Lots of Californians have purchased homes so far this year, and the California Association of Realtors did a little research to find out why.
More than a third of California homebuyers cited price reductions as their reason to buy. Housing prices are still down as much as 35 percent from their peak (before the economic downturn), even after prices have been on the rise for the last year or so. Lower purchase prices mean lower property taxes and less money borrowed—it can even mean slightly lower homeowners insurance payments.
Twelve percent said better financing. Interest rates are still down two full percentage points since the housing bubble burst. That means, for the same amount borrowed, your monthly mortgage payment is about 20 percent less. In other words, for the same size loan, your payment could go from $1,000 to $800 per month.
Ten percent of Californians purchased a home because of a better location. With improved prices and interest rates, people have been able to upgrade the location or neighborhoods they want their family to live in without paying more in monthly payments and maybe even less.
Nine percent of Californians bought homes to take advantage of the tax benefits of owning a home. Again, with lower prices and interest rates, owning a home has become a viable investment for a bigger portion of the population.
Finally, seven percent of California homebuyers were tired of renting, and with lower prices and rates, the money required to buy a home has been comparable to renting in many cases. Consequently, people are choosing to be homeowners rather than renters so they can pay off their own mortgage, rather than someone else’s.
There are lots of reasons to purchase a home, many of which I’ve discussed in previous columns. If you’d like to figure out whether you can afford to buy a home, call your realtor and they can help you figure it out.
Next time I’ll write about the good reasons people choose Ukiah. If there’s something you would like me to write about or if you have questions about real estate or property management, feel free to contact me at firstname.lastname@example.org or visit our website at www.realtyworldselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.