Buying Verses Renting in Tampa Bay in 2017
As a real estate professional servicing the Tampa Bay area, I’m often asked the question, “So how is the market in Tampa?” and I generally answer the same way the majority of the time. “It’s very strong!” As of today, in the general Tampa area spread across multiple regions with varying value points, the median home value is $187,400. There are several indicators that show a 4-5% rise over the next 12 months overall. The median rent in the Bay area is $1,495 according to the Tampa Metro . As long as we don’t have any economic catastrophes, that prediction should hold.
In December of 2016, prices were up 16% according to the National Association of Realtors. That is another good sign if you are looking at the outlook over a specific period of time.
The other major question that I always seem to get is, “Should I buy or should I rent?” Again, my answer is usually the same. If you are looking to fulfill a short term need based on a fluid employment situation or you don’t have the funds needed to take the plunge, then a rental may be your best option. However, if you have the money and you are in a stable employment and familial situation then why not consider buying?
On occasion, renting temporarily does give you the opportunity to experiment with an area that you are unfamiliar with. This is important to do if you are moving into a new market. It gives you a chance to understand the dynamics of an area before spending making a binding commitment.
It is the consensus of most mortgage professionals that it can up to three years of market appreciation before a new home owner can overcome the upfront closing associated with closing on a new home.
For residency of more than three years, I strongly recommend buying, especially if you’re looking at homes priced up to $300,000. There is a basic formula that can help. How much would the home you want to buy rent for? If renting that home would cost more than the mortgage (plus taxes and PMI), it’s probably a good bet to buy.
In the Tampa Bay area considering the variables including a down payment of 3 percent, a market appreciation of 3 to 4 percent annually, and a minimum of three years in a home should be the determining factor in Buying vs. Renting.
As a matter of fact, 90 percent of the communities in the Tampa Bay area, rent prices are higher than the equivalent mortgage prices. Here are some other things to consider (see pros and cons of buying and renting below) Also, if you are interested in talking with a qualified mortgage professional to see what you qualify for, give my partner Jeff Mioduszewski at Waterstone Mortgage a call. He would be happy to help you! (813) 300-7610. Waterstone-JeffM.com
Any additional questions, please contact me (Thomas Towns) at 727-455-4318.
Renting – Pros:
- Flexibility in time/location
- Not locked in past your lease term
- Landlord responsible for maintenance
- No exposure to market instability
Renting – Cons:
- Generally more expensive for the same size/type of dwelling
- Rent can increase annually
- Initial costs often include a security deposit and first/last months’ rent
- Landlord can sell the property
- Generally not much control over decorating/improvements
Owning – Pros:
- Generally costs less per month than renting
- Builds equity over time
- Historic average appreciation of 3 to 4.5%
- Income tax savings – you can itemize and deduct property taxes and percentage paid. Also, there are possible additional tax savings for first-time home buyers through the Florida Housing FTHB Tax Credit
- You typically decide how long to stay
Owning – Cons:
- Down payment can be tough to save for
- Maintenance is your responsibility
- You can’t control market values