At the start of the pandemic, there was a lot of concern about the housing market for good reason. The logic went that people would not only be staying in place but would have less money to spend on the property even if they wanted to move. What with businesses closing and jobs being lost, this seemed inevitable.
The crash never quite came, contrary to popular belief. Maybe you know someone who got their new home at a steal around May 2020, but for the most part, the cost of housing throughout America, and especially in Florida, stabilized and continued to rise.
This is no more true than in Boca Raton. In February 2020, the median sale price of houses in Boca Raton was $350 thousand. In July 2021, it is as high as $470 thousand! That is more than a hundred grand more than at any time before the pandemic.
For whatever reason, we are in a sellers’ market now. Houses stay on the market for just over a month in Boca Raton, also the lowest it has been in years. If you have been planning on buying a home in Boca Raton, you can expect a sizable mortgage.
However, renting in Boca Raton is not much easier. The average rent in Boca Raton is $2,343 in July 2021. This is almost $300 higher than pre-pandemic levels and almost $900 higher than the national average (although this latter fact is unsurprising, considering the status of Boca Raton).
Is it better to rent or buy in Boca Raton, considering the high costs either way? Let’s take a look at some of the reasons renting may still be a better option.
Resale value
Whether or not you can afford it, buying a home when housing prices are at a record high is not wise in a financial sense. There is reason to be optimistic that prices will continue to rise. But there are also many factors that could cause the housing market in America to crash badly.
One factor is the affordable housing crisis. There are fears that we will reach critical mass in the near future, at which point it will be impossible for the federal government not to take action to avoid a catastrophic surge in homelessness and tent communities. Any measures the government takes to make housing more affordable for the masses, including subsidizing rent in expensive neighborhoods, will even impact the resale value of luxury homes.
Furthermore, it is possible we have not yet seen the worst of the economic devastation wrought by COVID-19. Businesses are struggling to find staff for a reason. Many Americans were unemployed for so long that they cannot afford to get a job – they can no longer afford things like childcare and, even if they can get one job, they do not have the time for two jobs (as was the reality for many low-wage earners before the pandemic).
The increase in poverty among Americans may not be reflected by the markers used to measure economic growth. However, as big businesses and the wealthy are once again flourishing, the poor are getting poorer. This leads to economic instability, which brings a potential increase in crime and leads to conservative spending all around.
For now, renting can help you avoid making an investment that, within a few months, you might severely regret.
Florida renters Insurance
Another factor you have to consider when buying a home at a high value is related expenses. Homeowners insurance is going to cost you more than ever, considering the amount you will be insuring.
Florida renters insurance, on the other hand, is incredibly affordable. Renters insurance can cost as little as $5 a month. It can come with personal liability insurance, and you can add particularly expensive possessions as extras. You are only paying to insure your possessions, rather than the entirety of a $450 thousand house.
Insurance is just one of the expenses you are going to have to consider when buying a Boca Raton house. You will pay higher prices than ever to carry out routine maintenance and your rates are going to be high as well. In other words, in addition to your monthly home installments, you may end up spending thousands more on bills and repairs to your hvac, plumbing and roofing system. You may be able to use your insurance to pay for home repairs like a a pipeline camera inspection for your plumbing system as well as roofing repairs done by a residential roofing contractor. Other repairs like roof truss replacement, roof coating and maintenance, etc. can also be handled by roofing contractors.
Buying a home in 2021 is going to be very expensive. While renting is also more expensive than ever, it is worthwhile avoiding buying a home when property is at a record high and might come crashing down. Opting for properties for rent in Malta, for instance, can provide a more financially prudent and flexible housing option.