11 May Longer Ownership Required for Homeowning to Pay Off
For a home purchase to make financial sense, the amount of years someone needs to live in theirs is lengthening. In California, for home owning to pay off, homeowners will need to own their home for the following length of time:
- 4.1 years in San Diego, up from 3.4 in 2015;
- 2.1 years in Riverside, up from 1.8 in 2015;
- 2.2 years in Bakersfield, up from 1.7 in 2015;
- 2.4 years in Sacramento, up from 2.1 in 2015;
- 2.5 years in Fresno, the same as 2015;
- 4.1 years in Los Angeles, the same as 2015;
- 4.5 years in San Francisco, up from 2.9 in 2015; and
- 5.1 years in San Jose, up from 3.2 in 2015.
The forecast that this length of time will keep increasing, doesn’t make for great news for California homeowners and real estate professionals. When homeowners are required to stay in their home longer to make their investment worthwhile, home sales volume slows due to the decreased turnover.
Most homeowners plan to stay put more than a couple years when buying, so they aren’t as impacted. But for real estate professionals who rely on the transaction of turnover, the prospect of slower sales is a definite challenge.