Photo Credit: Alan Light
It’s official – Miami is the most difficult city in the US for renters. Bloomberg’s Businessweek blog released their top 25 toughest cities for renters on Monday, crowning Miami as the winner (or loser, in this case). According to a new report by Harvard University’s Joint Center for Housing Studies, 64.5 percent of Miami renters are paying more than 30 percent of their incomes on rent alone. With the average median income of only $31,900 and the average rent cost at $1,040, that is an enormous chunk of their yearly income spent on housing alone. Add in an additional $130 monthly for utilities and it’s even more apparent why this sunny city has such a dark reputation.
While the rising costs of renting are a burden, another obstacle for renters will be the availability of housing options. Mark Greer, CEO of Carlisle Development Group in Miami, told Yahoo, “the supply of affordable housing near the job core or by rapid transit lines is going to be unbelievably insufficient.” This means that the amount of reasonably-priced properties for rent on the market will be dwindling – and quickly. The question on many renters’ minds with these bleak prospects of high costs and high demand is if it’s time to buy. And for many, the answer is yes.
“The supply of affordable housing near the job core or by rapid transit lines is going to be unbelievably insufficient.” Mark Greer, CEO of Carlisle Development Group
For renters with established credit and a solid payment history, now is the best time to buy in Miami-Dade County. Renters run the risk of being thrown out of their homes, many of whom have paid faithfully for years, because the owner of the property defaulted on their home loan. And many of these renters pay the amount that a mortgage would cost, therefore taking this risk unnecessarily. The costs of buying a home have also stayed relatively low as compared to renting, due to the low demand and large inventory of properties in foreclosure and short-sale. Housing prices will only rise as the economy strengthens.
A renter with already average to above-average credit will also benefit tremendously from the equity that becoming a homeowner brings. Staying in a home long-term is the only way to efficiently earn equity, however a buyer looking to stay in a home for more than several years will reap the benefits of this. A forlorn renter’s market is not an impediment for the right person, but rather an opportunity to open additional doors into the future of homeownership.