As the housing market improves, some city realtors say it is now more realistic — and cheaper — for students to buy houses or condominiums in Gainesville instead of renting one. Not many students are buying into the bid, saying the short-term savings aren’t worth the long-term responsibility and cost.
Because interest rates are at an all-time low, a homeowner’s monthly mortgage payments on a house or condominium are roughly the same as monthly rent payments, said Richard Schackow, real estate broker and president of Schackow Real Estate and Development LLC.
Market conditions are currently favorable because of record-low mortgage interest rates and rising rent prices, said Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors, in a news release.
“Now is clearly the time to buy instead of rent, especially if students know they are going to be in Gainesville for another four or five years,” said Tracy Storms, a realtor at Alligator Realty Inc.
For some students, the cheap monthly payments that come with buying a home are pointless because they still have to put down a large initial payment upon purchase.
Down payments range from about $6,000 to about $20,000 or more, depending on the size of the house and the loan received, Schackow said.
Mike Leonard said the down payment would deter him from even considering buying a house or condominium.
“Yes, monthly payments are comparable, but you have to put way more money down when you buy a house,” the 20-year-old biology junior said. “I’m not going to spend that kind of money on something I’m going to use 5 percent of my life.”
Laura McLeran said she doesn’t want the responsibility of taking care of her own house, nor does she want to go through the hassle of selling it when the time comes, especially given the fluctuating housing market.
“I like having a landlord to take care of all that,” the 21-year-old marketing senior said.
Since November, Storms and Ben Goldberg, another realtor at Alligator Realty Inc., have sold 13 condominiums to students — the most they have ever sold in a four-month period since 2008.
Five years ago, Schackow developed Forest Creek, a 28-lot subdivision located on Northwest 34th Avenue. Out of that count, eight of the homes have been sold and built. Four more have been sold over the last few months but are in the midst of construction. Homes in the subdivision currently range from $139,900 to $300,000.
Potential buyers who have their eye on a $139,900 house in the subdivision will currently pay $956.61 per month for a three-bedroom, two-bathroom space.
The monthly mortgage payment factors in a common 30-year loan that covers 95 percent of the property value.
Those who rent apartments in The Enclave Apartments, a complex about 3 miles from UF, pay $1,575 rent per month to rent a three-bedroom and three-bathroom space, according to Isabella Jebian, leasing specialist at The Enclave.
The price includes utilities, cable and fees. Rent is usually split among those living in the space, so the monthly payment is divided among roommates.
Owning a place is feasible for students who are planning to stay in Gainesville for graduate school or to work because they stand to make money off the house if its value increases, Schackow said.
Students should not dwell on the down payment because, he said, the investments to be made on owning a home outweigh the initial payments.
“The difference is that you sink all this money into paying rent, and at the end of your three or four years, you have nothing to show for it,” Schackow said.
Although she understood that mentality, Carley Fuller said there is no point in buying a house when she isn’t going to stay in Gainesville for long.
“I can’t justify buying a house when I’m only going to school here,” the 20-year-old sophomore said. “I would only consider it if I got a job here after college.”
Camilla Savanti thought differently.
The 24-year-old UF dental student has been living in a condominium she owns for the past year. She said her family wanted to take advantage of the low housing prices.
“It’s just cheaper to own,” Savanti said. “And at the end of the day, you will have something to re-sell.”
Contact Adrianna Paidas at apaidas@alligator.org.
A sold home sits among others for sale in Forest Creek, a 28-lot subdivision off Northwest 34th Avenue. Some realtors are saying that now is the time to buy, not rent, in Gainesville.
