To rent or to buy? That is the real estate question in Stockton and a few other regional housing markets across California. The answer in 2017 is clear and simple: buying a home in Stockton makes more sense than renting, and the proof can be found in the numbers.
According to real estate analytics website Trulia, the median sales price in Stockton is currently just under $240K, and it is trending upwards along with other housing markets in the San Jose-San Francisco-Oakland, metropolitan area. The median rent payment in Stockton as of March 2017 is $1,400 per month, and it is also trending upwards after coming down gradually since last October.
Stockton, CA Home for Sale | Image Provided by MetroList
If you assume today's interest rates on a conventional, 30-year fixed mortgage, it is clear that buying has the upper hand in Stockton due to the high rate of monthly rent payments. With good credit and a reasonable down payment, you could buy a home with monthly mortgage payments that are almost the same as the median rental rate in Stockton; moreover, your mortgage loan specialist may suggest an adjustable rate mortgage to lower your monthly payments.
When you include the equity factor into the purchasing versus renting debate, buying a home becomes an even more attractive option. As previously mentioned, home values are appreciating in Stockton, a housing market that is very attractive due to the economic strength of Silicon Valley. In other words, you could break even on your purchase in just a few years at the current rate of value appreciation.
It is important to remember that the real estate market situation in California is nothing like Florida was around 2005, when there was a lot of home flipping and speculation about the future of retirement properties. The current state of housing markets in the Golden State is that this is a jurisdiction that has a gross domestic product comparable to France, Spain or The Netherlands.
The economic growth of California is as real as it gets. Regional markets such as San Jose-San Francisco-Oakland still have quite a few years of value appreciation left. The key is to purchase now because mortgage interest rates are certain to rise along with home prices. It is worth mentioning that Janet Yellen, Chair of the Federal Reserve Bank, has promised another rate hike this year and perhaps more if she sees volatility on Wall Street.
In the end, buying is currently the better option to renting in Stockton , and the numbers clearly add up to support this financial fact in 2017. Contact Lance McHan today to discuss your Stockton area real estate needs.