Buy vs. Rent Report – Virginia Beach

It’s true – nationwide real estate values are rising, and the advantages of buying over renting are beginning to squander. But, that doesn’t mean prices are rising everywhere in the country. In fact, it is the perfect time to buy in Virginia Beach, where the local housing market reached bottom in March of 2014, a full 18 months after the first US markets hit their low.  rent vs buy virginia beach

Due to this lag, the median sales price of Coastal Virginia Beach homes just surpassed their peak of $257,000 in September 2013. While the Federal Reserve recently increased interest rates by a quarter point in June, mortgage interest rates remain historically low.

The current median sales price of a home in Virginia Beach is $260,000 while the median rent is $1,500.  Assuming a 20 percent down payment on a mortgage with 4.35 percent interest rate, it is 26 percent cheaper to buy than rent in Virginia Beach at the city level.

That number will vary for Virginia Beach neighborhoods like Dam Neck, Northwest, and North Central – but which one offers the best value to prospective homebuyers? Each neighborhood area offers different quirks, desirable amenities and home prices, but the best value is up to you to decide.

Rent vs. Buy Virginia Beach – A Comparison

 

Median Sales Price

Median Rent Price

Buy vs. Rent

Virginia Beach

$266,000

$1,500

+27%

Dam Neck/Southeast Virginia Beach

$421,000

$2,950

+41%

Northwest Virginia Beach

$241,000

$1,425

+28%

North Central Virginia Beach

$319,000

$1,500

+10%

 

 Dam Neck Area

Located close to the Oceana Naval Air Station and home to the Virginia Beach Aquarium and Science Center, Dam Neck offers some of the best value for current renters opting to buy. It is 41 percent cheaper to buy than rent in the Dam Neck/Southeast Virginia Beach area. The median sales price of home is $420,000 and the median rent is $2,925.  Perceptive renters could save as much as $13,000 when choosing to buy than rent.

Northwest Virginia Beach

Go kayaking at Chic’s Beach or experience of the many activities available at Mt. Trashmore Park.  Active residents might want to buy in this great area especially since it is 28 percent less to buy than rent in Northwest Virginia Beach. The median sales price of homes in Northwest Virginia Beach is around $240,000 while the median rent is $1,425. Choosing to own and not give all your money away to a landlord or property management firm could net a $375 monthly savings.

North Central Virginia Beach

North Central Virginia Beach includes the subdivisions of Lynnhaven and Kings Grant.  It is just minutes away from the Lynnhaven Mall.  The choice between renting and buying in this neighborhood is a little tougher but for those who prefer to live close to shopping buying is still a payoff compared to renting. 

With a median sales price just under $320,000 and a median rent price of $1,500 it is 10 percent cheaper to buy than rent in North Central Virginia Beach.  Interest rates would have to increase another point before this neighborhood reaches its break-even point.  For those interested in this neighborhood keep a keen eye on its affordability and budget appropriately with this home affordability calculator.

Virginia Beach offers something for everyone.  Whether it is living near the beach, finding an active neighborhood or living close to shopping, renters should consider owning.  To start a home search and learn more about homeownership call us at 757-343-4949 or reach out online.

 

*This calculation also assumes owning a home for seven or more years and an income tax rate of 25 percent.