Rent or Buy When Relocating? (rental, prices, housing)

[5FLgirls]

Believe it or not, yesterday my husband found a rental in an area that he liked. Rentals aren't hard to find but decent rentals are. The house is not ideal but when you're trying to make something work for four kids--it's a bit hard to find the ideal. The prices for rentals are outrageous. We're negotiating with them over it right now. We're positive that these people are going to make a profit off this rental. It's a home they've lived in for years and are downsizing. The house needs to be redone but we can live with the 80s stuff for a year! The houses in that area are pretty steeply priced but the lots are large -- this one is 14,000 sq ft!

[Humanoid]

The prices for rentals are outrageous.

The rental prices are not outrageous, the prices have been going up just a bit over inflation. They may be "outrageous" compared in other states, but you have to compare apples-to-apples.

We're positive that these people are going to make a profit off this rental.

What do you want them to lose money? Also did you look at the sale history of the house? It seems a bit odd that someone would downsize and then rent out their old house instead of selling it. The only way it would make sense is if they owed nothing on the house or purchased it many years ago. But even then its pretty stupid given the current market.

[kturbe]

Great I am glad you found a home. Many move up sellers do rent their homes as it is still a good investment in the long run. But they aren't going to give it away really the market dictates the rents and they are expected to go up at least 7% this year. Keep in mind over 35% of the home owners in Orange County own their homes outright another 20% have fixed rate mortgages and equity so yes there are still a number of sellers moving up and renting out their properties and with the demand in renting it is great time for them to do so especially if you want to rent a house. Finally there are another 20% owners that are high net earners and can afford rate adjustments. The true figure of foreclosures is less the 2% in OC actually foreclose. The market currently is still very stable. You will love it here!

[Humanoid]

Many move up sellers do rent their homes as it is still a good investment in the long run.

When the market corrects itself to its fundamentals the prices will drop 30-70% (bigger drops for the low end less for the high end). It could take up to 20 years to make up for that lose, so it would be a very very long term investment.

The market currently is still very stable. You will love it here!

Who do we believe....every economist in the country or a realtor. I wonder.

[kturbe]

Sorry, 5FLgirls you are seeing negativity on this board vs. fact. I would strongly disagree with the above statement from Humunoid that we are going to see a drop of 30-70%. Very much the opposite.

Thankfully there are alot of renters which makes those investments all the more sound!

Best of luck and if you need any service contractors to fix up your new home, please do not hesitate to contact me.
Blessings,

[Humanoid]

Very much the opposite.

Not even close. The median family income for Orange County is roughly 80k. That means 50% of the families in Orange County cannot afford a home much over 300k. The ONLY reason families with these incomes have been able to afford homes over 300k is due to exotic financing. The companies that have offered this financing in the past have either gone bankrupt or no longer offer them.

Anyhow, the negativity is going to help 5FLGirls more than someone saying positive things to try to sell homes. Its great that her family was able to find a suitable place to RENT though! OC is a nice place and once the housing costs fall I'm sure she and her family will be happy with their choice of moving to orange county.

Also 5FLGirls, here is a nice site about housing in Irvine (and a bit of OC in general to):

Irvine Housing Blog

[5FLgirls]

I didn't rent a home because I couldn't afford one. We could afford a very beautiful home however we did not want to purchase a home that we would later regret. Renting seemed the best alternative to give ourselves a year to find the specific subdivision we liked. Although it's bad form to mention housing bubbles, etc., we've lived in FL for many years and our home greatly greatly appreciated. We put our home in SFL on the market and purchased a home in NFL because of a job transfer. Due to hurricanes and the great FL RE market, it took us 15 months to sell our home at a reduced cost of $200k. We sold because we had to. Carrying two mortgages got old. The cost of housing in OC is great--if you've lived there for awhile-- but it can be daunting for someone just moving there.

[kturbe]

Florida has gone thru some rough times and hopefully we won't see that here, but you never know. Orange County is totally different in everyway. I think renting is great and it makes sense since you don't know the area, but I am sure you wish you were buying as well, just because it is then your home and there is nothing better, for most. Agreed pricing is daunting but it is a reality and when I have helped Relo clients in the past they quickly adapt as they love it here. Safe travels out here!

[Humanoid]

I didn't rent a home because I couldn't afford one.

I wasn't suggesting you guys couldn't afford one. Rather that that your average family cannot, hence why the prices will drop.

it took us 15 months to sell our home at a reduced cost of $200k.

The same sort of thing is happening in Southern CA. So whatever reason you decided to rent, its going to save you tons of money. But its most likely going to take more than a year for prices to tank.

[Charles]

"Renting’s financial edge over homeownership remains near historic lows, at least by one measurement. The narrow gap between renting and buying suggests that the housing market could have support for a rebound if other conditions improve."

from



Renting’s edge vs. buying near historic low - Lansner on Real Estate - The Orange County Register