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Buy or rent a home in South Florida? Real estate experts have the answer

·2 min read

Contemplating whether to buy or rent a home in South Florida? Three real estate experts say you should rent since they anticipate eventual price decreases on houses for sale.

Residents of Miami-Dade, Broward and Palm Beach counties would be better off renting now and saving to buy later after steep housing prices, already softening in certain cities, further decline. That’s according to the latest Florida Atlantic University and Florida International University’s quarterly report released Wednesday comparing the costs of buying and renting.

Business professors Ken H. Johnson, Eli Beracha and William Hardin analyzed third-quarter changes in home prices, rents, mortgage rates, investment returns and property insurance costs in 23 U.S. metropolitan areas, including South Florida. Based on the data, they made buy or rent recommendations.

In Miami-Dade County, median sales prices have trended down for condominiums since August, while single-family home prices have fluctuated after reaching a historic high of $515,000 in April. Home prices have fluctuated in Broward with $489,000 the single-family median price for October, up 17.8% from a year ago. In Palm Beach County, the single-family median home price jumped 19% to $500,000 in October.

The report is meant to help prospective home buyers and renters make informed decisions, FAU’s Johnson said in an interview.

“Do you want to pay an 18% markup? The average price should be 18% below the median of what the Miami Association (of Realtors) is putting out,” he said. “If you are buying now, you are buying near the peak (of this housing cycle) and it is hard to get a return.”

It might be awhile until it’s advantageous for consumers to buy a home in South Florida instead of rent. The last time that occurred in South Florida’s housing market was in 2015, Johnson said.

He and the other two real estate experts also recommended renting homes rather than buying in Dallas, Denver, Houston, Kansas City, Seattle, Pittsburgh and Portland, Oregon.

In South Florida and those other cities, renters should invest their money in the stock market, he said.

“Sit down with your financial advisor and determine the mix of stocks and bonds,” Johnson said. “It should perform a little bit better than the equity gain in your home.”

However, buying could be a better option if you’re looking at housing in Atlanta, Boston, Chicago, Cincinnati, Cleveland, Detroit, Honolulu, Los Angeles, Milwaukee, Minneapolis, New York, Philadelphia, San Diego, San Francisco and St. Louis.

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