Buying Costlier than Renting, Especially in One South Florida County
Buying a home is expensive in all of South Florida — but it's especially expensive in Miami-Dade County.
December 19, 2017 at 03:24 PM
3 minute read
It's more expensive to buy a home instead of rent in South Florida, with workers and buyers in Miami-Dade County bearing the hardest costs in the region.
There, buying a median-priced home not only takes more than half of a household's median income, but the median income itself is less than in Broward and Palm Beach counties, and in the U.S. overall, according to Move Inc.-operated real estate information website Realtor.com.
It took this year 65.5 percent of the median $46,205 household income to buy a median-priced home in Miami-Dade, Realtor.com data show. The difference between buying and renting is most pronounced in Miami-Dade County as well, with buyers spending 26.8 percentage points more on buying than renting.
The next most expensive place to buy this year was Palm Beach County, where it took 41.7 percent of the median $56,718 household income to buy a home. In Broward County, it took this year 38.9 percent of the median $55,141 household income to buy, Realtor.com data show.
The difference between buying and renting was less pronounced in those two counties, with Palm Beach buyers spending 10.2 percentage points more on buying than renting and Broward buyers spending 4.9 percentage points more on buying than renting, the data show.
“While rents are rising, the cost of ownership is rising even faster. Therefore, it's taking up more of a percentage of the median household income,” said Ken H. Johnson, a real estate economist and associate dean of graduate programs for Florida Atlantic University in Boca Raton. “And that's true in the U.S. as well as in South Florida in particular.”
The Beracha, Hardin & Johnson Buy vs. Rent Index jibes with Realtor.com's findings.
The index was created by Johnson, Florida International University Tibor and Sheila Hollo School of Real Estate director William G. Hardin III, and Eli Beracha, faculty director in the real estate school's international real estate program. It is updated quarterly to show whether market conditions make it better to buy or rent a home in terms of accumulating wealth.
For now things are pointing toward renting.
“It's becoming more and more difficult for you to build greater wealth through home ownership and building up equity as opposed to renting the same property and reinvesting in a portfolio of stocks and bonds,” Johnson said.
Yet, renting might not be the best choice for everyone, Johnson added.
“If you rent and you just spent any extra savings on consumption, sometimes I call it spending that extra money on beer and cookies, you won't create more wealth,” he said.
In that case, he added, it's better to buy.
While Miami-Dade County was the most expensive place in South Florida to buy a home this year, buyers still were better off than last year.
In 2016, it took 68.9 percent of the median $44,198 household income to buy the median-priced home, according to Realtor.com.
The gap between renting and buying also was bigger in 2016 than in 2017 when buyers spent 28.5 percentage points more to buy than to rent, data show.
It cost buyers less to become homeowners this year compared with last year because incomes increased in 2017, Johnson said.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllYacht Broker Says It 'Has Done Nothing Wrong.' Asks Miami Court to Dismiss the Case
Hyper-Reality Revisited: A Tour of Waldorf Astoria Hotel & Residences Miami
5 minute read10 Years Later, This High Court Fight Over Real Estate Commissions Is Far From Over
4 minute readBroward Judge Awards $9.9M in Attorney Fees and Costs After $33M Salmon Settlement
4 minute readTrending Stories
- 1As Political Extremism Rises, is Voter Data the Next Privacy Frontier?
- 2So You Want to be a Tech Lawyer? Consider Product Counseling
- 3US District Judge in North Carolina Will Take Senior Status
- 4From 'Confusing Labyrinth' to Speeding 'Roller Coaster': Uncertainty Reigns in Title IX as Litigators Await Second Trump Admin
- 5Critical Mass With Law.com’s Amanda Bronstad: Why Jurors in California Failed to Reach Verdict Over Zantac, Bankruptcy Judge Tables Sanctions Against Beasley Allen Attorney
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250