquent, Second was Modesto, Calif., with one in 101, and neighboring Merced, where one in 104 homeowners was in some stage of default.