is it worth it to buy in the miami area anymore? (real estate market, apartment)

[sflove]

I can't decide...I own now but want to move to a nicer area and everything is just too expensive. After doing some math it doesn't totally seem worth it to buy anymore once you factor in interest and taxes going up again. I guess at the end you do own your own home but over time you just never know what an area is going to be like. It really only seems worth it if you pay cash or pay your loan off extremely fast. Any thoughts?

[bale002]

Originally Posted by sflove

I can't decide...I own now but want to move to a nicer area and everything is just too expensive. After doing some math it doesn't totally seem worth it to buy anymore once you factor in interest and taxes going up again. I guess at the end you do own your own home but over time you just never know what an area is going to be like. It really only seems worth it if you pay cash or pay your loan off extremely fast. Any thoughts?

In Miami's better neighborhoods, the potential property buyer is competing with people with high levels of cash and other assets, plus their income, from all over the world. In such neighborhoods, then, inventory appears to be tight: it was tight about two years ago, there was a lull in buying and price rises for several months last year, but the buying and price rises have resumed again, at probably an even faster pace, over the past several months. Part of the reason is continuing and increasing turmoil in other parts of the world, the US is still a safe haven for many people, and Miami, a small sliver of land between ocean and swamp, offers plenty of heat and water, which many living creatures, including humans, find comfortable.

So if you buy now with a mortgage, you are paying top dollar, plus doubling that over 30 years with interest payments. So, yes, it seems worth it only if you pay cash or pay off a loan extremely fast, and in any case property taxes will rise as assessed values rise. Not to mention property insurance, especially if it is not new construction with a concrete roof.

There is also the risk that Miami may not continue to increase the value of its role in the global economy and/or it suffers a natural disaster.

From that perspective, then, Miami is worth it if you can buy into it with only a portion of your assets and can maintain a property with only a portion of your income.

Like in any other major city with global economic connections, in Miami it is very, very tough for those who have to rely solely on their local income to finance a major single purchase and risk a very large portion of their financial future on just that.

And that was the very result of the cockamamie socio-economic policy that led us to the national disaster of 2008-2009 and its aftermath. We would have been better off gifting people a diversified portfolio of dividend-paying stocks than enticing them into toxic loans for the wrong kinds of housing in the wrong places at the wrong time. But that's another story, I digress. Sorry.

Anyway, Good Luck!

[ace587]

Not right now. I agree with bale002. Majority of the folks who are able to maintain these homes have strong international connections and have incomes generated overseas. Prices are climbing to 2007 levels again.

[tallrick]

No, wait till the Fed stops rigging interest rates. Just make sure your savings are in gold or silver first.

[sflove]

Yeah, this whole thing is frustrating. I don't want to "waste" my money on rent but then again we do not want to raise our kids in this neighborhood. It is so expensive to buy or even rent a house in miami... I can easily see how the housing market crashed with the allure of home ownership in a nicer neighborhood. I think the general feeling is $200000+ is just what you have to pay so "oh well" even if you can't afford it. I guess we will just have to rent an apartment or townhome if we want to stay in a decent area in South Florida. Maybe one day we will have the cash to buy if we are absolutely sure we are in love with the area.

[elchevere]

buy later....when interest rates rise (and they will at some point), prices will come down. Your mortgage payment will stay the same but if you have to sell your place or decide to leave better to do it at a lower cost.

[MadManofBethesda]

Originally Posted by ace587

Prices are climbing to 2007 levels again.

Maybe anecdotally. But prices overall are nowhere near 2007 levels. In fact, an article in today's Miami Herald provided the latest figures on Miami-Dade real estate prices. Although prices are still rising on a year-over-year basis, the median condo price is still 36% below it's 2007 peak and single family homes are down 35% from 2007.

[JohnD_fla]

If you are independently wealthy and you have the cash to buy, then yes. But, if the cash that you will be buying with is ALL of your money or if you'll be using a loan to buy then I'd re-think buying in Miami right now. Regardless of what the realtors and the media are saying, Miami is red-hot and over-inflated right now. Real estate is cyclical, and it will not always be the way it is now. When the market tanks or another big hurricane blows through and destroys the place you'll be wiped out. Stay where you are for a while longer. The Fed can't keep interest rates ridiculously low forever. And once rates begin to rise housing prices will begin to come down. This is another bubble. It will burst again. Wait!

[richzimme]

The housing market in S. Florida is being fueled by investors moving cash out of Argentina, Venezuela, Brazil, Colombia, Russia, and to some extent Europe and China. These are cash buyers. This is a movement of foreign capital into US real estate. Miami is a very strong international market and is flying high on these foreign cash purchases. At some point, this movement of foreign capital into the Miami real estate market will cease. At that point, the market here will deflate considerably.

[FlyMIA]

If you plan on using a mortgage buying now is sort of a 50/50 bad and good. It is bad because market prices are insanely high but it is good because mortgage rates are pretty low. No doubt about it though it is a sellers market. I would personally stay away from the condos. Homes in Miami are a limited commodity and in the nicer areas of town or the worst areas of town the prices while they have fluctuated, not nearly as drastic as middle class areas.

It all depends one what you feel comfortable doing. If I owned somewhere and I was happy I would wait this boom out a bit.