Most everywhere across the country, and in La Quinta too, all you have to do is look in the local paper at the ‘For Rent’ section of the Classifieds to see that the rent prices are climbing. At the same time, home prices are either still declining or remain at a relative low. This is enough to get some reluctant home buyers into the game and ready to take the plunge into home ownership and the current spring selling season is reflecting this trend.
Other factors contributing to the increased buying activity – sales made by investors and second-home purchasers . . . but, realtors are saying that they are hearing complaints from people who are currently renting about the rise in rental prices. Experts are saying that due to the rising rents (avg. apartment rents rose by 2.7% last year) coupled with stagnant or falling home prices and available low interest rates, demand for entry level homes is on the rise. They also believe that 2012 will be the first year since 2005 that the percentage of apartment renters moving out to buy a home will increase from the previous year.
Some housing analysts say that historically, the cost to rent an apartment has been about 10% lower than the after tax cost of owning a home. That discount began falling in 2010 and last year disappeared entirely. By the end of last year, it was found that the cost to rent an apartment was about 15% higher than the cost to own a home – showing that conditions are “overwhelming” in favor of buying now.
But not all markets have been seeing the same trend – for instance, in Orange County and NYC, where home prices are extremely high, it is still cheaper to rent. But even NY realtors say sales of small studio and one-bedroom apartments are brisk because renters don’t want to pay such high amounts to rent – so may as well own.
Spring home sales are bustling . . . and the question remains, To Buy or Not to Buy . . . stay tuned !!!