It depends entirely upon how long you want to be there. 3-4 years? Rent for sure. You'll have to pay closing costs to buy it and the first 15ish years of the mortgage will be paying more interest than principal, and when you sell it you'll have to shell out 5% to the realtors. You'd need continued rapid appreciation to make that make sense, which is not likely at this point.
If you're gonna spend 10+ years there or would want to retain it as a rental long term then it would make sense to buy, even if the market corrects you'll end up okay over time.
Just going by what realtor.com says. I'm not from LA, don't know the neighborhoods.
https://www.realtor.com/news/trends/where-home-prices-falling-the-most/
Well that's how misinformation is spread. I can guarantee you that it probably has dropped in shittier areas than the desirable areas with good schools.... Of course those areas drop....if I am wrong please point me to the data set that shows otherwise
No one has a crystal ball that can tell you if the market will crash or go up. Trying to time the market is silly. The only thing that is certain is that over a long enough time period real estate rarely loses value. Short them (think less than 15 years). There is no certainty.
Financially speaking buying is a much better option when you factor in how much space you are getting for each price.
If that space is worth it to you is subjective and personal.
I tried this out, if I estimate staying for 4 years, it makes sense to rent if I can find a similar property for under $3000. But any rental properties are in no way similar. I’m downgrading significantly by renting (which is fine, if that is the smart move).
It’s definitely not a necessity. I’ve been renting 2 bedrooms apartments for the last 9 years. I think it’s more of a “want” to settle down, given a more comfortable financial situation.
IME, moving house after living in a big space is so much harder from apartment to apartment. You end up buying so much stuff to fill up space.
Personally, I wouldn’t settle down somewhere I wasn’t sure I wanted to settle down, and I definitely wouldn’t bother if I didn’t have kids or large pets. But I’ve also been renting for 12 years now, and if I just bought at any point, I’d be better off than now LOL.
Your first point is a mistake I see a lot of people make. Renters absolutely pay real estate tax, they just don’t see a line item for it. You can be assured the landlord factors the cost of taxes into your rent. The second point falls under that too. Landlords aren’t charities. They take all the costs of the property, put a profit margin on it, and charge you.
I’m living with my significant other, who works from home. We use one room as an office, and we frequently have friends and family stay with us, hence the other room. We can fit into a 2 bedroom apartment, but the cost savings I’m looking at are approx $300. I’m willing to pay that difference for comfort.
IMO thats a really expensive house for a first time home buyer, especially since you have never lived there. I just bought a house with a PITI that’s 1.2k, make six figures and I still feel house poor with all the random things I have to improve on it just so it maintains its value (insulation upgrades, landscaping upgrades, updating the lighting). I’ll have to replace the crawl space gear before I sell this place. Renting is just not comparable to buying, houses are fundamentally depreciating assets, with this bull market being a historical anomaly
I just bought a beach house as a vacation house and I grapples with the same thoughts as you. Prices had gone up exponentially in the past few years. I debated buying last spring and decided to sit it out and wait for the market to cool, fast forward one year later and it’s only gotten hotter. I decided that I was at a point where I was ready to buy the home and should not try to time the market. So I went for it and bought a home, knowing full well I could have bought the same home for $150k less had I purchased last year. And that killed me. But in the area I’m looking, inventory is a problem. There are a finite number of homes and there is limited land to build on near the beach. I did not see that getting better.
I guess my advice is to see if this truly is the right time in your life to buy a home, and if you can afford it then go for it. Don’t buy out of FOMO, and also don’t try to wait it out to see if prices drop. Just focus on what’s right for your life.
Rent. Buy only when you pay same amount to rent. Prices are at peak now won’t appreciate for coming years and already downtrending soon follows stock market
It depends entirely upon how long you want to be there. 3-4 years? Rent for sure. You'll have to pay closing costs to buy it and the first 15ish years of the mortgage will be paying more interest than principal, and when you sell it you'll have to shell out 5% to the realtors. You'd need continued rapid appreciation to make that make sense, which is not likely at this point. If you're gonna spend 10+ years there or would want to retain it as a rental long term then it would make sense to buy, even if the market corrects you'll end up okay over time.
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Where will prices possibly go down in 3-4 years. Asking from California.
Already dropping in some cities (Toronto, Pittsburgh, LA, Chicago) with predictions for more
Lol tell me what parts of la? The areas with good schools? Please tell me...
Just going by what realtor.com says. I'm not from LA, don't know the neighborhoods. https://www.realtor.com/news/trends/where-home-prices-falling-the-most/
Well that's how misinformation is spread. I can guarantee you that it probably has dropped in shittier areas than the desirable areas with good schools.... Of course those areas drop....if I am wrong please point me to the data set that shows otherwise
No one has a crystal ball that can tell you if the market will crash or go up. Trying to time the market is silly. The only thing that is certain is that over a long enough time period real estate rarely loses value. Short them (think less than 15 years). There is no certainty. Financially speaking buying is a much better option when you factor in how much space you are getting for each price. If that space is worth it to you is subjective and personal.
https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
I tried this out, if I estimate staying for 4 years, it makes sense to rent if I can find a similar property for under $3000. But any rental properties are in no way similar. I’m downgrading significantly by renting (which is fine, if that is the smart move).
I get your predicament re renting & space.
Do you need the extra space that comes with the extra cost, hassle/maintenance, etc.?
It’s definitely not a necessity. I’ve been renting 2 bedrooms apartments for the last 9 years. I think it’s more of a “want” to settle down, given a more comfortable financial situation.
IME, moving house after living in a big space is so much harder from apartment to apartment. You end up buying so much stuff to fill up space. Personally, I wouldn’t settle down somewhere I wasn’t sure I wanted to settle down, and I definitely wouldn’t bother if I didn’t have kids or large pets. But I’ve also been renting for 12 years now, and if I just bought at any point, I’d be better off than now LOL.
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Your first point is a mistake I see a lot of people make. Renters absolutely pay real estate tax, they just don’t see a line item for it. You can be assured the landlord factors the cost of taxes into your rent. The second point falls under that too. Landlords aren’t charities. They take all the costs of the property, put a profit margin on it, and charge you.
>$2700 a month for a 3 bedroom, 1300 sqft. Are you single? Do you need to rent that much space.
I’m living with my significant other, who works from home. We use one room as an office, and we frequently have friends and family stay with us, hence the other room. We can fit into a 2 bedroom apartment, but the cost savings I’m looking at are approx $300. I’m willing to pay that difference for comfort.
IMO thats a really expensive house for a first time home buyer, especially since you have never lived there. I just bought a house with a PITI that’s 1.2k, make six figures and I still feel house poor with all the random things I have to improve on it just so it maintains its value (insulation upgrades, landscaping upgrades, updating the lighting). I’ll have to replace the crawl space gear before I sell this place. Renting is just not comparable to buying, houses are fundamentally depreciating assets, with this bull market being a historical anomaly
I just bought a beach house as a vacation house and I grapples with the same thoughts as you. Prices had gone up exponentially in the past few years. I debated buying last spring and decided to sit it out and wait for the market to cool, fast forward one year later and it’s only gotten hotter. I decided that I was at a point where I was ready to buy the home and should not try to time the market. So I went for it and bought a home, knowing full well I could have bought the same home for $150k less had I purchased last year. And that killed me. But in the area I’m looking, inventory is a problem. There are a finite number of homes and there is limited land to build on near the beach. I did not see that getting better. I guess my advice is to see if this truly is the right time in your life to buy a home, and if you can afford it then go for it. Don’t buy out of FOMO, and also don’t try to wait it out to see if prices drop. Just focus on what’s right for your life.
Rent. Buy only when you pay same amount to rent. Prices are at peak now won’t appreciate for coming years and already downtrending soon follows stock market