Renting or buying on the Central Coast; What’s more affordable?
Does it make more sense to rent or buy on the Central Coast? A recent report from RealtyTrac shows renting is the more affordable option. That same report also found that several Central Coast counties are considered some of the “least affordable” in the entire country.
According to RealtyTrac renters in both Monterey and Santa Cruz counties can expect to pay more than 60% of their income on rent, if they can even find a rental home.
Bay Property Management owner and broker, Gail Valdez, says, “We have very few rentals available right now. I would say our vacancy factor is about 1 to 2%, which is very low.” Valdez says rent for a three bedroom two bathroom home in Salinas ranges from $1,700 to $2,000 a month, and it’s easy to spend more. An example is a 2,400 square foot, 4 bedroom, 3 bath home in South Salinas, going for $2,900 a month. We also found some average 2 bedroom homes in Santa Cruz with rents between $2,500 and $3,000 a month.
When it comes to buying, RealtyTrac estimates homeowners on the Central Coast are likely to spend more than 80% of their monthly income on homes. Alfred Diaz-Infante, President/CEO of CHIPSA says, “Home prices around Monterey County are about $443,000. with 20% down. That’s over $80,000 that you have to have as a down payment, and your mortgage payment with insurance and property taxes is getting close to $2,000 a month.” Housing experts also agree there’s a shortage, not enough supply and too much red tape.
Diaz-Infante says, “When a developer proposes any kind of development, it often takes 5 to 10 years to get through the approval process. By the time they spend millions and millions of dollars, the market may not be where it needs to be for them to make any money.”
There are housing projects underway right now that could help stabilize the market, but they’re still years away. CHIPSA, which is Monterey County’s largest nonprofit housing developer, says it has been inundated with people looking for affordable housing. It has actually had to close its waiting lists because they’ve gotten so long.
