The metropolitan areas of California are expensive and will continue to get more expensive, as development is down, building costs are high, and developable land in these areas is scarce. Hence, prices in these areas will most likely remain high and unaffordable to many. The alternatives are to get creative in how you can get into the market:
– My daughter just partnered with another friend and bought a nice home in Seattle, neither one could afford on their own. Even though the price they paid was high for their first home, their housing expenses dropped by 50%. Explore the options of co-ownership to get into the game.
– Find a way to make-do with a smaller living area or an inferior neighborhood (hopefully up and coming) to get in at a lower price. Move to an area where the housing costs are lower. That can either be in an adjacent county or city to the one you are looking in – still close enough to that area.
– Buy a duplex, triplex, or fourplex, and live in one of the units and rent out the others to supplement the monthly payment.
– Maybe look into building another dwelling on a relative’s large lot to live in.
– I bought my first home in my early 20’s and lacked a down payment and a steady income. I was able to make ends meet by borrowing the down payment from my mother, and renting out the extra bedrooms in the home to friends to help me make the monthly payments. Two years later, I wanted to move up, so I sold, paid off my mother, and took the appreciation and bought a third of a much nicer home with two friends. Over the next two years, I bought my two friends out, and since then have owned all my homes exclusively.
Cities understand the need for more affordable housing. If you prefer to get out of California, research vibrant job markets nationwide and consider finding a job in one of these cities to significantly lower your housing expenses. Don’t give up on making things work. Do you research and make a well informed decision to get in the game somewhere.
Here is the good news: Inflation is still in check allowing mortgage rates to stay low historically. Is it still a good time to buy a home now? Absolutely. Get into the real estate game as soon as you can. Rents will just keep rising, and housing demand will remain strong. It is best to start building equity in a home and to take advantages of the tax deductibility of mortgage interest and property taxes, in addition to “fixing” your monthly payment. Owning real estate gives you control over your housing situation. Know that each year, the monthly payments get easier and easier to make as your career and income progresses. We are happy to review the creative possibilities for you to “get in the game.”