Buying Versus Renting In and Around Wilmington

After the housing market crashed in 2008, many buyers are understandably skittish. Homeowners saw the value of their homes plummet in some situations, and new buyers saw the dream of home ownership suddenly slip beyond their reach. However, a lot has changed since 2008, and there is no better time to think about buying in Wilmington, NC.

Intracoastal Realty

What Makes Wilmington Special

As of Fall 2014, the average list price of a home in Wilmington was nearly $290,000 for homes, condos and apartments. This means that, on average all over Wilmington, buyers are paying around $127 per square foot depending upon the location and size of the property. Although housing recovery has been sluggish across the country, Wilmington is showing signs of growth. The average price per square foot rose by 3.3% since 2013. The median price of a home is also on the rise, increasing by 1.5%. This increase in value is paired with a decrease in homes on the market as fewer distressed properties are listed over time. With this recovery, home values should rise steadily over the coming years.

Rent or Buy: Doing the Math

While it is clear that Wilmington is an attractive city, it may not be clear whether renting or buying is the best option. Some people may be reluctant to buy since it requires more cash upfront and often entails more commitment. However, all indications suggest that renting is still far more expensive, especially with the rise in rent over the past year nationwide.

The federal government has kept interest rates low in order to encourage buyers. This means it is possible to secure a mortgage which is cheaper than the average rental property. The margin of this savings will vary regionally. For example, areas like Hawaii have very little difference in the cost of renting and buying. In Los Angeles, buying often provides a savings of almost 25%.

And then you hit the subject of buying a vacation home instead of renting annually and it becomes a whole different ballgame. In this situation it is more of a personal decision. If you purchase a second home and pursue the rental market wisely you will end up making money ini the long run which is a fantastic option.

 

What This Means for You

For those buying their first home, this purchase is an investment. Since rental prices are higher than the average mortgage, the extra upfront costs are worthwhile in order to accrue long term savings. More importantly, homes in the area are retaining their value well, so selling later on should not be difficult.

When thinking about a vacation home, it may be hard to justify a downpayment for a property that is not used all year round. However, prices for good vacation rentals are particularly fierce, which means the savings month to month on a mortgage is going to be even more pronounced. Besides, owning the property gives you the freedom to rent it out to others, which can easily compensate for any costs and then some.

Overall, Wilmington is a vibrant community that shows no signs of slowing down. With the market in full swing, there is simply no better time to make a purchase and invest in this impressive city.

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