It’s Still Cheaper to Buy Rather Than Rent in the Sacramento Metropolitan Area & Nationwide
That’s right! Even with increasing housing value it’s still cheaper to buy, pretty much across the board. Home prices have been on the rise in 2013 but rents are still high in California and across the nation. Trulia’s March 2013 Rent vs. Buy Report shows that buying a home in the top 100 metropolitan markets is still less expensive than renting, demonstrating just how expensive renting can be. Trulia’s interactive map allows you to graphically access the report’s results and is quite informative and fun. It shows that even with a loan at 5.5%, San Francisco is the only market where it would be cheaper to rent if you stayed in your home for 7 years.
Rent Continues to Increase Nationwide
So why is it still cheaper to buy than to rent if housing prices have been increasing steadily? Because most people are still renting. The Zillow Rent Index shows consistent increases in rents in California, Sacramento, and San Francisco, among many others, over the past two years. Would-be homebuyers wary of the economy and the housing market are opting to rent. This is helping drive up the cost of renting nationwide. Large metropolitan cities like nearby San Francisco and Oakland have been hit particularly hard by increasing rental prices. It seems like the shadows of the housing crash are still looming over us as buyers’ fears of a second downturn continue to have unexpected effects on the housing market.
It’s not just the big cities feeling the squeeze. In some cases the average rental price in Placer County for a 2 bedroom unit rivals prices in San Francisco County. While residents of San Francisco may find themselves with no other options, as housing prices remain relatively high in the city, renters in Nevada and Placer County do have another attractive opportunity. With the allure of affordable housing prices, cities such as Roseville, Rocklin, and Granite Bay are likely to see an increase in home purchases as many buyers’ worries are quickly overshadowed by the weight of their monthly rent payments.
Higher rents mean it’s a good time to be a landlord as well. If you are looking to purchase a second home as an investment property, now is an excellent time. With a low interest rate on a mortgage and the ability to earn top dollar from tenant rents, it is easier to see greater returns from an investment property.
Stop throwing your money away on Rent!
Today’s housing market has a lot going for it: increasing rents, record low interest rates, drastically reduced down payments, and (most importantly) reasonably priced homes. The latest CoreLogic Housing Price Index reports housing prices are still more than 20% below their pre-bubble peak. Regardless of what the market is going to do tomorrow, the conditions today are hard to ignore. Going back to Trulia’s interactive Rent vs. Buy map, we can see that with a 4.5% mortgage and five years invested in a home it’s 22% cheaper to buy a home than it is to rent in the Sacramento Metropolitan Area. That is hard to ignore.
The next quarterly Rent vs. Buy report is due out soon. Will average rental prices continue to climb or will increased demand in the sales market finally start to slow the increasing cost of rent?
Read MoreEureka Schools Foundation is more important than ever for Roseville and Granite Bay Public Schools
Granite Bay and Roseville are two Placer County communities that go above and beyond the call of duty when it comes to education. Simply take a look at the work of the Eureka Schools Foundation (ESF) to find evidence of that dedication. For 21 years now the Eureka Schools Foundation, a non-profit foundation funded by donations from local businesses and private individuals, has been helping to enrich the lives of students and teachers in the Eureka Union School District (EUSD) by providing for additional programs not funded by the State’s budget.
Each year the Eureka Schools Foundation raises hundreds of thousands of dollars for EUSD through a number of community-based fundraising events. These events include an online and live auction, a student art auction, pledge drive, golf tournament, and the annual 5k/10k run. Local businesses and individuals are presented with various ways to help give to the organization and get involved with the community.
You might think that communities like Granite Bay or Roseville should have no problem funding their public schools due to a healthy property tax base. However, since before ESF’s inception, California’s outdated school budgeting program has left many districts far short of what they need to succeed; EUSD is one of those districts. In July Governor Jerry Brown signed the most sweeping (and controversial) change to California’s public school budgeting formula since 1972. The newly-created Local Control Funding Formula (LCFF) is intended to provide a more equitable funding model and to effectively pay back the deficit created by years of deferred payments. The formula replaces revenue limits with base grants per pupil, plus supplemental funding provided via percentage “weights” for students who are English learners, from low-income families, or in foster care.
Under the previous Revenue Limit budgeting system, established in 1972, the demographics and property tax base of the Eureka Union School District resulted in a yearly budget that fell far short of the needs of its students. Additionally, after years of insufficient funding and deferred payments, whereby the State re-allocated money belonging to California public schools to other government programs, EUSD and every other district in California found itself receiving less than 80% of the monies it was owed each year. In 2012 the amount of the deficit created by these deferrals was $10.4 Billion statewide. This deficit is what the LCFF is aimed at reconciling over its initial 8 year period. While this is an appropriate objective, the manner in which the LCFF model proposes to pay back the money the State had been deferring, means that many districts are likely to find their budgets varying greatly from year to year. There will also be wide variance in the funding levels between districts, as the LCFF is based on population demographics and not size or academic performance.
What does this mean for the Eureka Union School District? “The unpredictability of the LCFF budgeting model over the next 8 years means the Eureka Schools Foundation is more important than ever in maintaining the excellent educational standards that EUSD has established,” says Melody Glaspey, Chief Business Officer with EUSD, “Each year the Eureka Schools Foundation is there to fill in the gap created by the State’s public school funding.” Indeed every district should strive to achieve such high standards but without proper funding it is impossible to provide the programs and support that students need to thrive.
ESF has always been there to fill in the gap, funding many essential programs and services like library and technology staff, music programs, before and after-school Spanish language instruction, and after-school athletics coaches. Indeed the students of the EUSD see many of the same advantages of private school in a public school setting. In 2012 the record $669,000 donation made by ESF to the district prevented the School Board from having to lay off librarians while a nearby district was forced to let go of 24 teachers. In June ESF announced that they would be donating $301,000 to the Eureka Union School District for the 2013-14 school year.
ESF doesn’t just provide grants to educate and enrich the students of the EUSD. ESF’s Summer Institute program provides advanced summer instruction to EUSD teachers in “21st century teaching practices”. These courses are designed to inform teachers about new technology and new developments in classroom education, helping to enrich teachers’ knowledge and experience as well as the students’. “Our aim is to keep teachers sharp and motivated so they can create a positive educational environment for EUSD students,” says Mark Goozen, President of ESF. “This dedication is reflected in the high test scores seen throughout our district.” The schools in the Eureka Union School District are consistently ranked among the best schools in Placer County and the State of California.
The Eureka Schools Foundation strives for transparency by publishing a list of all the programs funded by ESF grants each year and cost of those programs. The funding grants for the five school years can be viewed on their website.
What the final verdict will be on the new LCFF model is unsure. What is clear though is that even with this new funding model the budget gap faced by the Eureka Union School District isn’t going away in the foreseeable future. Thankfully the community members of Roseville and Granite Bay place a great deal of value on education and they aren’t afraid to put their money where their mouth is.
Read MoreRoseville is Placer County’s Fastest Growing City in 2012
Roseville firmly surpasses neighboring Lincoln as the fastest growing city in Placer County. Last year, Roseville grew by 1.2%, which is above the state average of .8%, and is more than double the growth rate of Lincoln, the second fastest growing city in Placer County, with a population increase of .5%. The city of Lincoln previously held this distinction as its rapid expansion during the last decade earned it the title of “Fastest Growing City” in the country in the 2010 U.S. Census.
It is likely that Roseville will continue to hold this title as Lincoln’s recent overdevelopment has lowered home values in that city, making it less attractive to developers looking to see big returns from their investments. With Roseville’s attractive real estate market, thriving economy, abundance of urban amenities, good schools, and room to expand, the city looks like it should see steady and continued growth in the future.
Despite having housing prices that are higher across the board than the national average, California’s population continues to grow even during uncertain economic times. It is important to remember how vital the California Lifestyle is to our economic well-being. As an increasingly densely populated state we need to keep our eye on responsible and sustainable growth lest we experience the effects of wide-spread overdevelopment.
Homes in Roseville are found in is the last ‘urban’ community in Placer County. The Sierra Nevada Foothills offer far more suburban and rural accommodations than the areas surrounding Sacramento. With more than twice the residents of neighboring cities in Placer County, a strong revenue base, and a variety of shopping and entertainment attractions, Roseville will continue to be the magnet city for the region and the leader in growth for Placer County.
Read MoreNational Housing Price Index up 10.5% from March 2012. Is this Another Bubble?
Even with unexpectedly strong increases in housing prices in the last 12 months, there’s still room for growth in the housing market. But how much?
The latest Core Logic Housing Price Index (HPI) data shows that national housing prices in March 2013 are up 10.5% from March 2012. After 19 months of consecutive decline in the year-over-year HPI, March 2012 showed a 1.13% increase over March 2011. For the last 13 months up until March 2013 that number has steadily increased to 10.54% based on the latest data. At first glance it may appear that we are seeing the beginning of another bubble, however appearances can often be misleading.
As Paul Diggle, Property Analyst for Capital Economics notes in the article, “…if house prices and incomes continued rising at their current rate, the house price-to-income ratio wouldn’t return to its long-run average until 2017.” It took the housing market 4 years to reach the dizzying heights of its peak just before the crash. This single year increase of over 10% is nothing compared to the unbridled increases we saw in the early 2000’s.
A quick look at CoreLogic’s data shows several states saw annual growth that EXCEEDED 10% for 3 consecutive years. Let’s take a look at an example of what that kind of growth means. A home purchased in 2002 for $500,000, would be able to sell for over $665,000 by the end of 2005. Growth like that simply can’t go on forever. If the trend had continued that same house would be worth around $1.3 Million today. If that is the type of return on investment you’re looking for in the housing market then you need to reconsider your investment plans
Markets reward those with patience. Remember when the U.S. Stock Market was falling with seemingly no end in sight? Well that same market is once again back to its old value and reaching for a new high. And that is what is driving the housing market these days: patience. Long gone are the days of homebuyers expecting to sell their home a year after purchasing it for a profit. Instead a new kind of apprehension and respect for the market has settled in, and that doesn’t leave much room for those looking to squeeze quick profits from the market.
In a statement made 5/16/13 CoreLogic predicts, “Home prices projected to increase 3.9 percent annually over next five years, following a 7.3 percent rise in 2012.” That is exactly the kind of consistent and healthy growth we’ve been looking for from the U.S. housing market since the crash. With regular scrutiny of the CoreLogic data we will continue to track this trend as we wait and see if their predictions ring true.
Read MoreRoseville Hosts Monthly Food Truck Mania
Sacramento Mobile Foods (SactoMoFo) hosts monthly Food Truck Mania in Roseville. This eclectic culinary event occurs every 2nd Thursday at the corner of Washington and Vernon in the recently revitalized Downtown Vernon Street Shopping District. The next event will be Thursday, July 11th. As Roseville continues to encourage new and exciting community events it will ensure the city maintains its reputation in the region as a destination for entertainment, shopping, and modern culture.
Roseville Embraces the Food Truck Revolution
Food trucks are California’s answer to the wildly popular street food vendors found throughout the busiest streets in Manhattan. The success of mobile food trucks was aided by social media as the forerunners of this craze started using Facebook and Twitter to announce their whereabouts. Now, food truck events have sprung up in every city in the country. The social media influence on this newly formed American tradition has helped these events build a stronger sense of community as it provides residents with an opportunity to enjoy a wide variety of foods right in their neighborhood.
Unlike street fairs or farmers markets which generally involve a great deal more planning and set up, food truck events can almost appear out of nowhere. A typical street corner can quickly transform in to a festival of every type of food from vegan cuisine to gourmet grilled cheese. Some of the trucks that can be seen at Food Truck Mania include; Krush Burger, Drewski’s Hot Rod, Knucklehead Hot Dog Diner, Smoothie Patrol, and Volkswaffle.
Food Trucks are also a great way to provide catering for larger community and private events. If you’re looking to book 3 or more trucks for an upcoming event SactoMoFo can help. Food trucks can easily provide a number of meal options with significantly less hassle. “With a variety of cuisines all built in to one event, and no additional equipment to rent, our services showcase the Greater Sacramento Area food scene while easily adding gourmet value to your event,” says Paul Somerhausen, Coordinator at SactoMoFo.
For a list of the trucks that will be attending the next Food Truck Mania event or to book their trucks for your next event head over to the SactoMoFo website.
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