Ditch Rent For These New Communities $600k or Less (Yes, Even With Today’s Interest Rates!)
Let’s face it, interest rates suck right now. With interest rates in the 7-8% range, the average cost of a mortgage on a $600k house is in the high $3k-low $4k range. This is definitely not a fun conversation to have as a Realtor given interest rates were in the high 2%-mid 3% range not very long ago and you could afford a bigger, more pricier home for the same cost as you can now for a smaller, less expensive one. As we know by now, what we saw in the market not very long ago was unheard of, and most likely never to be seen again, so as we digest everything we just went through and accept the new norm of higher (compared to a few years ago) interest rates, and a sparse real estate market, I feel it’s important to talk about the similarity in cost of a 3/2 luxury rental vs. a 3/2 new construction home priced at $600k or less. Homeownership is certainly still attainable and today we’re going to break everything down and also give a comprehensive list of 2023 new construction communities worthy of checking out priced $600k or less, so let’s get into it!
When I search rentals (as a landlord, I am constantly doing so to ensure I am pricing my home competitively, but also as a Realtor, i’m assisting clients with finding a rental, or listing their rental for potential tenants) it’s almost a known fact that any luxury apartment building in a good location, or any new home that was recently built that offers 3+ more bedrooms will be available for $3k+ a month. When you look at the cost people are willing to spend on a clean, new home, and compare it to the average cost of a mortgage on a home $600k or less, the difference can be a few hundred dollars & you’re paying 8% interest tops, rather than 100% interest to a landlord (yes, the typical Realtor line, I know), but it’s true. It’s funny when I talk to people who are on the fence about buying a home right now, the first few objections they say are “interest rates are too high, I want to wait for them to come down” or “I am waiting for the market to crash”, and unfortunately there is no crystal ball into the real estate future & if there was one, someone would be extremely wealthy. The waiting game is dangerous when in this mindset because the same people who had this mindset 2-3 years ago may be kicking themselves now. Sure, interest rates are high, and a $4k mortgage is hard to swallow, but so is wasting $4k a month on renting something that brings you absolutely no gain, especially when builders are giving out incentives to buyers right now to gain business, the buyer pool has shrunken making negotiations easier, and waitlists are nearly in the past.
So let’s look at the numbers:
Actual rental listing in Downtown Sarasota:
2 bedrooms, 2 bathrooms, 1,207 SF: $3,909/Month
1 bedroom, 1 bathroom, 895SF: $3,349/Month
Mortgage on a $460k home in Waterside, Lakewood Ranch: $3,631/Month (Includes insurance, property taxes, & HOA fee)
4 bedrooms, 2 bathrooms, 1,580 SF
Mortgage on a $498,900 townhome in Waterside, Lakewood Ranch: 3,905/Month (Includes insurance, property taxes, & HOA fee)
3 bedrooms, 2.5 bathrooms, 1,850 SF
Mortgage on a $605,000 home in Sarasota: $4,389/Month (Includes insurance, property taxes, & HOA fee)
3 bedroom with den, 2.5 bathrooms, 1,790SF
As you can see, homes $600k or less, with 20% down at todays interest rate are similar, if not less than the luxury rentals around town.
So now that i’ve given my ditch rent, get a mortgage spiel, let’s get into the communities you should add to your watch list that offer great homes for $600k or less!
Lakewood Ranch
Sarasota/Nokomis/North Venice
The Townhomes at Skye Ranch, Taylor Morrison - High $200’s-Mid $400’s
Vistera of Venice, David Weekley Homes, Neal Communities, and M/I Homes - mid-high $500’s+
Magnolia Bay, Meritage Homes - Mid-High $500’s
Wellen Park, South Venice
If you have any questions about any of this, please let me know! Thanks for reading.