Are you thinking of buying or selling a house in Florida, but are not exactly sure where the real estate market is headed? Maybe you want the house for personal use, or perhaps you want it for investment property. You may even have a house you are trying to sell but cannot find the right moment.
Real estate in Florida has been rather hectic over the past couple of years. If you want to buy a home simply to live in, you might find that inconvenient. That being said, if you are interested in the Florida investment real estate market, you might find it profitable. Here are some things that might attract your attention.
Housing Market Predictions for Florida
Real estate experts believe that the market in Florida will remain hot throughout the rest of the year. That being said, some factors may cause people to do a double take. Whether it’s a good thing or a bad thing, here is what real estate professionals expect to happen.
Affordable Houses will Have Higher Demand
Up until 2021, luxury homes were very popular, with affluent buyers making purchases at every corner. Last year, one in five houses in Miami was sold for over 1 million dollars. This is a great difference compared to several years ago when only one in 13 homes were sold for this price.
Nowadays, people are going for affordability. The pandemic changed things for many people, and as things are going back to normal, people are looking for cheaper housing options. North Port and Naples have become rather popular for home buyers for their affordability.
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Home Sales May Go Down
Over the past couple of years, housing demand and prices have increased as a response to Florida’s growing population. More people have begun moving to Florida lately, creating a gap between supply and demand.
This will further increase prices, causing uncertainty for buyers. Fewer homes will be on the market, and people may not be able to get a good home at an affordable price.
For the real estate market, this may not necessarily be a bad thing. Indeed, not as many homes will be sold, but a home that would normally get three offers would now get six or seven. The competition will lead to a higher bid, making it a good opportunity for the seller.
High Mortgage Might Affect Price Growth
When mortgage rates become too high, it makes buyers less confident about their ability to buy a property. They will put their home buying plans on hold until the prices go lower or at least stop increasing.
In certain Florida real estate markets, this low demand may lead to slow growth in the price. If the price growth is slow, this may make remaining home buyers feel more confident. As rates are no longer increasing, they will feel it’s much easier to find an affordable home.
Smaller Markets in Florida May Get More Popularity
In 2022, it is expected that people will steer away from major cities and move into much smaller markets. The west coast of Florida is getting a lot of hype these days, due to its slower pace. People want a break from busy cities and are looking for more tranquility.
This puts the spotlight on Florida’s much smaller markets, such as Lakeland or Fort Myers. Compared to the bigger cities, these areas are much more affordable. That being said, the increase in demand is likely to lead to an increase in prices as well.
This can prove to be a great opportunity for people buying an investment property. At the moment, the prices are still at a low point, allowing them to buy houses at a cheap price. With the shift in attention, these homes will increase in value over the next five years, bringing profit to those planning to sell the property.
Best Places for Investment Property in Florida
With the Florida real estate market shifting continuously, investors need to choose their metro carefully. Even with the extra expense, buying property in areas with growing prices can prove profitable in the future. Here are some areas in Florida where the sales prices have seen significant growth over the past few years.
- Panama City: Homes in Panama City saw an average 19.6% price growth over the past year. The average home sells for $250k, and it stays for only about 36 days on the market. This is around one-third of the time it stayed last year.
- Plantation: Home prices in Plantation saw a 30.5% increase over the past year. The median price for a home is around $509k.
- West Palm Beach: Prices in West Palm Beach increased dramatically since 2021, up by 35.7%. The average price for a home now is $387k, but it is expected to increase by 2023 even more.
When there is a similar increase in price, the trend is expected to keep up in later years. A home purchased at a lower price now may become very profitable in the future.
The Bottom Line
The housing market in Florida is as reliable as the weatherman telling you when it’s going to rain. While you can’t be 100% sure, it gives you a good idea. So far, people are investing in smaller markets, and this is likely where you will find profit.