Renting in the Bay Area – Does monthly cost override a long term investment?
Blog Presented by Marci Pipes, Loan Officer Security National Mortgage NMLS# 224360
Rent or Buy? – Buy or Rent?
That is quite a dilemma for those living in the San Francisco Bay Peninsula Area.
What is the best for you?
The biggest question you may have with home values on the rise, “Am I able to afford to buy a home in the Bay Area?”
According to a May 10th report from the California Association of REALTORS®, the percentage of California home buyers who could afford to purchase a median-priced single family home dropped to 44% during the First Quarter of 2013 – down from 56% in the First Quarter of 2012 and down from 48% in 2012’s Fourth Quarter.
According to the same CAR report, buyers who want to qualify to purchase a statewide median-priced home of $350,490 would need an annual income of $66,800. If the buyer put 20% down ($70,098 down payment), the monthly payment could be around $1,670.00. This compares to 2012 median price of $279,190 with an annual income of $56,320 to make that same purchase.
Home prices in the Bay Area saw the greater home price increase, which pencils out to the least home affordability in the state. “The upsurge in the median price continues to be driven by an increase in sales in the upper- price range, where low inventory is less of an issue,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “Over the past year, home sales in the $500,000-and-higher market segment posted a year-over-year gain of 35 percent on average, which contributed to an increase in the statewide median price of nearly 30 percent from the previous year.”
With home prices on the rise, rental prices – not so much. According to a May 13th Mercury News article, “Year-over-year rents in April also declined 4.8 percent in the San Jose metro area, despite the area’s year-over-year asking price gain of 22.9 percent.”
So … What is best for you? We can help you figure that out.
Call Marci Pipes at (650) 440-3215 today. Our Team of knowledgeable Lenders can give you information and details to help you make that decision.
In the meantime, check out the Rent vs Buy Calculator on Realtor.com.