Zillow Report Favors Buying
As I have told you before on my Costa Mesa real estate blog, right now it is cheaper to buy a home in Costa Mesa real estate than it is to rent one.
For renters, buying a home pays off after three years on average
A new analysis by real estate website Zillow shows that, on average, a renter thinking about buying a home will reach what it calls the “break-even horizon,” after just three years. The break-even horizon compares what it would cost to buy or rent the same home in a number of U.S. markets over time.
Costa Mesa real estate took a little longer to hit it’s break-even point: 4.5 years according to their research. Which is pretty good considering neighboring Irvine would take nearly double, or 8.3 years to hit that same break-even point. Considering most people on average move every seven years, there is big benefit to hitting that break-even point three years earlier. Newport Beach incidentally takes even longer – 14 years! SoIs It Cheaper to Rent or Buy in Costa Mesa ?
What Does That Analysis Consider? Is It Cheaper to Rent or Buy in Costa Mesa ?
- The analysis takes into account a host of factors potential buyers should think about when considering a Costa Mesa home purchase, including the down payment, mortgage and rental payments, buying and selling costs, property taxes, utilities, maintenance costs, and tax deductions. The analysis adjusts for inflation and forecasts home value and rental price appreciation.
- Zillow said that the data should help homeowners get a rough and immediate sense of whether buying makes sense in a particular area in relation to their financial situation.
- Additionally, many analysts believe that a housing bottom has been reached, which may help renters determine if now is the right time to buy. However, analysts also say they are not expecting home prices to return to the same levels as during the real estate bubble.
- There is also some concern about the strength of the housing recovery, with home sales slowing in June as inventory remained tight and buyers paid higher prices. At the same time, rents are rising, housing affordability is at record levels, and mortgage interest rates remain very low. These factors are prompting many renters to consider homeownership.
The one idea that their research does not take into account for Costa Mesa is how much the rental market for a Costa Mesa home has accelerated in the past 6-12 months. Rental demand for Costa Mesa is higher than it has ever been, with multiple applications on most properties right now.
Need help figuring out what is right for you in Costa Mesa real estate – buy or rent? I would be happy to do an analysis for you. Call Colin at 714-743-9882 or E-mail me.