Should you buy a house in Florida now or rent it out until the real estate market cools?
JACKSONVILLE, Florida – It’s a question in the heads of thousands of Floridians looking for housing this summer: should we buy a house in this overheated market, or rent and wait for things to cool down?
Real estate economist urges Floridians to rent because home ownership is too expensive right now.
Low inventories, low interest rates and historically high demand for housing have created a housing market that has not been so expensive since the onset of the 2008 economic crisis.
Jacksonville buyers are paying 23% more than they should be for a home, according to a new report released by the College of Business at Florida Atlantic University. Homes in Tampa are 32% overvalued, those in Orlando by 21%, and those in Miami by 16.9% overvalued.
Florida Atlantic University real estate economist and associate dean Ken H. Johnson points out that the investment market is stronger and more stable than the housing market, which is why he urges Floridians to rent instead. to buy.
“Individuals should consider renting a property of a similar type and then reinvesting the money that they would have spent on a down payment, property taxes, maintenance insurance, etc., and take that money and invest it, and it it won’t be that much of a difference, it’s a better way to go now, ”Johnson said.
Johnson said the cost of renting a home in Florida has also gone up, but not as much as the price of homes, which in many circumstances sell for more than they value. Johnson says the higher the price you pay today, the harder it will be to get a return on your investment.
“Right now, home prices are so high and appreciating so quickly in Jacksonville that it might be time to rent and reinvest. On average, buying and renting are close, but renting and reinvesting will win, ”Johnson said.
Johnson has said he expects house prices to stagnate eventually. He doesn’t expect the economic bubble to burst like it did in 2008, but predicts that interest rates will slow things down.
“Rising interest rates will likely trigger the slowdown, we’re not going to build enough homes, properties fast enough, or stop people from moving to Florida, that’s going to be an interest rate trigger that will cause things to go wrong.” as a state as a state. while moderating housing prices, ”he said.
To put it in perspective, how quickly Jacksonville home prices are appreciating.
Just two months ago, Jacksonville homes were 18% overpriced, and now they are 23%.
Of course, Johnson’s advice isn’t for every family in every situation, but if you can afford the wait to buy it could save you thousands of dollars.
Copyright 2021 by WJXT News4Jax – All rights reserved.