Jitters about a possible interest rate hike and the escalation of rental costs have a lot of California renters wondering, “Should I buy a home right now?” It’s not an unrealistic concern since interest rates are expected to rise from their still historic low levels. How much home you can afford at rates below 5 percent is significantly different than how much home you can afford even if rates rise just a few percentage points. According to a recent article by The Economist, a lot of people are confused about whether they should scramble onto the housing ladder. According to experts there are several reasons why it may be smart to buy now, especially if you are eyeing new construction homes in Southern or Northern California where rent is so high.
Clearing up of foreclosures
Experts say between 2008 and 2011, more than one third of home sales were made up of distressed homes. Some of the downsides of short sales and foreclosures include mystery maintenance problems, mildew and surprise financial problems such as liens on the properties. Buying a new construction home is one way to get on the property ladder without worrying about falling off into a money pit.
Rising cost of rent
If you just had your rent go up, you may also be asking yourself, “Should I buy a home right now?” According to a recent report by KPCC, the rental market in Southern California is extremely unaffordable. In fact, the inflation-adjusted median rent went up 25 percent between 2000 and 2012 in Los Angeles County. The downside to renting is that you aren’t building any equity for the future. Vacancy rates are low, which motivates property management companies or individual landlords to push up rents to record levels. Even if you buy a home and later decide to move, you will have an incredible income opportunity by renting out your property.
Although the market trends definitely favor buying instead of renting, the decision is highly personal. If you value a sustainable lifestyle and living in urban areas within walking distance to where you want to be, consider new construction homes in Milpitas, San Jose and Silver Lake California. Trumark Homes is known for its spectacular urban infill projects that cater to progressive people with green attitudes. For more information about buying a new construction home now, please contact us.