Rents continue to rise in South Florida, increasing 3.5 percent in July compared to the same time last year. A three-bedroom home is now going for a median of $1,771-a-month according to a Zillow study of Palm Beach, Broward and Miami-Dade counties.
Whether it’s better to buy a home instead of renting_ if you can out-compete the cash investors _ depends on how long you plan to live there and what city you’re buying in.
Seattle-based Zillow has come up with a measure called the “breakeven horizon.” Basically, it’s how long you have to live in a home before it makes more financial sense to buy it.
For example, in Boca Raton last month the median rent on all homes was $1,987 per month. At that rate, you would have to live in a home for 2.4 years before it makes more sense to buy.
In West Palm Beach, the median rent was $1,426 on all homes, and you would only have to live in a house 1.9 years before it makes more sense to buy.
Other Palm Beach County cities include Boynton Beach (1.9 years), Delray Beach (2.1 years), Jupiter (2.6 years), and Palm Beach Gardens (2.1 years).
Zillow Chief Economist Stan Humphries said he doesn’t believe South Florida will see home price declines, but appreciation rates will slow significantly. That’s not the case for other areas in the country, including parts of California and Nevada, where Humphries believes there is a price bubble forming.
“Prepare for volatility for the balance of the decade,” Humphries said. “In periods of volatility, the best advice is provide a margin of safety in your purchase. Don’t try to extend yourself too much.”
This entry was posted
on Wednesday, September 4th, 2013 at 8:05 am and is filed under Foreclosures, Housing affordability, Housing boom.
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