Buy or rent? The choice is clear in much of the state
By Ron Trujillo / firstname.lastname@example.org
California has enjoyed one of the best housing markets in decades, with hefty price gains and multiple offers in most regions. But what if you’ve missed out on the boom, should you buy or keep on renting?
Well, for a large majority of consumers in most regions of the Golden State, renting is a better financial choice than buying, according to the ATTOM Data Solutions’ 2018 Rental Affordability Report.
ATTOM crunched average weekly income for dozens of communities in the state compared to the median purchase price and monthly rent, and found waiting to buy may be wise, at least from a purely financial perspective. Of course, ATTOM did not include the benefits of buying — such as mortgage interest deduction or the sheer pride of ownership.
But, in general, shelling out dollars for rent, and not building equity, is the way to go, especially in the Bay Area and Southern California, according to the annual report.
Only Kings County, best-known for Hanford and the Lemoore Naval Air Station, in the Central Valley is a market where purchasing is financially smarter than renting. A three-bedroom home rents for $1,433 in Kings County, while the median-home price is $203,000, almost $350,000 less than the statewide median in December, according to the California Association Realtors.
For example, in Los Angeles, a three-bedroom house with cost $2,412 per month or 49.3% of monthly income, compared to paying 78% of the average paycheck to cover the monthly mortgage for the $587,500 median-priced home.
Ouch, but that’s a bargain compared to the Bay Area, where you will need 58.2% of income to rent a three-bedroom home vs. 89.7% to purchase the $840,000 house in Alameda County.
Now, there are some counties where buying or renting is a much tougher decision, with only a small difference, such as Fresno, Kern and Shasta counties. Tulare County, think Visalia, is basically a wash at 41.5%.
Again, crunch the numbers and consider the hard-to-quantify benefits of homeownership vs. renting, like deductions for property tax and mortgage interest, and being able to tackle home-improvement projects or planting a new garden.
Photo of Foster City apartments by Sundry Photography/Shutterstock
Find a job, buy a house
The biggest hurdle for buying a home is saving money for the down payment and qualifying for a mortgage — and that takes a job. Preferably, a good-paying job with opportunities for promotion.
Fortunately, two of the nation’s 10 best cities for job-seekers are in California, according to WalletHub. Three cities in the state cracked the top 20, and nine finished in the top 50.
WalletHub compared more than 180 metros nationwide, looking at 26 key indicators of job-market strength, from employment growth to starting salary.
San Francisco finished third on the national list, with Irvine landing at No. 8. Fremont in the Bay Area ranked No. 18. Check out the complete list and how other cities in the state ranked.
Arizona had four cities in the top five, including first-place Chandler and second-place Scottsdale.
Photo of Irvine skyline by Lagunatic Photo/Shutterstock
Zillow: San Jose best bet for price growth in 2018
California boasts two of the nation’s hottest 10 markets in 2018, according to Zillow.
San Jose, with an abundance of jobs and the only metro market with median income of $100,000-plus in the nation, was at the top of the list. Zillow estimates the center of Silicon Valley will enjoy an 8.9% increase in home prices this year.
San Francisco finished in fifth-place on the list, with an estimated 3.8% increase in home prices this year.