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Is it better to buy or rent in Tampa Bay? Both come with hurdles

The region is one of the least affordable places to rent compared to paying a monthly mortgage. But finding a house is a whole other problem.
Renter Silvie Johnson poses for a portrait with her son Aiden Hille in front of their apartment on Sunday, Sept. 12, 2021 in Pinellas Park.
Renter Silvie Johnson poses for a portrait with her son Aiden Hille in front of their apartment on Sunday, Sept. 12, 2021 in Pinellas Park. [ LUIS SANTANA | Times ]
Published Sep. 14

To rent or buy a house? That is the question many around Tampa Bay face when looking for a place to live right now.

As industries recovered from the coronavirus pandemic, the housing market became white hot. Home prices shot up and so did rates for rental properties. Tampa Bay is unique in that it saw some of the sharpest spikes in prices over the last year, making the region one of the most expensive in the country to rent an apartment or a home.

Related: In Tampa Bay, it takes three minimum wage jobs to make rent, report says

Renters in Tampa Bay pay 20.6 percent more than homeowners do per month, according to research from the real estate software company Stessa. Tampa Bay has the seventh-highest cost disparity between renters and homeowners when compared to other large metro areas around the U.S.

“It is almost as expensive, if not more expensive to rent right now than it is to buy,” said Renee Celli, a St. Petersburg Realtor at RE/MAX Metro and also a landlord.

The median rent across the counties that make up Tampa Bay is about $1,400 a month, according to Stessa’s analysis. Meanwhile, the median mortgage is around $1,100.

Luke DeForest, a military veteran who worked in the restaurant industry, lived in Tampa for nearly 20 years. The rising costs of rent is why he decided to move from Seminole Heights to Zephyrhills.

“We were actually paying more [in rent] than what we would pay through purchasing a home,” DeForest said.

But the process of securing a home was “cutthroat”, DeForest said. He offered more than $30,000 over the asking price to get the seller’s attention for the house he lives in now.

“You’re being challenged on both fronts with inventory that’s not available,” Celli said about the difficulty of finding a place to rent or buy.

Celli tells her clients they have three choices if they’re looking to switch to owning a home in this current market: Lower expectations, raise the budget and if tenants can’t do either, then keep renting.

Renter turned homeowner Luke DeForest poses for a portrait in front of his home on Sunday, Sept. 12, 2021 in Zephyrhills. DeForest moved from the desirable Seminole Heights neighborhood in Tampa because costs were getting too high to afford.
Renter turned homeowner Luke DeForest poses for a portrait in front of his home on Sunday, Sept. 12, 2021 in Zephyrhills. DeForest moved from the desirable Seminole Heights neighborhood in Tampa because costs were getting too high to afford.

Lei Wedge, an associate professor at University of South Florida’s Muma College of Business, has no doubt rent is the more expensive option, but there are many who aren’t able to buy a home right now.

“If you can buy, absolutely, you’re better off paying lower mortgage than rent right now,” Wedge said. “But the issue is, are you really going to be able to buy?”

Silvie Kralova Johnson, a single mother, was pregnant with her now 8-month-old son when she was looking all over Pinellas County to buy a house before the start of the pandemic. She searched for six months and couldn’t find anything affordable or that didn’t require expensive repairs.

When she was close to giving birth, she stopped and decided to rent.

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“I’m not going to buy something just to buy something,” Johnson said. “I don’t want to be switching windows for I don’t know how much money that I don’t have.”

She found a 750-square-foot unit in a duplex and pays $1,200 per month, which rose by $100 when her lease was recently renewed.

With the rising costs of utility bills — her electric bill averages between $200 and $250 a month — Johnson said she worries about being priced out of the area.

“I don’t want to be paying somebody money when I can be paying for my own house to live in and own eventually,” Johnson said, adding that she’s waiting to buy a home until the market cools down.

Wedge said the the exploding real estate market is to blame for the rising cost of rent, especially for single-family homes. Tampa Bay saw the highest increase in rent in 2021 compared to any other metro area in the country, according CoStar Group, a real estate research company.

Pinellas County was one of the largest counties in the U.S. where it’s cheaper to own than rent as of the start of this year, according to a report from ATTOM Data Solutions, another real estate firm.

Renter Silvie Johnson poses for a portrait with her son Aiden Hille in front of their apartment on Sunday, Sept. 12, 2021 in Pinellas Park. Johnson said she hopes to own a home when the market cools.
Renter Silvie Johnson poses for a portrait with her son Aiden Hille in front of their apartment on Sunday, Sept. 12, 2021 in Pinellas Park. Johnson said she hopes to own a home when the market cools. [ LUIS SANTANA | Times ]

And investors are noticing.

“You have all these investors who are paying cash and bidding on starter homes. (It’s) making it very difficult for young families,” Wedge said.

For example, a four-bedroom house on Summer Savory Street in Tampa sold for nearly $300,000 in May. It was then rented out in June for $2,400 a month. A 30-year mortgage plus property tax, insurance and other standard costs on a similar house of that value would be about $1,400 each month, Wedge calculated.

Related: Florida homebuyers struggle to compete. Can a real estate startup help?

Celli, the RE/MAX Realtor, said she sees this all the time. Investors buy homes to rent them out because they know there’s demand for it, and they can make a profit.

“Investors are taking housing from people who are looking to stop renting,” Celli said. “Then they’re stuck (and) continuing to rent because there’s nothing else for them to buy.”

For some, buying and renting is just not realistic — so they look for alternatives. Abigail Andrews and her husband bought an RV instead.

Andrews, a 28-year-old Tampa native who recently moved back to the area after living in Virginia, was searching for a home. The plan was to buy, but the couple quickly realized they couldn’t find anything within their budget.

Related: RV industry continues to grow in Florida, spurred in part by the pandemic

As a stay-at-home mom of three kids, it was difficult to find a house on just her husband’s income. Most rental properties that were suitable for their family cost more than $2,000 a month, she said.

One rental home in Tampa in their price range was $1,500 per month, Andrews said, but the property wasn’t maintained and had some structural issues. After struggling to find a place, she and her husband decided to buy an RV.

They’ve lived in an RV park about 15 minutes west of downtown Tampa for four months and haven’t looked back.

“We figured even if we ended up paying the same price as what we paid in rent, at least at the end of this, we’re coming out owning something,” Andrews said.