Rising Rents Make Buying More Appealing

Real estate agents and economists agree, climbing rent prices and declining home prices are making home ownership look pretty good right about now. Even once-reluctant home buyers are being lured into the market this spring season, and with good reason.

Average apartment rent prices rose by 2.7 percent last year while the national vacancy rate dropped below 5 percent for the first time since 2001, according to a quarterly survey by Reis, Inc., a real estate research firm. According to the survey, the largest rent increases occurred in San Francisco and San Jose, Calif., which saw jumps of 5.9 percent and 4.9 percent, respectively.

While the survey provides strong evidence for buying appeal throughout the U.S., it isn't the cheapest option everywhere. In some markets, like New York City and Orange County, Calif., it's still cheaper to rent. Nevertheless, many residents of such areas are getting fed up with paying high rent for small spaces, opting instead to pay more for the benefit of ownership.

If you're thinking of making the transition from renter to homeowner, contact a mortgage professional in your area to learn about first time buyer home loans, low money down financing and more.

Markets with the most expensive rents according to Out of Reach Report from the National Low Income Housing Coalition:

10: Washington - Arlington - Alexandria Metro
9. Danbury. CT
8. Bergen-Passaic, NJ
7. West Chester County, NY
6. San Jose - Sunnyvale - Santa Clara
5. Orange County, CA
4. Nassau - Suffolk, NY
3. Honolulu
2. Stamford - Norwalk, CT
1. San Francisco

Does is make sense to consider buying an investment property?

In our local rental market in Wilmington, North Carolina, there appears to be some great deals for investors as inventory has fallen dramatically and prices remain deflated. Jay Seville, a real estate professional with Wilmington Real Estate 4U pointed out in a recent video that despite prices being lower than there recent peak, 2012 has produced a mini boom for single family homes with the median prices climbing into the $250K's. "The Wilmington market is flush with opportunities for people looking to capitalize on lower prices and a rising demand for rentals" he told us. "When you run the numbers it's fairly easy to find units, especially in certain pockets of the market, where investors can see immediate positive cashflow".  You can find additional information on the local market including a number of very informative videos on Jay's site at http://www.kure-beach-homes.com.

We spoke with Brian Mitchell at Gateway Bank Mortgage (also in Wilmington) about some of the requirements for buying rental properties in the current lending environment. "The days of buying an investment property with little to no money down have come to an end. There may be some private investors out there who may be willing to lend with less than 20 to 25% down but most lenders are going to require a fairly substantial downpayment."

Other Recent Housing Articles of Interest:
Influence of Seniors and Young Adults in the Housing Market
Improving Real Estate Markets - Where Home Values are on the Rise