Rent, do not buy! (Tampa, Coral Springs: for sale, rentals, mortgage)

JimKing · 02-27-2007, 02:37 PM

People need to be careful about buying Florida houses. The prices are too high and will gradually sink back down to 2001 levels. But this will take years.

Right now, rent, rent, rent. Take the monthly rental and for every $100 in monthly rent, multiply by $12,500. That is how much you should pay for a house. That figure has worked forever. It is not exact, but a great indicator.

I can rent so many great houses in Jupiter, Juno Beach, Palm Beach Gardens for $2000-2500/month. Unless I can buy those houses for $250,000-315,000, I should rent. Right now those houses are selling for $400000-600000, totally out of whack with reality.

At those prices unless you plan on staying in a house for 20 years or more, rent.

Same thing in Sarasota, Tampa, New Tampa, Parkland, Coral Springs, Port Saint Lucie. There are some places in Florida where the rent vs own numbers are not so out of whack, but in most of Florida, you should rent until prices drop a ton. Put your down payment in a CD at 6% and wait this thing out.

Considering the vast majority of people change house in 3,5, 7 years tops, I would say most people on this forum should be looking for rentals and not buying.

Now beware, I bet lots of realtor types will be all over this post. But do the research yourself. Run a rent vs own calculator before you buy.....I bet you will be surprised.

Need_affordable_home · 02-27-2007, 02:40 PM

Its not so simple and we calculate that even renting I would lose alot of money. The best thing to do is just leave FL and buy a correctly priced house. You will then have a mortgage much cheaper than what it costs to rent in FL as well as something called equity!

BlueWillowPlate · 02-27-2007, 02:47 PM

But I have a large dog, and a cat, and I am so sick of renting! Wah!

sunrico90 · 02-27-2007, 03:01 PM

Renting is an option that can be used to evaluate how a new resident should proceed. If you are buying, do your research, in our area we are finding homes for sale in the $150k range, so the market is available for negotiation.

Today stock market scare makes many think about on how to proceed with their hard earned money. Evaluate and make a business decision, keep the emotions away from the transaction.

Everyone has a unique need and YOU are the one that can decide on how to proceed….

macguy · 02-27-2007, 03:07 PM

Quote:

Originally Posted by cil

But I have a large dog, and a cat, and I am so sick of renting! Wah!

I have three cats a bird and a big snake. I am thinking about renting myself for a while and the animals may pose a problem. I am seriously thinking of buying an RV to live in for a while. I used to have a class A like the things rock stars use years ago and loved it. We went all over the east coast even up into Canada. We did this for a few years.

carnut · 02-27-2007, 03:10 PM

I agree.

DO NOT buy any home in Florida right now. I think it will be two to three years before the market correction is complete. If you choose to buy today subtract about 35% - 40% of the purchase price. That is how much you will overpay in today's market.

Some builders are gving away the farm to get sales. Think about this for a second. Do you think they would sell these homes this cheap if they thought they were priced right in the first place. NO they would not. I have seen some builders tell people they would take $100,000.00 off the sales price just to get someone to LOOK at the home. The problem is it is still $300,000.00 over priced.

Two years ago flippers were buying five to ten homes in each development here. They thought they would be able to sell them when they were completed for a $300,000 - $400,000 profit. And they were right. The problem is EVERYONE started doing the same thing and hundreds of thousands of homes were sold. When the sales picked up the prices went through the roof. Cost went up 40-60% on everything. These cost were passed on to the buyers who really did not see the trainwreck coming. They kept buying and buying. Now all these homes are getting finished and the people will not close on them because they will not appraise for what they paid for them when they bought them. In some cases many hundreds of thousands of dollars less. Some of the volumn home builders will tell you the appraisals are still coming in OK. What they are not telling you is that they OWN the appraisal companies AND the mortgage companies and the are writing the rules for these loans.

Builders are tying incentives on the homes if you use thier mortgage companies. Think about this. If they home would appraise correctly and was worth the money why would they not give you the 1 -$200,000.00 discount if you used your own mortgae company.

A strong word of advise; If you have to buy now.
Get your own appraiser, use your own bank or mortage company.

macguy · 02-27-2007, 03:19 PM

Quote:

Originally Posted by JimKing

People need to be careful about buying Florida houses. The prices are too high and will gradually sink back down to 2001 levels. But this will take years.

Right now, rent, rent, rent. Take the monthly rental and for every $100 in monthly rent, multiply by $12,500. That is how much you should pay for a house. That figure has worked forever. It is not exact, but a great indicator.

I can rent so many great houses in Jupiter, Juno Beach, Palm Beach Gardens for $2000-2500/month. Unless I can buy those houses for $250,000-315,000, I should rent. Right now those houses are selling for $400000-600000, totally out of whack with reality.

At those prices unless you plan on staying in a house for 20 years or more, rent.

Same thing in Sarasota, Tampa, New Tampa, Parkland, Coral Springs, Port Saint Lucie. There are some places in Florida where the rent vs own numbers are not so out of whack, but in most of Florida, you should rent until prices drop a ton. Put your down payment in a CD at 6% and wait this thing out.

Considering the vast majority of people change house in 3,5, 7 years tops, I would say most people on this forum should be looking for rentals and not buying.

Now beware, I bet lots of realtor types will be all over this post. But do the research yourself. Run a rent vs own calculator before you buy.....I bet you will be surprised.

Long term home owners almost need an intervention to convince them renting may be a good idea. There is nothing wrong with renting. You always bought homes because you made money on them and built equity. Now though that may not be the case. Almost all of your mortgage payment goes to interest for the first few years so you are not building equity and the property may not even go up in value for years. Renting may be a very good idea for some people who never in the past considered it. It may be nice for a change to not have all the headaches of home ownership.

daniellefort · 02-27-2007, 03:32 PM

There is a home in our neighborhood that just sold about a 8 months ago that is on the lake but at the end of a canal. It's a small home in great shape but really doesn't have a yard to it. It sold for $268,000. the people who bought it spent about 2 weeks painting it, putting in new carpet and paving the driveway. Probably a couple thousand dollars at the most and that's a high estimate. Now they have it up for sale for $350,000. Their looking at an $82,000 turn around and sell profit. Too bad it's still sitting there for sale. Most anything on the waterfront in FL doesn't usually last long but obviously people know this is way out of line.

daniellefort · 02-27-2007, 03:43 PM

Well if you think about it, if you rent at say $1000 a month or $12,000 for the year. Your basically throwing that money away. If you buy, yeah the price will higher but at least that $12,000 your paying is paying for something that you can say is yours. You may or may not ever get it back when you sell the house but for sure you'll never get your rent back. A friend of mine rented for 2 years and offered to buy the place and wanted to use his $24,000 he paid in rent towards the purchase price. well that wasn't going to work with the owner. He would have been out that $24,000 he paid in rent and have to start paying on the house all over again. In my opinion, i would buy just make sure to do your research before you buy. You can look online at the sale prices of these homes so you have an idea just how much that price is jacked up giving you room to negotiate.

sunrico90 · 02-27-2007, 03:47 PM

Quote:

Originally Posted by daniellefort

There is a home in our neighborhood that just sold about a 8 months ago that is on the lake but at the end of a canal. It's a small home in great shape but really doesn't have a yard to it. It sold for $268,000. the people who bought it spent about 2 weeks painting it, putting in new carpet and paving the driveway. Probably a couple thousand dollars at the most and that's a high estimate. Now they have it up for sale for $350,000. Their looking at an $82,000 turn around and sell profit. Too bad it's still sitting there for sale. Most anything on the waterfront in FL doesn't usually last long but obviously people know this is way out of line.

The buyers are getting a bit smarter and are waiting and doing better research to maximize their investment. The example that you provide quantifies the actual problem; seller want to make money. If the seller can afford the payments they don't care because the morgage gets paid. If they can't afford the morgage soon the sell price will drop.