Residents of South Florida are better off renting rather than buying homes, report says
Thinking of buying or renting a home in South Florida? Three real estate experts say you should rent because they anticipate possible price drops on homes for sale.
Residents of Miami-Dade, Broward and Palm Beach counties are better off renting now and saving to buy later after high home prices, already falling in some cities, continue to drop. That’s according to the latest quarterly report from Florida Atlantic University and Florida International University released Wednesday comparing buying and leasing costs.
Business professors Ken H. Johnson, Eli Beracha and William Hardin analyzed third-quarter changes in house prices, rents, mortgage rates, investment returns and property insurance costs in 23 metropolitan areas of the United States, including South Florida. Based on the data, they made recommendations to buy or rent.
In Miami-Dade County, median condominium selling prices have been trending down since August, while single-family home prices have fluctuated after hitting an all-time high of $ 515,000 in April. Home prices fluctuated in Broward with $ 489,000 the median price of single-family homes for October, up 17.8% from a year ago. In Palm Beach County, the median price of single-family homes jumped 19% to $ 500,000 in October.
The report is intended to help potential buyers and tenants make informed decisions, FAU’s Johnson said in an interview.
“Do you want to pay an 18% mark-up?” The average price is expected to be 18% lower than the median of what the Miami Association (of Realtors) is offering, âhe said. “If you buy now, you are buying near the top (of this real estate cycle) and it’s hard to get a return.”
It may be some time before it becomes beneficial for consumers to buy a house in South Florida instead of renting it. The last time this happened in the South Florida real estate market was in 2015, Johnson said.
He and the other two real estate experts also recommended renting homes over buying in Dallas, Denver, Houston, Kansas City, Seattle, Pittsburgh and Portland, Oregon.
In South Florida and those other cities, tenants should invest their money in the stock market, he said.
âSit down with your financial advisor and figure out the mix of stocks and bonds,â Johnson said. âIt should work a little better than the equity gain in your home. “
However, buying might be a better option if you are looking for accommodation in Atlanta, Boston, Chicago, Cincinnati, Cleveland, Detroit, Honolulu, Los Angeles, Milwaukee, Minneapolis, New York, Philadelphia, San Diego, San Francisco, and St. Louis.
This story was originally published 8 December 2021 3:34 pm.