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Overseas Buyers about to start buying in force again on Floridas Gulf Coast

Investors and all-cash home buyers accounted for about 19 percent and 30 percent, respectively, of all sales in March, according to the National Association of Realtors®. That represents a significant share of the market, and some analysts are concerned that investor and all-cash demand will start to shrink as home prices rise.

Who will step up in their place?

One avenue of buyers who have been waiting on the sidelines are foreign nationals who want a second home, away from home – Gary Young president of Universal Vacations, a property management and rental agency based on the Gulf Coast of Florida said in a recent article in Gulf Coast Newsweek. “Up until very recently it has been near impossible for overseas buyers to purchase in the US unless they were paying cash, banks have now opened their doors with wide welcoming arms and offering great rates with as little as 25% deposit on a single family properties”  Young went on “our company used to travel all over Europe promoting certain areas on the Gulf Coast, when the collapse came a few years ago we stopped over night as the vast majority of our clients wanted financing, it looks like it is time to start the overseas roadshow’s again”   Continue reading “As prices rise, investor demand falls. What’s next?” »

Overall, buying a home is 44 percent cheaper than renting nationwide

SAN FRANCISCO – Mar 20, 2013 – Trulia’s Winter 2013 Rent vs. Buy Report looked at homes for sale and for rent on Trulia between Dec. 1, 2012, and Feb. 28, 2013, and compared the costs, factoring in transaction costs, taxes and opportunity costs. For homeownership costs, study authors assumed a 30-year fixed-rate mortgage, 20 percent down, itemizing tax deductions at the 25% bracket and a stay of seven years in the home.

Overall, buying a home is 44 percent cheaper than renting nationwide – down just slightly from 46 percent in 2012. In each of the 100 largest metros, buying is more affordable than renting, though it ranges significantly – from 70 percent cheaper to buy than rent in Detroit to only 19 percent cheaper in San Francisco.

In the 10 Florida markets checked by Trulia, savings ranged from 40 percent to 60 percent. They include:

Fort Myers: 45% cheaper to buy

Miami: 43% cheaper to buy
Fort Lauderdale: 53% cheaper to buy
West Palm Beach: 56% cheaper to buy
North Port-Bradenton-Sarasota: 51% cheaper to buy
Lakeland-Winter Haven: 55% cheaper to buy
Palm Bay-Melbourne-Titusville: 50% cheaper to buy
Orlando: 51% cheaper to buy
Tampa-St. Petersburg: 55% cheaper to buy
Jacksonville: 54% cheaper to buy

Visitors can change the map to suit their circumstance by choosing the mortgage rate they expect to pay (3.5%, 4.5% or 5.5%), their IRS tax bracket (none, 15%, 25%, 35%) and the length of time they expect to be in the house. The map then changes its buy-versus-rent estimates based on input.

For example, changing a Miami buy-versus-rent decision to a three-year stay, 15 percent tax bracket and 5.5 percent mortgage interest rate makes it wiser to rent for a 1 percent savings.

“People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat,” says Jed Kolko, Trulia’s chief economist. “Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets – so long as they can get a mortgage in the first place.”