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Better to Buy or Rent in Palm Beach County?

Better to Buy or Rent in Palm Beach County?

The rental market has been absolutely bonkers!  Everyone puts a plea out on social media to help a nice person who can’t find a rental and is looking to stay in the area.  Sadly, there are no secret giveaway deals as landlords aren’t in the charity business and their costs have gone up greatly.  For a while though renters really were way under market and while they didn’t collect on the equity rise, they did have a good deal throughout much of the pandemic.  But the tide has changed.

This week I was interviewed by the Palm Beach Post on whether it was better to buy or rent in Palm Beach County.  The answer is that it’s even but trending toward purchasing.

The first part to answer that question is that it always depends on your individual situation. If you are testing where you want to land or not sure if you might relocate, then renting is always the safe bet as there are lots of costs associated with moving.

However, if you know where you want to be and want some stability in pricing and not moving, then buying is the right thing to do.  Here you can check out all the rentals in the MLS versus homes for sale.

The second part is it’s probably favoring purchasing over renting now. Here is why. ….

  1. When the pandemic first occurred, rental rates took a long time to catch up to resale values. So, renting was far and away the better the option. One by one from mid-2020 to mid-2022, rental contracts that were sometimes 50% under market value came up for renewal and moratoriums on eviction from the pandemic were lifted.  The landlord owners have either sold some of those properties and cashed in or raised the rent to market value. Taxes and other costs have also gone up and those have to be passed on to the tenant. However, with sale prices stabilizing, rentals finally caught up. And at street level, we see it changing rapidly now in the other direction.

 

  1. A rental for a 1 bedroom in Palm Beach Gardens at the low end is $2000-$2200. A seasonal rental we just did with a golf membership in PGA jumped from $9,000 a month to $14,5000 a month. Rental prices are still rising and that is where a purchase might be better.

 

 

  1. The number of Airbnb owners has shot up greatly. This has taken homes out of the pool of longtime landlords and limited long term and seasonal rentals.

 

  1. Listing prices are really dipping even though stable. This is because we are experiencing year over inflation and the prices are not rising with it.

 

 

  1. While still a sellers’ market, inventory is significantly up in the home sale market, but not nearly as much in the rental market.

 

  1. Rates historically even at 6% are low and under the rate of inflation. You marry the house but can always date the rate if rates drop.

 

  1. When purchasing you are putting money away and don’t have to make a secondary forced move. That moving expense and anxiety cost is eliminated. Purchasing is also a safeguard against getting priced out of a marketplace. With an estimated 7,200 households a year surplus moving to Palm Beach County through the next decade, that hedges prices from dipping as our area is still a great value.

 

Search all the rentals in the MLS compared to homes for sale.

 

Jeff Lichtenstein is owner and broker of Echo Fine Properties, a luxury real estate brokerage selling real estate in Jupiter  and homes in Palm Beach Gardens, Florida. He has 20 years of real estate experience, has closed over 1,000 transactions, and manages over 70 agents in a non-traditional model of real estate that mimics a traditional business model.  Some publications he has been quoted in.

Feel free to ask him a question directly at jeff@EchoFineProperties.com including a complimentary real valuation of your home.

Posted in Open House Blog, Real Estate Tips on September 24, 2022 at 6:13 am.

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