Buy or rent in a flat market?
In my previous posts, I have been exploring the notion of opportunity in the South Bay real estate market. What I realize as I look at this further is that timing depends on many factors, not the least of which is the future demand for homes here. It looks like supplies are dwindling (as seen by falling inventories in most categories and areas), but we really can’t tell if demand will pick up or not.
I was halfway through my morning sand run when I got a call this morning from a friend who is an executive with a local aerospace company. He has been contemplating buying a home in the Manhattan Beach or Palos Verdes areas for some time. We reconnected later that day and discussed the market. What has been holding him back is his belief that home sales prices here can keep going down for another year or more. He has a strong feeling that demand will decline as unemployment rises, the number of foreclosed properties increases and the economy remains relatively weak.
Who knows what will actually happen to the lawsuit? It may be too soon to tell, but what we both seem to agree on is that prices in places that interest you at your price point may not increase anytime soon. If you need to move out of your current home for any reason, you may want to consider renting for a year or two. We’ve done some cursory math and if one assumes zero appreciation for a new purchase, short-term rentals may be the way to go. Again, there are many factors at play and your conditions are not the same as everyone else’s.
