Good Times Santa Cruz: Buying is Still Cheaper Than Renting

Every month, Suzy Rodoni-Silverberg writes a column for the Good Times Santa Cruz, sharing important information about real estate and property management for those living, renting, and buying in the greater Santa Cruz Area. This month, Suzy explores the renting vs. buying topic. Do you have a real estate or property management question that you’d like to have answered? Submit your question in the comments below!

Home prices have been rising slowly and steadily this year, but according to a recently published analysis from Trulia Chief Economist Jed Kolko, homeownership is still cheaper than renting nationally. Of course, the gap between renting and buying depends on location.

For example, in locations like Memphis, Tennessee; Saint Louis, Missouri; and Grand Rapids, Michigan, it’s over 50 percent less expensive to buy, whereas in Los Angeles, California and New York, New York it’s approximately 20 percent cheaper. In the Santa Cruz area, it’s still 9 percent cheaper to buy than rent.

Therefore, if you’re thinking about buying, it may make sense to act now before interest rates rise. According to Kolko, nationally, buying will be cheaper than renting until interest rates hit 10.6 percent, but in the Santa Cruz area, the scales tip when interest rates reach 6 percent. By the end of 2014, Fannie Mae predicts interest rates to be at 4.8 percent, National Association of Realtors and Mortgage Bankers Association predict them to be 5.3 percent, and Freddie Mac predicts them to be at 5 percent.

In order to determine if buying is truly a better option for you than renting, it’s important to understand that Trulia’s calculations are quite conservative. The calculations assume a 4.5 percent 30-year fixed-rate mortgage, 20 percent down, itemizing tax deductions at the 25 percent bracket and 7 years in the home. They also use a conservative annual home price assumption that ranges between 1.7 percent and 3.1 percent, depending on the area.

 

For more information and to view the entire article on the Good Times Santa Cruz website, click here.

Why We Love Capitola Year Round

It’s no mystery that we’re big fans of Capitola Village and the surrounding neighborhoods. We recently shared our top 5 reasons for loving the Jewel Box neighborhood. One thing that makes Capitola unique is that it is an incredibly seasonal city, providing visitors and residents with two very different types of experiences during the year. CAPITOLA… Continue Reading

5 Reasons We Love the Jewel Box in Capitola

Why is Capitola’s Jewel Box one of Santa Cruz County’s most desired neighborhoods? We are going to give you our top five reasons in our first edition of our new monthly blog featuring neighborhoods in the 831. Capitola and the Jewel Box are a natural place to start as the Real Estate Eight Three One… Continue Reading

How to Handle Repairs for your Santa Cruz Rental Property

Today we are talking about how to handle repairs and maintenance on your rental property in Santa Cruz. Property maintenance is very important for your rental home, and not just because it reduces your liability. It’s also important to keep your investment in good shape. You have a lot of money invested in your rental… Continue Reading

REAL ESTATE EIGHT THREE ONE
4510 Capitola Rd. Capitola, CA 95010
DRE# 01526597 / 831.475.5695 / RE831.com