Real Estate News

To rent or to buy? The answer may depend on timing

This three-bedroom, 2 1/2-bath townhome in Coconut Creek measures 1,769 square feet. Redfin Realty has listed it for $309,000.
This three-bedroom, 2 1/2-bath townhome in Coconut Creek measures 1,769 square feet. Redfin Realty has listed it for $309,000. Redfin

Perhaps you’re tired of that scruffy college apartment and want something more sophisticated. Or maybe you’ve started a family and need extra room. You might even be nearing retirement and thinking of downsizing.

From millennials to baby boomers, South Florida’s population is growing — and so is the demand for housing. According to the Florida Chamber of Commerce, more than 550 people move into the Sunshine State every day, with most heading for South Florida.

That has led to a boom in new apartment, condominium and single family home construction. Yet even with all those housing options, it’s still no simple task to find the right place to call home. Just ask Angel Oyola.

“It’s just very competitive right now,” said the 31-year-old Oyola, a property manager who spent about six weeks searching for the perfect apartment. The number of new rental properties on the market — and the different incentives offered by rental companies — have made finding an apartment confusing, he said.

“It’s not easy to pick a place you like because, at the end of the day, you’re left with so many options,” Oyola said. Although he initially was searching for a one-bedroom apartment, he was pleased to find that a two-bedroom, two-bath pad in a gate Fort Lauderdale community with high-end amenities — including granite counters, stainless steel appliances and a community gym and pool was well within his $1,600 monthly budget.

Erin Ruiz has the opposite problem. She and her husband, Irving, were looking to trade up from their villa to a larger place, only to find that shopping for a single-family home can be competitive, with cash buyers scooping up entry-level properties often on the first day a house hit the market.

“We’d see something we liked and go to put an offer on it, but the next morning it was gone,” said Ruiz, owner of Cupcake Couture Cupcakery, a Fort Lauderdale cake and cupcake supplier. After a six-month search, the couple found a three-bedroom, two-bath fixer-upper in West Lauderhill for $185,000.

Amanda Burns is still looking for her dream home. The director of video services for Florida Atlantic University put together a five-year plan to become a homeowner, but she has yet to find a three-bedroom home with a garage in a good neighborhood priced in the $200,000s. Although she expanded her search from Boca Raton to Delray, Coconut Creek and Deerfield Beach, she just can’t seem to beat the competition. In the past six months, she lost out on three properties after cash buyers stepped in and scooped up the homes she was planning to buy .

“I have every possible [real estate] app on my phone and I’m constantly checking to see if anything pops up,” said the 34-year-old first-time home buyer. “I’m just trying to stay on top of things.”

So are scores of other South Florida home buyers and renters.


Ask any Realtor, rental agent or mortgage broker, and all will tell you the same thing. Whether you rent or buy depends on three things: your preference, your pocketbook and your penchant for permanence.

“It all depends on what you are looking for,” said Ellen Mitchell, president of the Miami Association of Realtors, Broward Council.

Renting appeals to people who prefer a more carefree lifestyle or those who like to live without the responsibility of mowing the lawn or making home repairs. It’s also the better option for millennials and others who expect to change jobs or relocate in the next few years, said Hansen.

But there are drawbacks.

Tenants also are at the mercy of landlords when it comes to repairs. And rentals come with one-time expenses that can add up, such as a security deposit as well as the first — and sometimes last — month’s rent; moving costs and any fees charged by rental agents. Recurring costs include utilities and renters’ insurance.

What’s more, rents in the South Florida market are are on the upswing, a trend that Mitchell said is expected to continue. In Miami, the median cost of a two bedroom apartment is about $1,900 per month; in Broward, it is about 1,700 per month, according to the real estate site The money simply goes down the tubes, without building equity.

That equity is part of the attraction of home ownership. If the market stays at the price you paid or — better yet — increases, a homeowner may be able to recoup the investment or even build wealth if they stay in the home long enough. (Most experts recommend staying at least five years for a purchase to make sense.)

Financial incentives help. Along with the federal tax deduction for mortgage interest, Florida’s homestead tax exemption reduces the taxable value of a home by $50,000. The state’s Save Our Homes provision limits property tax increases to 3 percent annually. Some lending institutions offer first-time buyer programs at special terms. And the costs of the monthly mortgage payment remains flat for a fixed period time.

Federal tax deductions can offset those expenses, but you may have to wait a year before you see any real payback, money managers said.

Buying also comes with one-time expenses — closing costs, inspection expenses, appraisal fees — plus ongoing fees including utilities, property taxes, private mortgage insurance, windstorm and property insurance, lawn and pool maintenance. It can all add several thousand dollars per month to the cost of ownership, said Edward Wilburn, managing director of First Equity Mortgage Bankers Inc. in Miami.

And without a sizable down payment — often 20 percent or more — and a good credit history, mortgage firms may balk at making loans, Realtors said. In Miami-Dade, the median sales price for a single-family home rose to $305,000 in December; condo prices were at $210,000, according to the Miami Association of Realtors. In Broward, the median single-family home price was even higher, at $320,000, while condo prices were $149,700.

In South Florida, finding an entry-level home can be the harder task.

Competition between international buyers, cash buyers and first-timers has spurred price hikes, bidding wars and all-cash purchases that have made properties under $200,000 difficult to find, realtors said.

Buyers have better luck finding upscale properties like those listed above the $350,000 mark simply because they are not as sought after, said Julie Van Pelt, a real estate agent with Century 21 in Fort Lauderdale.

““I tell buyers if you even want your offer to be considered, you are going to have to offer full offer price or maybe even above that. And you’re going to have to negotiate if the appraisal comes is lower,” she said.

Owning a condo brings some simplicity; monthly maintenance fees cover costs (and hassles) associated with maintenance of green space and common-use facilities. But would-be condo owners sometimes face difficulty getting low cost loans because under federal guidelines, condo associations must set aside at least 10 percent of their annual budget in a reserve fund. Some communities can’t afford it, said James Monninger, a loan originator with Hamilton Group Funding in Sunrise. Others are too expensive to qualify.

Condos can come with other complexities: special assessments for upgrades or refurbishment, and the politics of living in a group scenario.

Yet, perhaps the best advice may be the simplest of all.

“Make sure you are comfortable with the expenses you take on,” advised Wilburn, “because you are going to be the one to make those payments, hopefully without changing your lifestyle.”.

Prices still on the rise

Home prices

Miami-Dade Realtors listed 14,810 condos and townhouses and 6,605 single-family homes on the market in December. While the number of sales has been falling, prices are still edging up. The median sales price was $305,000, up 9.5 percent over December 2015. Condo prices inched up to $210,000, up 1.3 percent.

In Broward, Realtors listed 5,119 single family homes and 8,291 townhouses and condos on the market. The median single-family home sold for $320,000 in December, up 5.9 percent year-over-year. Condo prices jumped to $149,700, up 13.4 percent.


In Miami, the median monthly rent for a one bedroom apartment in December 2016 was $1,800 (down 1.1 percent over 2015) while a two-bedroom apartment went for $2,500 (even with 2015.) Out of 50 cities nationally, Miami ranked as the ninth most expensive rental market in the country, according to research by Zumper, an apartment rental site.

Fort Lauderdale ranked No. 13, with a median rental price of $1,500 for a one-bedroom apartment (up 6.4 percent over 2015) and $1,880 for a two-bedroom (up 2.7 percent.)