Unless you can drop a pile of cash on the table, you may get squeezed into renting in South Florida’s crazy homebuying market.
Home shoppers who need a mortgage are finding it harder and harder to land a house when competing against buyers — many from out of state — who are offering huge amounts of cash. That’s driving many people to rent, which only drives rents even higher.
Average rents have increased almost 4% in South Florida in the past year, double the increase the year before. Rents could rise an additional 2.5% to 3.5% in the coming year, according to Ken H. Johnson, a real estate economist at Florida Atlantic University.
Kristina Mahon, 35, and husband David, 43, face the typical predicament. They have searched without luck for a home in the Pompano Beach, Margate or Coconut Creek areas. They’ve put in offers on four houses, up to $30,000 over the asking price, but they’ve lost out to multiple cash offers on the same houses.
For now they’re renting a condo at Palm Aire, a condominium complex in Pompano Beach, on a month-to-month basis as they continue to search for a home.
“We were kind of forced into it,” Kristina Mahon said. Their plan is to reevaluate if they haven’t bought a home within six months.