The Florida real estate market is one of the most controversial topics among Florida residents, and it’s pretty common to hear citizens ask themselves what will happen to the Florida real estate market this year.
Reasons why Florida’s real estate market is so torn
So, before selling a property in Florida, make sure you have the right information about the current market conditions as well as future prices. Here we have done all the research so that you don’t have to do it yourself.
Demand and desirability
People love Florida because of all the different activities they can do outdoors, such as boating, kayaking, golfing and many more. This past year accelerated the trends of looking for a house near the ocean, and many Americans really want to move to that State.
It’s estimated that more than 600 people are going to move to Florida per day over the next 4 years. Nonetheless, people are focusing on Southwest Florida, and they are looking to move there for good.
The result of COVID
Because of the global pandemic and shutdowns, people haven’t been able to travel overseas which left many not only valuing home ownership more, but has also made them look for a getaway over in Florida.
Due to this, single-family homes want vacation rentals as institutional investors see the potential given that other investment vehicles have become unappealing because of the massive shutdowns.
Many tax benefits of being a Florida citizen include having no state income tax (7 of only 7 states) meaning Social Security retirement benefits like pension income. All of these are untaxed.
Besides that, there are no estate or inheritance tax-saving families that determine the amount of money people have to deposit. Bottom line, retirement accounts are a good reason to move to Florida.
Homestead tax exemption
Residents enjoy the advantages of a reduced taxable value. One aspect that they are going to love is the “Save Our Homes” provision because they can save up to $500,000 and then pick them up and move into a new homestead property, which are considered to be “Portability”.
Thanks to the rise of remote working and concern for the employee’s wellbeing, you can expect a new model of working for different companies. Shared spaces are expected to become areas of growth, and even though many are torn because of this mix between high-quality-adaptable buildings vs. the most outdated ones, we can’t tell what the results are going to be.
According to the National Association of Realtors, the Southwest part of Florida was ranked as the number one commercial market in the US back in 2010, specifically Cape Coral and Fort Myers. This is the evidence that shows investors are comfortable with purchasing in Florida, which is a big boost for local employment.
Homebuilders are always optimistic, especially when it comes to working in Florida. As a result of this, only half as many homes over the past decade have been built. The Florida real estate market predictions have hit a bottleneck point where it can’t keep up with the rate of demand, meaning it won’t maintain upward pressure on pricing as well.
New construction is the most direct source of the new supply of homes, but this doesn’t mean that selling your house will be a negative thing to do.
Pricing and distribution chain
Given the experience of this past year with the mass economic blows and rising material costs across the country, both inflation and supply chain problems are still an obstacle to reaching economic recovery.
Furthermore, roofing, plumbing materials, and appliances are harder to obtain, and their prices are higher. We are seeing the new costs of new construction homes and it surpasses $24k on average.
Bottom line, it’s better for buyers to purchase an established property instead of investing in a new one.
The future of Florida’s real estate market
Florida is a large and diverse state and it’s often difficult to talk about its real estate market without dividing it into different areas. For example, highly populated areas in South Florida are going to have a different kind of market in comparison to rural areas in Central Florida.
To obtain the best information possible regarding the future of Florida’s real estate market, we decided to break down the different markets present in the state:
For South Florida, you can expect more of the same. According to data coming from Zillow, properties in this area, specifically on Palm Beach and Miami-Dade are overvalued by more than 9%.
In the same counties, single-family home sales increased more than 20% in March 2021, with median sales increasing more than 15% to $457,500.
Although there are areas around the nation, including South Florida, that saw a small demand for condos and smaller spaces during the beginning of the pandemic, those sales are starting to rebound. Townhouse and Condo sales in South Florida increased more than 30%, and this trend is likely a result of the rising cost of single-family properties.
While the Central Florida real estate market it’s not very active if we compare it to South Florida’s, both buyers and sellers have noticed the changes. April 2021 was one of the key months for this area of Florida, and as a result of low supply and high demand, the median sales costs increased at least 4%.
The Tampa area has always been considered an affordable real estate market, meaning it’s a great place for homebuyers. However, as more and more buyers want to take this opportunity, the environment becomes more of a challenge. Back in March 2021, median sales costs of a single-family property in areas like Pasco and Pinellas, was $300,000, which was a 17.6% increase from $255,000 from March 2020.
Northeast Florida is the area of the state that offers the most affordable home prices, so new buyers focus on getting properties here. Back in April 2021, the median sales costs in counties like Clay and Putnam were $284,491, proving that there was an increase of 14.1% from a year prior. Unlike other parts that are dealing with a slowdown in listings, North Florida won a total of 4,030 listings during April.
How’s the current house market in Florida?
The housing market in Florida is beginning to settle, thanks to a steady rate of moderate price increase. As more families decide to put their houses on the market, they are able to stay there for longer periods.
You have to keep in mind that Florida will remain as one of the best places to live and purchase properties because the real estate market will always grow due to all of the things related to vacations and wanting to escape from the routine.
As time goes by, housing has become a stable component of the American economy. It has benefited from the overall economy’s stability. However, when the economy becomes hot, it will always cool down, so housing markets are going to become more balanced.
You need to keep in mind that in Florida it takes a lot of time for a house to sell, and nowadays, this process is beginning to look like seasonal trends. For instance, this September, the typical house spends 43 days on the market, a week less than last year.
While the market remains ongoing, fewer competing offers and conditions have returned to stay; both are clear signs of an improved housing market. First, buyers are going to have access to more mortgage rates and fewer competitors. Meaning their chances of finding the correct property are higher.
Should you sell your house?
As a seller, you shouldn’t be afraid to sell your house due to the real estate market’s situation. One thing that you should know is that Florida is a solid-state when it comes to the housing market.
Thanks to all the information we gathered in today’s article, sellers can relax. Florida’s real estate market is going to continue growing due to different reasons.
People love traveling to this state, in fact; it has to be one of the most visited states in the country. You will find all kinds of properties here. Depending on where you live, the number of people traveling there could be higher if we compare it to different areas of Florida.
In addition, when it comes to such a competitive market, any small issue is not going to cause sellers to lose out on properties. The most common issue here is financing, as common loans are going to take time and work to secure.
Besides, mortgage rates help control the impact of increasing house costs on monthly payments. Lastly, all of the fluctuations happening in Florida’s real estate market are going to ease up as the year continues, and it will continue growing.
Also, to help you even more, we are going to recommend you the services of a real estate agency in the U.S. Dluxuss will provide you with home staging services, meaning you won’t have to do anything to prepare your home.
By getting these services, your home will be prepared in every way possible, from decoration to the tiniest object. Everything will shine and buyers are going to adore the way your house looks, meaning your chances of selling the house are going to be higher.
To find out more about Dluxuss reputation, you can click here. You will not regret taking a look.
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