Should you purchase or lease property in Central Florida?
While we might have a soft spot for Central Florida, it's undeniable that it's a prime location to settle down. With its pristine beaches, renowned amusement parks, consistent pleasant weather, cost-effective living, and a plethora of job opportunities, Central Florida is a top choice for many. Given the current real estate trends, you might wonder – is purchasing property more economical than renting in Central Florida?
The concise response? It's a good time to buy!
Recent statistics from Realtor.com suggest that in over half of America's major markets, buying a beginner's home is more cost-effective than renting. This study revealed that in 26 major cities, the monthly expenses of owning a home were 20.6% less than renting, translating to an average monthly saving of $323. Impressive!
Rent trends post-pandemic
Escalating Rent Prices As of January 2022, for eight consecutive months, rent for properties with up to two bedrooms has seen a double-digit increase. In the top 50 metropolitan regions in the U.S., the median rent surged by 19.8% from the previous year, with the current median rent standing at $1,789 monthly.
In contrast, the median price for a beginner's home in these markets rose by 9.5% annually. Considering the current mortgage rates, this represents only an 11% hike in ownership costs, as opposed to the 19.8% surge in rent.
Most of these rent hikes are evident in the Sun Belt, implying that in Florida, where we construct new homes, buying is generally more economical than renting.
To be more specific, both Tampa and Orlando from Central Florida are among the top 10 U.S. markets where buying is favored over renting. Tampa is ranked 9th, while Orlando holds the 8th position. Additionally, these markets rank 2nd and 3rd respectively for rent price hikes, with Tampa seeing a 37.5% annual increase and Orlando a 34.8% rise.
Spotlight on Tampa, Florida
In Tampa, the current median rent is a staggering $2,070 monthly. In contrast, owning a home costs about $1,543 monthly, resulting in a significant monthly saving of $527 or 25.5% for homeowners. This trend isn't recent; a year ago, we highlighted the cost benefits of buying over renting in Tampa. Back then, the average rent was roughly $1,600 monthly, with homeowners saving an average of $111 monthly. Clearly, Tampa consistently leans towards property ownership.
Tampa's property market thrives due to its affordability relative to other major Florida cities, its economic progress, and its prime location along Florida's Gulf coast. However, this robust market also means heightened competition for properties.
One solution to bypass this competition is to opt for a new build. While builders are grappling with high demand, you might have to wait a bit, but you'll avoid the hassle of constant house hunting and potential bidding wars. Plus, there's nothing like the satisfaction of being the first owner of a brand-new property.
Highlight on Orlando, Florida
In Orlando, the heart of Central Florida, the current median rent stands at $1,820 monthly, while owning a home costs about $1,327 monthly. This translates to a 27.1% saving for homeowners, or an average monthly saving of $493.
Orlando is globally recognized for its theme parks and as a tourist hotspot. However, it offers much more, from a bustling downtown to serene suburbs, picturesque lakes, parks, and consistent sunshine. All these factors contribute to Orlando's rapid growth and its position as Florida's third-largest metropolitan area.
If you're keen on settling in the Orlando region, there are new properties going live every day! Give us a call to start your home search.
Interested in exploring the financial benefits of HOME OWNERSHIP in Central Florida? Our team of Florida Home Experts is here to assist. Reach out to us today!
