7 Reasons to Buy Homes in Southern California in 2014
Many homeowners are still waiting for that special property. Some are starting to feel the pinch of still being a renter. For many reasons, 2014 has become a critical time to buy a house in Southern California, especially if you have considered moving to San Diego in the next decade. So, here are 7 reasons why you should buy a home in Southern California this year.
Houses in Southern California have lower home loan interests. Many homebuyers do not realize the amount they have to spend in down payment in a new home. They also ignore the fact that the difference between a 4.5% and 7.5% interests is big. Plus, they still need to pay an extra $1,000 every month in interest and principal payments for mortgage.
2. Low Home Price
Some buyers, especially those who have seen Southern California home prices rise, may not feel that their prices are low although, historically, they are low. A few of these homes are still 50% below their previous high prices. Many great deals are available, but they will not last. Thus, it is recommended to start looking for homes in the area this year.
3. Rare Opportunity
This is a once in a lifetime opportunity. The next time you will see home prices this low, you will be looking for rooms in retirements homes. Thus, it is best to buy them now.
4. Passive Wealth Making
Thanks to the rising home values of California, trillions of dollars have been added to the national net worth. This beats inflation, grows substantial nest egg for retirement, and provides access to emergency cash, like college funds. If you will buy real estate now, the growing equity is your hope to come up with the down payment for your dream house.
5. High Investment Returns.
If you have started with your retirement and investment funds, you can benefit from moving a larger percentage of your portfolio to the enhanced returns of the real estate market in Southern California. Even if you have invested in a frothy stock market, you can still move your savings to safety, especially when 401ks and IRAs are used to invest on real estate.
6. Break Away from the Renter Trap
There may be a time when renting is a good option, but it is never a smart long term strategy. Rents are rising and getting even higher. If you don’t buy a house, you will just pay more your entire life. You will be lifelong tenants of landlords who will keep increasing rents and will slack on maintenance.
7. Tax Benefits
There are tax advantages when buying a house such as closing cost, mortgage interest reduction, and capital gains breakage. Taxes can make a double digit difference on what you can take home and what is available for you to spend.