When the pandemic first hit in March 2020, early predictions foresaw a faltering real estate market, with many expecting people to stay put and wait out the pandemic. Although April and the early part of May played out accordingly, this nervous market didn't last long.
It exploded into a frenzy of transactions that have continued into the new year. It also raised the question for those considering new digs—is it better to buy amidst a bullish real estate market or settle for the lower stakes of renting?
If you're ready to lay down Westside roots or stake a claim with a real estate investment, here are three reasons to buy in Westside rather than rent.
A Wise Investment
Over the past 12 months, home values in Los Angeles have increased 10%. Forecasts anticipate values rising another 10.5% throughout 2021. Add in an annualized rate of 7%, and L.A. ranks in the top 10% nationally for real estate appreciation.
Los Angeles, including its under the radar Westside communities—Marina del Rey, Playa del Rey, and Playa Vista—offer excellent returns on investment if you jump into the market now. Renting, on the other hand, provides no such ROI. Rental rates in and around L.A. are double the national average—and they're only going up, nearly 10% annually.
Investing in a Westside home now will ensure you acquire property ahead of rising values. You can also opt to reap the benefits of growing rental income with tenets of your own.
One of the main aspects fueling the hot single-family housing market is historically low interest rates. Even in the face of home values that continue to rise, current rates provide potential homebuyers with considerable buying power—something you can't take advantage of as a renter.
Throughout December 2020, rates hovered at 2.5% for a 30-year fixed-rate mortgage—a once unfathomable number. Entering February 2021, a 30-year fixed rate is 2.80%, with a 15-year fixed-rate at 2.25%. These rates will not remain that low forever—if there was ever a time to secure a Westside home without a burdensome interest rate, the time is now.
Long Term Prospects
Certainly, the pandemic is forcing many individuals and families across the country to reevaluate their current lifestyles and living situations. While this pushed many long-term residents elsewhere, the door is now wide open for younger generations—such as Millennials—to fill the void.
Consider that, in the near future, Amazon will descend upon Culver City en masse. Apple, HBO, and TikTok are already there. Whatever you may have read about California's demise, and more specifically Los Angeles, has been grossly overstated.
Millennials are set to become the next powerhouse homebuying segment over the next three to five years as they flood the market post-pandemic seeking jobs and housing, which will further drive up value. Instead of competing with them over the next half-decade, get ahead of the game while interest rates are low and home prices are still manageable.
Are you interested in buying or selling a home in Westside Los Angeles? Perhaps you're seeking more information on El Segundo homes for sale or Marina del Rey real estate? Contact Bill Ruane today and allow his years of experience and expertise to help you navigate the process.