One of the greatest attractions of Southern California is the spectacular weather virtually year-round. Whether you are searching for your dream house in Los Angeles or Newport Beach or your first place in Irvine or San Diego, there are countless reasons to call these beautiful cities home.
So when homebuyers ask when is the best time to buy a house in Southern California, the answer is very different than other parts of the country that have more dramatic seasonal weather changes. When pondering the ideal time of the year to buy in Southern California, the decision will be influenced more by your personal timelines than the seasons.
Below we highlight several of those life moments when it might be the best time to buy a home in Southern California for you.
You are financially ready
The most important criteria in weighing the ideal time to buy a home is whether you are financially ready to. While you may have FOMO watching your friends buy their first place or seeing an amazing space on HGTV, you need to be patient and responsible.
Purchasing a home is a big responsibility, so doing so before you are comfortable can be stressful. If you do feel the time is right for you, connect with a buyer’s agent in your area to get local insights and advice on getting the sale price possible for your dream home.
Mortgage rates are low
The real estate market in Southern California has been red hot over the past year with record home sales in California and low levels of housing inventory for sale. That strength has been partly driven by mortgage rates making new record lows every other month.
The historic drop in mortgage rates since the beginning of 2020 helps homebuyers in two key ways. You are either able to: 1) pay less for the same size mortgage compared to a year ago or 2) borrow more with a larger mortgage for a similar monthly payment.
First, the lower rate decreases your monthly borrowing cost. That means, your monthly payment on an $800,000 mortgage to buy a $1,000,000 home is lower today at the start of 2021 compared to the beginning of 2020.
Depending on your lender, borrowing costs have declined by about 25% to 33% over the past year.
Second, if you have a set monthly payment that you can afford, you can now borrow a larger amount to purchase a bigger or more expensive home without extending your budget. This may cause a rise in listing prices in the short term with increased competition for houses, but will save you thousands of dollars over the life of your loan.
As it relates to more affordable monthly mortgage payments, this creates an opportunity for renters to enter the property ladder as the estimated monthly mortgage payment may finally be more attractive compared to current rents.
If you are ready to buy, get started by getting a mortgage pre-approval.
You need more space
Californians experienced the dramatic effects of Covid on day-to-day life in 2020 and continue to experience them in 2021. Many residents have been forced to work remotely, and have found a new appreciation for their space and home needs.
There is a distinct trend over the past year of renters buying their first home to expand their personal footprint, and many existing homeowners trading in their current place for a larger house. After all, people are working, educating their children, and exercising in the confines of their homes. This dynamic has influenced buyers to seek listings offering home offices, Peloton rooms, and extra room for personal space away from those you live with.
If you find yourself craving more space, the right time to buy a new home is not soon enough.
It’s time for a vacation home
While buying a vacation home is a luxury that only a few can afford, stay-at-home orders over the past year amid Covid have inspired a lot of folks to seek an escape from their daily lives. As a result, there is growing interest among California residents to purchase a vacation home for periodic retreats. And in many cases, these homes are in locales within driving distance a few hours away.
If you find yourself with the desire to escape and extra funds to finance such a purchase, then it might be the right time for you to buy your first vacation spot.
When you want to invest
In California, real estate has been a well-documented asset class for wealth creation over the long term, and not just from owning your primary residence for many years. Buying an investment property can be a great way to grow your net worth via passive income or asset appreciation, as well as diversify away from traditional stock and bond retirement investments.
With the current interest rate environment, more investment buyers are taking advantage of low mortgages rates to acquire attractive rental properties or second homes in areas with the possibility of appreciation.
If you are itching to buy your first investment property in Southern California, be sure to speak to your financial advisor and local real estate agent to make sure you are ready for such a goal.
There is a Chinese proverb that states, “The best time to plant a tree was 20 years ago. The second best time is now.” The same holds true in real estate. Is the best time for you to buy a house in Southern California now?
