If I was Going to Buy or Sell in Florida I Would…
If I was thinking of selling in Florida, I would sell now before this strong seller’s market comes to an end, which may happen much quicker than many realize.
If I living in Florida and was thinking of buying now, I would still move forward and consider buying. On the flip side, if I was thinking of moving to Florida but didn’t have to move right now, I might wait until after the current Florida real estate homes pricing settles just a little and lots of homes come on the market to choose from.
Caveats
-
- The Fed has lowered interest rates to the lowest point ever and kept them there for longer than ever before. We are in uncharted territory as they raise rates.
- The US has a downturn or recession every 7 years on average. It’s been longer that that since the last one. So the odds are, normally, …but he stock market hit a new high right after the 2016 presidential election. If a recession develops in 2018-2019, Florida real estate prices could drop substantially causing a fantastic buying opportunity of up to 50% or more off current home prices.
- I’m hearing “you should buy now because if you don’t, prices will just be higher next week” and “It’s different this time because there’s a wave of babyboomers coming that will cause prices to just keep going up and Florida is the new California, etc.” This is exactly what they were saying right up to the last day before the Florida real estate bubble popped and home prices proceeded to drop 60% on average.
- When this current bubble pops, prices will likely drop the most in neighborhoods where homes are occupied mainly by people who bought to live in Florida full-time.
- Prices usually drop less in areas where homes and condos are mostly owned by wealthier folks who mainly only occupy them during the winter months such as in Palm Beach (Note: Not Palm Beach County in general, not West Palm Beach, etc., but the town of Palm Beach on the key) and Naples proper.
So Where Are Florida Home Prices Now?
- People who moved to Florida during the 10 year “hurricane drought” only to be forced out of their homes for the first time in their lives during the “return to normal” 2017 hurricane season, will decide that where they moved from, wasn’t so bad after all and want to sell. This will increase supply and lead to lower prices.
- People that were forced out of their homes and have not been able to return to them because hurricane damage, have already move and established life elsewhere. A high percentage of these homes will go up for sale, increasing supply and lowering prices.
- The 2017 hurricane season which devastated parts of Texas, then Florida and finally Puerto Rico was heavily reported nationwide, slowing demand as people think twice about moving to Florida. This is reducing demand.
- The “normal” 30,000 or so who move out of Florida for monthly now for reasons other than hurricanes, continues.
- This has worsened throughout the year as the 2017 hurricane damage money is spent and all the those additional workers and jobs leave the state, reducing housing demand and leading to lower prices.
Where Are They Heading?
Bottom Line: What will Happen to Florida Real Estate Prices in 2018 and 2019
- Look for growing inventory, homes sitting on the market longer and price reductions this year in 2018. This will gain steam as the year progresses and interest rates increase.
- If the annual 6 month hurricane season in Florida in 2018 is another “normal” one like 2017 with evacuations and damage, look for Florida real estate prices to tank in 2019, fingers crossed that won’t be the case.
- If the country experiences a downturn or recession (historically we are overdue for one) look for Florida real estate prices to drop like a rock in 2019.
- If both of those things happen, look for Florida real estate prices to collapse and rapidly drop up to 50% or more in 2019 as the floodgates of sellers opens up and the pipeline of buyers slows to a trickle.