Source CB Blue Matter
Looking in Solano county because San Francisco is too expensive?
Our proximity to both the bay area and Sacramento creates a unique housing market. Because of this location, we have always had a fair amount of the population that commutes to one or the other. Anyone can see that if they spend time on the freeway before 9 am or after noon on most days.
Based on a recent article by FORBES, (link here) the bay area apartment rent prices are beginning to level off in some markets, however in the markets that are being hit the hardest, are not.
Recent construction in California has been primarily Class A apartments and rental units, where the major demand for rentals is in Cass B and Class C housing markets. Luxury apartments are going in statewide, but there are fewer apartments going in that can appeal to the majority of the population.
Because many in the B and C market are faced with very few apartment options, that they are in many times opting to live in a single family dwelling. This has caused our supply to dwindle, and prices to increase. Why? Because it can. Simple supply in demand.
Some investors are beginning to opt to revitalizing older apartment complexes- which is in many ways wiser and more affordable on their end, in order to tap into a growing market of the market, however the supply is still yet to be met.
In my opinion, this is one of the many factors that is causing a few problems currently affecting our housing market… If someone is paying more in rent than they can afford they are unlikely to be capable of saving money to purchase a home. And it’s not because of a surplus of better options. Most in the rental market have very limited options. With no downpayment, looming debt, even with a good paying job it seems impossible to purchase a home.
So, how do you buy a home when you can’t afford a down payment?
There are people doing it- so it’s gotta be possible. Millennials have set a record breaking high of 40% living at home with their parents. Some are home with the intention of saving money, some just because they do not have affordable options for rent. There are many that live at home because they cannot or do not want to find work.
For those that do have good employment history may have limited options, however they do have options. There are loan programs for $80,000 buyers and buyers in the luxury category. It is important to be realistic about expectations. While certain shows may be appealing to watch, a first time buyer may not get updated flooring, valued ceilings and granite counters. Sometimes you have to create the home you want, and thats ok- it will be yours, and improvements can always be made later down the road.
No matter where you are in the process, living at home with parents, getting ready to move up to your retirement home, or any where in between, that you speak to a local lender or mortgage company. Why local? They are people you can actually meet with, sit down with and discuss your plans with. They have an investment in your community and know the programs that will work for you based on your specific situation. Many will also help you with credit repair, help you know how much to save and where to make it work in your budget. It will not cost a thing, and it will get you in the mindset and give you the tools to create a plan to move forward, rather than spinning your wheels in the rental market.
For more local resources or to start making your home buying process, feel free to contact me.