It’s official. According to Trulia. Com, it is now 52 per cent more affordable to purchase a home in Palm Beach County than it is to rent one.
However last year at this time it was 59 per cent better to buy a home in Palm Beach County. This is a reflection of rising home values in Palm Beach County, as well as increasing mortgage rates. This week’s average rate is around 4.4 percent. Last year at this time it was 3.66%.
Buyers priced out of market; rental rates increase.
Because rents continue to rise based on increased demand, the buy to rent ratio remains constant or may increase. Because so many first time buyers in Palm Beach County have been priced out of the market, rental rates are more than likely to increase.
Young families and first time homebuyers in Palm Beach County need somewhere to live; because of the lack of inventory, rentals become their only alternative until more homes are available to bring prices down — or at least hold them steady. Right now with only a 4 month supply of homes in inventory, we are below standard market equilibrium, which generally equals a 6 month backlog,
Sellers still maintain market advantage.
Even though the number of Palm Beach County homes for sale are ahead of last years numbers by about 6 per cent, this is not enough movement to change the balance of the market. So, for the moment, while it is more advantageous, to buy than to rent, it remains more advantageous to sell your Palm Beach County home than it is to buy a home in the current real estate climate.
Marc Jablon, the Jablon Team
RE/MAX Complete Solutions