SARASOTA, FLORIDA, August 2nd, 2016 – It makes more sense to buy a home rather than rent a residence in Florida, according to GOBankingRates.com, a personal finance website which tracked monthly rents and monthly mortgage payments across the U.S.
The website, in a study released in July 2016, ranked the top states where homeownership is cheaper than renting through a comparison of median listed sale prices and median rent prices for single family residences in each state. For the median list price of homes, the study assumed a 20 percent down payment plus a 30-year fixed-rate loan term. Also included in the assumptions are insurance costs and property taxes.
Taking all these into consideration, the study found out that owning a home is cheaper than renting in 42 states. It is in only eight states and the District of Columbia where renting has the edge over homeownership, according to GOBankingRates.com
Florida came out sixth among the top 10 states where owning a home is better than renting. The website estimated that owning a home in Florida would save $398 monthly compared to living in a rented residence.
Mortgage rates currently trending near historic lows and recent strong gains in rental rates for single family homes and apartment units should further broaden homeownership’s edge over renting. In Sarasota and Manatee during the 2016 first quarter, average monthly rent for a three-bedroom single family home was estimated at $1,418, up 3.7 percent or by $50 from a year earlier. Monthly rent in 2015 for a two-bedroom apartment in Sarasota and Bradenton rose 8.8 percent and 5.2 percent, respectively, compared with the 4 percent increase across the U.S.
Sluggish wage growth though could be a dampener in a marked shift of more renters turning into actual buyers of Manatee or Sarasota homes for sale. Weekly wages was estimated to have increased by just 3.1 percent in Sarasota and by 5 percent in Manatee during the first quarter of 2016.
On a longer timeframe, the research firm RealtyTrac estimated a 4.2 percent wage growth in the North Port-Bradenton-Sarasota metro area compared with a 14.7 percent increase in home prices in 2015. This translated into a 3.48-to-1 ratio of home price appreciation to wage growth last year, placing our metro area in the 89th spot amongst 184 statistical areas surveyed nationwide.
Be that as it may, there is a school of thought on home affordability contending that the need for an alignment between average home prices and average wages is a myth. In a recent forum on affordable housing, Adrian Moore, Ph.D., vice president of Reason Foundation and a Sarasota resident, pointed out that the characteristics of the labor and housing markets are not the same.
Moore underscored the high mobility of the labor market wherein the workforce constantly shifts for better pay, resulting in rapid change in labor supply and demand in the local, regional, and national economy. The housing market, on the other hand, is not as mobile and its demand and supply factors change much slower, particularly its supply component, he added.
He said what is clear in home price gains outstripping wage growth is that workers are willing to take jobs in the region although salaries for many of these positions are below the amount needed to afford Manatee or Sarasota homes for sale.
A comparison of average salaries to home prices, Moore argued, assumes that those trying to buy houses are only single-worker households. This is typically not the case at the affordable housing price points, he observed, saying that many households have combined income with two partners working.
Moore further suggested that workers, particularly the younger generation still growing their careers in the region, do not have renting as their only option in looking for affordable housing. They can also consider purchases of smaller housing, older fixer-uppers, or buying in neighborhoods with longer commutes to and from their workplace, he said.
SARASOTA, FLORIDA, October 7, 2019 – Property values of communities in the Sarasota-Manatee region now face lesser threat from neighborhood eyesores brought about by abandoned, foreclosed homes. Known in the real estate trade as zombie foreclosures, these properties have shrunk significantly in the region. According to an August report of ATTOM Data Solutions, abandoned […] more>>