Rent vs Buy in Orange County

With mortgage rates at an all-time low, buying a home is looking increasingly attractive for residents of Orange County.  Home prices have continued to fall, while rents have stayed high, making the financial edge of renting over buying ever leaner.

The OC Register ran the numbers in a recent article, and found that on average, typical house payments are $2,177 in Orange County, while average monthly rent ran $1,440.  The monthly savings of renting are just 34%, the lowest they have been in a decade.

Of course, buying vs renting carries a whole set of advantages and disadvantages, other than the theoretical savings on paper.  When you buy a home, you can take advantage of the Mortage Interest Deduction and Property Tax Deduction, and you also gain the satisfaction of investing in your own equity.  However, you do commit yourself to a home, which you will have to upkeep, and which may make it difficult to move on short notice if required.  For credit-strapped OC residents, it may not be possible right now to get a home loan.

When renting, you are subject to the availability of rental units, which is shrinking in 2011-2012 as more OC residents search for rental homes.  You may not find a unit entirely to your liking because of the increased demand for rentals.  Rental prices are also on the rise, gaining 3% this year, while housing prices have dropped 5%.

Bottom line is: there are a host of factors for any individual to consider when debating buying vs renting in Orange County.  However, homes in Orange County have not been this affordable in 10 years, and if you are in a position to buy, 2011-2012 may be the opportunity you’ve been looking for.  If you’re looking for investment property that will earn you 6% to 10% return on your investment, this is the time.

If you have questions about whether buying vs renting in Orange County is right for you, contact us for a free buyer consultation.  We have expert knowledge of the market and will sit down with you to determine your personal needs.

Markus and Heidi Brown, Realtors