Here is a helpful property management tip if you are a Fort Lauderdale resident looking for a new place to live, it is better on your budget to rent than to buy a home right now. Some South Florida professors are reporting that renters may have a better chance at saving money than homebuyers.
Two South Florida professors created a “Buy vs. Rent” index. They concluded that it may be cheaper to rent right now than to buy a home with the nation’s housing market, especially Fort Lauderdale, reaching the top of its price cycles.
Ken Johnson, who is a real estate economist at Florida Atlantic University and one of the two professors who created the index, spoke to the Sun Sentinel about renting vs. buying a home in South Florida during this market time.
Johnson said that the money saved by renting should be spent wisely. He encouraged renters to reinvest their savings in stocks and bonds.
“We see people shifting into renting. We don’t see any signs that this is going to be like 2007, where we’re going to have a market crash in terms of housing prices,” said Johnson to the Sun Sentinel.
Johnson said that the quarterly Beracha, “Hardin & Johnson Buy vs. Rent Index” was made in order for property management companies, real estate agencies, and residents to see if they should be renting or buying during this market time.
The index reveals if the market conditions favor buying or renting a home by looking at the variables of wealth creation over a fixed period of time and relating that to historical market conditions and alternative investment opportunities.
The index that Johnson helped create zeros in on 23 major housing markets in the United States including Miami. The Miami market area incorporates Palm Beach, Broward, and Miami-Dade counties.
In addition to Miami, Atlanta, Denver, Dallas, Honolulu, Houston, Kansas City, Los Angeles, Minneapolis, Pittsburgh, Portland, San Diego, San Francisco, Seattle, and St. Louis were analyzed for the creation of the index.
A lot of the 23 metro areas that were focused on are now close to being at the peaks of their current price cycles. According to Johnson, this may mean that they are projected to go above the historical pricing trends in that region.